1
A N N U A L
R E P O R T
22
TASFOODS ANNUAL REPORT 2022 AUDITOR
PricewaterhouseCoopers
2 Riverside Quay
Southbank Victoria 3006 Australia
SOLICITORS
HWL Ebsworth
Level 26, 530 Collins Street
Melbourne Victoria 3000 Australia
O’Reilly Legal & Governance Pty Ltd
Maning Avenue,
Sandy Bay, Tasmania, 7005 Australia
BANKERS
Australia and New Zealand Banking Group
Bendigo Bank
STOCK EXCHANGE LISTING
TasFoods Limited shares are listed on the Australian
Securities Exchange, ticker: TFL
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CORPORATE DIRECTORY
BOARD OF DIRECTORS
John Murphy
Independent Non-Executive Chair
Ben Swain
Non-Executive Director
John O’Hara
Independent Non-Executive Director
COMPANY SECRETARY
Shona Croucher
REGISTERED OFFICE
52-54 Tamar Street
Launceston Tasmania 7250 Australia
Telephone:
Facsimile:
Website:
+ 61 3 6331 6983
+ 61 3 6256 9251
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
+ 61 2 9287 0303
Facsimile:
TasFoods Limited
ACN 084 800 902
TA S F O O D S A N N U A L R E P O R T 2 0 2 2
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CONTENT
Corporate Directory
Chairman & CEO's Report
Operating & Financial Review
• Poultry Division
• Dairy Division
• Wasabi
• Corporate
• 2023 Outlook
• Risk
Board of Directors
Executive Team
Directors’ Report
Financial Report
• Consolidated Statement of Profit or Loss
IFC
05
10
11
14
18
20
21
23
27
28
29
54
and Other Comprehensive Income
55
• Consolidated Statement of Financial Position 56
• Consolidated Statement of Changes In Equity 57
• Consolidated Statement of Cash Flows
58
• Notes to Financial Statements
• Directors’ Declaration
• Independent Auditor’s Report
Shareholder Information
102
96
59
97
TA S F O O D S A N N U A L R E P O R T 2 0 2 2
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OUR
BRAND
PORTFOLIO
OUR BRANDS
EMBODY AUTHENTIC
PROVENANCE THAT
REFLECTS THE ESSENCE
OF PREMIUM TASMANIAN
PRODUCTS. OUR
DIVERSIFIED CUSTOMER
BASE ENABLES US TO
DELIVER THE ESSENCE
OF TASMANIA TO WHERE
CONSUMERS CHOOSE
TO SHOP.
PREMIUM
Brands that reflect artisan provenance
and Tasmanian heritage, targeted at
food lovers seeking authenticity.
EVERYDAY LUXURY
Brands that provide a piece of Tasmanian
indulgence for everyday life, targeted at
national retail and export markets.
MAINSTREAM / VALUE
Brands that support loyal customers
with local products providing profitable
volume to underpin the operations.
TA S F O O D S A N N U A L R E P O R T 2 0 2 2
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CHAIRMAN & CEO’S
REPORT
JOHN MURPHY
NON-EXECUTIVE
CHAIRMAN
SCOTT HADLEY
CHIEF EXECUTIVE
OFFICER
ON BEHALF OF THE BOARD OF
DIRECTORS AND THE MANAGEMENT OF
TASFOODS LTD, WE PRESENT TO YOU
THE ANNUAL REPORT FOR THE FINANCIAL
YEAR ENDED 31 DECEMBER 2022.
As announced in our AGM address 12 months
ago, we had reviewed and refreshed the strategic
plan, and our immediate priority in 2022 was to
stabilise the foundations of the business and be
in a position to leverage our core competencies
for profitable growth. We achieved a substantial
amount during the year and made significant changes
to all aspects of the business with Management
and the Board working together to simplify,
streamline and enhance our operating model to
drive superior execution and provide greater speed
and nimbleness as market conditions evolve.
“
OUR IMMEDIATE PRIORITY IN 2022 WAS
TO STABILISE THE FOUNDATIONS OF THE
BUSINESS AND THEN BE IN A POSITION
TO LEVERAGE OUR CORE COMPETENCIES
FOR PROFITABLE GROWTH.
At our AGM last year, the Chairman of the Board,
Craig Treasure, announced his decision to step
down from this position and the Board. Craig made
a significant contribution to TasFoods and we thank
him for his commitment and service to the Company.
John Murphy was appointed Acting Chairman
and formally ratified to the position in August
2022. The Board’s composition and capabilities
continue to be reviewed to ensure the skill set,
industry experience and tenure of the Directors
remains appropriate for the business and continues
to provide the necessary support, checks and
balances and guidance to the Management team.
In the first half of the year, the Company completed
a successful capital raising of $5.5m placement,
along with a $0.5m Share Purchase Plan to fund
initial stages of the Company’s new strategy and
working capital requirements. The placement was
strongly supported by our investors to undertake
the rebuild work required under the strategic
reset and support the opportunity for TasFoods.
Over the course of the year, both the broader
categories in which TasFoods operates and
the Company itself has faced unprecedented
uncertainty, supply chain disruptions and broader
macro-economic pressures which impacted
TASFOODS ANNUAL REPORT 2022 0 6
CHAIRMAN & CEO’S
REPORT, CONT.
operational performance. COVID-19 disruptions
affected both our business divisions where labour
shortages severely impacted operations and
imposed significant costs. The Poultry division in
particular was impacted as we prioritised continuity
of supply and animal welfare during the first quarter.
