ANNUAL REPORT
2019
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Chairman’s Report
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Executive Team
Business Operations Summary
20 Directors’ Report
TasFoods Limited
ACN 084 800 902
Managing Director and
CEO’s Report
10 Operating and Financial Review
18 Board of Directors
39 Financial Report
88 Shareholder Information
90 Corporate Directory
ABOUT TASFOODS
TasFoods is a diversified food business
leveraging the natural attributes
of Tasmania’s agricultural and food
production environment to create
premium food products for sale to
Australian and export customers.
The company owns a stable of high value food
brands in the three product categories: Poultry
(Nichols), Dairy (Pyengana, Meander Valley,
Betta Milk and Robur Farm) and Horticulture
(Shima Wasabi).
TasFoods’ focus is to showcase Tasmania’s finest
produce to the world.
TasFoods Limited
ACN 084 800 902
tasfoods.com.au
TasFoods Annual Report 2019 | 1
2019 was another year of strong organic sales
growth, together with the strategic acquisition
of the complementary assets of the Betta Milk
dairy business.
Shane Noble Executive Chairman
32%
INCREASE IN SALES REVENUE
Both these businesses are well positioned
to benefit from positive consumer
consumption trends and our continued focus
on operational optimisation and customer
partnerships. Our growth initiatives in 2020
will be supported by the recent appointment
of a Chief Marketing Officer who is tasked
with implementing a disciplined approach to
brand development and product innovation.
Whilst TasFoods delivered strong 32% sales
revenue growth in 2019, our financial
performance was negatively impacted
by drought-influenced commodity price
increases which saw the gross profit margin
decline by 3%. Despite these commodity
price headwinds, the business delivered a
29% improvement in operating EBITDA and
structured price increases implemented in
Q4 2019 should flow through to an improved
gross profit margin in the first half of 2020.
I am pleased with TasFoods’ progress in a
year when we have rebalanced our product
portfolio and continued to refine our internal
resources to ensure a brand-driven focus on
strong organic growth.
The purchase of Betta Milk was completed
on 31st July 2019 for a total consideration
of $11.42 million after adjustments and was
funded by a combination of cash-on-hand
and an $8 million capital raising at 12c per
share. The acquisition of the Betta Milk assets
has substantially increased the size and
scale of our diversified Dairy operations and
provided us with an under-utilised bottling
facility and distribution network which will be
key contributors to our revenue and profit
growth into the future.
“ The TasFoods business
portfolio now has two strong
operational pillars, with
Poultry continuing to be our
largest business unit and
Dairy operations forecast to
contribute circa 40% of total
revenue in FY2020.”
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2 | TasFoods Annual Report 2019
OVERALL REVENUE $’000
REVENUE BY DIVISION
$16,139
2016
2017
2018
2019
$31,112
$38,920
$51,105
$51.1m
total revenue
Poultry – 69%
Dairy – 30%
Wasabi and
other – 1%
LOOKING TO THE FUTURE
Strong sales growth is forecast in 2020, supported by a full year’s sales
from the Betta Milk acquisition and increased volumes of poultry from
the new chicken sheds completed in Q3 2019. Our focus is profitable
growth which will be driven by leveraging our Tasmanian heritage and
unlocking the potential of our established brands.
The business will continue to focus on optimising its existing asset
mix and on margin improvement initiatives, and is well positioned to
deliver its first full year of positive operating EBITDA in 2020.
Shane Noble
Executive Chairman
“ The acquisition
of Betta Milk has
provided TasFoods
with the opportunity
to leverage
an established
Tasmania‑wide
distribution network.“
Shane Noble Executive Chairman
TasFoods Annual Report 2019 | 3
BUSINESS OPERATIONS
SUMMARY
POULTRY OPERATIONS
Nichols Poultry was established in the early 1980s. The
business has grown to become one of the most trusted
and respected meat brands in Tasmania.
Operational activities
● Chicken processing
● Chicken growing
● Contract grower
management
DAIRY OPERATIONS
The dairy division includes the milk and cream
processing operations at Burnie and Kings Meadows,
goat farming operations located at the Nichols Poultry
farm at Sassafras, and the operations of Pyengana Dairy.
Operational activities
● Milk and cream
processing facilities
● Cheese manufacture
and maturation facility
● Café and retail shop
● Goat farming operation
WASABI
Shima Wasabi is the largest commercial wasabi farm in
Australia. Located in Tasmania’s temperate northwest,
it supplies fresh and powdered wasabi products to
markets across Australia.
Operational activities
● Wasabi growing and
harvesting facilities
● Wasabi packing and
processing facilities
4 | TasFoods Annual Report 2019
“ Revenue growth across all business units has been driven by strong
Tasmanian support for local producers and growing consumer interest
from mainland and export markets in Tasmanian produce.“
Shane Noble Executive Chairman
Achievements in the year
Objectives for FY2020
Sales revenue ($’000)
● Poultry sales revenue growth of 9% to
● Continue margin recovery initiatives
$34.942 million
● Achieved 85% growth on higher margin
Ethical Free Range products
● Expand Ethical Free Range chicken
markets through additional product
differentiation
$34,942
$32,103
$27,978
● Capital expenditure project delivered
● Targeted capital expenditure on
on time and on budget constructing two
tunnel-ventilated chicken growing sheds
on Nichols Poultry land
upgrading older company-owned
chicken growing sheds to
improve yield
$13,847
FY2016
FY2017 FY2018
FY2019
Achievements in the year
Objectives for FY2020
Sales revenue ($’000)
● Dairy sales revenue growth of 158% to
● Sales growth through full year of sales
$15,375
$15.375 million
from acquisition of Betta Milk
● Dairy organic sales growth of 29%
(excluding Betta Milk)
● Leveraging the distribution synergies
gained from the Betta Milk acquisition
● Acquisition of Betta Milk providing
● Implement margin recovery initiatives
increased milk processing capacity and a
Tasmania-wide distribution network
● Expansion of ranging for Meander Valley
Dairy branded Crème Fraiche into a major
retailer nationally
● Launch of Tassie Taste white milk brand
into two Tasmanian independent retailers
● Launch of a number of new
dairy products
$5,961
$1,981
$2,484
FY2016
FY2017 FY2018
FY2019
Achievements in the year
Objectives for FY2020
Sales revenue ($’000)
● Wasabi sales revenue growth of 8% to
$0.352 million
● Expansion of distribution network for fresh
wasabi products into Queensland
● Continued research into health and
wellbeing properties of the wasabi
plant with a view to potential new
product opportunities
$352
$327
$261
● Expansion of industrial customer use
of wasabi products
$150
FY2016
FY2017 FY2018
FY2019
TasFoods Annual Report 2019 | 5
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2019 was a year of strong growth across
the TasFoods business, accompanied by
a transformational acquisition that has
established a strategic foundation to
drive future growth.
Jane Bennett Managing Director and CEO
158%
INCREASE IN DAIRY SALES
REVENUE
The business continued to implement
our three year strategic plan focused
on driving growth, continuous
improvement in operations and
upskilling the business in key areas.
We achieved strong revenue growth
and completed a strategic acquisition
which has enabled us to leverage our
existing resources and facilities. This
has created a scaled Tasmanian food
business that further enhances the
opportunity to showcase the state’s
finest product whilst retaining our
solid market position in Tasmania.
ACQUISITION
On 31 July 2019 TasFoods completed
the acquisition of the milk processing
assets and brands of The Betta
Milk Co-Operative Society Limited
(Betta Milk), an unlisted public
company. The cost of the acquisition
was $11.4 million which was
funded from internal and external
sources including an $8 million
non-renounceable rights issue which
was underwritten at $0.12 per share.
“ The acquisition included
Betta Milk’s recently
upgraded export‑accredited
processing facility in Burnie
as well as distribution centres
in Launceston and Hobart.”
The acquisition complements TasFoods’
existing dairy brands and has driven
production efficiencies and expanded our
distribution network.
A number of synergies identified in the
Betta Milk acquisition business case have
been realised during the first five months
of ownership, and the full financial impact
of these will flow through to the 2020
financial year.
The financial results for 2019 include
five months’ trading for the Betta Milk
business, and its sales revenue and EBITDA
in this period have exceeded our due
diligence expectations.
6 | TasFoods Annual Report 2019
FINANCIAL PERFORMANCE
Sales revenue
Gross profit
Gross profit margin
EBITDA
Acquisition costs
Operating EBITDA*
NPAT
FY2019
$’000
FY2018
$’000
50,690
12,825
25%
(1,155)
(497)
(658)
38,391
10,716
28%
(1,110)
(187)
(924)
(3,459)
(1,358)
Change
($)
12,299
2,109
(44)
266
(2,101)
Change
(%)
32%
20%
-3%
-4%
29%
-155%
*Before acquisition and investment costs
Sales revenue in 2019 grew to a milestone $50.69 million,
32% up on 2018 ($38.39 million). This was achieved
through a combination of organic growth and the
acquisition of Betta Milk. Sales growth from existing
business operations (excluding Betta Milk) was
12%, driven by increased sales of 29% in the dairy segment
and 9% in the poultry segment.
Gross profit increased by 20% to $12.825 million; however,
the gross profit margin declined by 3% to 25% due to
input price increases for poultry feed grain, milk and
cream influenced by drought. Structured price increases
began in Q4 2019 to recover lost margin and further
increases are being introduced in H1 2020.
Operating EBITDA (statutory EBITDA less acquisition and
investment costs) in 2019 was negative $0.658 million, a
29% improvement on 2018. Operating EBITDA for H2 2019
was positive at $0.05 million.
The company’s bottom line performance was a net loss
before tax of $3.20 million.
TasFoods Annual Report 2019 | 7
“ We are the
Tasmanian
food specialist.
We are the
trusted source
for premium
Tasmanian
products fit
for the world
stage. Our
products are
the essence of
Tasmania.”
Jane Bennett Managing
Director and CEO
MANAGING DIRECTOR AND CEO’S
REPORT (CONT’D)
SALES
OPERATIONS
The impact of commodity price increases,
influenced by the drought, resulted in the
percentage of raw material costs increasing
from 53% of sales revenue in 2018 to 58%
in 2019. This led to a 3% drop in the gross
margin to 25%. The total impact of these cost
increases in 2019 was $2.62 million.
The business continued to drive
manufacturing and labour efficiencies
throughout 2019, reducing employment and
contractor expenditure from 32% of sales
revenue in 2018 to 30% in 2019. Corporate
costs continued to decline as a percentage of
sales from 11% in 2018 to 9% in 2019.
A range of strategic price increases for
chicken and dairy products was implemented
in Q4 2019, and further price increases are
being implemented in H1 2020.
The company’s major capital investment
in 2019 was $2.5 million for two new
40,000 bird growing sheds on the Nichols
Poultry site. These new sheds began
supplying birds into the factory in Q4 2019,
increasing the average number of birds
processed per week to 90,000.
TasFoods continued to grow revenue from
its existing business during 2019 through a
combination of new customers and increased
sales to existing customers, and this was
complemented by five months’ sales of
Betta Milk products.
The acquisition of Betta Milk grew the dairy
segment to 30% of total sales, up from 15% in
2018. A full year of ownership of Betta Milk
will further increase the dairy segment’s
proportion of total sales in 2020, bringing
greater balance to the business.
Nichols Poultry remains the largest segment,
contributing 69% of sales revenue in 2019,
down from 84% in 2018. Growth in poultry
sales in 2019 was 9%, driven by an increase
in bird numbers, and interstate sales grew
by 46% due to demand for Ethical Free
Range Chicken and new markets for air
chilled product.
The strong foundation underpinning our
business is the strength of our brands with
loyal Tasmanian consumers. We continue
to focus on nurturing the Tasmanian market
which achieved strong sales growth across the
business in 2019. Growing sales to markets
outside Tasmania remains a core objective,
and stronger distribution partnerships,
established in 2018, and expansion of
product offerings combined to grow sales to
interstate markets.
SALES REVENUE COMPARISON TO RAW MATERIALS AND
EMPLOYMENT AND CONTRACT EXPENDITURE ($’000s)
60,000
50,000
40,000
30,000
20,000
10,000
0
8 | TasFoods Annual Report 2019
FY2017
FY2018
FY2019
Sales Revenue
Raw Materials
Employment and Contractor Expenditure
BRANDS AND MARKETING
In 2019, the business had a major focus
on building awareness of our brands
with target consumers. This has helped
cement the positioning of TasFoods brands
with Tasmanians and interstate lovers of
Tasmanian food.
We launched a number of new products in
several key market segments. The majority
of these were launched in the dairy division
during Q4 and included new cream variants,
flavoured butters, marinated goat cheese and
a new white milk brand called Tassie Taste
developed in conjunction with Tasmanian
independent retail chains.
A new Chief Marketing Officer was appointed
in September 2019 and investment in
marketing will grow as we review our brand
strategy and key areas of focus for 2020.
Strong sales growth and further EBITDA
improvement are forecast for 2020. A
disciplined approach to cost management
will continue to strengthen bottom line
performance.
Jane Bennett
Managing Director and CEO
TasFoods Annual Report 2019 | 9
OPERATING AND
FINANCIAL REVIEW
THE
NICHOLS
DIFFERENCE
Demand for air-chilled
chicken is growing
as consumers and
chefs seek out higher
quality protein, free
from added water
and chemicals.
10 | TasFoods Annual Report 2019
NICHOLS POULTRY
Nichols Poultry remains the business’ largest division with sales of
$34.94 million in 2019, up from $32.10 million in 2018. The increase
in sales largely reflects further growth in non retail sales to
wholesale customers and interstate distribution partners that were
established in 2018.
The premium priced Nichols Ethical Free
Range Chicken achieved 85% growth
in 2019 as interstate markets expanded
through ranging in a number of premium
restaurants in Sydney and Melbourne.
Distribution also increased into Queensland
markets through a number of food service
partnerships. The Nichols Kitchen value
added range grew sales by 44% through
meeting the growing consumer demand
for convenience.
The 2018 investment in a new air chiller for
the Nichols poultry processing site delivered
on anticipated quality and efficiency gains
however margin improvement was offset by
increased feed input costs.
The company invested $2.5 million in
2019 in two new tunnel ventilated chicken
growing sheds, each with a capacity for
40,000 birds, erected on the Nichols Poultry
site. These sheds became operational in
Q3 2019 and will deliver further growth to
the business in 2020.
The 2019 shed investment will also allow
the company to benchmark a best practice
approach to chicken growing. All learnings
from this investment will be shared with the
wider company contract grower network.
Heading into 2020 commodity grain pricing
remains at near record highs. A strategic
approach to grain purchasing has been
adopted for 2020 with 60% of the required
grain supply for the year having been
forward purchased at a reduced cost to the
2019 purchase cost.
New pricing strategies to improve margins
are being implemented in early 2020 as a
result of continuing feed cost pressures.
“ Chicken is Australia’s most popular meat, and Australia has
the world’s 3rd highest per capita consumption. Chicken
consumption is driven by affordability, health and quality.“
Australian Chicken Meat Federation
85%
GROWTH
IN ETHICAL
FREE RANGE
CHICKEN
REVENUE
IN 2019
The small flock size
of the Nichols Ethical
free range chicken,
combined with
innovative shed design
and the absence of
foxes and natural
predators, encourages
chickens to range
24 hours a day in their
unique Tasmanian
environment.
TasFoods Annual Report 2019 | 11
OPERATING AND FINANCIAL REVIEW
(CONT’D)
A WELL
LOVED
TASMANIAN
BRAND
Betta Milk is recognised
as one of Tasmania’s
best known milk brands.
37%
GROWTH
IN 2019 OF
MEANDER
VALLEY DAIRY
Sales growth supported
by a consumer trend
towards consumption
of premium butters and
indulgent cream.
12 | TasFoods Annual Report 2019
DAIRY DIVISION
TasFoods’ dairy division consists of a number of different operational
sites including the Betta Milk facility in Burnie, Kings Meadows Dairy
in Launceston and Pyengana Dairy in North East Tasmania.
The division’s sales revenue grew by 158% in
2019 to $15.38 million, up from $5.96 million
in 2018, with sales from existing operations
(excluding Betta Milk) growing by 29%
to $7.71 million. This significant growth
doubled the division’s percentage of total
TasFoods sales revenue to 30%, up from
15% in 2018.
Sales from the Betta Milk operation
increased by over 10% during its first five
months of TasFoods ownership, driven
by the acquisition of new customers for
existing products and the launch of Tassie
Taste, a new brand of white milk. Tassie
Taste will contribute to further revenue
growth in 2020, improve manufacturing
efficiences and generate cream for the
company, reducing its reliance on external
cream supply.
Sales for Meander Valley Dairy and Robur
Farm goat dairy products grew strongly
throughout the year. The increase was
supported by a full year’s sales of Crème
Fraiche in Coles and expanded distribution
of Meander Valley Dairy’s cream and butter
products and of Robur Farm’s goat cheese
products to independent retail markets via
distribution partners.
Several new products were launched during
Q4 including a range of flavoured butters
and Christmas seasonal creams under the
Meander Valley Dairy brand, as well as a
marinated goat cheese under the Robur
Farm brand.
Gross margins across the dairy division
were negatively impacted during 2019
by increases in cream input costs and a
15% increase in farm gate milk prices during
H2. In addition to the sales price increases
being implemented in H1 2020, there are a
number of cost savings that will be achieved
through a full year of Betta Milk ownership.
The creation of the role of Chief Marketing
Officer and the significant experience of
the dairy operational and quality assurance
team provide an in-house capability to
develop new products. A range of new
products will be developed during 2020.
The transfer of Meander Valley and
Pyengana Dairy’s Tasmanian distribution
into the Betta Milk distribution network has
resulted in significant freight savings for the
Kings Meadows and Pyengana sites. More
frequent deliveries to customers’ stores
have also increased sales for the Pyengana
Dairy brands as loyal consumers are able
to maintain a continuous supply of their
preferred milk product.
There will be a strong focus in 2020
on benefiting from further efficiencies
and opportunities for growth in the
dairy segment as a result of the
Betta Milk acquisition.
Milk supply for the Pyengana Dairy was
increased by 30% in June 2019 with an
additional farm in the Pyengana valley
contracted to supply milk.
130 YEARS
OF HERITAGE
Consumer appreciation
of the Pyengana Valley’s
long dairy heritage and
unique environment
is driving the growing
demand for Pyengana
Traditional Cloth Bound
Cheddar and the
Pyengana milk range.
A GROWING
SEGMENT IN
THE DAIRY
CATEGORY
FOR THOSE
SEEKING
INTENSE
FLAVOURS OR
WITH LACTOSE
INTOLERANCE
Demand for goat dairy
products continues to
grow among high-end
consumers and people
seeking an alternative to
cow’s milk.
TasFoods Annual Report 2019 | 13
OPERATING AND FINANCIAL REVIEW
(CONT’D)
SHIMA WASABI
Total revenue for Shima Wasabi grew by 8% in 2019 to $0.35 million.
A number of strategic initiatives during 2018 to improve distribution
of fresh wasabi and improve service to interstate food service
customers increased fresh wasabi product sales (stem, leaf and
flowers) to interstate markets.
The interstate distribution changes
initiated in 2018 resulted in reduced
freight and packaging costs in addition to
operational improvements from harvest
efficiencies in 2019. Together, these
delivered significant improvements in the
gross margin.
Innovation grant funding was received in
late 2019 from Food Innovation Australia
Ltd to further the research commenced with
CSIRO in 2018 on the active components of
wasabi that may be beneficial to health and
wellbeing. This research has commenced
in 2020.
TASMANIA’S
AUTHENTIC
WASABI
North West Tasmania
is an ideal growing
environment for Shima
Wasabi, Australia’s only
commercial wasabi
farming operation
providing premium
fresh wasabi products
to consumers and chefs
across Australia.
14 | TasFoods Annual Report 2019
THE
TASMANIAN
ADVANTAGE
Tasmania’s cool
climate and fertile
soils create the
perfect environment
for production of a
wide range of food
products. Surrounded
by ocean, Tasmania
is a trusted ‘place of
origin’ for premium
food products.