Temporary labour and overtime increases were
required to process birds, and the team at Nichols
did an outstanding job under difficult circumstances.
During the second half of the year, consumer
sentiment and spending was negatively impacted
by the upward momentum of inflation and interest
rates. Consumers are actively controlling their
spending and value offerings are seeing growth at
the expense of premium brands in the categories
TasFoods operates in. Our Dairy division felt the
impacts of this change in behaviour with volume
negatively impacted. Poultry sales performed
adequately during this period as chicken remains the
most affordable protein, however the division did see
a swing to more affordable cuts and pack formats.
FINANCIAL PERFORMANCE
Gross margins for the year were significantly
impacted by input cost increases associated
with dairy (milk and cream), poultry feed and
labour (COVID related). As part of the Company’s
ongoing efficiency program, Management have
fully implemented a SKU rationalisation program
across both the Dairy and Poultry divisions
and implemented significant changes to the
Company’s logistics network. The Company
has also implemented initiatives to reduce per
unit conversion costs in our facilities through
efficiency and effectiveness measures.
The performance in 2022 coupled with subdued
forward looking industry forecasts for the categories
TasFoods participates in has resulted in the company
recognising an impairment charge of $6.8m,
comprising brands and trademark impairment of
$2.9m in the Poultry division and $3.9m in the Dairy
division. The impairment charges are non-cash
and do not impact the Company’s cash position.
FY 2022
FY 2021
Dairy
$’000
Poultry
$’000
Horticulture
$’000
Shared
Services
$’000
Total
$’000
Dairy
$’000
Poultry
$’000
Horticulture
$’000
Shared
Services
$’000
Total
$’000
Change
$’000
Change
%
31,213
39,858
423
120
71,615
30,497
39,083
412
76
70,067
1,505
2.1%
(29,738)
(43,980)
(518)
(7,338)
(85,421)
(28,162)
(40,439)
(451)
(5,735)
(74,788)
(4,131)
5.5%
1,475
(1,509)
(94)
(7,218)
(7,346)
2,334
(1,356)
(39)
(5,660)
(4,720)
(2,626)
(55.6%)
Total
Revenue
Operating
Expenditure
Operating
EBITDA
GP Margin
29%
18%
298
-
Movement
in Fair Value
Impairment
Expense
(3,925)
(2,910)
59%
77
-
-
-
-
22%
375
35%
(32)
17%
(113)
(6,835)
(2,770)
(1,137)
60%
69
-
-
-
-
27%
(76)
(3,907)
(5.0%)
EBITDA
(2,449)
(4,122)
(17)
(7,218)
(13,806)
(468)
(2,606)
30
(5,660)
(8,704)
(5,102)
(58.6%)
NPAT
(16,478)
(10,741)
TASFOODS ANNUAL REPORT 2022 0 7
CHAIRMAN & CEO’S
REPORT, CONT.
Sales to interstate markets grew in late 2H 2022
through increased volume to existing customers and
the acquisition of new customers. Profitable growth
in interstate markets will remain a focus in 2023.
Input costs increased at unprecedented levels in
2022 and the Company worked hard to either
minimise their impact or pass through to customers
where appropriate. Feed costs associated with
the Poultry division increased by 14.9% per tonne,
milk costs increased by 30% per litre as a direct
result of higher farm gate prices, and cream prices
increased by 13% per litre compared to PCP.
Against the backdrop of this challenging operating
environment which may continue for sometime,
whilst we are positive on the many operating
initiatives we have put in place, we continue to assess
the asset profile of both our key business divisions,
and the businesses themselves to ensure we are
able to drive long term returns for shareholders.
We continue to review our Capital management
framework and have made key decisions
to exit the organic poultry operations and
the sale & leaseback of non-core real estate
assets associated with Betta Milk.
The Company produced a solid sales performance,
reporting an increase of 1.6% to $70.6 million,
despite undertaking an extensive SKU and
customer rationalisation to simplify operations.
On a like for like basis, sales revenue was up
2.7%. Group operating EBITDA was a loss of $7.3
million which was driven by significantly increased
input costs relating to milk, wheat, cream and
labour. COVID impacted the result, particularly
in the first quarter, with labour costs increasing by
$0.4 million to ensure continuity of supply. The
organic poultry operation resulted in a loss of $0.9
million for the year (including decommissioning
costs) with this business unit being closed in
July to eliminate future operating losses.
The impairment expense of $6.8 million
recognised in December contributed to the full-
year financial result of a net loss after tax of $16.5
million. The impairment of intangible assets did
not affect the cash position of the company.
After taking into account the SKU rationalisation
programme, our two major operating divisions
both achieved sales revenue growth, with the
Poultry division increasing revenue by 1.5% and
Dairy division increasing sales by 2.3%. The SKU
rationalisation programme was significant with over
50% of poultry SKU’s being rationalised, 24% of
Betta Milk SKU’s deleted and 56% of Meander Valley
Dairy SKU’s discontinued. This programme started
in March 2022 and was completed by the end of
the year as we ran out stocks of raw materials.