OPERATING AND FINANCIAL REVIEW
(CONT’D)
BUSINESS OUTLOOK
The business anticipates continued strong revenue growth across
all business segments in 2020. The acquisition of Betta Milk in 2019
has increased the scale of TasFoods’ dairy segment and the business
now has two solid foundation pillars in dairy and poultry from which it
will grow.
The dairy segment’s revenue will grow
significantly in 2020 through a full year’s
ownership of Betta Milk and the new
white milk brand Tassie Taste launched in
December. Additional revenue growth will
be achieved from cheese, butter and cream
products launched in Q4 2019. A range of
new products are being developed for release
in H2 2020.
Processing efficiencies will be achieved in
the dairy segment during 2020 as further
synergies are derived from the acquisition
of Betta Milk. Together with price increases,
these will improve margins as commodity milk
inpuy pricing remains high.
The poultry division’s revenue will
continue to grow during 2020 through a
full year’s production from the two new
company-owned chicken sheds that
commenced supply in Q4 2019. Price
increases for poultry will continue to be rolled
out in H1 2020 to improve gross margin.
Older company-owned chicken sheds will
be upgraded during 2020 to improve their
growing performance.
Shima Wasabi will continue to expand its
existing markets for fresh wasabi. A research
grant from Food Innovation Australia will
further develop understanding of the
active components of the wasabi plant
that may have value to the health and
wellbeing markets.
Margin recovery remains a core focus in
2020. The business will continue to identify
operational efficiencies and introduce
price increases to recover the impact of
input price increases.
TasFoods’ distribution-led market growth
will be supported in 2020 by a range of
marketing initiatives to strengthen the
presence and awareness of its brands in
key markets.
The business will continue to seek
further acquisitions that will complement
existing operations or provide
stand-alone contributions to strengthen
bottom-line performance.
The board believes that the long-term
fundamentals of TasFoods’ businesses
are strong, with increasing demand for
premium foods. The company’s strategy
will be to continue to expand through
leveraging its Tasmanian heritage and
maintaining the premium provenance of
its brands, and growing distribution in
existing and new markets.
TasFoods Annual Report 2019 | 15
OPERATING AND FINANCIAL REVIEW
(CONT’D)
RISK
TasFoods is committed to effective management of risk to reduce
uncertainty in the group’s business outcomes and to protect and
enhance shareholder value. There are various internal and external
risks that may have a material impact on the group’s future financial
performance and economic sustainability.
The company has a formalised Risk
Management Policy and Framework
which operates across the group. The
policy provides high level direction,
establishes key principles and allocates
responsibilities to ensure TasFoods has an
effective and efficient risk management
system. This process facilitates the
identification, assessment, evaluation
and treatment of risks in order to achieve
strategic and performance objectives.
A copy of the Risk Management Policy can
be located on the company’s website at
http://www.tasfoods.com.au/corporate-
governance/
During 2019 the group complied with its
Risk Management Policy and Framework,
ensuring all risks were regularly reviewed
and risk registers were updated for
new risks and changes to existing risk
profiles. Identified risks remain relatively
stable, with no expectation of increases
or decreases in the foreseeable future
unless specifically noted below. The
material business risks which may have an
effect on the financial performance of the
group are:
Supply Risk
Ensuring our input supply is secure,
stable and reliable.
TasFoods is reliant on a number of key
suppliers for inputs such as hatchlings,
milk, cream and chicken feed. We have
strong relationships and contracts with our
suppliers to ensure that quality, quantity
and price are stable. Where appropriate,
TasFoods is diversifying supply channels
to reduce risk levels and dependence on
key suppliers.
Market Risk
Delivering on our customer promises and
growing our customer base.
TasFoods has a number of large key
customers and the loss of one or more would
have a detrimental impact on the group.
TasFoods mitigates this risk by investing in the
quality of its relationships with key customers,
and ensuring we manufacture product in
accordance with our customer’s required
specification and standard. The company
continues to grow and diversify its customer
base. In addition, TasFoods responds to
changing customer compliance requirements
through upgrading its facilities and operating
processes. TasFoods has also developed a
point of difference in our products which
reduces the risk of substitution.
Biosecurity Risk
Minimising the risk of disease and
infection impacting our animals,
manufacturing facilities and inputs.
Careful site management, biosecurity
measures and good animal husbandry
and agricultural management are used
to manage TasFoods’ risk of exposure
to disease, infection and contamination.
Significant disease outbreaks may result in
mass mortality of livestock or loss of plants,
having a significant impact on saleable
goods. Suppliers undergo an approval
process to ensure inputs comply with product
specifications. These are internally, and where
appropriate externally, audited and monitored
for compliance.
16 | TasFoods Annual Report 2019
Safety Risk
Ensuring our products are safe for
customers and our staff are safe at work.
Food safety and workplace health and safety
are risks that must be managed by TasFoods
at all times. We have built strong quality and
safety assurance systems which are externally
audited against relevant standards. These
systems are overseen by highly skilled staff
within a culture committed to food and
people safety. In addition, TasFoods holds
relevant insurances to further mitigate food
safety and workplace health and safety risks.
Climate Risk
Minimising the risks to the business from
a changing climate that is contributing to
increased extreme weather events.
TasFoods’ operations are geographically
dispersed across Northern Tasmania
which mitigates the impact of any one
climate-influenced event on its production
capabilities. Business continuity plans have
been established for each business operation
that include policies and procedures to
manage biological assets in extreme weather
events to minimise the risk of losses.
Investment in irrigation infrastructure across
the Tasmanian agricultural landscape
provides surety of crop for key inputs such
as grain and dairy. Drought or extreme
weather events in other regions of Australia
may impact commodity pricing for inputs to
TasFoods’ operations.
TasFoods Annual Report 2019 | 17
BOARD OF DIRECTORS
SHANE NOBLE EXECUTIVE CHAIRMAN
Shane has over 20 year’s experience operating
at either the CEO or Executive Chair level
in a diverse range of businesses across the
consumer foods and agribusiness sectors.
Appointed as a Non Executive Director on
30 November 2017, Shane became Executive
Chair as of 1 February 2018. In his most recent
prior role Shane was Executive Chairman and
CEO of Green’s Foods Holdings for 8 years.
ALEXANDER (SANDY) BEARD
NON-EXECUTIVE DIRECTOR
Sandy has over 20 year’s experience as a
Director and investor in assisting the growth
of public and private companies. He was
previously Managing Director and CEO of
CVC Limited and has extensive experience in
a broad range of businesses with particular
expertise in food manufacturing. He is
an experienced Board Director and has
played important roles in delivering value to
shareholders over the past 20 years across
a broad spectrum of industries and stages
of company growth. He was appointed as a
Non-Executive Director on 13 March 2018.
ROGER MCBAIN NON-EXECUTIVE DIRECTOR
Roger led a Tasmanian based Chartered
Accounting firm as a partner for 25 years
ultimately leading the successful merging
of the practice into Deloitte in 2010.
Continuing as a partner at Deloitte for a
further five years, Roger delivered strong
results to the Tasmanian practice, through
his extensive experience in a broad range
of businesses with particular expertise in
FMCG, agribusiness and mining services.
Roger currently pursues a number of
private business interests including a water
remediation technology company, property
development, tourism, hospitality and
retail investments.
JANE BENNETT MANAGING DIRECTOR & CEO
Jane has over 20 year’s of experience as
a senior executive in vertically integrated
dairy businesses in Tasmania and the
UK. She has extensive past experience in
regional provenance branding as Chair of
the Tasmanian Food Industry Council, Board
Member of the Brand Tasmania Council
and Nuffield Scholar studying Place of
Origin Branding. Jane has previously served
on the Boards of Australian Broadcasting
Corporation, CSIRO, and Food Innovation
Australia Ltd. She is a Fellow of the Australian
Institute of Company Directors. Jane was
named 2010 Tasmanian Telstra Business
Woman of the Year and 1997 Australian ABC
Rural Woman of the Year.
JANELLE O’REILLY COMPANY SECRETARY
& GENERAL COUNSEL
Janelle is an expert in commercial law and
corporate governance. She previously held
the positions of Company Secretary &
General Counsel for ASX listed companies
Crane Group Limited and Ruralco Holdings
Limited and was the General Manager of
Governance for Tasmanian State owned
Aurora Energy Pty Ltd.
18 | TasFoods Annual Report 2019
EXECUTIVE TEAM
JANE BENNETT MANAGING DIRECTOR & CEO
Jane has over 20 year’s of experience as
a senior executive in vertically integrated
dairy businesses in Tasmania and the
UK. She has extensive past experience in
regional provenance branding as Chair of
the Tasmanian Food Industry Council, Board
Member of the Brand Tasmania Council
and Nuffield Scholar studying Place of
Origin Branding. Jane has previously served
on the Boards of Australian Broadcasting
Corporation, CSIRO, and Food Innovation
Australia Ltd. She is a Fellow of the Australian
Institute of Company Directors. Jane was
named 2010 Tasmanian Telstra Business
Woman of the Year and 1997 Australian ABC
Rural Woman of the Year.
DONNA WILSON CHIEF FINANCIAL OFFICER
Donna is a qualified finance executive with
20 year’s of experience working within public
practice at KPMG, ASX listed companies
and at an executive level in statutory
government authorities. Donna holds a
Masters of Business Administration in
Corporate Governance and a Batchelor of
Commerce. She is a member of Chartered
Accountants Australia and New Zealand and
a graduate member of the Australian Institute
of Company Directors. Donna serves on the
Finance Committee of the Scotch Oakburn
College School Board.
DAVID BENNETT CHIEF SALES OFFICER
David has extensive experience in national
sales, distribution and marketing of fast
moving consumer goods, specialising in
premium dairy products. David holds a
Batchelor of Laws (Honours) and Batchelor
of Commerce and has completed a Graduate
Diploma in Legal Practice. He previously
served as Inaugural Chair of the North
West Tasmanian Tourism, Cradle to Coast
Tasting Trail.
CATHY ZEPPIERI CHIEF MARKETING OFFICER
Cathy Zeppieri joined Tas Foods Limited
in 2019. She has extensive marketing and
brand building experience coupled with a
business mindset and holds a Bachelor of
Business (Marketing). Her career includes
Unilever, Frito-Lay (PepsiCo), Ferrero,
Campbell-Arnotts, Green’s General Foods
and Masterpet (EBOS). Cathy has a passion
for building strong brand led business
strategies, collaborative team work, customer
partnership and insight driven innovation.
Cathy is a member of the HORT apple and
pear marketing strategic advisory board.
TasFoods Annual Report 2019 | 19
20 | TasFoods Annual Report 2019
DIRECTORS’ REPORTThe Directors of TasFoods Limited (the Company) present the financial report on the Company and its controlled entities (the Group) for the year ended 31 December 2019.In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:DIRECTORSShane NobleExecutive ChairShane joined the Board on 30 November 2017 and became Chair of the Board on 1 February 2018. Shane is a member of both the Audit and Risk Committee and the Nomination and Remuneration Committee.Experience and qualificationsShane has extensive experience in the consumer foods and agribusiness industries. In his most recent prior role, Shane was the Executive Chair and Chief Executive Officer of Green’s Foods Holdings which he successfully transformed through an integrated plan of profit improvement initiatives and strategic acquisitions.Other Directorships in listed entities:NilFormer Directorships in listed entities in the last 3 years:NilInterest in shares and options:3,968,055 Ordinary Shares5,000,000 Share Options exercisable at $0.20 before 30 November 2021Jane BennettChief Executive Officer (CEO) and Managing DirectorJane was promoted to the position of CEO and Director on 18 February 2016, having previously been the Company’s Head of Strategic Development and General Manager of Dairy.Jane was appointed to build TasFoods into a successful branded food business based on the unique attributes of Tasmania and its produce.Experience and qualificationsJane has extensive experience in the premium branded food industry in Tasmania, including as the former Managing Director of Ashgrove Cheese, one of Australia’s leading premium dairy brands. Jane also chaired the Tasmanian Food Industry Council for 8 years and was a board member of the Brand Tasmania Council for 10 years. Jane spent 4 years working as a non‑executive director in a diverse portfolio of companies including the CSIRO, Australian Broadcasting Corporation and Tasmanian Ports Corporation. Jane is a fellow of the Australian Institute of Company Directors.Other Directorships in listed entities:NilFormer Directorships in listed entities in the last 3 years:NilInterest in shares and options:2,877,466 Ordinary Shares Roger McBain
Non-Executive Director
Experience and qualifications
Roger was appointed to the Board as an Executive Director on
3 September 2015 and transitioned to a Non-Executive Director
role on 1 July 2016. He was reappointed to the Board at the
Annual General Meeting on 23 May 2019 and was considered an
independent Director from 1 July 2019. Roger is the Chair of the
Audit and Risk Committee and is a member of the Nomination
and Remuneration Committee.
Roger led a Tasmanian based Chartered Accounting firm as a
partner for 25 years ultimately leading the successful merging
of the practice into Deloitte in 2010 and continued as partner
in Deloitte Private until June 2015. With particular expertise in
FMCG, agribusiness and mining services, he delivered strong
results to the Tasmanian practice.
Roger currently pursues a number of private business interests
including a water remediation technology company, property
development, tourism, hospitality and retail investments. Roger is
currently the Chair of Evocra Pty Ltd an unlisted environmental and
water remediation company.
Other Directorships in listed entities:
Former Directorships in listed entities in the
last 3 years:
Nil
Nil
Interest in shares and options:
2,844,370 Ordinary Shares
Alexander (Sandy) Beard
Non-Executive Director
Experience and qualifications
Sandy was appointed to the Board as a Non-Executive Director
on 13 March 2018. Sandy is the Chair of the Nomination and
Remuneration Committee and a member of the Audit and
Risk Committee.
Sandy has over 20 years experience as a Director and investor
in assisting the growth of public and private companies. He
was previously the Managing Director and CEO of CVC Limited
and has extensive experience in a broad range of businesses
with particular expertise in food manufacturing. Sandy is an
experienced Board Director and has played important roles in
delivering value to shareholders over the past 20 years across a
broad spectrum of industries and stages of company growth.
Sandy is a Fellow of the Chartered Accountants Australia
and New Zealand and is a Member of the Institute of
Company Directors.
Other Directorships in listed entities:
Probiotec Limited (since 2018)
Former Directorships in listed entities in the
last 3 years:
Centrepoint Alliance Limited (since 2020)
CVC Limited (1999 – 2019)
Eildon Capital Limited (1999 – 2019)
US Residential Fund (2017 – 2019)
Cellnet Group Limited (2007 – 2017)
Lantern Hotel Group (2018 – 2019)
Interest in shares and options:
Nil
TasFoods Annual Report 2019 | 21
COMPANY SECRETARY
Janelle O’Reilly
Experience and qualifications
Company Secretary and General Counsel
Janelle joined TasFoods on 9 September 2016
Janelle is an expert in commercial law and corporate governance.
She previously held the positions of Company Secretary &
General Counsel for ASX listed companies Crane Group Limited
and Ruralco Holdings Limited and was the General Manager
of Governance for Tasmanian State-owned Aurora Energy Pty
Ltd where she was the responsible for legal services, company
secretariat, risk, compliance and information management. She is a
Director of the Tasmanian not for profit associations Colony 47 and
Women’s Health Education Network and a member of the Audit
and Risk Committee of the University of Tasmania. She is a fellow
of the Governance Institute of Australia and a Graduate Member
of the Australian Institute of Company Directors.
MEETING OF DIRECTORS
The following table sets out the number of meetings of the Company’s Directors during the year ended
31 December 2019 and the number of meetings attended by each Director during the financial year.
Board Meetings were held in addition to the Company’s Annual General Meeting held on 23 May 2019.
Board meeting
Audit and Risk
Committee
Nomination &
Remuneration
Committee
Held during
time on
Board
Attended
Held during
time on
Board
Attended
Held during
time on
Board
Attended
14
14
14
14
14
13#
14
14
5
5
5
5
5
4#
5
5
3
3
3
3
3
3
3
3
Director
S Noble
A Beard
J Bennett*
R McBain
All Directors were on the Board for the entire financial year.
# Mr Beard made an apology for one meeting due to a conflicting commitment.
* Ms Bennett is not a member of the Audit and Risk Committee or the Nomination and Remuneration Committee but attends the
meetings as an invitee.
PRINCIPAL ACTIVITIES
The principal activities of the Group are the processing, manufacture and sale of premium Tasmanian-made
food products.
OPERATING RESULTS AND FINANCIAL POSITION
A comprehensive review of operations is set out in Operating and Financial Review section of this Annual Report.
22 | TasFoods Annual Report 2019
DIRECTORS’ REPORT SIGNIFICANT CHANGE IN STATE OF AFFAIRS
In July 2019 TasFoods completed the acquisition of the milk processing assets and brands of the Betta Milk Co-operative
Society Ltd at a cost of $11.42 million. The acquisition expanded TasFoods existing dairy segment, providing access
to further processing capacity, operational efficiencies and reducing input costs through leveraging scale of its dairy
operations. It also provided access to a refrigerated distribution network across Tasmania.
The acquisition was funded from $3.9 million of cash reserves and the issue of 66,666,667 shares under a capital raising
that included a rights offer of 1 new fully paid ordinary share for every 3.099 existing fully paid share at $0.12 a share
raising $8.0 million (before costs). The capital raising was also completed in July 2019.
There were no other significant changes in the state of affairs of the Group during the financial year.
AFTER BALANCE DATE EVENTS
There are no matters or circumstances that have arisen since 31 December 2019, which have significantly affected the
Group’s operations, results or state of affairs, or may do so in future years.
REMUNERATION REPORT (AUDITED)
The Directors of TasFoods Limited present the Remuneration Report for the Company and its controlled entities for the
financial year ended 31 December 2019, prepared in accordance with the requirements of the Corporations Act 2001 and
its regulations.
This report outlines the remuneration arrangements in place for the Key Management Personnel (KMP) of the Group,
which comprises all Directors (executive and non-executive) and those other members of the TasFoods Executive who
have authority and responsibility for planning, directing and controlling the activities of the Group.
In 2019 the Company’s main activity related to developing Tasmanian premium branded food businesses (including
Nichols Poultry, Meander Valley Dairy, Pyengana Dairy, Shima Wasabi and Betta Milk), therefore, the details of KMP
remuneration for 2019 relate to those activities and the current remuneration structure.
This report has been prepared in accordance with section 300A of the Corporations Act 2001.
The Report has been set out as follows:
1. Key management personnel
2. Role of the Nomination and Remuneration Committee
3. Engagement of remuneration consultants
4. Remuneration strategy and framework
4.1. Executive remuneration schedule
4.2. Remuneration mix and linking pay to performance
4.3. 2019 fixed remuneration
4.4. 2019 short-term incentive arrangements
4.5. 2019 long-term incentive arrangements
4.6. KMPs 2019 short-term incentive arrangement results
4.7. Summary of 2019 short-term incentive payments to KMP
4.8. Company financial performance
5. Executive contracts
TasFoods Annual Report 2019 | 23
6. Non-executive directors’ remuneration structure
6.1. Current fee levels and fee pool
7. Restrictions on long-term incentive plan shares prior to vesting
8. Remuneration tables – Directors and KMP executives
1. KEY MANAGEMENT PERSONNEL
The term Key Management Personnel refers to those persons having the authority and responsibility for planning,
directing and controlling the activities of the Consolidated entity, directly or indirectly, and includes any director of the
Group (whether executive or otherwise).
The KMP of TasFoods for the year ended 31 December 2019 were:
Current Executive and Non‑executive Directors
Role
Shane Noble1
Roger McBain
Alexander Beard
Appointment Date
30 November 2017
Executive Chair
Non-executive Director
3 September 2015
Non-executive Director
13 March 2018
Current KMP Executives
Role
Appointment Date
Jane Bennett
Donna Wilson
Chief Executive Officer
3 September 2015
Chief Financial Officer
27 June 2016
Former KMP Executives
Role
End Date
Tom Woolley
Chief Operating Officer
12 September 2019
1. Shane Noble was a Non-Executive Director prior to his appointment to Executive Chair on 1 February 2018.
2.