TASFOODS ANNUAL REPORT 2022 0 8
CHAIRMAN & CEO’S
REPORT, CONT.
PEOPLE & SYSTEMS CAPABILITY
MARKETING & E-COMMERCE
During the year, a new management team and
structure was implemented to best deliver upon
our strategy and maximise performance of the
business. New and replacement hires were made
in sales, marketing, dairy operations, IT, logistics,
procurement and finance, and this increased
capability has enabled many initiatives to be
implemented to the benefit of the Company. It
is with regret that we accepted the resignation
of our Chief Financial Officer, Shona Croucher,
however we are pleased that we were able to
find a well credentialed replacement in Joshua
Fletcher. We thank Shona for her efforts in
the past 15 months in helping implement key
strategic and operational initiatives that are
fundamental to the future success of TasFoods.
The Company’s newly implemented ERP system
is now operational across Meander Valley Dairy,
Pyengana Dairy, Shima Wasabi, e-Commerce
and Shared Services business units. Betta Milk
will be operational in H1 2023 and will enable
integration of all Dairy businesses to maximise
efficiency and effectiveness measures.
The Company was proud to accept numerous
gold and silver awards at the Australian Grand
Dairy Awards. Pyengana Traditional Cheese,
Pyengana Milk, Betta Milk Lactose Free and Meander
Valley Dairy Sour Cream all won gold awards.
Numerous other Meander Valley Dairy, Betta Milk
and Pyengana Cheese products received silver
awards. These awards are a great testament
to the high quality of our authentic products.
Recognising the rising consumer demand for
online gifting and direct to consumer food
offerings, the Company is investing in the
growth of its e-Commerce capability.
The Company has re-branded and re-launched
its authentic real wasabi brand, Shima, and
initiated a chef ambassador program, partnering
with some of Australia’s most recognisable
culinary identities and restaurants, including
Luke Burgess and Tetsuya’s Restaurant.
To better service consumer desire for authentic
offerings with provenance, the Company has
relaunched its premium cheese brand, Pyengana,
through a new identity, online platform and social
presence, with multiple award-winning cheddar and
blue cheese offerings now available direct to home.
During October the Company launched a new
luxury and corporate gifting brand, ‘Boxolove’,
targeted at the consumer and corporate gifting
market. The online channel will deliver curated
hampers, with extensive selections of food and
beverages from Tasmania’s finest producers.
These changes, combined with an increased
digital media spend, resulted in a growth
of 209% in online sales for the year.
TASFOODS ANNUAL REPORT 2022 0 9
CHAIRMAN & CEO’S
REPORT, CONT.
STRATEGY
At the beginning of 2022, the Company re-purposed our strategic intent as shown below:
Reimagining authentic provenance
To create the most reputable, sustainable, and authentic premium products collective
Our Vision
Our Mission
Create a world leading growth platform for premium provenance brands to deliver superior consumer and customer experience and market leading shareholder returns
Our Winning Capabilities
People and Capability
TasFoods will invest in our people and
their capability to ensure they thrive,
develop and grow in the support of
our business.
Brand building
TasFoods will invest behind our
premium brands to ensure we remain
relevant to evolving consumer needs.
Customer service
TasFoods will deliver exceptional
service to all customers and be known
for being easy to do business with for
mutual growth.
Operational excellence
TasFoods will deliver the highest
quality products and be known for
being best in class in efficiency and
effectiveness.
Capital management
TasFoods will pro actively manage our
portfolio of business’ and brands to
maximise returns to all stakeholders.
Our Values
Passion
We are passionate about our people,
products and brands.
Respect
We have respect for each other, our
stakeholders, the animals and the
environment.
Accountability
Our people are accountable for their
actions and focused on results that
deliver on our strategy.
Together
Working together as a team we achieve
amazing outcomes.
1
We are very proud of the team at TasFoods and
they have shown great resilience in the face of
many challenges during 2022. We always strive
to deliver outstanding products of the highest
quality with the team upholding our values of
passion, respect, accountability and togetherness.
Against a very challenging external environment
in 2022, we have made significant progress
on simplifying and strengthening the business,
and whilst the financial result for the year is not
reflective of the many improvements that have
been made we can see the initiatives coming
through in the latter period of the year which give
us continued confidence in the unique opportunity
that Tasmanian brands have to offer. The Board
and management team, with improved capability
in process, systems and people, are well equipped
to implement initiatives to respond to these
changing market conditions. Whilst the business
transformation agenda has been progressed
very quickly, it is a multi-year programme that
will deliver significant benefits over time and it
will adapt to evolving market conditions, to best
provide improved returns for shareholders.
We would like to thank all stakeholders, our
customers, suppliers, employees and shareholders
for their continued support to the business.
John Murphy
Non-Executive Chair
Scott Hadley
Chief Executive Officer
TASFOODS ANNUAL REPORT 2022
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OPERATING &
FINANCIAL
REVIEW
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POULTRY DIVISION
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POULTRY DIVISION
TOTAL REVENUE FOR THE POULTRY DIVISION
GREW BY 1.9% ON THE PCP IN 2022 TO $39.8
MILLION. REVENUE GROWTH WAS LARGELY
DRIVEN BY STRATEGIES IMPLEMENTED
DURING THE YEAR, INCLUDING PRICE RISES
AND THE IMPLEMENTATION OF MINIMUM
ORDER QUANTITIES, PARTIALLY OFFSET
BY A SKU RATIONALISATION PROGRAM
AIMED AT SIMPLIFYING THE PRODUCT
OFFERING AND IMPROVING EFFICIENCIES.