ROLE OF THE NOMINATION AND REMUNERATION COMMITTEE
The Committee has the responsibility for proposing candidates for consideration by the Board to fill casual vacancies
or additions to the Board and for devising criteria for Board membership and for reviewing membership of the
Board, including:
● Assessment of necessary and desirable competencies of Board members;
● Review of Board succession plans to maintain an appropriate balance of skills, experience and expertise;
● As requested by the Board, evaluation of the Board’s performance and, as appropriate, developing and
implementing a plan for identifying, assessing and enhancing Director competencies; and
● Recommendations for the appointment or replacement of Directors.
Additional responsibilities of the Committee include reviewing and reporting to the Board on:
● Remuneration arrangements for the directors and senior executives of the Company (including, without limitation,
incentive, equity and other benefit plans and service contracts) to ensure remuneration suitably motivates executives
to pursue the success of the Company through the identification and profitable integration of growth opportunities;
● The review of the Audited Remuneration Report to be included in the annual report;
● Remuneration policies and practices for the Company generally;
● Superannuation arrangements;
● Board remuneration; and
● Such other matters as the Board may refer to the Committee from time to time.
24 | TasFoods Annual Report 2019
DIRECTORS’ REPORT 3.
ENGAGEMENT OF REMUNERATION CONSULTANTS
The Nomination and Remuneration Committee periodically engages independent external consultants to advise
and assess KMP remuneration arrangements. No advice was sought or provided by external advisors regarding the
remuneration structure during the year ended 31 December 2019.
During 2019 Mercer Consulting Australia Pty Ltd (Mercer) was engaged to provide the valuation of rights to senior
executives (issued under the existing LTI Plan), but did not provide any recommendations on the participants, quantum
for participants, or the hurdles.
4.
REMUNERATION STRATEGY AND FRAMEWORK
The remuneration strategy sets the direction for the remuneration framework and drives the design and application of
remuneration policies for executives of TasFoods (including KMP).
TasFoods remuneration strategy and framework aims to attract and retain the best available people to run and
manage TasFoods and align their interests with our shareholders. The Board is committed to having a remuneration
strategy and framework that rewards, motivates, and retains executives, to achieve our business objectives and deliver
shareholder returns.
TasFoods seeks to create alignment between the interests of its executives and shareholders. In the case of executives,
by providing a fixed remuneration component together with specific short-term and long-term incentives based on key
performance areas affecting TasFoods financial results.
In the case of non-executive directors and the Executive Chair, their remuneration does not contain performance-based
or ‘at risk’ components. Non-executive directors and the Executive Chair are paid fees and are encouraged to hold
shares in TasFoods. The Executive Chair also holds options in TasFoods.
Executive remuneration structure
4.1.
The performance of the Company depends upon the quality of its executives. To prosper, the Company must attract,
motivate and retain highly skilled executives. To that end, the Company embodies the following principles in its
remuneration framework:
● Provide competitive rewards to attract high calibre executives;
● Focus on creating sustained shareholder value;
● Place a portion of executive remuneration at risk by linking reward with the strategic goals and performance of
the Company;
● Differentiate individual rewards commensurate with contribution to overall results and according to individual
accountability, performance and potential; and
● Ensure total remuneration is competitive by market standards.
Executives’ total remuneration package may be comprised of the following elements:
● Total Fixed Remuneration (base salary and superannuation)
● At-Risk Remuneration:
– Short-Term Incentive (STI)
– Long-Term Incentive (LTI)
TasFoods Annual Report 2019 | 25
Total Fixed Remuneration (TFR)
● salary
● statutory superannuation
Performance Condition
Executive remuneration levels are
market-aligned by comparison to similar
roles in ASX-listed companies that
have comparable market capitalisation,
revenues, and financial metrics relevant
to the executive’s role, executive’s
knowledge, skills and experience, and
individual performance.
Short Term Incentive (STI)
Performance is measured against:
Annual incentive opportunity
delivered in cash
● Financial Group performance (i.e.
sales revenue, gross profit margin and
EBITDA); and
● Non-Financial KPIs (i.e. WH&S (LTIFR)).
The STI plan applies more broadly
beyond the KMP and KPI’s vary
depending on the executive’s level
and role.
Non-Financial KPIs also vary and depend
on the executive’s individual role and
responsibilities.
Details of the specific measures and
results for 2019 can be found in section
4.6 and section 4.7.
Long Term Incentive (LTI)
An award of rights with
performance assessed over 3 years
LTI awards for the 2019 grants were
provided under the LTIP approved by
shareholders at the 2016 AGM.
A three-year performance period
provides a reasonable period to align
reward with shareholder return and also
acts as a vehicle to help retain the KMP,
align the business planning cycle, and
provide sufficient time for the longer-term
performance to be achieved.
Due to the importance that the Board
places on an improvement in share price
a single measure based on share price
growth was chosen for the 2019 grant.
Remuneration Strategy/
Performance Link
Fixed remuneration is set to
attract, motivate, retain executives
to ensure they can deliver on
TasFoods business strategy and
contribute to the TasFoods ongoing
financial performance.
The STI plan is designed to
encourage and reward high
performance and for this reason it
places a significant proportion of
the executives’ remuneration at-
risk against targets linked to the
Company’s annual performance
objectives and therefore supports
the alignment between the interests
of the executive, TasFoods and
our shareholders.
A combination of financial and
non-financial KPIs are used because
the Board believes that there
should be a balance between short
term financial measures and more
strategic non-financial measures
which in the medium to longer term
will support the growth of TasFoods.
The Board believes the STI provides
the right measures and appropriately
challenging targets for participants.
The purpose of the LTI is to
focus the executives’ efforts on
the achievement of sustainable
long-term shareholder value creation
and the long term financial success
of TasFoods.
The provision of LTIP awards via
performance rights for ordinary
shares in TasFoods encourages
long-term share exposure for the
executives and, therefore, aligns the
long-term interests of executives
and shareholders.
26 | TasFoods Annual Report 2019
DIRECTORS’ REPORT 4.2. Remuneration mix and linking pay to performance
The Board recognises that each executive needs a significant portion of their remuneration to be at-risk and be linked to
TasFoods annual business objectives and actual performance.
Remuneration is linked to performance by:
● Requiring a proportion of the executives’ remuneration to vary with the short-term and long-term performance
of TasFoods;
● Setting clear expectations on target and stretch performance objectives required for STI payments to ensure quality
results; and
● Assessment of long-term performance through multiple measures to provide a complete picture of TasFoods
performance and the increase in shareholder value.
In addition, STI and LTI outcomes are not driven by a purely formulaic approach. The Nomination and Remuneration
Committee holds discretion to determine that awards are not to be provided or vested in circumstances where it would
be inappropriate or would provide unintended outcomes.
The relative weighting of fixed and variable components for target performance is set according to the scope of the
executive’s role. For the KMP the ‘at risk’ components for 2019 were as follows:
Current KMP Executives
Jane Bennett
Donna Wilson
Former KMP Executives
Tom Woolley
TFR
$262,800
$210,788
$229,000
Short Term
Incentive
(At‑Target)1
Short Term
Incentive
(Stretch)2
Long Term
Incentive
(Target
Opportunity)3
Long Term
Incentive
(Maximum
Opportunity)
30%
25%
25%
38%
31.3%
20%
17.5%
31.3%
17.5%
40%
35%
35%
1. The short-term incentive is the total payment at-target as a % of TFR
2. KMP executives’ STIs have a stretch component that is designed to encourage above at-target performance as a % of TFR.
3. The long-term incentive refers to the value, of any grant as a % of TFR.
Jane
Bennett
Donna
Wilson
Tom
Woolley
TFR – 67%
STI – 20%
LTI – 13%
TFR – 70%
STI – 18%
LTI – 12%
TFR – 70%
STI – 18%
LTI – 12%
TasFoods Annual Report 2019 | 27
2019 fixed remuneration
4.3.
TasFoods uses a total fixed remuneration (base salary and superannuation) for the purposes of calculating STI and/or
LTI amounts.
Details of KMP executives’ total fixed remuneration for the year ended 31 December 2019 (and 31 December 2018) can
be found in the ‘Remuneration Tables’ section of this report.
2019 short‑term incentive arrangements
4.4.
The TasFoods Short Term Incentive Plan (STIP) rewards the CEO and those executives reporting to the CEO (including
the KMP executives) for performance against a pre-determined scorecard of measures linked to TasFoods short-term
business performance (12 months) and individual performance. The specific performance measures may vary from year
to year depending on the business’s objectives but are chosen on the basis that they will increase financial performance,
market share and shareholder returns.
The relative weighting of fixed and variable components for target performance is set according to the scope of the
executive’s role.
The key performance indicators and other targets against which performance can be measured for determining the
proportion of ‘at-risk’ remuneration, are generally as follows:
● Financial – actual results compared to budgeted results for items including EBITDA, Sales Revenue, and Gross
Profit Margin.
● Business growth – NPAT, earnings per share, price earnings ratio, new order value, acquisitions and new customers.
● Business management – cash generation, capital management, number of days sales outstanding in debtors,
inventory turnover, cost/revenue ratios, and staff utilisation.
● Strategy – development, approval, implementation, and achievement.
● People – Workplace Health and Safety (LTIFR).
Performance for each measure is assessed on a range from Target to Stretch. Stretch is set by the Board for
each measure at a level that ensures maximum STI is payable only where performance has truly and substantially
exceeded expectations.
Details of the STI performance measures and targets for 2019 are set out in section 4.6 and section 4.7.
2019 long‑term incentive arrangements
4.5.
Executive remuneration is determined by the Board, having consideration to relevant market practices and the
circumstances of the Company on an annual basis. It is the view of the Board that it is in the interests of Shareholders
for selected Executives (the Participants) to receive part of their total remuneration package (TRP) in the form of at-risk
equity that will vest based on performance against indicators that are linked to Shareholder benefit (refer to details in
respect of the Vesting Conditions following) during a defined Measurement Period. This is also considered best practice
with regards to evident market practices. It should therefore be considered appropriate to provide some equity-based
remuneration to Executives of the Company instead of cash only.
The TasFoods Limited Rights Plan (TFLRP) was designed to form a significant component of at-risk remuneration and
to create alignment between Shareholder value creation and the remuneration of selected Executives. Grants under
the TFLRP will facilitate the Company providing appropriate, competitive and performance-linked remuneration to its
Executives. The Board seeks to ensure that grants to Executives are made at a level that will appropriately position their
TRPs in the market, in accordance with the Company’s remuneration policies.
The key elements of the LTI plan are:
Participants: the CEO, executive KMP, and provision for additional participants but noting that the terms of their grants
may be varied as considered appropriate by the Board.
Instrument: The TFLRP uses Rights which are an entitlement to the value of a Share which may be settled either in the
form of cash or a Share/Restricted Share (a Share which is subject to disposal restrictions). Generally, it is expected that
vested Rights will be satisfied in Restricted Shares.
28 | TasFoods Annual Report 2019
DIRECTORS’ REPORT Maximum number of Performance Rights: The maximum number of Performance Rights is calculated by multiplying
the total fixed remuneration (TFR) of the Participant at the beginning of the financial year by the maximum LTI % and
then dividing that figure by a 10-day volume weighted average share price (VWAP) related to the time of calculation. The
VWAP used to calculate the maximum number of performance rights for 2019 was $0.136 based on the share price over a
10-day period, between 25 January 2019 and 8 February 2019.
Measurement Period: The Measurement Period will be the three financial years from 1 January 2019 to
31 December 2021.
Vesting Conditions: In order for Performance Rights to vest, the Participant must remain employed by the Company
during the Measurement Period (except in the case of a “Good Leaver”) and the performance conditions must be
satisfied. The performance condition in relation to the 2019 grant of Performance Rights is Share Price growth, with the
vesting percentages (of the grant/stretch/maximum level of LTI) to be determined by the following scale:
Performance Level
TFL Share Price
% of the Grant/Stretch/Maximum Vesting
>Stretch
Stretch
>$0.43
$0.43
Between Target and Stretch
>$0.36, < $0.43
Target
$0.36
100%
100%
Pro-rata
50%
The targets for share price growth are based on a starting share price of $0.25 (being the share price at which investors
acquired their shares at the 2016 capital raising) which is a Compound Annual Growth Rate (CAGR) from 2016, the year
of investment, of 7.5% to achieve ‘target’ share price and a CAGR of 11.434% to achieve ‘stretch’ share price; noting that
the share price at the beginning of 2019 was lower than the 2016 capital raising price, using the VWAP of $0.136 as a
base, a CAGR of 38.3% over the years 2019 to 2021 is required to achieve ‘target’ share price and a CAGR of 46.77% is
required to achieve ‘stretch’ share price.
Share Price will be determined by a ten trading day VWAP ending on the date that is the end of the Measurement Period
(see above). Details of the performance rights allocated to KMP can be found in Table D of section 8 below.
Retesting: Retesting is not permitted under the proposed terms of the 2019 Invitations.
Exercise Price: No amount will be payable by the Participant to exercise a Performance Right that has vested.
Cessation of Employment: Unless the Board determines otherwise, if a TFLRP Participant ceases employment and is
classified as a “Bad Leaver” (dismissal for cause, termination for poor performance or otherwise as determined by the
Board), all unvested Performance Rights held by the Participant will lapse. Unless the Board determines otherwise, if a
Participant ceases employment for any other reason, including by reason of death, disability, redundancy or retirement
(“Good Leaver”), Performance Rights that were granted to the Participant during the financial year in which the
termination occurred will be forfeited in the same proportion as the remainder of the financial year bears to the full
year. All remaining Performance Rights for which Vesting Conditions have not been satisfied as at the date of cessation
of employment will then remain “on foot”, subject to the original Vesting Conditions. In the circumstances of any
termination, any Restricted Shares that flow from the exercising of the Rights would cease to be subject to disposal
restrictions unless otherwise specified in the Invitation.
4.6. KMPs 2019 short‑term incentive arrangement results
The measures and targets for the 2019 STI were set by the Board in March 2019 and were based on the priorities
for 2019. The key performance indicators were based upon stretch targets, with operating EBITDA set as a hurdle
requirement for payment of the 2019 STI.
The Nominations and Remuneration Committee had the option to review the 2019 STI targets after the acquisition of
Betta Milk with a view to adjusting targets to reflect the impact of the acquisition. This review was not undertaken, rather
the Nominations and Remuneration Committee determined to continue to assess KMP 2019 STI using measures and
targets established in March 2019 for existing operations (ie excluding Betta Milk performance).
TasFoods Annual Report 2019 | 29
The following table shows the Company’s 2019 STI performance measures, weightings and outcomes as applied to KMP.
Performance Measure Description
Weighting Outcome
Comment
Sales Revenue
Statutory gross sales revenue 20%
Gross Profit Margin
Operating EBITDA
WHS – Lost time injury
frequency rate (LTIFR)
20%
40%
20%
Statutory gross profit margin
excluding biological asset
movements
Statutory EBITDA adjusted
for acquisition costs, capital
raising costs and incentive
payments
LTIFR are the number of lost
time injuries within a given
year relative to the total
number of hours worked in
the same period multiplied
by 1 million
Target not
achieved
Target
achieved
Growth in sales revenue is key
to improved performance and
sustainability of the Group
The gross profit margin
is seen as a key outcome
of sales effectiveness and
operational efficiency
Target not
achieved
EBITDA is seen as a key factor
of trading performance and
operational sustainability.
Target not
achieved
Operating EBITDA is a hurdle
requirement for STI payments
Employees are a key asset to
TasFoods and their safety is
paramount. A reduction in the
LTIFR is a key outcome of the
WHS program
Summary of 2019 short‑term incentive payments to KMP
4.7.
Details of KMP executives’ STI payments for the year ended 31 December 2019, the proportion to be received for
at-target and stretch performance, achieved STI, and the amounts forfeited are shown in the table below.
FY19 STI Payment
Current KMP Executives
Jane Bennett
Donna Wilson
STI $
At‑Target
STI $
Stretch
STI $
Achieved
% At‑
Target STI
Achieved
% Stretch
STI
Achieved
% Stretch
STI
Forfeited
(78,840)
52,697
98,550
65,871
–
–
0%
0%
0%
0%
100%
100%
30 | TasFoods Annual Report 2019
DIRECTORS’ REPORT 4.8. Company financial performance
The following table shows the relationship between KMP executives’ at-risk remuneration and TasFoods overall
financial performance:
Financial Year Ended 31 December
2019
2018
2017
2016
Revenue ($000)
$51,105
$38,920
$31,112
$16,139
Net (loss)/profit before tax ($'000)
Net (loss)/profit after tax ($'000)
Share price at start of year
Share price at end of year
Share price growth
Dividends
Basic (loss)/earnings per share (cents)
Diluted (loss)/earnings per share (cents)
Average STI payout as a % at‑target for
eligible KMP executives
($3,202)
($2,459)
$0.135
$0.120
($2,273)
($1,358)
$0.190
$0.135
-11.11%
-28.95%
$0.00
(1.48)
(1.48)
$0.00
(0.67)
(0.67)
($6,639)
($6,808)
$0.180
$0.190
5.56%
$0.00
(4.14)
(4.14)
($2,611)
($2,577)
$0.410
$0.180
-56.10%
$0.00
(2.33)
(2.33)
2015
$2,476
($2,096)
($4,203)
$0.260
$0.410
57.69%
$0.09
(4.39)
(4.39)
0%
0%
20%
0%
100%
5.
EXECUTIVE CONTRACTS
The remuneration and other terms of employment for the executives are covered in formal employment contracts
that have no fixed terms. TasFoods may terminate an executive immediately for cause, in which case the executive
is not entitled to any payment other than the value of total fixed remuneration (and accrued entitlements) up to the
termination date.
Name
Notice
Period by
TasFoods
Notice
Period by
Executive
Termination/Redundancy Payment
KMP – Executive Director
Jane Bennett
6 months
6 months
The Company has discretion to make a payment in lieu of all or
part of the notice period.
If the CEO’s employment is terminated in circumstances where
there has been a fundamental change to her role, or if she is
made redundant then she is entitled to a severance payment
equivalent to 12 months’ salary.
KMP Executives
Donna Wilson
6 months
6 months
The Company has discretion to make a payment in lieu of all or
part of the notice period.
If the CFO’s employment is terminated in circumstances where
there has been a fundamental change to her role, or if she is
made redundant then she is entitled to a severance payment
equivalent to 12 months’ salary.
TasFoods Annual Report 2019 | 31
6. NON‑EXECUTIVE DIRECTORS’ REMUNERATION STRUCTURE
TasFoods remuneration policy for executive and non-executive directors aims to ensure that TasFoods can attract and
retain suitably qualified and experienced directors having regard to:
● the level of fees paid to executive and non-executive directors of other comparable Australian listed companies;
● the growing size and complexity of TasFoods operations;
● the responsibilities and work requirements of Board members; and
● the skills and diversity of Board members.
6.1. Current fee levels and pool
Within the aggregate amount of $400,000, non-executive and the Executive Chair’s directors’ fees are reviewed
periodically and determined by the Nomination and Remuneration Committee and the Board with reference to other
ASX-listed companies that have comparable market capitalisation.
A review of NED fees was undertaken in November 2017, based on the benchmark data of a market capitalisation
comparator group. Non-executive and the Executive Chair’s directors’ fees, effective 1 January 2019 (inclusive of
superannuation) were:
Director
Shane Noble (Executive Chair)1
Roger McBain
Alexander Beard2
Base Fee
$
250,000
45,000
45,000
Committee
Chair Fee
$
–
–
–
Total
$
250,000
45,000
45,000
1. Shane Noble as Executive Chair has a more significant role in the business than that of a Non-Executive Chair and in particular
spends approximately 2 days a week working with the CEO and Executive Team. Accordingly, the fee reflects the extra work that is
provided by Shane Noble to TasFoods.
2. Alexander (Sandy) Beard was appointed to the Board on 13 March 2018, Sandy elected not to be paid a Directors fee by TasFoods
Limited until 1 September 2019.
Directors may also be reimbursed for travel and other expenses incurred in attending to TasFoods affairs.
A non-executive director may be paid such additional or special remuneration as the Board decides is appropriate where
a director performs extra work or services. No fees were paid during 2019 as additional or special remuneration.
There are no retirement benefit schemes for directors other than statutory superannuation contributions, and executive
chair and non-executive directors’ remuneration must not include a commission on, or a percentage of, the profits or
income of TasFoods.
7.