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.
The operating and efficiency measures implemented
in the poultry business unit in Q3 have started to
show positive results, resulting in a gross margin
improvement of 1.4% on the PCP. Gross margin was
significantly impacted in this division by increased
input costs including grain costs associated
with feed, increased labour processing costs
as the business dealt with continued COVID-19
related operating implications in Q1 and Q2, and
significant increases in freight and distribution.
Volume sold decreased on 2021 levels by 6%, driven
by the decision to cease organic farming, however
revenue per kg increased by 9% which facilitated
the increase in gross margin. During 2022 the
business made the decision to exit the organic poultry
operations and discontinue sales from July 2022.
The organic poultry operation placed a significant
financial and operational stress on the broader
Nichols business unit. The Company incurred one-
off expenditure of $0.9 million relating to operating
losses and the closure of organic poultry operations
in 2022. Organic poultry has not been profitable
for Nichols since inception and using the TasFoods
Capital Management Framework it was decided to
deploy the resources in other areas of the business.
The Poultry division reported an operating EBITDA
loss for 2022 primarily due to the increased
input costs. Other contributors to the result
were an increase in repairs and maintenance
and material increases in distribution costs.
As a result of strategic changes implemented in
the Nichols business unit in 2H 2022, overtime
costs have reduced by 50% compared to 1H
2022 (an annualised savings of $0.5m).
TASFOODS ANNUAL REPORT 2022 1 3
POULTRY DIVISION, CONT.
The Company further extended its partnership
with Coles during the year with distribution into
Victoria, which is a great testament to the quality
of our product and the service we provide to this
valued partner. Mainland sales increased in Q4
2022 by 21 % from the PCP, which was driven by
new mainland customer acquisitions. We believe
Nichols Poultry is uniquely placed in the market
given its chemical and chlorine free characteristics
as a result of our air-chilling process. We believe
Nichols has strong consumer cut-through not
only in Tasmania but importantly in the mainland
market where customers are demanding better
tasting poultry products. Poultry remains Australian
consumers first choice for protein and Nichols is
well placed to gain more share of this market.
TA S F O O D S A N N U A L R E P O R T 2 0 2 2
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DAIRY DIVISION
TA S F O O D S A N N U A L R E P O R T 2 0 2 2
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DAIRY DIVISION, CONT.
OUR DAIRY DIVISION COMPRISES THREE
BUSINESS UNITS, BETTA MILK, MEANDER
VALLEY DAIRY AND PYENGANA DAIRY. EACH
BUSINESS UNIT PLAYS A UNIQUE ROLE WITHIN
THE TASFOODS DAIRY DIVISION HOWEVER
THERE ARE OPPORTUNITIES FOR FURTHER
GROWTH AND EFFICIENCIES AS WE CONTINUE
TO CONSOLIDATE THE DAIRY DIVISION.
The division reported a reasonable financial
contribution at both the revenue and EBITDA levels.
Total revenue for the Dairy division grew by 2.4%
to $31.2 million. The sales growth was primarily
driven by increases in Pyengana Cheese and Milk
and Meander Valley Butter and Cream range.
THE DAIRY DIVISION
HAS THREE CENTRES
OF EXCELLENCE;
• PYENGANA DAIRY –
CHEESE AND
TOURISM CAFE
• MEANDER VALLEY
DAIRY – SPECIALTY
CREAMS AND BUTTER
• BETTA MILK BURNIE –
FRESH MILK BOTTLING
Input costs in the Dairy division increased significantly
during the year, predominately on the back of rises
in farm gate milk prices (23.5%). During 2022, the
business absorbed the majority of these increases
which resulted in gross margin decline from 2021.
This translated into a lower operating EBITDA
contribution of $1.5 million, a 37% decline on 2021
results. Increased logistics, marketing and repairs
and maintenance costs similarly contributed to
the lower level of EBITDA performance. As part
of the ERP implementation across the Dairy unit,
Pyengana inventory was devalued by $0.3m,
with some of this relating to prior periods.
The Company continues to focus on implementing
initiatives to reduce manufacturing conversion
costs in its dairy processing facilities through
efficiency and effectiveness measures. As a
result of strategic changes implemented in the
Betta Milk business unit in 2H 2022, overtime
costs have reduced by 30% compared to 1H
2022 (an annualised savings of $0.2m).
The Pyengana business unit produced a solid result
with sales increasing by 8% which flowed through
to an improve EBITDA performance from PCP.
The premium brand positioning of this high-quality
product resonates strongly with customers who are
looking for more indulgent experiences, particularly
after COVID-19 lockdowns. Management is buoyed by
the growth of this brand and believes it will provide a
platform for future growth into the Hotel, Restaurant
and Café sector, both state-wide and mainland.
The Meander Valley Dairy business unit recorded sales
growth across its key categories of Butter and Cream.
Total butter volumes increased by 36% compared to
PCP, resulting in a 35% increase in sales compared to
PCP. Total cream volume reduced by 6% compared
to PCP, mainly as a result of the Company’s decision
to delete loss making flavoured cream range which
negatively impacted sales by 1%. The butter and
cream range makes up the majority of sales in this
division and continues to grow on the back of national
distribution in key distribution channels, along with
an increased ranging in independent channels.
TA S F O O D S A N N U A L R E P O R T 2 0 2 2
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DAIRY DIVISION, CONT.
White milk volume under the Betta Milk brand
declined from 2021 levels by 6% on PCP. Price
rises have been implemented to offset the
substantial increases in input costs, as competition
intensified within the Tasmanian market in this
dairy commodity category. White milk remains a
competitive category but new products such as
Lactose Free has helped maintain the relevance of
the Betta Milk brand. Management is confident in
Betta Milk continuing to contribute to the overall
group performance given the strong brand equity
within Tasmania, however Management will look
to explore new product development to take the
brand into less cost-competitive adjacencies.
TA S F O O D S A N N U A L R E P O R T 2 0 2 2
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WASABI
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HORTICULTURE - SHIMA WASABI
SHIMA WASABI IS POSITIONED AS A UNIQUE,
PREMIUM, PROVINCIAL OFFERING WHICH
OPENS ACCESS TO PREMIUM FOOD CHANNELS
SUCH AS HIGH-END RESTAURANTS FOR OTHER
TASFOODS PRODUCTS. SHIMA SALES WERE
CONSISTENT WITH 2021 WITH A SLIGHT
DECLINE IN EBITDA CONTRIBUTION, MAINLY
ATTRIBUTED TO INCREASED LABOUR COSTS.
A UNIQUE, PREMIUM,
PROVINCIAL OFFERING
Our unique ready-to-use wasabi paste made from
real wasabi is a key driver of growth for this business
unit after being launched in 2021. This provides
customers with a premium and authentic wasabi
flavour. There are few alternative options within the
Australian domestic food market and our access
to the premium route trade market is assisted by
having Shima Wasabi in our product portfolio.
The Company’s newly implemented ERP system has
been in operation since Q4 2022 at Shima Wasabi.
As the market conditions improve during
2023, we expect an improvement in
Shima sales revenue and profitability.
TA S F O O D S A N N U A L R E P O R T 2 0 2 2
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CORPORATE
SHARED SERVICES
BALANCE SHEET AND CASHFLOWS
The Head Office Centre of Excellence for TasFoods
saw an increase in expenditure compared to 2021,
particularly in regard to investment in people,
capability and IT infrastructure and systems. The
TasFoods business has undergone significant change
in FY2022 and there is an expectation of continued
evolution as the Management team build capability
in process, systems and personnel. These changes
are expected to further improve efficiencies,
leading to improved financial performance for
shareholders and a platform for future growth.
Whilst the business transformation agenda is moving
at pace, it will be a multi-year programme and will
deliver further significant benefits over time.
The Group is supported by a balance sheet with
net assets at 31 December 2022 of $18.3 million
(31 December 2021: $28.6 million), including
fixed asset balances of $25.8 million. Cash
balances were $0.3 million (31 December
2021: $1.4 million) and the Group had an
undrawn overdraft facility of $3.2 million.
The decrease in group net assets is mainly due
to the operating loss of $16.5 million, which
includes a non-cash impairment charge of $6.8
million. Inventory at 31 December 2022 was
$4.6 million (31 December 2021: $4.6 million).
Net cash outflows from operating activities were
$5.7 million (2021: $4.5 million). This is reflective of
the implementation of selling price increases which
have been offset by increased input costs including
grain costs associated with feed, farm gate milk
price for milk, increased labour processing costs and
significant increases in freight and distribution costs.
Net cash inflows from investing activities were $0.7
million (2021: $2.8 million outflow). During 2022 the
group invested $0.9 million into fixed assets including
upgrades to increase butter capacity for Meander
Valley Dairy, and other general upgrades of equipment
as required. 2H 2022 also saw the sale of one of a
non-core distribution asset based in Launceston as
part of the Company’s sale and leaseback strategy.
Net cash inflows from financing activities were
$4.0 million (2021: $1.4 million). This included a
successful capital raise of $5.5 million placement
along with a $0.5 million Share Purchase Plan
to fund initial stages of the Company’s new
strategy and working capital requirements.
Management continue to focus on a disciplined
approach to working capital management to
ensure improved profitability and cash flows.
TASFOODS ANNUAL REPORT 2022 2 1
2 1
2023 OUTLOOK
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2023 OUTLOOK
The ERP will provide vital information to ensure
profitable decision making, whilst making TasFoods
easier to do business with. The ERP will provide
the foundational support to improve operational
efficiencies, particularly in the areas of logistics,
customer service and manufacturing. TasFoods will
be able to operate as one integrated Dairy business for
the first time and it will help un-lock our true potential.
Recognising the rising consumer demand for online
gifting and direct to consumer food offerings, the
Company will continue to focus on the growth of
its e-Commerce capability. The Company has re-
branded and re-launched its authentic real wasabi
brand, Shima, we have relaunched our premium
cheese brand, Pyengana, through a new identity,
online platform and social presence, and we launched
a new luxury and corporate gifting brand, ‘Boxolove’,
targeted at the consumer and corporate gifting
market. The online channel will deliver curated
hampers, with extensive selections of food and
beverages from Tasmania’s finest producers.