RESTRICTIONS ON LTIP SHARES PRIOR TO VESTING
The Company prohibits executives from entering into arrangements to protect the value of unvested Long-Term
Incentive awards. This includes entering into contracts to hedge their exposure to performance rights over shares
granted as part of their remuneration package. Adherence to this policy is monitored informally on an annual basis where
such awards exist by the Nomination and Remuneration Committee requesting confirmation from each of the executives
that no such activity has occurred.
The Company treats compliance with this policy as a serious issue and takes appropriate measures to ensure
policy adherence.
32 | TasFoods Annual Report 2019
DIRECTORS’ REPORT 8.
REMUNERATION TABLES – DIRECTORS AND KMP EXECUTIVES
Details of the nature and amount of each element of the remuneration and shareholdings of the KMP of the
consolidated entity are set out in the following tables.
Table A: Remuneration for KMP for the year ended 31 December 2019
%
‑
f
r
e
P
e
c
n
a
m
r
o
d
e
t
a
e
R
l
$
l
a
t
o
T
$
‑
f
r
e
P
e
c
n
a
m
r
o
/
s
t
h
g
R
i
s
n
o
i
t
p
O
$
$
$
s
e
r
a
h
S
s
t
fi
e
n
e
b
n
o
i
t
a
u
n
n
a
s
t
n
e
m
s
t
fi
e
n
e
b
t
n
e
m
y
a
P
s
e
e
F
g
n
o
L
m
r
e
t
t
n
e
m
l
‑
y
o
p
m
e
‑
r
e
p
u
S
‑
l
p
m
E
n
i
e
e
y
o
‑
e
l
t
i
t
n
E
t
n
e
m
e
v
o
M
‑
n
o
N
y
r
a
t
e
n
o
m
I
T
S
/
y
r
a
a
S
l
d
e
s
a
B
e
r
a
h
S
s
t
n
e
m
y
a
P
l
t
n
e
m
y
o
p
m
e
‑
t
s
o
P
s
t
fi
e
n
e
B
s
t
fi
e
n
e
B
e
e
y
o
p
m
E
m
r
e
T
l
t
r
o
h
S
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
0
0
0
,
5
4
0
5
3
,
2
4
1
4
0
,
5
1
–
–
–
0
5
2
,
1
3
3
0
5
2
,
1
8
0
5
6
,
1
3
3
0
5
2
,
1
8
2
7
1
,
0
0
3
8
3
6
,
5
2
0
5
8
,
2
9
2
7
2
2
,
0
2
8
4
9
,
0
4
2
6
2
2
,
3
1
6
2
2
,
0
1
2
9
2
4
,
9
1
1
0
,
9
4
2
2
6
2
,
3
1
2
9
4
,
9
8
1
)
0
5
8
,
9
2
(
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
9
8
6
,
1
2
4
2
7
,
1
2
4
0
9
,
3
4
7
6
,
3
5
0
3
,
1
l
e
b
a
c
i
l
p
p
a
t
o
N
$
–
–
–
–
–
0
9
5
,
2
2
5
9
8
,
1
1
1
5
0
,
4
2
5
9
8
,
1
1
3
9
3
,
8
1
3
1
2
,
5
1
3
6
1
,
7
1
3
0
6
,
3
1
5
1
8
,
9
1
6
9
8
,
5
8
8
4
,
8
1
)
9
9
2
,
7
2
(
$
$
$
r
a
e
Y
s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
e
-
n
o
N
d
n
a
r
i
a
h
C
e
v
i
t
u
c
e
x
E
t
n
e
r
r
u
C
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5
7
6
,
8
2
2
8
1
0
2
1
1
3
,
8
2
2
9
1
0
2
l
e
b
o
N
e
n
a
h
S
6
9
0
,
1
4
9
1
0
2
i
n
a
B
c
M
r
e
g
o
R
6
7
6
,
8
3
8
1
0
2
6
3
7
,
3
1
9
1
0
2
8
1
0
2
r
e
d
n
a
x
e
A
l
)
1
(
d
r
a
e
B
9
3
0
,
0
1
2
8
1
0
2
0
5
0
,
0
4
2
9
1
0
2
t
t
e
n
n
e
B
e
n
a
J
s
e
v
i
t
u
c
e
x
E
P
M
K
t
n
e
r
r
u
C
7
7
6
,
6
3
2
8
1
0
2
1
3
0
,
0
7
1
8
1
0
2
5
1
1
,
4
9
1
9
1
0
2
n
o
s
l
i
W
a
n
n
o
D
2
5
1
,
8
2
2
9
1
0
2
)
2
(
y
e
l
l
o
o
W
m
o
T
s
e
v
i
t
u
c
e
x
E
P
M
K
r
e
m
r
o
F
9
1
0
2
r
e
b
m
e
t
p
e
S
1
l
i
t
n
u
e
e
f
s
r
o
t
c
e
r
i
i
D
a
d
a
p
e
b
o
t
l
t
o
n
d
e
t
c
e
e
d
n
a
8
1
0
2
h
c
r
a
M
3
1
n
o
d
r
a
o
B
e
h
t
o
t
d
e
t
n
o
p
p
a
i
s
a
w
d
r
a
e
B
r
e
d
n
a
x
e
A
l
)
1
(
9
1
0
2
r
e
b
m
e
t
p
e
S
2
1
n
o
d
e
n
g
i
s
e
r
y
e
l
l
o
o
W
m
o
T
)
2
(
TasFoods Annual Report 2019 | 33
Table B: Shareholdings
Shares held at
Start of Year
No.
Year
Issued as
Remuneration
Share
Buyback
No.
Net other
changes
Shares held at
End of Year
No.
Current Executive Chair and Non-executive Directors
Shane Noble
3,000,000
2019
Roger McBain
Alexander Beard
Current KMP Executives
Jane Bennett
Donna Wilson
Former KMP Executives
Tom Woolley
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
3,000,000
2,199,000
2,199,000
–
–
2,175,472
1,999,000
–
–
No.
599,000
599,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
No.
–
–
968,055
3,968,055
–
3,000,000
645,370
2,844,370
–
–
–
2,199,000
–
–
701,994
2,877,466
176,472
2,175,472
–
–
–
–
–
–
No.
N/A
599,000
Table C: Movements during 2019 in performance rights or options over shares in the Company held, directly, indirectly or
beneficially, by each KMP, including their related parties.
Performance
Rights or
Options held
at Start of Year
No.
Year
Granted as
Remuneration
Exercised
during
the
reporting
period
No.
Vested
and exer‑
cisable
No.
Performance
Rights or
Options held
at End of Year
No.
Forfeited
No.
Current Executive Chair and Non-executive Directors
Shane Noble
5,000,000
2019
–
–
–
–
772,941
618,353
542,468
383,250
–
–
–
–
–
–
–
–
–
–
–
–
5,000,000
5,000,000
– (2,500,000)
–
–
–
2,500,000
– (2,500,000)
2,775,913
–
–
–
–
–
–
4,502,972
1,509,718
967,250
Roger McBain
2018
2019
2018
Current KMP Executives
Jane Bennett
2019
Donna Wilson
2018
2019
2018
5,000,000
2,500,000
2,500,000
4,502,972
3,884,619
967,250
584,000
34 | TasFoods Annual Report 2019
DIRECTORS’ REPORT Performance
Rights or
Options held
at Start of Year
No.
Year
Granted as
Remuneration
Exercised
during
the
reporting
period
No.
Vested
and exer‑
cisable
No.
Performance
Rights or
Options held
at End of Year
No.
Forfeited
No.
Former Non-executive Directors
Robert Woolley
2019
9,500,000
2018
9,500,000
Antony Robinson 2019
1,500,000
2018
1,500,000
Former KMP Executives
Tom Woolley
2019
3,829,346
–
–
–
–
–
2018
3,378,464
450,882
–
–
–
–
–
–
– (9,500,000)
–
– (1,500,000)
–
9,500,000
–
–
–
1,500,000
– (3,829,346)
–
–
–
3,829,346
Table D: Share-based payments granted as remuneration to KMP during 2019.
Current KMP Executives
Jane Bennett
Year Grant Date
Number
Granted
2019
24‑Oct‑19
772,941
2018
26-Jul-18
618,353
Donna Wilson
2019
24‑Oct‑19
542,468
2018
26-Jul-18
383,250
Former KMP Executives
Tom Woolley
2019
2018
–
26-Jul-18
450,882
Value of
Performance
Rights or
Options
Granted
Number
Vested
Percentage
of Grant
Forfeited
32,464
27,208
22,784
16,863
–
19,839
–
–
–
–
–
–
0%
0%
0%
0%
0%
0%
Indemnity and Insurance of Officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith. During the
financial year, the Company paid a premium in respect of a contract to insure the directors and officers of the Company
against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of
the nature of liability and the amount of the premium.
Indemnity and Insurance of Auditor
The Company has not, during or since the financial year, indemnified or agreed to indemnify the auditor of the Company
or any related entity against a liability incurred by the auditor. During the financial year, the Company has not paid a
premium in respect of a contract to insure the auditor of the Company or any related entity.
Environmental Regulations
The Company is subject to usual Federal and State environmental regulations. TasFoods manufacturing sites are licenced
with Council and State authorities. The licences stipulate performance standards for all emissions (noise, air, odour, waste
water etc), from the sites as well as the frequency and method of assessment of emissions. The Company’s activities are
in full compliance with all prescribed environmental regulations.
TasFoods Annual Report 2019 | 35
Shares Options and Performance Rights
During the financial year the Company issued 1,653,571 performance rights and 1,500,000 share options. Further details
regarding the performance rights and options granted are contained within the Remuneration Report and in note 30.
Proceedings on Behalf of the Company
No person has applied for leave of the Court under Section 327 of the Corporations Act 2001 to bring proceedings
on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any
proceedings during the year.
Non‑Audit Services
The Group may decide to engage its auditor on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Group are important. Where auditors are engaged to perform non-audit services, the
Directors are satisfied that the provision of these non-audit services by the auditor (or by another person or firm on the
auditor’s behalf) is compatible with the general standard of independence for auditors imposed by the Corporations
Act 2001.
Details of amounts paid or payable to the Group’s auditor for audit and non-audit services provided during the year are
set out below.
Auditors of the parent entity:
Auditing the financial report
Other assurance services
2019
$
2018
$
168,175
123,900
–
3,876
168,175
127,776
Auditor’s Independence Declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is
included at page 38 of the Annual Report.
Auditor
PricewaterhouseCoopers continues in accordance with section 327 of the Corporations Act 2001. There are no officers of
the Company who are former audit partners of PricewaterhouseCoopers.
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors support the
principles of good corporate governance. The Group continued to follow best practice recommendations as set out
by the ASX Corporate Governance Council. Where the Group has not followed best practice for any recommendation,
explanation is given in the Corporate Governance Statement which is available on the Company’s website at http://www.
tasfoods.com.au/corporate-governance/
36 | TasFoods Annual Report 2019
DIRECTORS’ REPORT Rounding of Amounts
The amounts contained in this report and in the financial report have been rounded to the nearest thousand (where
rounding is applicable) under the option available to the company under ASIC Corporations (Rounding in Financial/
Directors’ Reports) Instrument 2016/191. The company is an entity to which the Class Order applies. Amounts in the
directors’ report have been rounded off in accordance with the Class Order to the nearest thousand dollars, or in certain
cases, to the nearest dollar.
Signed in accordance with a resolution of the Directors made pursuant to section 298(2) of the Corporations Act 2001.
On behalf of the Directors
Shane Noble
Executive Chair
28 February 2020
TasFoods Annual Report 2019 | 37
Auditor’s Independence Declaration
As lead auditor for the audit of TasFoods Limited for the year ended 31 December 2019, I declare that
to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of TasFoods Limited and the entities it controlled during the period.
PricewaterhouseCoopers
Alison Tait
Partner
Melbourne
28 February 2020
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
38 | TasFoods Annual Report 2019
AUDITOR’S INDEPENDENCE DECLARATION
Revenue from operations
Other income
Fair value adjustment of biological assets
Raw materials used
Employment and contractor expense
Freight
Occupancy costs
Depreciation and amortisation
Finance costs
Travel and accommodation
Legal and professional fees
Marketing and event expenses
Repairs and maintenance
Research and development
Investment expenses
Other expenses
Loss before income tax
Income tax benefit/(expense)
Net Loss after tax for the year from continuing operations
Net profit after tax for the year from discontinued operations
Net Loss after tax for the year
Other comprehensive income
Items that may be reclassified to profit or loss in the future:
Other comprehensive loss net of tax
Total comprehensive income
Net profit for the period attributable to:
Non-controlling interest
Owners of TasFoods Limited
Total comprehensive income for the year is attributable to:
Non-controlling interest
Owners of TasFoods Limited
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
Basic loss per share from continuing operations (cents per share)
Diluted loss per share from continuing operations (cents per share)
The above statement should be read in conjunction with the accompanying notes.
Note
6
6
8
4
4
4
4
2019
$’000
2018
$’000
50,690
38,391
416
1,169
(29,224)
(15,264)
(3,385)
(971)
(1,839)
(261)
(147)
(292)
(396)
(638)
(29)
(497)
529
291
(20,539)
(12,375)
(2,370)
(1,102)
(1,210)
(109)
(160)
(209)
(521)
(573)
(38)
(187)
(2,533)
(3,202)
(256)
(2,091)
(2,273)
915
(3,459)
(1,358)
–
–
(3,459)
(1,358)
–
–
(3,459)
(1,358)
–
(3,459)
(3,459)
–
(1,358)
(1,358)
–
(3,459)
(3,459)
(1.48)
(1.48)
(1.48)
(1.48)
–
(1,358)
(1,358)
(0.67)
(0.67)
(0.67)
(0.67)
TasFoods Annual Report 2019 | 39
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEfor the year ended 31 December 2019
Current Assets
Cash and cash equivalents
Trade and other receivables
Biological assets
Inventory
Prepayments
Total Current Assets
Non-Current Assets
Property, plant and equipment
Right of use assets
Intangible assets
Biological assets
Deferred tax assets
Total Non‑Current Assets
Total Assets
Current Liabilities
Trade and other payables
Borrowings
Lease Liabilities
Provisions
Total Current Liabilities
Non-Current Liabilities
Borrowings
Lease Liabilities
Provisions
Deferred tax liabilities
Total Non‑Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed Equity
Reserves
Accumulated Losses
Total Equity
Note
2019
$’000
2018
$’000
19
9
10
11
12a
12b
13
10
8
14
15
12b
16
15
12b
16
8
17
18
2,209
4,394
2,729
4,123
699
6,658
2,609
2,432
2,572
542
14,155
14,813
25,048
1,081
14,013
1,170
–
17,458
–
8,673
275
–
41,313
26,406
55,467
41,219
8,628
765
423
976
3,976
1,470
–
623
10,793
6,069
4,500
1,477
220
–
6,197
727
–
156
–
883
16,990
6,953
38,477
34,266
53,983
46,354
493
390
(15,998)
(12,477)
38,477
34,266
The above statement should be read in conjunction with the accompanying notes.
40 | TasFoods Annual Report 2019
CONSOLIDATED STATEMENT OF FINANCIAL POSITIONfor the year ended 31 December 2019
At 1 January 2018
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Issue of shares
Share issue costs
Share-based payment expense
As at 31 December 2018
At 1 January 2019
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Issue of shares
Share issue costs
Share-based payment expense
Adoption of AASB 16 Leases
As at 31 December 2019
Contributed
Equity
$’000
Reserves
$’000
Accumulated
Losses
$’000
Total
$’000
42,505
260
(11,119)
31,646
–
–
–
4,000
(151)
–
46,354
–
–
–
–
–
130
390
(1,358)
(1,358)
–
(1,358)
–
–
–
–
(1,358)
4,000
(151)
130
(12,477)
34,267
46,354
390
(12,477)
34,267
–
–
–
8,000
(372)
–
–
–
–
–
–
–
103
(3,459)
(3,459)
–
(3,459)
–
–
–
(63)
–
(3,459)
8,000
(372)
103
(63)
53,983
493
(15,998)
38,476
The above statement should be read in conjunction with the accompanying notes.
TasFoods Annual Report 2019 | 41
CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the year ended 31 December 2019
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Expenditure incurred in the pursuit of acquisitions and
investment opportunities
Income taxes received
Other
Note
2019
$’000
2018
$’000
49,533
(50,030)
39,052
(41,152)
60
(252)
(498)
–
282
148
(104)
(187)
0
266
Net cash used in operating activities
19
(904)
(1,976)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for other non-current assets
Proceeds from disposal of property, plant, and equipment
Net cash used in business combination
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Cost of issuing shares
Proceeds from borrowings
Principal elements of lease payments
Transaction costs related to borrowings
Net cash provided by financing activities
Net (decrease)/increase in cash held
(3,357)
(4,108)
(28)
20
(11,423)
–
11
–
(14,788)
(4,098)
8,000
(531)
4,645
(954)
(1)
4,000
(215)
152
(1,112)
–
11,159
2,825
(4,533)
(3,249)
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
5,977
1,444
9,226
5,977
19
The above statement should be read in conjunction with the accompanying notes.
42 | TasFoods Annual Report 2019
CONSOLIDATED STATEMENT OF CASH FLOWSfor the year ended 31 December 2019
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
for the year ended 31 December 2019
1. GENERAL INFORMATION
The consolidated financial statements and notes represent those of TasFoods Limited and its Controlled Entities.
TasFoods Limited is a company incorporated in Australia, and whose shares are publicly traded on the Australian
Securities Exchange (ASX).
The financial statements were authorised for issue on 28 February 2020 by the Directors of the Company.
All press releases and other information are available on our website www.tasfoods.com.au.
2.
SIGNIFICANT CHANGES IN THE CURRENT REPORTING PERIOD
In July 2019 TasFoods completed the acquisition of the milk processing assets and brands of the Betta Milk Co-operative
Society Ltd at a cost of $11.42 million. The acquisition expanded TasFoods existing dairy segment, providing access
to further processing capacity, operational efficiencies and reducing input costs through leveraging scale of its dairy
operations. It also provided access to a refrigerated distribution network across Tasmania.
The acquisition was funded from $3.9 million of cash reserves and the issue of 66,666,667 shares under a capital raising
that included a rights offer of 1 new fully paid ordinary share for every 3.099 existing fully paid share at $0.12 a share
raising $8.0 million (before costs). The capital raising was also completed in July 2019.
A detailed discussion of the Group’s financial performance and position is included in the Operating and Financial
Review on pages 10 to 17 at the start of this Annual Report.
There have been no changes in accounting policies since the previous financial report at 31 December 2018, with the
exception of those outlined in Note 31(h).
3.
SEGMENT INFORMATION
The operating segments are based upon the units identified in the operating reports reviewed by the Board and
executive management, and that are used to make strategic decisions, in conjunction with the quantitative thresholds
established by AASB 8 Operating Segments. As such, there are three identifiable and reportable segments each of which
are outlined below:
● The Dairy segment incorporates the Meander Valley Dairy, Pyengana Dairy and Betta Milk (Van Diemen’s Land Dairy)
businesses, the assets of which were acquired in September 2015, October 2017 and July 2019, respectively. In
addition, the Dairy segment includes goat farming operations which were acquired in June 2016. The Dairy segment
primarily derives revenue from dairy processing activities including the manufacture of premium fresh milk, cheese,
cream and butter products. These products are sold under the Meander Valley Dairy, Pyengana Dairy, Real Milk,
Robur Farm Dairy, Betta Milk and Tassie Taste brands.
● The Poultry segment incorporates the net assets and business operations of Nichols Poultry Pty Ltd, which was
acquired in June 2016. Revenue is primarily derived by the poultry segment from the sale of poultry meat products
sold under the Nichols Poultry, Nichols Ethical Free Range and Nichols Kitchen brands.
● The Corporate and Other segment, which comprise:
– Corporate costs that are not directly attributable to operational business units, including Shared Service teams,
which provide administrative support to the operational production units in the areas of financial management,
human resources, sales, marketing, brand management, route to market, quality assurance and food safety, and
work health and safety; and
– The net assets and business operations of Shima Wasabi Pty Ltd, which were acquired in June 2016.
Management measures the performance of the segments identified at the ‘net profit before tax’ level.