2022 was a year to establish new foundations for
the business. We are now in a position to capitalise
on our strength in Tasmania through delivering a
positive financial return, aggressively expanding
our interstate and on-line offerings, and being
continuously aware of opportunities in adjacent
categories that fit with the strategy of TasFoods
premium authentic business. We believe that
delivering on these initiatives will put TasFoods on the
path to profit and sustainable returns to shareholders.
THE PERFORMANCE OF THE BUSINESS IN
2022 WAS CHALLENGED BY NUMEROUS
FACTORS BOTH INTERNAL AND EXTERNAL.
CONSUMER SENTIMENT AND SPENDING
CONTINUES TO BE IMPACTED BY THE
MACROECONOMIC BACKDROP OF RISING
INFLATION AND INTEREST RATES HOWEVER
MANAGEMENT ARE FOCUSSED ON ENSURING
THE COMPANY BUILDS ON OUR NOW SOLID
FOUNDATIONS TO DELIVER STRONG GROWTH.
TasFoods is an integrated business distributing
premium, authentic brands with a rich
provincial story that consumers trust and love.
Understanding the consumer and meeting
their needs will be at the heart of what we do,
and we need to communicate our unique story
and attributes to them in a compelling way.
We have made fundamental changes to our business
that establish the foundations for profitable growth.
We are implementing cost reduction programmes in
manufacturing and logistics that will deliver benefits
in 2023, we are expanding our portfolio of products
through 3rd party licensing and we continue to
build capability in our Sales & Marketing team.
A major initiative for 2022 was the implementation
of a TasFoods enterprise resource planning (ERP)
system. It is now operational across Meander Valley
Dairy, Pyengana Dairy, Shima Wasabi, e-Commerce
and Shared Services business units. We have
begun the implementation planning for Betta Milk,
which will be operational in H1 2023 and enable
integration of all Dairy businesses to maximise
efficiency and effectiveness measures. Management
have made the decision to not implement the
same ERP (SAP Business 1) into Nichols Poultry at
this time as we feel this will not facilitate the same
benefits as we will see in the Dairy division.
TASFOODS ANNUAL REPORT 2022 2 3
2 3
RISK
TA S F O O D S A N N U A L R E P O R T 2 0 2 2
2 4
RISK
TasFoods is committed to the effective management
of risk to reduce uncertainty in the Group's business
outcomes and to protect and enhance shareholder
value. There are various 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 system and process that will facilitate 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 2022 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 and able, TasFoods is
diversifying supply channels to reduce risk levels and
dependence on key suppliers.
PANDEMIC RISK
Ensuring the safety of our employees, contractors
and customers in a pandemic environment as well as
securing input supplies and managing the impact of
market volatility.
TasFoods operates on a number of different sites with
varying levels of pandemic impact risk. The Group has
developed site specific multi scenario pandemic plans
for each operational location that respond to updated
health, Government and industry advice as well as
emerging market conditions.
Each site plan prioritises the health and safety of
employees, site visitors and customers, follows
recommended advice from Government and Health
Officials relating to pandemic safety measures
including;
n Removal of all non-essential employees from
sites to work from home;
n Non-essential visitors not permitted on
processing sites;
n Provision of relevant protective equipment
to employees;
n Temperature testing of employees;
n Payment of standard wages to all employees
awaiting COVID or other relevant test results;
n Pandemic/COVID-specific daily cleaning and
sanitation programs;
n Additional staff facilities provided on large work sites
to allow for isolation of work groups; and
n Identification of social and commuting groups within
the workforce to ensure employees likely to have
contact outside of work remain in contained work
groups.
TASFOODS ANNUAL REPORT 2022 2 5
RISK, CONT.
MARKET RISK
CLIMATE 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 the upgrading of 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 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 climatic 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.
Minimising the risk of disease and infection impacting
our animals, manufacturing facilities and inputs.
ENVIRONMENTAL, SOCIAL
AND GOVERNANCE (ESG) RISK
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.
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.
Minimising the risk to the business of by focusing
on environmental and social impacts of business
operations.
TasFoods has a moral and business imperative to
understand and manage its ESG risks. To consider
TasFoods physical and social environment is not
only the right thing to do, but it is expected by
employees, customers, investors and regulatory
bodies. As the speed and pace of change on these
issues have increased, so have the expectations of
our stakeholders. TasFoods is not only expected to do
the right thing, insufficient action on these issues can
have a negative financial implication. ESG risks bring
a high degree of uncertainty in the form of potentially
severe disruption to the environmental, financial, and
social environment which may create immediate and
unforeseen outcomes for TasFoods and its various
stakeholders. TasFoods is focussed on reducing its
carbon footprint by utilising on-site wind turbine
electricity generation at it Sassafras facility to help
reduce electricity costs to the business.
TASFOODS ANNUAL REPORT 2022 2 6
FINANCIAL
REPORT
FOR THE YEAR ENDED
31 DECEMBER 2022
TA S F O O D S A N N U A L R E P O R T 2 0 2 2
2 7
BOARD OF DIRECTORS
JOHN MURPHY INDEPENDENT NON-EXECUTIVE CHAIR
Appointed Independent Non-Executive Director on 23 June 2021
Appointed Deputy Chair on 31 January 2022.