TasFoods Annual Report 2019 | 43
Consolidated – 2019
Revenue
Total segment sales revenue
Other income
Segment profit/(loss)
Profit after tax from discontinued operation
Loss before income tax expense
Income tax (expense)/benefit
Loss after income tax expense
Assets
Segment assets
Unallocated assets from continuing operations:
Total Assets
Total assets include:
Dairy
$’000
Poultry
$’000
Corporate
and Other
$’000
Total
$’000
15,375
34,942
40
234
15,415
35,176
373
141
514
227
1,211
(4,640)
50,690
416
51,105
(3,203)
–
(3,202)
(256)
(3,459)
24,488
25,622
5,358
55,467
–
55,467
Goodwill on acquisition of non-current assets
3,820
3,137
–
6,957
Liabilities
Segment liabilities
Deferred tax liability/(asset)
Total liabilities
5,370
10,130
1,490
16,990
–
16,990
44 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 20193. SEGMENT INFORMATION (CONT’D)
Consolidated – 2018
Revenue
Total segment sales revenue
Other income
Segment profit/(loss)
Loss before income tax expense
Income tax benefit
Loss after income tax expense
Assets
Segment assets
Unallocated assets from continuing operations:
Total Assets
Total assets include:
Dairy
$’000
Poultry
$’000
Corporate
and Other
$’000
Total
$’000
5,961
122
6,083
(521)
32,103
244
32,347
2,708
327
163
490
(4,460)
38,391
529
38,920
(2,274)
(2,273)
915
(1,359)
8,221
23,290
9,709
41,220
41,220
Goodwill on acquisition of non-current assets
2,397
3,137
–
5,534
Liabilities
Segment liabilities
Deferred tax liability/(asset)
Total liabilities
1,506
4,321
1,126
6,953
–
6,953
SHAREHOLDER RETURNS
4.
EARNINGS PER SHARE
Basic loss per share
Diluted loss per share
Basic loss per share from continuing operations
Diluted loss per share from continuing operations
Basic (loss)/earnings per share from discontinued operations
Diluted (loss)/earnings per share from discontinued operations
Net (loss)/profit from continuing operations attributable to the owners of TasFoods
Limited used in calculation of basic and diluted earnings per share for:
All operations
Continuing operations
2019
Cents
2018
Cents
(1.48)
(1.48)
(1.48)
(1.48)
–
–
(0.67)
(0.67)
(0.67)
(0.67)
–
–
2019
$’000
2018
$’000
(3,459)
(3,459)
(1,358)
(1,358)
TasFoods Annual Report 2019 | 45
Basic
Weighted average number of ordinary shares outstanding during the period used in the
calculation of basic earnings per share
Diluted
Weighted average number of ordinary shares and convertible redeemable preference
shares outstanding and performance rights during the period used in the calculation of
basic earnings per share
2019
Number
2018
Number
233,882,763
203,745,777
233,882,763
203,745,777
Information Concerning the Classification of Securities
Potential ordinary shares:
a) There were no options (other than those referred to in note 30) or other forms of potential shares on issue at
31 December 2019 (31 December 2018: Nil).
b) Options granted (as referred to in note 30) are not included in the calculation of diluted earnings per share as the
share price as at 31 December 2019 was lower than the exercise price. If the share price were to increase above the
exercise price, any options exercised would have a dilutive impact on the earnings per share.
Recognition and measurement
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs
of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of
ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
● Costs of servicing equity (other than dividends) and preference share dividends;
● The after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
● Other non-discretionary changes in revenues or expenses during the year that would result from the dilution of
potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary
shares, adjusted for any bonus element.
5. DIVIDENDS TO SHAREHOLDERS
No dividends have been paid or declared during the year ended 31 December 2019 (31 December 2018: Nil).
46 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 20194. EARNINGS PER SHARE (CONT’D) PROFIT AND LOSS INFORMATION
6.
REVENUE
Revenue from continuing operations
Sales revenue
Other income
Interest received
Sundry income
2019
$’000
2018
$’000
50,690
38,391
53
363
416
156
373
529
Recognition and measurement
Sales revenue
Accounting for wholesale sales of dairy, poultry and wasabi goods
The sale of dairy, poultry and wasabi goods is measured at the fair value of consideration received net of any trade
discounts and volume rebates allowed.
The sale of dairy, poultry and wasabi goods represents a single performance obligation and accordingly, revenue is
recognised in respect of the sale of these goods at the point in time when control over the corresponding goods and
services is transferred to the customer (i.e. at a point in time for sale of goods when the goods are delivered to the
customer or transferred to the freight forwarder).
Delivery occurs when the products have been shipped to the customer, the risks of obsolescence and loss have been
transferred to the customer, and either the customer has accepted the products, the acceptance provisions have lapsed,
or the group has objective evidence that all criteria for acceptance have been satisfied.
While such arrangements are rare, if an arrangement with a wholesale customer includes multiple performance
obligations, the total revenues are allocated to the separate elements of the contract, at the appropriate transaction
price. In such cases, revenue will be recognised once each performance obligation is met.
Accounting for retail and online sales
Revenue is recognised when the transaction is processed at the point of sale, whether that is at the register in-store or via
an on-line checkout process.
Accounting for bill and hold transactions
For bill and hold sales transactions, control is deemed to pass and as such revenue recognised when (a) the customer has
accepted delivery of the goods; or (b) the customer’s freight forwarder has taken possession of the goods.
All revenue is stated net of the amount of goods and services tax (GST), where applicable.
Interest revenue
Interest revenue is recognised on a proportional basis using the effective interest rate method.
TasFoods Annual Report 2019 | 47
7.
EXPENSES
Profit before income tax expense includes the following specific expenses:
Employee benefits expense:
Salaries and wages
Temporary employees
Share based payments
Superannuation expense (defined contribution)
Total employee benefits
Other employment expenses
Total employment and contractor expense
Rental expenses related to operating leases
Investment expense
2019
$’000
2018
$’000
13,845
10,255
280
103
1,036
15,264
–
137
130
922
11,444
932
15,264
12,375
–
497
203
187
Investment expense arises from costs relating to the identification of, and pursuit of investment and acquisition
opportunities. This includes non-refundable contractual payments to secure rights to exclusive periods of negotiation
with third parties and associated costs.
48 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 2019
8.
INCOME TAX
(a) Income tax recognised in profit or loss:
Tax expense/(benefit) comprises:
Current tax (benefit)/expense
Deferred tax movements
Deferred income tax (benefit)/expense included in income tax expense comprises:
(Increase)/decrease in deferred tax assets
Increase/(decrease) in deferred tax liabilities
Reconciliation of income tax expense to proforma facie tax on accounting profit:
Loss before income tax expense
Tax benefit at Australian tax rate of 30% (2018: 30%)
Tax effect of amounts which are not deductible in calculating taxable income
Derecognition/(recognition) of prior year tax losses
Deferred taxes not recognised
Income tax (benefit)/expense for the period
(b) Income tax benefit recognised directly in equity during the period
Deferred tax arising from share issue costs
2019
$’000
2018
$’000
–
256
256
(179)
436
256
–
(915)
(915)
(1,062)
146
(915)
(3,202)
(2,273)
(961)
36
1,181
256
–
256
(159)
(159)
(682)
61
(294)
(915)
–
(915)
(65)
(65)
TasFoods Annual Report 2019 | 49
Acquired
as part of
a Business
Combination
$’000
Opening
Balance
$’000
Charged to
Income
$’000
Charged to
Equity
$’000
Closing
Balance
$’000
(c) Deferred tax
Gross deferred tax assets:
Provisions
Trade and other payables
Share issue expenses
Trade and other receivables
Property, plant and equipment
Intangibles
Tax Losses
Interest bearing liabilities
Gross deferred tax liabilities:
Biological assets
Inventory
Intangibles
Other
Net deferred tax asset/(liability)
258
30
277
8
8
7
1,176
–
1,764
(648)
(232)
(873)
(11)
(1,764)
–
97
97
–
97
20
11
(67)
(2)
(319)
15
169
351
179
(347)
(81)
(7)
(436)
(256)
(d) Tax losses
Unused tax losses for which no deferred tax asset has been recognised:
Capital losses
Revenue losses
Potential tax benefit at 30%
159
375
41
370
6
(311)
22
1,345
351
159
2,200
(995)
(313)
(873)
(18)
–
159
(2,200)
–
2019
$’000
2018
$’000
–
27,173
27,173
8,152
–
19,315
19,315
5,795
Unused tax losses
The Group has recognised tax losses in the year ended 31 December 2019 only to the extent of the Groups taxable
temporary differences. After recognition of these losses the Group had a further $27.173 million of carry forward tax
losses for which no deferred tax asset has been recognised (31 December 2018: $19.315 million). The losses relate to
both Group’s current operations and also losses incurred by the loyalty, rewards and payments business previously
operated by the Group. Prior to recognising the carry forward tax losses transferred into and incurred by the loyalty,
rewards and payments business, the Group will assess the application of the continuity of ownership and continuity of
business tests.
50 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 20198. INCOME TAX (CONT’D) Recognition and measurement
Current income tax expense or revenue is the tax payable on the current year’s taxable income based on the applicable
income tax rate adjusted by changes in deferred tax assets and liabilities.
A balance sheet approach is adopted, under which deferred tax assets and liabilities are recognised for temporary
differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No
deferred tax asset or liability is recognised if it arose in a transaction, other than a business combination, that at the time
of the transaction did not affect either accounting or taxable profit or loss.
Deferred tax assets are recognised for temporary differences and unused tax losses only when it is probable that future
taxable amounts will be available to utilise those temporary differences and losses. Current and deferred tax balances
attributable to amounts recognised directly in equity are also recognised directly in equity.
Tax Consolidation
The Company and its wholly-owned Australian controlled entities have formed an income tax consolidated group
effective 1 July 2010 under tax consolidation legislation. Each entity in the Group recognises its own deferred tax assets
and liabilities arising from temporary differences. Such taxes are measured using the ‘stand-alone taxpayer’ approach.
Current tax liabilities or assets and deferred tax assets arising from unused tax losses and tax credits in the controlled
entities are immediately transferred to the head entity which is the Parent entity. No tax sharing or funding arrangements
are presently in place.
CURRENT ASSETS
9.
TRADE AND OTHER RECEIVABLES
Trade Receivables
Loss allowance
Other receivables
Loss Allowance
Movements in the loss allowance were as follows:
Carrying value at the beginning of the year
Increase/(decrease) in loss allowance recognised
Receivables written off as uncollectable
Unused amount reversed
Carrying value at the end of the year
Trade receivables past due but not impaired
Under one month
One to three months
Over three months
2019
$’000
3,907
(20)
508
2018
$’000
2,265
(26)
371
4,394
2,609
2019
$’000
2018
$’000
26
(7)
–
–
20
462
38
36
536
20
14
(8)
–
26
384
22
24
430
TasFoods Annual Report 2019 | 51
Recognition and measurement
Trade receivables include amounts due from customers for goods sold and services performed in the ordinary course
of business. Receivables expected to be collected within 12 months of the end of the reporting period are classified as
current assets. All other receivables are classified as non-current assets.
Trade receivables are initially recognised at fair value and subsequently recognised less any expected loss allowance.
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected
loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have been grouped
based on shared credit risk characteristics and the number of days outstanding. The expected loss rates applied are
based upon the payment sales profiles over a 12 month period and the historical credit losses experienced in this period.
Historical loss rates are adjusted to reflect current and forward looking information including macroeconomic factors
affecting the ability of the customers to settle the receivables.
The loss allowance is determined as follows for trade receivables:
31 December 2019
Expected Loss Rate
Trade Receivables Gross Carrying Amount
($'000)
Loss Allowance ($'000)
Current
30 days
60 days
90+ days
Total
0%
0%
3,369
–
462
–
0%
38
–
51%
38
19
3,907
19
31 December 2018
Expected Loss Rate
Trade Receivables Gross Carrying Amount
($'000)
Loss Allowance ($'000)
Current
30 days
60 days
90+ days
Total
0%
0%
1,808
–
381
–
0%
22
–
51%
51
26
2,263
26
The amount of the impairment loss is recognised in the consolidated statement of profit and loss within other
expenses. When a trade receivable for which an impairment allowance has been recognised becomes uncollectable in a
subsequent period, it is written off against the provision account. Subsequent recoveries of amounts previously written
off are credited against other expenses.
Fair values of trade and other receivables
Due to the short-term nature of the current receivables, their carrying amount is approximated to fair value.
Credit risk
The Group has no significant concentration of credit risk with respect to any single counterparty or group of
counterparties other than those receivables specifically provided for within the loss allowance. The main source of credit
risk to the Group is considered to relate to the class of assets described as ‘trade and other receivables’.
The above table details the Group’s trade and other receivables exposed to credit risk (prior to collateral and other credit
enhancements) with ageing analysis and impairment provided thereon. Amounts are considered as ‘past due’ when the
debt has not been settled within the terms and conditions agreed between the Group and the customer or counterparty
to the transaction. Receivables that are past due are assessed for impairment by ascertaining the solvency of the debtors
and are provided for where there are specific circumstances that the debt may not be fully repaid to the Group.
The balances of receivables that remain within initial trading terms are considered to be of low credit risk.
52 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 20199. TRADE AND OTHER RECEIVABLES (CONT’D) 10. BIOLOGICAL ASSETS
Balance as at 1 January 2018
Increases due to purchases and production
Decreases due to sales/processing/mortality (i)
Movement in fair value as a result of physical and/or price
changes (ii)
Balance as at 31 December 2018
Current
Non-current
Balance as at 1 January 2019
Increases due to purchases and production
Decreases due to sales/processing/mortality (i)
Movement in fair value as a result of physical and/or price
changes (ii)
Balance as at 31 December 2019
Current
Non-current
Poultry
$’000
957
1,312
(957)
134
1,446
1,446
–
1,446
1,446
1,724
(1,446)
512
2,235
2,235
–
2,235
Goats
$’000
Wasabi
Plants
$’000
330
8
(64)
10
284
11
273
284
284
–
(68)
37
253
–
253
253
973
2
(144)
147
977
976
2
977
977
9
(267)
692
1,412
494
918
Total
$’000
2,260
1,322
(1,165)
291
2,708
2,432
275
2,708
2,708
1,733
(1,781)
1,241
3,900
2,729
1,170
1,412
3,900
(i) includes biological assets reclassified as inventory at the point of harvest and/or processing.
(ii) includes physical changes as a result of biological transformation such as growth, degeneration and procreation.
Recognition and Measurement
Biological assets of the Group include poultry, goats and wasabi plants and are measured at fair value less costs to
sell in accordance with AASB 141 Agriculture. Where fair value cannot be reliably measured or little or no biological
transformation has taken place biological assets are measured at cost less impairment losses.
Market prices are derived from observable market prices and achieved sales prices and are reduced for costs associated
with bringing the finished product to market including incremental selling costs and harvesting and production costs to
process the biological asset into a saleable form.
The change in estimated fair value is charged to the income statement on a separate line item as fair value adjustment of
biological assets. This line item includes movements in fair value as a result of both physical and price changes.
Biological assets are reclassified as inventory at the point of harvesting or processing.
As at 31 December 2019, the Group held 531,280 live poultry (2018: 465,788), 585 goats (2018: 764) and 6,576 mature
wasabi plants (2018: 8,750) and 549 immature wasabi plants (2018: 704) that are less than 12 months of age and not
suitable for harvest.
TasFoods Annual Report 2019 | 53
Poultry
For live poultry with an estimated dressed weight of below 1kg (which is consistent with independent poultry
performance guidelines for meat chicken) the carrying amount is a reasonable approximation of fair value. Live poultry
with an estimated dressed weight of greater than 1kg are measured at fair value less costs to sell and the measurement is
categorised into Level 2 in the fair value hierarchy.
The valuation is completed at the whole dressed bird stage for each batch of live poultry as there is no effective market
for live poultry produced by the Group. The valuation methodology takes into consideration estimated growth rates,
feed intake and carcass yield per independent performance guidelines.
Based on market prices and weights utilised at 31 December 2019, with all other variables held constant, the Group’s
net profit/(loss) for the period would have been impacted by $103,334 (2018: $57,564) by a pricing or dressed weight
increase/decrease of 5%.
Goats
Goats are measured at fair value less costs to sell, based on market prices of similar age, breed and genetic merit. As
these prices are observable, they are deemed to be Level 2 in the fair value hierarchy.
The value of goats, comprised of mature does, weaned doelings and breeding bucks, is determined by independent
valuation with reference to prices received from sales of milking goat stock similar to the Group’s herd with direct
references made to recent sales evidence in relevant dairy goat markets. Prices of the Group’s goats are reflective of
current market conditions.
Wasabi Plants
Wasabi plants which are greater than twelve months of age are considered mature and ready for harvest, as such
plants which are greater than twelve months of age are disclosed as a current asset. At 31 December 2019 the Group’s
wasabi plants were an average of 24 months of age (31 December 2018: 23 months) and at various stages of growth
post-harvest, as such wasabi plants are valued at fair value less estimated point of sale costs. The valuation methodology
is deemed to be Level 3 in the fair value hierarchy as it contains unobservable inputs due to the rare nature of the crop.
The fair value of the wasabi plants is determined using the estimated yield per plant in kilograms which has been
determined through collection of historical growth rate and harvest data for mature wasabi plants within the crop.
Notable variations and fluctuations in the fair value of wasabi plants may occur as a result of factors including; plant
variety, the timing of cultivation, plant maturity, timing of harvest, seasonal growth patterns and weather conditions.
Based on market prices and estimated yields utilised within the valuation methodology at 31 December 2019,
with all other variables held constant, the Group’s net profit/(loss) for the period would have been impacted by
$93,585 (31 December 2018: $72,682) by a price increase/decrease of 5%.
Fair Value Measurement
Recurring fair value measurements
– Poultry
– Goats
– Wasabi plants
Total biological assets recognised at fair value
2019
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
–
–
–
–
2,235
253
–
2,488
–
–
1,412
1,412
2,235
253
1,412
3,900
54 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 201910. BIOLOGICAL ASSETS (CONT’D) Recurring fair value measurements
– Poultry
– Goats
– Wasabi plants
Total biological assets recognised at fair value
2018
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
–
–
–
–
1,446
284
–
1,731
–
–
977
977
1,446
284
977
2,708
Fair value measurements using significant unobservable inputs
The following table summarises the quantitative information about the significant unobservable inputs used in Level 3
fair value measurements:
Description
Wasabi plant biological assets at fair value:
Unobservable inputs
Relationship to unobservable inputs to fair value
Average yield per wasabi plant used in fair value
measurement: 0.46 kilograms (31 December 2018:
0.58 kilograms)
An increase/decrease in yield would result in a direct
increase/decrease in the fair value
11.
INVENTORY
Finished goods
Raw materials and packaging
Other
2019
$’000
2,025
1,550
548
2018
$’000
1,343
591
637
4,123
2,572
Recognition and measurement
Inventories are measured at the lower of cost and net realisable value and are assigned on a weighted average cost
basis. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and costs to sell.
Inventories are accounted for in the following manner:
● Finished goods: cost includes direct materials, direct labour and an appropriate proportion of manufacturing variable
and fixed overheads based on normal operating capacity but excluding any borrowing costs.
● Biological assets reclassified as inventory: the initial cost assigned to agricultural produce is the fair value less costs to
sell at the point of harvesting or processing in accordance with AASB 141.
● Raw materials and packaging: purchase cost.
TasFoods Annual Report 2019 | 55
NON‑CURRENT ASSETS
12. PROPERTY, PLANT AND EQUIPMENT
a.