Appointed Acting Chair on 31 May 2022
Appointed Chair on 26 August 2022
John has over 35 years’ experience in the Australian and International Beverage, Food, Fast Moving Consumer
Goods and Packaging Industries. He has held a range of leadership roles in large multinational organisations including
Managing Director of Coca-Cola Amatil Australia; the CEO of Visy Industries Australian business; and the Managing
Director of Carlton & United Breweries Australian beer business after an extensive career with the company. John has
served on the boards of both public and private companies and has previously served as a board member/advisor
of PFD Foods, Bellamy’s Organic and Tribe Breweries and is currently a start-up founding advisor of the Turner
Stillhouse craft distillery in Tasmania.
BEN SWAIN NON-EXECUTIVE DIRECTOR
Appointed Non-Executive Director on 4 June 2020.
Ben is a partner of Tasmanian law firm Murdoch Clarke. His practice areas include corporate advice,
transactional mergers and acquisitions, real property and private client matters. Ben is a director
of various Pty Ltd companies and trusts including the Elsie Cameron Foundation Pty Ltd which has
investment in entities including TasFoods Limited. With a passion for Tasmania’s finest foods and
produce and the companies that grow and produce them, Ben gets great fulfilment from assisting, in
his professional capacity, various Tasmanian food and agriculture business to achieve their goals.
JOHN O’HARA INDEPENDENT NON-EXECUTIVE DIRECTOR
Appointed Independent Non-Executive Director on 23 June 2021.
John is a highly accomplished Executive and Non-Executive Director with a track record of substantive
contribution to strategic development and growth, cultural reform, value creation, building reputation and
stakeholder relationships. John’s Director experience spans across large private entities, corporations, and
Not For Profit. His executive roles have encompassed ASX organisations, Co-Operatives and large private
companies with national and international operations. John spent the last 18 years with Sunny Queen Australia,
the last 8 as CEO & Managing Director. Prior to that he has held Senior Executive roles in both Dairy Farmers
Cooperative and National Foods. He was previously Chair of Mulgowie Farming Company and is currently
Advisory Board Chair of Morgan's Pastoral Company, Preistley's Gourmet Delights and Simon George & Sons.
CRAIG TREASURE NON-EXECUTIVE CHAIR
Appointed Non-Executive Chair on 4 June 2020. Ceased being a Director on 30 May 2022.
Craig has had over 35 years experience in business and property development. His most recent executive role
was as CEO and Managing Director of ASX listed Villa World Limited (VLW). He is an experienced ASX Director
and has had many roles in private and public sectors as a business owner and director. He is a Member of the
Australian Institute of Company Directors and a Fellow of the Urban Development Institute of Australia.
TASFOODS ANNUAL REPORT 2022 2 8
EXECUTIVE TEAM
SCOTT HADLEY
CHIEF EXECUTIVE OFFICER
Appointed CEO in October 2021.
Scott is a proud Tasmanian with over 20 years experience in a range of companies in Australia building
premium brands, leading teams and developing go to market and supply chain organisations. Scott was
previously CEO of Asahi Beverages Alcohol Division and has held senior positions with TT-Line, Fosters
Group, GlaxoSmithKline and Cadbury. Scott is a member of the AICD, has an MBA (Executive) from
AGSM, completed the Senior Executive Programme at London Business School and is a CPA.
SHONA CROUCHER
CHIEF FINANCIAL OFFICER & COMPANY SECRETARY
Appointed CFO in October 2021.
Appointed Company Secretary in November 2021.
Shona is an experienced professional. Shona has previously worked at Bellamy’s Organic where she has
held the roles of Chief Financial Officer, and Director of Finance and People. Prior to these roles, Shona
was a Director at KPMG where she specialised in taxation, corporate business advisory, and business
valuation. Shona’s advisory experience covered a diverse range of industry sectors including agriculture,
manufacturing, and professional services. Shona holds a Master of Applied Finance, is a Fellow of the
Taxation Institute of Australia, has a Graduate Diploma of Financial Planning, and is a member of the Institute
of Chartered Accountants Australia and New Zealand (CA ANZ). Shona has also completed the Emerging
CFO: Strategic Leadership Financial Program at the Stanford University Graduate School of Business.
TASFOODS ANNUAL REPORT 2022 2 9
DIRECTORS’ REPORT
The 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 2022
In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:
DIRECTORS
John Murphy
Experience and qualifications
Independent Non-Executive Chair
John became the Deputy Chair on 31 January 2022, Acting Chair on 31
May 2022 and Chair on 26 August 2022
John was appointed to the Board as an Independent Non-Executive
Director on 23 June 2021. John was Chair of the Audit and Risk
Committee until 29 September 2022. During FY22 John was a
member of both the Audit and Risk Committee and the Nomination and
Remuneration Committee.
John has over 35 years’ experience in the Australian and International
Beverage, Food, Fast Moving Consumer Goods and Packaging Industries.