Property, Plant and Equipment
Land and buildings – at cost
Less accumulated depreciation
Plant and equipment – at cost
Less accumulated depreciation
Office equipment – at cost
Less accumulated depreciation
Motor vehicles – at cost
Less accumulated depreciation
Capital Work in Progress – at cost
Total Property, Plant and Equipment
2019
$’000
13,334
(747)
12,586
14,751
(3,039)
11,712
221
(153)
68
787
(183)
603
78
2018
$’000
8,243
(475)
7,769
8,812
(1,781)
7,031
181
(131)
50
483
(96)
387
2,220
25,048
17,458
Reconciliations
Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the
financial year are set out below:
Land and
buildings
$’000
Plant and
equipment
$’000
Office
equipment
$’000
Motor
vehicles
$’000
Capital
work in
progress
$’000
Total
$’000
Carrying value
As at 1 January 2018
Additions
Capitalisation to asset categories
Depreciation expense
7,879
111
–
(221)
6,650
1,274
–
(892)
Balance as at 31 December 2018
7,769
7,031
As at 1 January 2019
Additions
Additions as a part of a
business combination
Capitalisation to asset categories
Disposals
7,769
2,328
7,031
3,095
2,760
2,885
–
–
–
(30)
Depreciation expense
(264)
(1,272)
Balance as at 31 December 2019
12,593
11,710
56 | TasFoods Annual Report 2019
77
8
–
(35)
50
50
4
36
–
–
(21)
69
162
287
–
(62)
177
14,945
2,220
(177)
–
3,899
(177)
(1,210)
387
2,220
17,458
387
89
214
–
–
(92)
598
2,220
17,458
–
–
(2,142)
–
–
5,517
5,894
(2,142)
(30)
(1,649)
78
25,048
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 2019
Recognition and measurement
Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with
the item will flow to the Group and that the cost of the item can be measured reliably.
Repairs and maintenance expenditure is charged to the profit and loss during the period in which the expenditure
is incurred.
The average depreciation rates for each class of fixed assets are:
Class of fixed asset
Buildings
Leasehold improvements
Plant and equipment
Office equipment
Motor vehicles
Average
depreciation
rates
2-5%
10-12%
8-20%
40-50%
15-20%
The assets’ residual values and useful lives are reviewed and adjusted if appropriate at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
Assets are derecognised when sold or replaced with gains and losses on disposals determined by comparing
proceeds with the carrying amount. These gains or losses are recognised in the consolidated income statement when
the item is derecognised.
b.
Right of Use Assets and Lease Liabilities
Right of Use Assets
Recognised right-of-use assets relate to the following types of assets:
31 December
2019
$’000
1 January
2019
$’000
Land and buildings
Motor vehicles
Total right‑of‑use assets
1,075
5
1,081
Set out below are the carrying amounts of the Group’s right-of-use assets and the movements during the period:
Carrying value
Balance at 1 January
Additions
Depreciation expense
Net carrying amount at 31 December 2019
Land and
buildings
$’000
Motor
vehicles
$’000
1,224
21
(170)
1,075
13
–
(8)
5
1,224
13
1,238
Total
$’000
1,238
21
(178)
1,081
TasFoods Annual Report 2019 | 57
Lease Liabilities
Current
Non-Current
31 December
2019
$’000
1 January
2019
$’000
423
1,477
1,901
995
1,822
2,817
In the previous year the Group only recognised lease assets and lease liabilities in relation to leases that were classified
as ‘finance leases’ under AASB 117 Leases. Lease liabilities recognised under AASB 117 were recorded as part of the
Group’s borrowings. For adjustments recognised on adoption of AASB 16 on 1 January 2019, refer to note 31(h).
Statutory EBITDA for 2019 includes a $0.21 million benefit relating to AASB 16 with minimal impact to EBIT, Net Profit
Before Tax and Net Profit After Tax.
Recognition and measurement
The Group leases property and motor vehicles. Rental contracts are typically made for periods of 24 months to 5 years
but may have options to extend as described below.
Contracts made contain both lease and non-lease components. The Group allocated consideration in the contract to the
lease and non-lease components based on their relative stand-alone prices. However, for leases of real estate for which
the Group is a lessee, it has elected not to separate lease and non-lease components, instead accounts for these as a
single lease component.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants other than security interests in the leased assets that are held by the lessor.
Leased assets may not be used as security for borrowing purposes.
Until the 2018 financial year, leases of property, plant and equipment were classified as either finance leases or operating
leases. From 1 January 2019, leases are recognised as a right-of-use asset and a corresponding lease liability at the date
at which the leased asset is available for use by the Group.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
● Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
● Variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the
commencement date;
● Amounts expected to be payable by the Group under residual guarantees;
● The exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
● Payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of
the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being
the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to
the right-of-use asset in a similar economic environment with similar terms, security and conditions.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit and loss over the
lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability each period.
Right-of-use assets are measured at cost comprising the following:
58 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 201912. PROPERTY, PLANT AND EQUIPMENT (CONT’D) ● The amount of the initial measurement of the lease liability;
● Any lease payments made at or before the commencement date less any lease incentives received;
● Any initial indirect costs; and
● Restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a
straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated
over the underlying asset’s life.
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 comprise
IT-equipment and small items of office furniture.
Extension and termination options are included in a number of property leases of the Group. These are used to
maximise operational flexibility in terms of managing the assets used in the Group’s operations. The majority of
extension and termination options held are exercisable only by the Group and not by the respective lessor.
13.
INTANGIBLE ASSETS
Goodwill
Brands and trademarks
Other
Gross carrying value
At cost
Accumulated impairment and amortisation
Total net carrying amounts
Reconciliations
Carrying amount at beginning
Additions
Business combinations during the year
Carrying amount at end
2019
$’000
6,957
6,835
222
2018
$’000
5,534
2,945
194
14,013
8,673
16,731
(2,717)
14,013
11,390
(2,717)
8,673
8,673
28
5,312
8,673
–
–
14,013
8,673
Goodwill relates to the acquisition of the assets of the following businesses:
● Meander Valley Dairy in 2015;
● Pyengana Dairy in 2017; and
● Betta Milk in 2019.
Goodwill is also attributable to the acquisition of the wholly-owned controlled entities Nichols Poultry Pty Ltd and
Shima Wasabi Pty Ltd acquired in the 2016 year.
The goodwill of Shima Wasabi was written down to nil during 2017 as part of the annual impairment testing process.
Brands and trademarks are predominantly associated with the Nichols Poultry brand acquired in 2016 and the Betta Milk
brand acquired in 2019.
Other intangible assets include water rights and intellectual property.
TasFoods Annual Report 2019 | 59
Goodwill and intangibles assessed as having an indefinite useful life are allocated to the Group’s cash generating units
(CGUs) as follows:
2019
2018
Brands
& Trade‑
marks
$’000
3,925
2,910
–
Good‑
will
$’000
3,820
3,137
–
Other
$’000
20
194
9
Total
$’000
7,764
6,241
Good‑
will
$’000
2,397
3,137
9
–
Brands
& Trade‑
marks
$’000
35
2,910
–
Other
$’000
–
194
–
Total
$’000
2,432
6,241
–
Dairy
Poultry
Corporate and Other
Total
6,957
6,835
222
14,013
5,534
2,945
194
8,673
Recognition and measurement
Intangible assets are initially recognised and recorded at cost where it is probable that future economic benefits
attributable to the asset will flow to the Group and the cost can be measured reliably. Subsequently, intangible assets are
carried at cost less any impairment losses.
Indefinite life assets
Assets with an indefinite useful life are not amortised but are tested annually for impairment. Assets subject to annual
depreciation or amortisation are reviewed for impairment whenever events or circumstances arise that indicate that the
carrying amount of the asset may be impaired.
Management has determined that the brand name associated with the Poultry and Dairy CGU’s have an indefinite useful
life. This assessment was based on factors including independent expert advice, historical business growth rates and
performance and future strategy associated with the brands.
Goodwill
Goodwill is not amortised but is tested annually for impairment or more frequently if events or changes in circumstances
indicate that it might be impaired. Goodwill is carried at cost less accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date,
allocated to each of the Group’s cash generating units, or groups of cash generating units, that are expected to benefit
from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to
those units or group of units. Each unit or group of units to which the goodwill is so allocated represents the lowest level
within the Group at which the goodwill is monitored for internal management purposes.
Impairment is determined by assessing the recoverable amount of the cash generating unit (group of cash generating
units) to which the goodwill relates. When the recoverable amount of the cash generating unit (group of cash generating
units) is less than the carrying amount, an impairment loss is recognised.
When goodwill forms part of a cash generating unit (group of cash generating units) and part of the operation within
that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of
the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this manner is
measured based on the relative values of the operation disposed of and the portion of the cash generating unit retained.
Impairment losses recognised for goodwill are not subsequently reversed.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
60 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 201913. INTANGIBLE ASSETS (CONT’D) Recoverable amount of goodwill and indefinite life intangibles
In accordance with the Company’s accounting policy, impairment testing has been undertaken at 31 December 2019
for all groups of cash generating units (CGUs) for goodwill and indefinite life intangibles or where there is an indication
of impairment.
The Company has two CGUs for which impairment testing has been completed for goodwill and indefinite life
intangibles, which are as follows:
Dairy CGU
The recoverable amount of the Dairy CGU has been determined based on a value-in-use calculation which uses cash
flow projections based on financial budgets and forecasts approved by management covering a five-year period, before
any fair value adjustments for biological assets.
Key assumptions used in the value-in-use calculations for the dairy CGU include:
Revenue Growth
Production costs
Revenue growth over the five-year period is based upon budgeted revenue
growth associated with the Groups growth strategy with the expansion of the
business unit via increases in production volumes, new product offerings and
expansion into new markets.
Average revenue growth over the five-year forecast period is anticipated to
be 9.2% (normalised for acquisition growth) per annum (2018: 14.2%), with the
baseline on which growth has been determined including the full-year effect of
sales growth initiatives achieved in 2019 and the full-year impact of the acquisition
of Betta Milk in 2020.
Production costs are anticipated to be 2% lower than 2019 levels over the
five-year period and are projected to be on average 72% of revenue over the
five-year period (2018: 69%).
Indirect costs
Indirect costs are anticipated to increase by 5% per annum.
Long-term growth rate
The long-term growth rate is the weighted average growth rate used to
extrapolate cash flows beyond the budget period. A long-term growth rate
of 2.5% (2018: 2.5%) has been used in the value-in-use calculation, which is
consistent with the Reserve Bank of Australia rates.
Pre-tax discount rates
Discount rates represent the current market assessment of the risks relating to the
relevant CGU.
In performing the value-in-use calculations for the CGU, the Group has applied
post-tax discount rates to discount the forecast future attributable post-tax cash
flows. The equivalent pre-tax discount rate is 13.5% (2018: 10.8%).
Based on the above assumptions the recoverable amount of the CGU is estimated to be $25.94 million, which exceeds
the CGU’s carrying amount by $6.67 million. The recoverable amount of the CGU would equal its carrying amount if the
key assumptions were to change as follows:
Pre-tax discount rate
Increase from 13.5% to 16.6%.
Annual revenue growth rate
Reduction in average from 9.2% to 7.52% (normalised for acquisition growth).
Production costs
Increase from 72% of revenue to 73.7%.
Poultry CGU
The recoverable amount of the Poultry CGU has been determined based on a value-in-use calculation which uses cash
flow projections based on financial budgets and forecasts approved by management covering a five-year period, before
any fair value adjustments for biological assets.
Key assumptions used in the value-in-use calculations for the Poultry CGU include:
TasFoods Annual Report 2019 | 61
Revenue Growth
Production costs
Revenue growth over the five-year period is based upon budgeted revenue
growth associated with the Groups growth strategy with the expansion of the
business unit via increases in production volumes, new product offerings and
expansion into new markets.
Average revenue growth over the five-year forecast period is anticipated to be
9.2% per annum (2018: 8.7%).
Forecast production costs are anticipated to increase over the five-year period in
line with revenue growth and are projected to be on average 77% (2018: 77%) of
revenue over the five-year period.
Indirect costs
Indirect costs are anticipated to increase by 5% per annum.
Long-term growth rate
The long-term growth rate is the weighted average growth rate used to
extrapolate cash flows beyond the budget period. A long-term growth rate
of 2.5% (2018: 2.5%) has been used in the value-in-use calculation, which is
consistent with the Reserve Bank of Australia rates.
Pre-tax discount rates
Discount rates represent the current market assessment of the risks relating to the
relevant CGU.
In performing the value-in-use calculations for the CGU, the Group has applied
post-tax discount rates to discount the forecast future attributable post-tax cash
flows. The equivalent pre-tax discount rate is 13.5% (2018: 10.8%).
LIABILITIES
14. TRADE AND OTHER PAYABLES
Trade and other payables
2019
$’000
8,628
2018
$’000
3,976
8,628
3,976
Recognition and measurement
Trade and other payables represent liabilities for goods and services received by the Group which remain unpaid at
the end of the reporting period. The balance is recognised as a current liability with amounts paid in accordance with
supplier trading terms.
Fair value of trade and other payables
Due to the short-term nature of trade and other payables, the carrying value is reflective of fair value.
62 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 201913. INTANGIBLE ASSETS (CONT’D) 15. BORROWINGS
Current
Bank Overdraft
Finance Lease Liabilities (refer to note 12b)
Non-Current
Bank Loans
Finance Lease Liabilities (refer to note 12b)
Total borrowings
Financing arrangements
Commitments in relation to financing arrangements are payable as follows:
2019
$’000
2018
$’000
765
–
765
4,500
–
4,500
5,265
681
789
1,470
–
727
727
2,198
At 31 December 2019
Non-derivatives
Trade payables
Bank Overdraft
Bank Loans
Finance lease liabilities (refer to note 12b)
At 31 December 2018
Non-derivatives
Trade payables
Bank Overdraft
Finance lease liabilities (refer to note 12b)
Available facilities:
Equipment Finance Liabilities (refer to note 12b)
Bank Bill Facility
Bank Loan Facility
Bank Overdraft
Less than
12 months
$’000
Between
1 and 5
years
$’000
Over 5
years
$’000
Total
contracted
cash flows
$’000
Carrying
Amount
$’000
8,628
765
–
–
–
–
4,500
–
9,394
4,500
3,976
681
789
5,446
–
–
727
727
–
–
–
–
–
–
–
–
–
8,628
765
4,500
–
8,628
765
4,500
–
13,894
13,894
3,976
681
1,517
6,173
3,976
681
1,517
6,173
2019
2018
Limit
$’000
–
2,000
2,500
2,000
6,500
Undrawn
Balance
$’000
–
–
–
Limit
$’000
1,517
2,000
Undrawn
Balance
$’000
–
2,000
1,235
1,235
1,000
4,517
319
2,319
TasFoods Annual Report 2019 | 63
Changes to the financial statements as a result of adoption of AASB 16 Leases include the reclassification of finance
lease liabilities within the financial statements from being disclosed as borrowings to finance lease liabilities.
Recognition and measurement
Borrowings, including finance lease liabilities, 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 the consolidated income statement over the period of the
borrowings using the effective interest method.
Borrowings are removed from the balance sheet of the Group when the terms and obligations specified in the contract
are discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party, and the consideration paid is recognised in the consolidated income
statement as other income or finance costs.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period.
Borrowing costs, including transaction fees, are recognised in the consolidated income statement in the period in which
they are incurred.
Secured liabilities and assets pledged as security
In May 2019, Nichols Poultry accessed a $2 million facility with Australia and New Zealand Banking Group Limited (ANZ).
The facility is a two-year fixed rate interest only commercial bill facility. Funds from this facility were returned to the
business to reinstate working capital used in 2018 for the construction of the new air chiller facility at Nichols Poultry.
In June 2019, Nichols Poultry finalised a $2.5 million bank loan facility with ANZ. The facility is a two-year variable rate
interest only business loan facility. Funds from this facility were used for the construction of two new 40,000 bird tunnel
ventilated chicken growing sheds on the Nichols Poultry site.
All borrowings are secured by mortgage over the property and water rights owned by Nichols Poultry Pty Ltd and a
general security agreement over property of Nichols Poultry Pty Ltd not otherwise secured.
Financial covenants
Upon acquisition of Nichols Poultry Pty Ltd, the Group also acquired the financial covenants associated with the Nichols
Poultry overdraft and business development loan facility. Under the terms of the facilities, Nichols Poultry is required to
comply with the following financial covenant:
● Interest Cover Ratio (calculated using EBITDA) for each financial half year will not, as at the Compliance date, be less
than 1.50:1.
The Group has complied with the financial covenants throughout the reporting period.
64 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 201915. BORROWINGS (CONT’D) 16. PROVISIONS
Current
Employee benefits
Other provisions
Non-current
Employee benefits
2019
$’000
2018
$’000
976
–
976
220
220
623
–
623
156
156
Recognition and measurement
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the quantum of
the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation
at the reporting date, taking into consideration the risks and uncertainties surrounding the obligation. If the effect of
the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the time value of
money and the risks specific to the liability.
Employee benefits
A provision is made for employee benefits arising at the end of the reporting period. Employee benefit obligations are
presented as current liabilities in the consolidated balance sheet if the Group does not have an unconditional right to
defer settlement for at least 12 months after the reporting period, regardless of when the actual settlement is expected
to occur.
Employee benefits that are expected to be settled within one year from the reporting date have been measured at
amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been
measured at present value of the estimated future cash outflows to be made for those benefits. In determining the
liability, consideration is given to employee wage increments and the probability that the employee may satisfy any
vesting requirements. Those cash flows are discounted using market yields on Australian corporate bond rates with terms
to maturity that match the expected timing of cash flows attributable to those employees.
Provision has been made in the financial statements for benefits accruing to employees up to the reporting date such as
annual leave, long service leave and bonuses (where applicable). No provision is made for non-vesting sick leave as the
anticipated patterns of future sick leave indicates that accumulated non-vesting sick leave will not be paid. Annual leave
provisions are measured at nominal values using the remuneration rates expected to apply at the time of settlement.
Long service leave provisions are measured as the present value of expected future payments to be made in respect of
services provided to employees up to reporting date. Expected future payments are discounted using market yields at
reporting date on Australian corporate bonds with terms to maturity that match the estimated future cash flows.
On-costs, such as superannuation and payroll tax are included in the determination of employee benefits provisions.
The net change in the obligation for employee benefits provisions are recognised in the consolidated income statement
as a part of employee benefits expense.
TasFoods Annual Report 2019 | 65
EQUITY
17. CONTRIBUTED EQUITY
Ordinary shares – fully paid (no par value)
273,265,740
206,599,073
53,983
46,355
Total share capital
53,983
46,355
Number of Shares
Share Capital
2019
2018
2019
$’000
2018
$’000
Movements in ordinary share capital:
Date
1/1/19
19/7/19
Details
Balance at beginning of period
Issue of shares
Issue costs – net of tax
Terms and Conditions of Issued Capital
Ordinary
Share
206,599,073
Price
66,666,667
0.12
273,265,740
$’000
46,355
8,000
(372)
53,983
Ordinary Shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of shares held. On a show of hands each holder of ordinary shares present at a meeting in
person or by proxy is entitled to one vote, and upon a poll each share is entitled to one vote.
Share Options and Performance Rights
Share options and performance rights do not entitle the holder to participate in dividends and the proceeds on winding
up of the Company. The holder is not entitled to vote at General Meetings.
There were 6,500,000 share options on issue and 5,149,822 performance rights granted as at 31 December 2019
(2018: 23,500,000 share options and 4,825,597 performance rights).
Recognition and measurement
Ordinary shares are classified as equity, with ordinary share capital being recognised at the fair value of the consideration
received by the Company.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share
proceeds received. Ordinary share capital bears no special terms or conditions affecting income or capital entitlements
of the shareholders.
Where the Company purchases the Company’s equity instruments, for example as the result of a share buy-back or a
share-based payment plan, the consideration paid, including any directly attributable incremental costs (net of income
taxes) is deducted from the equity attributable to the owners of TasFoods Limited as ordinary share capital until the
shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net
of any directly attributable incremental transactions costs and the related income tax effects, is included in the equity
attributable to the owners of TasFoods Limited.
66 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 2019 18. RESERVES
Employee share option reserve
Nature and Purpose of Reserves
2019
$’000
493
493
2018
$’000
390
390
Employee share option reserve
The reserve is used to record the value of equity instruments issued to employees and directors as part of their
remuneration, and other parties as part of compensation for their services. Details of the employee share option
payments are contained in note 30.
Balance at start of year
Net Movement during the year
Balance at end of year
OTHER NOTES
19. ADDITIONAL CASH FLOW INFORMATION
Cash and cash equivalents
2019
$’000
390
103
493
2018
$’000
260
130
390
2019
$’000
2,209
2018
$’000
6,658
Recognition and measurement
Cash and cash equivalents include cash on hand and at banks and short-term deposits with an original maturity of three
months or less held at call with financial institutions.
Reconciliation of cash and cash equivalents to the statement of cash flows:
(a)
For the purposes of the statement of cash flows, cash and cash equivalents includes cash on hand and in banks and
short-term deposits at call, net of outstanding bank overdrafts. Cash and cash equivalents as at the end of the financial
year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position
as follows:
Cash and cash equivalents
Bank overdraft
2019
$’000
2,209
(765)
2018
$’000
6,658
(681)
1,444
5,977
TasFoods Annual Report 2019 | 67
b)
Reconciliation of operating profit after income tax to net cash flows from operating activities:
Net loss after income tax
Depreciation and amortisation
Movement in fair value of biological assets
Share based payments
Interest on leased assets
Other
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
(Increase)/decrease in inventories
(Increase)/decrease in prepayments
(Increase)/decrease in deferred taxes
(Decrease)/Increase in trade and other payables
Increase/(decrease) in provisions
Net cash (outflow)/inflow from operating activities
c)
There were no non-cash financing activities.
Non-cash activities
2019
$’000
(3,459)
1,839
(1,169)
103
53
267
(1,785)
(974)
(145)
256
4,072
37
(904)
2018
$’000
(1,358)
1,210
(291)
130
–
254
190
(559)
(192)
(979)
(492)
111
(1,976)
20. FINANCIAL RISK MANAGEMENT
The Group’s principal financial instruments comprise receivables, payables, cash and short-term deposits.
The Group manages its exposure to key financial risks, including interest rate and currency risk in accordance with the
Group’s financial risk management policy. The objective of the policy is to support the delivery of the Group’s financial
targets whilst protecting future financial security.
The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, price risk, credit
risk and liquidity risk. The Group uses different methods to measure and manage different types of risk to which it is
exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and assessments of
market forecasts for interest rate, foreign exchange and commodity prices. Ageing analyses and monitoring of specific
credit allowances are undertaken to manage credit risk, liquidity risk is monitored through the development of future
rolling cash flow forecasts.
The Board reviews and agrees policies for managing each of these risks as summarised in the following.
Primary responsibility for identification and control of financial risks rests with the Chief Financial Officer under the
authority of the Board. The Board reviews and agrees policies for managing each of the risks identified below, including
any hedging cover of foreign currency, interest rate risk, credit allowances, and future cash flow forecast projections.
The carrying amounts of the Group’s financial assets and liabilities at balance date were equal to their fair value.
Recognition and measurement
Classification
The Group classifies its financial instruments in the following categories: financial assets at fair value through profit
or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification
68 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 201919. ADDITIONAL CASH FLOW INFORMATION (CONT’D) depends on the purpose for which the investments were acquired. Management determines the classification of its
financial instruments at the time of initial recognition.
Financial Assets at Fair Value through Profit or Loss
Upon initial recognition a financial asset or financial liability is designated as at fair value through profit or loss when:
(a) An entire contract containing one or more embedded derivatives is designated as a financial asset or financial liability
at fair value through profit and loss.
(b) Doing so results in more relevant information, because either:
(i)
It eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from
measuring assets or liabilities or recognising gains or losses on them on different bases.
(ii) A group of financial assets, financial liabilities or both is managed and its performance is evaluated on a fair value
basis, in accordance with a documented risk management or investment strategy, and information about the
group is provided internally on that basis to key management personnel.
Investments in equity instruments that do not have a quoted market price in an active market, and whose fair value
cannot be reliably measured are not designated as at fair value though profit or loss.
Present investment strategy is to keep assets in a highly liquid state and almost all of the investment assets are held
in cash.
A gain or loss arising from a change in the fair value of a financial asset or financial liability classified as at fair value
through profit or loss is recognised in the consolidated statement of profit or loss and other comprehensive income.
Non-listed investments, for which fair value cannot be reliably measured, are carried at cost and tested for impairment.
Loans and Receivables
Loan and receivables are measured at fair value at inception and subsequently at amortised cost using the effective
interest rate method.
Financial Liabilities
Financial liabilities include trade payables, other creditors and loans from third parties including inter-company balances
and loans from or other amounts due to Director-related entities.
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principle payments
and amortisation.
Risk Exposures and Responses
Interest Rate Risk
The Group’s exposure to market interest rate related primarily to the Group’s cash deposits. At balance sheet date, the
Group had the following mix of financial assets exposed to Australian and overseas variable interest rate risks that are
not designated as cash flow hedges:
Financial Assets
Cash and cash equivalents
Net exposure
2019
$’000
2018
$’000
2,209
2,209
6,658
6,658
The Group regularly analyses its interest rate opportunity and exposure. Within this analysis consideration is given to
existing positions and alternative arrangements for its deposits.
The following sensitivity analysis is based on the interest rate opportunity/risk relating to cash deposits at balance date.
At 31 December 2019, if interest rates had moved, as illustrated in the table below, with all other variables held constant,
post-tax profit and equity would have been affected as follows:
TasFoods Annual Report 2019 | 69
Judgements of reasonably possible movements
+ 0.5% (50 basis points)
- 0.5% (50 basis points)
2019
$’000
2018
$’000
11
(11)
33
(33)
The movement in profits are due to higher/lower interest received. As the Group does not have any derivative
instruments the movements in equity are those of profit only. A movement of + and – 0.5% is selected because this
historically is within a range of rate movements.
Liquidity Risk
Liquidity Risk is the risk that the Group, although balance sheet solvent, cannot meet or generate sufficient cash
resources to meet its payment obligations in full as they fall due, or can only do so at materially disadvantageous terms.
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long-term funding
and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves and
by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets
and liabilities.
The Group has Total Liabilities of $16.990 million (2018: $6.953 million) of which $10.793 million (2018: $6.069 million) is
recorded as current liabilities and Total Current Assets of $14.155 million (2018: $14.813 million) of which $2.209 million
(2018: $6.658 million) consists of cash or cash equivalents providing the Board with comfort that the Group is solvent and
can meet its payment obligations in full as they fall due.
All current liabilities fall due within normal trade terms, which are generally 30 days.
Credit Risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents and trade
and other receivables. The Group’s exposure to credit risk arises from potential default of the counter party, with
maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is addressed in each
applicable note.
The Group does not hold any credit derivatives to offset its credit exposure.
The Group trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is it the
Group’s policy to securitize its trade and other receivables.
It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures
including an assessment of their independent credit rating, financial position, past experience and industry reputation.
The risks are regularly monitored.
The Group applies the AASB 9 simplified approach to measuring expected credit losses as disclosed in note 9.
Receivables balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is
not significant.
Fair Value
The method for estimating fair value is outlined in the relevant notes to the financial statements. All financial assets held
at fair value are valued based on the principles outlined in AASB 7 in relation to Level 1 of the hierarchy of fair values,
being quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date.
70 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 201920. FINANCIAL RISK MANAGEMENT (CONT’D) 21. CAPITAL MANAGEMENT
When managing capital, management’s objective is to ensure the entity continues as a going concern as well as to
maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a
capital structure that ensures the lowest cost of capital available to the entity.
Management are constantly adjusting the capital structure to take advantage of favourable costs of capital or high
returns on assets. As the market is constantly changing, the Board may change the amount of dividends to be paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Borrowings
Trade and other payables
Total debt
Less cash and cash equivalents
Net (cash)/debt
Total equity
Total capital
Gearing ratio (total debt / total equity)
2019
$’000
5,265
8,628
13,894
(2,209)
11,685
38,477
53,983
36.1%
2018
$’000
2,198
3,976
6,173
(6,658)
(485)
34,266
46,354
18.0%
The Group is not subject to any externally imposed capital requirements, other than those referred to in note 15 relating
to Nichols Poultry Pty Ltd.
TasFoods Annual Report 2019 | 71
GROUP MANAGEMENT
22. PARENT ENTITY SUPPLEMENTARY INFORMATION
Information relating to TasFoods Limited:
Financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Contributed equity
Reserves
Accumulated losses
Total equity
Financial performance
Total revenue
Loss for the period
Comprehensive loss for the period
2019
$’000
2018
$’000
28,356
12,599
24,440
12,329
40,955
36,769
2,699
386
2,046
365
3,085
2,411
37,869
34,358
53,983
46,320
493
390
(16,606)
(12,351)
37,869
34,358
6,028
(5,679)
(5,679)
4,525
(4,915)
(4,915)
Deed of Cross Guarantee
The wholly-owned subsidiaries disclosed in note 23 are parties to a deed of cross guarantee under which each company
guarantees the debts of the others. By entering into the deed, the wholly-owned entities have been relieved from any
requirement to prepare a financial report and directors’ report that might otherwise apply under Instrument 2016/785
issued by the Australian Securities and Investments Commission.
The closed group financial information for 2019 is identical to the financial information included in the consolidated
financial statements. The wholly-owned subsidiaries became a party to the deed of cross guarantee dated
23 October 2017.
The companies disclosed in note 23 represent a ‘closed group’ for the purposes of the Instrument, and as there are no
other parties to the deed of cross guarantee that are controlled by TasFoods Limited, they also represent the ‘extended
closed group’.
Capital Commitments
There were no non-cancellable capital expenditure contracted for but not in the financial statements.
Contingent Liabilities
TasFoods Limited is not subject to any liabilities that are considered contingent upon events known at balance
sheet date.
72 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 2019 23. SUBSIDIARIES
Van Diemen's Land Dairy Pty Ltd
Nichols Poultry Pty Ltd
Shima Wasabi Pty Ltd
Tasmanian Food Co Dairy Pty Ltd
Equity Holding
Country of
Incorporation
Principal
Activity
Australia
Australia
Australia
Australia
Dairy
Poultry
Wasabi
Dairy
2019
%
100%
100%
100%
100%
2018
%
100%
100%
100%
100%
24. BUSINESS COMBINATIONS
Betta Milk
On 31 July 2019 the Company acquired via its subsidiary Van Diemen’s Land Dairy Pty Ltd, the milk processing,
distribution and brands of the Betta Milk Co-operative Society Ltd business based in Tasmania. The acquisition was
completed for cash consideration of $11.423 million.
Consideration
Cash Consideration
$’000
11,423
Acquisition related costs of $496,970 have been excluded from the consideration transferred and have been recognised
as an expense in the profit or loss in the current year.
The net identifiable assets acquired are considered to be preliminary. In accordance with the Group’s accounting policy,
the Company is finalising the allocation of the purchase price to the acquired assets. In particular, fair values assigned to
property, plant and equipment, intangible assets and contingent assets and liabilities are still being assessed and subject
to finalisation. In accordance with accounting standards, the acquisition accounting will be finalised within twelve months
of the acquisition date.
Land and Buildings
Plant and equipment
Motor vehicles
Brand name
Inventory on hand
Deferred tax asset
Provisions
Net identifiable assets acquired
Add: Goodwill
Consideration paid
Preliminary Fair
Value as presented at
31 December 2019
$’000
2,762
2,920
214
3,890
498
97
(380)
10,001
1,422
11,423
TasFoods Annual Report 2019 | 73
Recognition and Measurement
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a
business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of
assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquire, and the equity
instruments issued by the Group in exchange for control of the acquiree.
Acquisition-related costs are expensed as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value.
Goodwill is measured as the excess of the sum of the consideration transferred and the fair value of the acquirer’s
previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable
assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the
identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any
non-controlling interests in the acquiree and the fair value of the acquirer’s previously held interest in the acquiree (if
any), the excess is recognised immediately in profit or loss as a bargain purchase gain.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those
provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognised, to
reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known,
would have affected the amounts recognised as of that date.
UNRECOGNISED ITEMS
25. CONTINGENT LIABILITIES AND ASSETS
There are no matters which the Group consider would result in a contingent liability as at the date of this report.
26. COMMITMENTS FOR EXPENDITURE
Capital Commitments – Capital Expenditure Projects
There were no non-cancellable capital expenditure contracted for but not in the financial statements.
Other Commitments – Operating Expenditure
Operating expenditure contracted but not included in the financial statements:
Payable:
– Not longer than one year
– Longer than one year and not longer than five years
– Longer than five years
2019
$’000
2018
$’000
33
33
–
65
1,367
65
–
1,432
74 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 201924. BUSINESS COMBINATIONS (CONT’D) 27. EVENTS OCCURRING AFTER REPORTING DATE
The Board is not aware of any matter or circumstance not otherwise dealt with in these financial statements that has
significantly or may significantly affect the operation of the Group, the results of those operations, or the state of affairs
of the Group in subsequent financial years.
OTHER INFORMATION
28. RELATED PARTY TRANSACTIONS
Key Management Personnel Compensation
The aggregate compensation of the key management personnel of the entity is set out below:
Short term benefits
Post-employment benefits
Share based payments
Termination payments
2019
$’000
2018
$’000
951,164
931,477
86,370
90,264
–
87,993
124,169
–
1,127,798
1,143,639
29. AUDITOR’S REMUNERATION
Remuneration for audit and review of the financial reports of the parent entity or any entity in the Group:
Auditors of the parent entity:
Auditing the financial report
Other assurance services
2019
$
2018
$
168,175
123,900
–
3,876
168,175
127,776
TasFoods Annual Report 2019 | 75
30. SHARE BASED PAYMENTS
Performance Rights
Share based payment arrangements
a.
TasFoods Limited offers the Chief Executive Officer and senior management the opportunity to participate in the
Long-Term Incentive Plan (LTIP), which involves performance rights to receive shares in TasFoods Limited. The LTIP is
designed to:
● Assist in the motivation, retention and reward of employees, including the Chief Executive Officer and members of
senior management; and
● Align the interests of employees participating in the LTIP more closely with the interests of shareholders by providing
an opportunity for those employees to receive an equity interest in the TasFoods Limited Group through the granting
of performance rights.
Under the LTIP, performance rights were issued to the Chief Executive Officer and managers of senior management
as the LTI component of their remuneration. Performance rights granted under the LTIP have a share price growth
performance vesting condition. Vesting percentages (of the grant/stretch/maximum level of LTI) to be determined by the
following scale:
Performance Level
TFL Share Price
>Stretch
Stretch
>$0.43
$0.43
Between Target and Stretch
>$0.36 and < $0.43
Target
$0.36
% of the Grant/Stretch/
Maximum Vesting
100%
100%
Pro-rata
50%
The targets for share price growth are based on a starting share price of $0.25 (being the share price at which investors
acquired their shares at the 2016 capital raising) which is a Compound Annual Growth Rate (CAGR) from 2016, the year
of investment, of 7.5% to achieve ‘target’ share price and a CAGR of 11.434% to achieve ‘stretch’ share price; noting that
the share price at the beginning of 2019 was lower than the 2016 capital raising price, using the VWAP of $0.136 as a
base, a CAGR of 38.3% over the years 2019 to 2021 is required to achieve ‘target’ share price and a CAGR of 46.77% is
required to achieve ‘stretch’ share price.
Share Price will be determined by a ten-trading day volume weighted average share price ending on the date that is the
end of the Measurement Period.
b.
Below is a summary of performance rights granted under the LTIP.
Performance rights granted
2019
Grant
Date
Performance Period
From
To
Balance
at start of
Year
Granted
During
Year
Forfeited
Vested
17/7/17
1/1/17
31/12/19
3,212,083
26/7/18
1/1/18
31/12/20
1,613,514
–
–
(878,464)
(450,882)
24/10/19
1/1/19
31/12/21
–
1,653,571
–
–
–
–
2018
Grant
Date
Performance Period
From
To
Balance
at start of
Year
Granted
During
Year
Forfeited
Vested
Balance
at End of
Year
2,333,619
1,162,632
1,653,571
Fair Value
per Share
$0.068
$0.044
$0.042
Balance
at End of
Year
Fair Value
per Share
17/7/17
1/1/17
31/12/19
3,212,083
–
26/7/18
1/1/18
31/12/20
–
1,613,514
–
–
–
–
3,212,083
1,613,514
$0.068
$0.044
76 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 2019 The performance rights hold no voting or dividend rights and are not transferable.
Fair value of performance rights granted
c.
For the performance rights granted during the 2019 financial year, the fair value was measured at the grant date of
24 October 2019 for those rights issued to the Chief Executive Officer and senior management.
The fair value of the performance rights granted under the LTIP was calculated by an independent expert using a
Monte-Carlo simulation.
The expense recognised in relation to the performance rights applicable to the Chief Executive Officer and senior
management for the year ended 31 December 2019 is $59,811 (31 December 2018: $48,236).
Share Options
Share based payment arrangements
a.
On 16 October 2019 TasFoods Limited issued 1,500,000 share options to Cathy Zeppieri upon her appointment as
Chief Marketing Officer of the Company. The options granted were for nil cash consideration and will entitle the option
holder to acquire one ordinary share in the Company after meeting a three year service requirement, at an exercise price
of $0.205 (subject to adjustments to the number of underlying shares and/or exercise price due to pro rata offers and
other capital reorganisations and otherwise on and subject to usual option terms) until 24 October 2022.
On 30 November 2017 TasFoods Limited issued 5,000,000 share options to Shane Noble upon his appointment as
a Director of the Company. The options granted were for nil cash consideration and will entitle the option holder to
acquire one ordinary share in the Company at an exercise price of $0.20 until 30 November 2021.
In addition, during 2015 TasFoods Limited established an employee share ownership plan (ESOP) to provide a long-term
incentive for employees and Directors of TasFoods Limited. It allowed entitled officers of the Group to participate in
TasFoods Limited’s future growth and provided an incentive to increase profitability and returns to shareholders. The
ESOP was replaced with the LTIP noted above in 2017. Options under the ESOP granted in 2015 were not exercised and
as a result expired in 2019.
b.
Share options outstanding at 31 December 2019 are as follows:
Share options granted
Grant Date
Expiry Date
4/9/15
4/9/15
30/11/17
16/10/19
3/9/19
3/9/19
30/11/21
24/10/22
Exercise
Price
$0.210
$0.420
$0.200
$0.205
Granted
Exercised
Balance
at start of
Year
10,000,000
8,500,000
5,000,000
–
–
–
–
1,500,000
Expired/
forfeited/
other
Balance at
the end of
the Year
(10,000,000)
(8,500,000)
–
–
–
–
5,000,000
1,500,000
–
–
–
–
Weighted average exercise price
$0.20
23,500,000
1,500,000
– (18,500,000)
6,500,000
The options hold no voting or dividend rights and are not transferable.
Fair value of share options granted
c.
For share options granted during the 2017 and 2019 financial years, the fair value was measured at the grant date of
30 November 2017 and 16 October 2019 respectively.
The fair value of the performance rights granted under the LTIP was calculated by an independent expert using the
Binomial method.
The expense recognised in relation to share options for the year ended 31 December 2019 is $86,039
(31 December 2018: $81,250).
TasFoods Annual Report 2019 | 77
d.
Details of share options held by Directors and employees outstanding as at end of year:
Share Options at 31 December 2019
Grant Date
Exercisable Date
Expiry Date
Grant Date Exercise Price
Share Price at
Fair Value at
Grant Date
30/11/17
16/10/19
30/11/21
24/10/22
30/11/21
24/10/22
$0.165
$0.135
$0.200
$0.205
$0.065
$0.046
There are no performance hurdles attached to the options granted, however service conditions do apply.
Recognition and Measurement
The Group provides benefits to the Directors, the Chief Executive Officer and certain senior management in the form of
share-based payment, whereby services are rendered in exchange for rights over shares (performance rights) or options.
The fair value of the performance rights and options is recognised as an employee benefits expense, with a
corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the
performance rights or options granted.
The total expense is recognised over the period in which the performance and/or service conditions are fulfilled
(the vesting period), ending on the date on which the relevant employees become fully entitled to the award (the
vesting date).
31. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
(a)
These financial statements are general purpose financial statements that have been prepared in accordance with
Australian Accounting Standards, Australian Accounting Interpretations and the Corporations Act 2001, as appropriate
for profit oriented entities.
The financial statements cover the Company and its controlled entities as a group for the financial year ended
31 December 2019. The Company is a company limited by shares, incorporated and domiciled in Australia.
Separate financial statements for the Company as an individual entity are no longer presented as a consequence of a
change to the Corporations Act 2001, however limited financial information for the Company as an individual entity is
included in Note 22.
The following is a summary of material accounting policies adopted by the Group in the preparation and presentation
of the financial statements not elsewhere disclosed. The accounting policies have been consistently applied, unless
otherwise stated.
Compliance with IFRS
(b)
The financial statements comply with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB).
Historical Cost Convention
(c)
The financial statements have been prepared under the historical cost convention. All amounts are presented in
Australian dollars unless otherwise noted.
Principles of Consolidation
(d)
The consolidated financial statements are those of the Group, comprising the parent entity and its controlled entities as
defined in Accounting Standard AASB 10 ‘Consolidated Financial Statements’. Control is achieved when the Company:
● has power over the investee;
78 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 201930. SHARE BASED PAYMENTS (CONT’D) ● is exposed, or has rights, to variable returns from its involvement with the investee; and
● has the ability to use its power to affect its returns.
The Company reassess whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control listed above.
Details of the controlled entities are contained in note 23.
Financial statements for controlled entities are prepared for the same reporting period as the parent entity. Controlled
entities are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated
from the date on which control is transferred out of the Group. Adjustments are made to bring into line any dissimilar
accounting policies, which may exist.
All inter-company balances and transactions, including any unrealised profits or losses have been eliminated on
consolidation.
Non-controlling interests in the equity and results of the entities that are controlled are shown separately in the
consolidated financial statements.
Critical Accounting Estimates, Judgements and Errors
(e)
The preparation of the financial statements of the Group requires the use of accounting estimates which, by definition,
will seldom equal the actual results. Management also needs to exercise judgement in applying the Group’s
accounting policies.
Areas within the financial report which contain a higher degree of judgement or complexity, and items which are more
likely to be materially adjusted due to estimates and assumptions turning out to be incorrect. Detailed information
about each of these estimates and judgements are included in the notes to the financial statements together with the
basis of calculation.
The areas involving significant estimates or judgements are:
● Estimated fair value of biological assets; and
● Estimated value in use calculations for the assessment of the recoverable amount of goodwill and indefinite
life intangibles.
Estimates and judgements are continually evaluated. They are based on historical experience, information, 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.
Comparatives
(f)
Where necessary, comparative information has been reclassified and repositioned for consistency with current
year disclosures.
New and Amending Accounting Standards and Interpretations Adopted
(g)
The Group has applied the following standards and amendments for the first time for its annual reporting period
commencing 1 January 2019:
● AASB 16 Leases
The Group was required to change its accounting policies as a result of adopting AASB 16. The Group elected to
adopt the new rules retrospectively but recognised the cumulative effect of initially applying the new standard on
1 January 2019, as disclosed in note 31(h) below.
New, Revised or Amending Accounting Standards and Interpretations Adopted
(h)
This note explains the impact of the adoption of AASB 16 Leases on the Group’s financial statements and also discloses
the new accounting policies that have been applied from 1 January 2019, where they are different to those applied in
prior periods.
As indicated in note 31(g) above, the Group has adopted AASB 16 Leases retrospectively from 1 January 2019 but has
not restated comparatives for the 2018 reporting period, as permitted under the specific transition provisions in the
TasFoods Annual Report 2019 | 79
standard. Reclassifications and adjustments arising from the new leasing rules are therefore recognised in the opening
balance sheet on 1 January 2019. The new accounting policies for the treatment of right-of-use assets and lease liabilities
are disclosed in note 12b.
On adoption of AASB 16, the Group recognised lease liabilities in relation to leases which had previously been classified
as ‘operating leases’ under the principles of AASB 117 Leases. These liabilities were measured at the present value
of the remaining lease payments, discounted using the interest rate implicit in the lease. Where the rate could not
be determined, the lessee’s incremental borrowing rate as of 1 January 2019 is used. The weighted average lessee’s
incremental borrowing rate applied to the lease liabilities on 1 January 2019 was 3.7%.
For leases previously classified as finance leases, the Group recognised the carrying amount of the lease asset and lease
liability immediately before transition as the carrying amount of the right of use asset and the lease liability at the date of
initial application. The measurement principles of AASB 16 are only applied after that date.
Practical expedients applied
In applying AASB 16 for the first time, the group has used the following practical expedients permitted by the standard:
● the use of a single discount rate to a portfolio of leases with reasonably similar characteristics;
● reliance on previous assessments on whether leases are onerous; and
● the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application.
The Group has also elected not to reassess whether a contract is, or contains a lease at the date of initial application.
Instead, for contracts entered into before the transition date the group relied on its assessment made applying AASB 117
and Interpretation 4 Determining whether an Arrangement contains a Lease.
Measurement of lease liabilities
Operating lease commitments disclosed as at 31 December 2018
Discounted using the lessee’s incremental borrowing rate at the date of initial application
Add finance lease liabilities recognised as at 31 December 2018
Lease liability recognised as at 1 January 2019
Of which are:
Current lease liabilities
Non-current lease liabilities
2019
$’000
1,443
1,300
1,517
2,817
995
1,821
2,817
Measurement of right-of-use assets
The associated right-of-use assets for property leases were measured on a retrospective basis as if the new rules
had always applied. Other right-of-use assets were measured at the amount equal to the lease liability, adjusted by
the amount of any prepaid or accrued lease payments relating to that lease recognised in the balance sheet as at
31 December 2018.
80 | TasFoods Annual Report 2019
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 31 December 201931. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Adjustments recognised in the balance sheet on 1 January 2019
The change in accounting policy affected the following items in the balance sheet on 1 January 2019:
● Right-of-use assets – increase by $1,238,000
● Borrowings – decrease by $1,517,000
● Lease liabilities – increase by $1,300,000
The net impact on accumulated losses on 1 January 2019 was an increase of $63,000.
New Standards and interpretations not yet adopted
(i)
Certain new accounting standards and interpretations have been published that are not mandatory for
31 December 2019 reporting periods and have not yet been adopted by the Group. There are no standards that are
not yet effective and that would be expected to have a material impact on the Group in the current or future reporting
periods and on foreseeable future transactions.
Rounding Amounts
(j)
The company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191 and in accordance with that Class Order, amounts in the financial statements have been rounded off to the
nearest thousand dollars, or in certain cases, to the nearest dollar.
TasFoods Annual Report 2019 | 81
1.
In the opinion of the Directors of TasFoods Limited (the “Company”):
a. The financial report and the Remuneration Report included in the Directors’ Report, designated as audited of the
Group are in accordance with the Corporations Act 2001, including:
i. Giving a true and fair view of the Group’s financial position as at 31 December 2019 and of its performance for
the year ended on that date; and
ii. Complying with the Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements;
b. At the date of this declaration, there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable;
2. The financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board, as described in the notes to the financial statements; and
3. This declaration has been made after receiving the declarations required by section 295A of the Corporations Act
2001 from the Chief Executive Officer and the Chief Financial Officer for the financial year ended 31 December 2019.
Signed in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
Shane Noble
Executive Chair
28 February 2020
Launceston
82 | TasFoods Annual Report 2019
DIRECTORS’ DECLARATIONfor the year ended 31 December 2019 INDEPENDENT AUDITOR’S REPORT
for the year ended 31 December 2019
Independent auditor’s report
To the members of TasFoods Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of TasFoods Limited (the Company) and its controlled entities (together the
Group) is in accordance with the Corporations Act 2001, including:
a) giving a true and fair view of the Group's financial position as at 31 December 2019 and of its financial
performance for the year then ended
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
the consolidated statement of financial position as at 31 December 2019
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the consolidated statement of profit or loss and other comprehensive income for the year then ended
the notes to and forming part of the financial statements, which include a summary of significant accounting
policies
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act
2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of
Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of
the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the
financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial report as a whole, taking into account the geographic and management structure of the Group, its
accounting processes and controls and the industry in which it operates.
TasFoods Annual Report 2019 | 83
Materiality
Audit scope
Key audit matters
Our audit focused on where the
Group made subjective judgements;
for example, significant accounting
estimates involving assumptions
and inherently uncertain future
events.
We performed an audit of the
most significant operating business
units of the Group, being Poultry
and Dairy. We performed specific
risk focused audit procedures over
Wasabi and the corporate head
office.
Amongst other relevant
topics, we communicated the
following key audit matters to
the Audit and Risk Committee:
-
-
Valuation of goodwill
and indefinite lived
intangible assets
Accounting for
biological assets
These are further described
in the Key audit matters section
of our report.
.
For the purpose of our audit we used
overall Group materiality of $506,000,
which represents approximately 1% of the
Group’s total revenue.
We applied this threshold, together with
qualitative considerations, to determine
the scope of our audit and the nature,
timing and extent of our audit procedures
and to evaluate the effect of
misstatements on the financial report as a
whole.
We chose Group revenue as, in our view, it
is the benchmark against which the
performance of the Group is most
commonly measured given the Group
remains in growth and acquisition phase.
We utilised a 1% threshold based on our
professional judgement, noting it is within
the range of commonly acceptable
thresholds.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial report for the current period. The key audit matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. Further, any commentary on the outcomes of a particular audit procedure is made in that context.
Key audit matter
How our audit addressed the key audit matter
Valuation of goodwill and indefinite lived
intangible assets
(Refer to note 13 in the financial report)
The Group holds intangible assets totalling $14.0m as at
31 December 2019. Under Australian Accounting
Standards, the Group is required to assess goodwill and
indefinite life intangibles for impairment at least
annually.
The Group performed an impairment assessment for the
Dairy and Poultry Cash Generating Units (CGUs),
calculating the value-in-use of the net assets, including
intangible assets, in each CGU.
We assessed whether the Group’s determination of CGUs was
consistent with our understanding of the nature of the
Group’s operations and internal Group reporting. We
assessed management’s conclusions around allocating Betta
Milk into the Dairy CGU, in light of the interdependencies
and integration on and with other Dairy entities, amongst
other factors.
We tested the mathematical accuracy and integrity of the
calculations in the models.
84 | TasFoods Annual Report 2019
INDEPENDENT AUDITOR’S REPORTfor the year ended 31 December 2019
The Group allocated the assets and cash flows
associated with the acquisition of Betta Milk to the
Dairy CGU.
To evaluate the cash flow forecasts and the process by which
they were developed, we performed the following procedures,
amongst others:
The valuation models (the “models”) used by the Group
to perform the impairment assessment are based on
cash flow forecasts obtained from board approved
budgets.
The Group did not identify any impairment for the
CGUs. The Group performed sensitivity analysis and
determined that the Dairy CGU impairment assessment
was sensitive to a reasonable change in growth rates and
the discount rate. The changes in these assumptions are
disclosed in note 13.
The assessment of the carrying value of indefinite-lived
intangibles was a key audit matter as the balance is
material and there is significant judgement involved in
estimating future cash flows and other key assumptions,
particularly with respect to determining appropriate:
Discount rates
Annual growth rates
Terminal growth rates
We specifically focused on the Dairy CGU given the
impairment assessment is sensitive to reasonable
changes in key assumptions.
compared the 2020 forecasted cash flows used in
the models with the FY20 budget formally approved
by the Board
assessed the historical accuracy of the Group’s
forecasts by comparing the forecasts used in the
prior year models to the actual performance
assessed the forecast growth assumptions used in
the models by reference to our understanding of the
key drivers for future growth, with reference to third
party information.
Compared the terminal growth rate used in the
models to economic forecasts.
With the assistance of PwC internal valuation experts, we
assessed the discount rates used in the
impairment assessment by comparing them to our view of a
reasonable discount rate based on market data, comparable
companies and industry research.
We performed sensitivity analysis which highlighted that the
Dairy CGU impairment model is sensitive to changes in key
assumptions. We recalculated the change in the growth rates
and discount rate which would result in an impairment and
evaluated the adequacy of the disclosures in note 13 in light of
the requirements of Australian Accounting Standards.
Key audit matter
How our audit addressed the key audit matter
Accounting for biological assets
(Refer to note 10 in the financial report)
The Group held biological assets of $3.9 million at
31 December 2019. The biological assets include live
poultry, wasabi plants and goats.
Australian Accounting Standards require biological
assets to be measured at fair value less cost to sell or, in
the absence of a fair value, at cost less impairment.
The Group has valued each of the biological assets as
follows:
Poultry
At 31 December 2019 the carrying value of poultry was
$2.2 million. The quantity, age and related weight of the
chickens are key elements of the valuation methodology.
The Group considered the cost of the chicks, feed costs,
grower costs and the conversion rate for the chicken
meat (using industry standards), to determine the fair
value less cost to sell.
Wasabi plants
The carrying value of wasabi plants at 31 December
2019 was $1.4 million. This was determined based on
the current market price of wasabi powder net of the
costs of harvesting, preparing and selling the product.
The methodology takes into account an estimated yield
We performed the following procedures amongst others on
the biological assets:
Considered the appropriateness of the valuation
methodologies against the relevant Australian
Accounting Standard.
Tested the mathematical accuracy of the valuation
calculations.
On a sample basis, compared the fair value
recognised as at 31 December 2019 to the actual
selling price once biological assets were reclassified
into inventory.
Assessed the adequacy of the disclosures in note 10
and 31, in light of the requirements of Australian
Accounting Standards.
To assess the valuation of the poultry biological assets, we
performed the following procedures, amongst others:
Compared the reasonableness of the number and
age of chickens recognised as at 31 December 2019
based on a sample of purchase information for
chickens for the December period and physical
observation of chickens as at 31 December 2019.
TasFoods Annual Report 2019 | 85
per plant in kilograms, which has been determined
based on historical growth rates and harvest data for
mature wasabi plants.
We consider the valuation of biological assets a key
audit matter on the basis that these involve judgement
and estimates using key assumptions.
Compared the conversion rate for chicken meat
used in the Group’s calculation as at 31 December
2019 to the industry valuation methodology
standard and the Group’s performance for such
biological assets.
Agreed the cost of feed, grower and other costs to
sell used in the Group’s calculation as at 31
December 2019 to a sample of supplier invoices.
To assess the valuation of the wasabi biological assets, we
performed the following procedures, amongst others:
Considered the reasonableness of the number of
plants on hand based on physical observation at 31
December 2019.
Assessed the reasonableness of the yield per plant
based on the harvest data prepared by the Group
over the preceding 12 month period.
Considered the reasonableness of the costs of
harvest and selling costs based on the costs incurred
over the preceding 12 month period.
Observed the harvest of a wasabi plant, and its fresh yield (in
kgs) and compared this to the Group’s data.
Other information
The directors are responsible for the other information. The other information comprises the information included in
the annual report for the year ended 31 December 2019, but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s
report, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as
the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view
and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
86 | TasFoods Annual Report 2019
INDEPENDENT AUDITOR’S REPORTfor the year ended 31 December 2019
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the
Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description
forms part of our auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 23 to 35 of the Annual report for the year ended 31
December 2019.
In our opinion, the remuneration report of TasFoods Limited for the year ended 31 December 2019 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the remuneration report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.
PricewaterhouseCoopers
Alison Tait
Partner
Melbourne
28 February 2020
TasFoods Annual Report 2019 | 87
The shareholder information set out below was applicable as at 10 February 2020.
A. DISTRIBUTION OF EQUITY SECURITIES
Analysis of numbers of equity security holders by size of holding:
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Securities
245,963,710
24,212,056
1,736,221
1,273,287
80,466
%
90.01
8.86
0.64
0.47
0.03
No. of
holders
240
630
217
411
244
%
13.78
36.17
12.46
23.59
14.01
273,265,740
100.00
1,742
100.00
The number of shareholders with less than a marketable parcel is 539.
B.
EQUITY SECURITY HOLDERS
Twenty largest quoted equity security holders.
The names of the twenty largest holders of quoted equity securities are listed below (some are grouped where the
holdings are deemed to be controlled by the same entity):
Rank Name
1
2
3
4
5
6
7
8
9
10
11
Janet H Cameron held via:
Elsie Cameron Foundation Pty Ltd
JB Were (NZ) Nominees Limited <50645 A/C>
Elsie Cameron Foundation
JB Were (NZ) Nominees Limited <45230 A/C>
JB Were (Nz) Nominees Limited <56871 A/C>
Bicheno Investments Pty Ltd
CVC Limited
Tasplan Superannuation Fund held via National Nominees
HSBC Custody Nominees (Australia) Limited
HSBC Custody Nominees (Australia) Limited – A/C 2
Includes Ellerston Capital Limited and its Associates Shares
Nichols Investments Pty Ltd
Trebor Slochin Pty Ltd
Buduva Pty Ltd
Helbern Investments Pty Ltd
BNP Paribas Nominees Pty Ltd
BNP Paribas Nominees Pty Ltd
Mrkat Pty Ltd
Shane Alexander Noble
Jane Bennett held via:
Jane Frances Bennett
Chardon Lodge Pty Ltd
Ms Jane Frances Bennett
88 | TasFoods Annual Report 2019
Units
%
40,566,436
14.84%
38,367,078
33,779,663
21,114,888
14.04%
12.40%
7.70%
7,400,000
2.70%
6,461,587
6,000,000
6,069,126
4,373,472
3,968,055
2,877,466
2.36%
2.19%
1.60%
1.60%
1.45%
1.04%
SHAREHOLDER INFORMATION Rank Name
12
13
14
15
16
17
18
19
20
Roger McBain held via:
Vermilion 21 Pty Ltd
Cerulean 37 Pty Ltd
Vermilion 21 Pty Ltd
Vermilion 21 Pty Ltd
Mr Darius Isaac
Budleaf Pty Ltd
Quality Life Pty Ltd
J P Morgan Nominees Australia Pty Limited
Elphinstone Holdings Pty Ltd
Custodial Services Limited
(various private holders)
Mr Jimmy Thomas and Ms Ivy Ruth Ponniah
Mr Andrew Woolley + Mr Stephen Richard Kreft
Mr Andrew Woolley
Totals: Top 20 holders of TFL Ordinary Fully Paid
Total Remaining Holders Balance
Total Holders Balance
Units
%
2,844,370
1.04%
2,665,492
2,646,000
2,541,070
2,173,468
2,000,000
1,816,830
0.98%
0.97%
0.93%
0.80%
0.73%
0.67%
1,767,756
0.65%
1,766,938
0.65%
191,199,695
82,066,045
273,265,740
As at 10 February 2020, the 20 largest shareholders held ordinary shares representing 69.97% of the issued share capital.
Substantial Shareholders
Substantial holders in the Company are set out below:
Name
Janet H Cameron
CVC Limited
Tasplan Superannuation Fund (as per last notice)
Ellerston Capital and its associates (as per last notice)
C. VOTING RIGHTS
The voting rights attached to ordinary shares are set out below:
No. of
Shares Held
40,566,436
38,367,078
33,779,638
15,312,126
%
14.84%
14.04%
12.40%
5.60%
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
D. USE OF CASH
Cash and assets readily convertible to cash held by the Company for the reporting period were used in a way consistent
with its business strategy and objectives.
TasFoods Annual Report 2019 | 89
Board of Directors
Shane Noble
Jane Bennett
Alexander Beard
Roger McBain
Executive Chair
Managing Director and CEO
Non-Executive Director
Non-Executive Director
Company Secretary
Janelle O’Reilly
Registered Office
52-54 Tamar Street
Launceston Tasmania 7250 AUSTRALIA
Telephone: + 61 3 6331 6983
Facsimile: + 61 3 6256 9251
Website: www.tasfoods.com.au
Postal Address
PO Box 425
Launceston Tasmania 7250 AUSTRALIA
Share Registry
Link Market Services
Level 12, 680 George Street
Sydney New South Wales 2000 AUSTRALIA
Telephone: + 61 2 8280 7100
Facsimile: + 61 2 9287 0303
Auditor
PricewaterhouseCoopers
2 Riverside Quay
Southbank Boulevard
Southbank Victoria 3006 AUSTRALIA
Solicitors
K&L Gates
Level 31, 1 O’Connell Street
Sydney New South Wales 2000 AUSTRALIA
Groom Kennedy Lawyers and Advisers
Level 1, 47 Sandy Bay Road
Hobart Tasmania 7000 AUSTRALIA
Bankers
Australia and New Zealand Banking Group
Bendigo Bank
Stock Exchange Listing
TasFoods Limited shares are listed on the Australian Securities Exchange, code TFL
90 | TasFoods Annual Report 2019
CORPORATE DIRECTORY