He has held a range of leadership roles in large multinational organisations
including Managing Director of Coca-Cola Amatil Australia; the CEO of
Visy Industries Australian business; and the Managing Director of Carlton
& United Breweries Australian beer business after an extensive career with
the company. John has served on the boards of both public and private
companies and has previously served as a board member/advisor of PFD
Foods, Bellamy’s Organic and Tribe Breweries and is currently a start-up
founding advisor of the Turner Stillhouse craft distillery in Tasmania.
Other Directorships in listed entities:
Former Directorships in listed entities in the last 3 years:
Nil
Nil
Interest in shares and options:
2,106,061 Share Appreciation Rights
Ben Swain
Non-Executive Director
Experience and qualifications
Ben was appointed to the Board as a Non-Executive Director on 4 June
2020. During FY22 Ben was a member of both the Audit and Risk
Committee and the Nomination and Remuneration Committee. Ben
became Chair of the Audit and Risk Committee on 29 September 2022.
Ben is a partner of Tasmanian law firm Murdoch Clarke. His practice
areas include corporate advice, transactional mergers and acquisitions,
real property and private client matters. Ben is a director of various
private companies and trusts including the Elsie Cameron Foundation Pty
Ltd which has an investment in entities including TasFoods Limited. With
a passion for Tasmania’s finest foods and produce and the companies that
grow and produce them, Ben gets great fulfilment from assisting, in his
professional capacity, various Tasmanian food and agriculture business to
achieve their goals.
Other Directorships in listed entities:
Former Directorships in listed entities in the last 3 years:
Nil
Nil
Interest in shares and options:
1,578,571 Ordinary Shares
2,106,061 Share Appreciation Rights
TASFOODS ANNUAL REPORT 2022 3 0
DIRECTORS’ REPORT, CONT.
DIRECTORS
John O’Hara
Experience and qualifications
Independent Non-Executive Director since 23 June 2021
John was appointed to the Board as an Independent Non-Executive
Director on 23 June 2021. During FY22 John was a member of both
the Audit and Risk Committee and the Nomination and Remuneration
Committee. John became Chair of the Nomination and Remuneration
Committee on 31 January 2022.
John is a highly accomplished Executive and Non-Executive Director
with a track record of substantive contribution to strategic development
and growth, cultural reform, value creation, building reputation and
stakeholder relationships. John’s Director experience spans across
large private entities, corporations, and Not For Profit. His executive
roles have encompassed ASX organisations, Co-Operatives and
large private companies with national and international operations.
John spent the last 18 years with Sunny Queen Australia, the last
8 as CEO & Managing Director. Prior to that he has held Senior
Executive roles in both Dairy Farmers Cooperative and National
Foods. He was previously Chair of Mulgowie Farming Company and
is currently Advisory Board Chair of Morgan's Pastoral Company,
Preistley's Gourmet Delights and Simon George & Sons.
Other Directorships in listed entities:
Former Directorships in listed entities in the last 3 years:
Nil
Nil
Interest in shares and options:
2,106,061 Share Appreciation Rights
Craig Treasure
Non-Executive Chair until 30 May 2022
Experience and qualifications
Craig joined the Board on 4 June 2020 and was appointed by the Board
as Independent Non-Executive Chair on this date. During FY21 Craig
joined the Board of substantial shareholder CVC Limited as Executive
Chairman. The TasFoods Board designated Craig a Non-Independent
Non-Executive Director and Chair on 31 January 2022. Craig was a
member of the Audit and Risk Committee and during FY22 was the Chair
of the Nomination and Remuneration Committee. Craig ceased to be a
Director on 30 May 2022.
Craig has over 35 years’ experience in business and property
development. Craig’s most recent executive role was as CEO and
Managing Director of ASX listed Villa World Limited. Craig is an
experienced ASX Director and has had many roles in the public and
private sectors as a business owner and director. He is a member of the
Australian Institute of Company Directors and a Fellow of the Urban
Development Institute of Australia.
Other Directorships in listed entities:
CVC Limited
Former Directorships in listed entities in the last 3 years:
Villa World Limited; Eildon Capital Limited
Interest in shares and options:
721,861 Ordinary Shares (at the time of resignation)
TASFOODS ANNUAL REPORT 2022 3 1
DIRECTORS’ REPORT, CONT.
COMPANY SECRETARY
Shona Croucher
Experience and qualifications
Company Secretary and Chief Financial Officer
Shona joined the Company as Chief Financial Officer on 25 October
2021. She was appointed as Company Secretary on 26 November
2021.
Shona is an experienced finance professional. Previously Shona has
worked at Bellamy’s Organic where she has held the roles of Chief
Financial Officer and Director of Finance and People. Prior to this role,
Shona was a Director at KPMG where she specialised in taxation,
corporate business advisory, and business valuation. Shona holds
a Master of Applied Finance (Kaplan Professional), is a Fellow of the
Taxation Institute of Australia, has a Graduate Diploma of Financial
Planning (Securities Institute of Australia), and is a member of the
Institute of Chartered Accountants Australia and New Zealand (CA
ANZ).
TASFOODS ANNUAL REPORT 2022 3 2
DIRECTORS’ REPORT, CONT.
MEETING OF DIRECTORS
The following table sets out the number of meetings of the Company’s Directors during the year ended 31 December
2022 and the number of meetings attended by each Director during that time. Board Meetings were held in addition to
the Company’s Annual General Meeting held on 30 May 2022.
Director
Board Meeting
Audit And Risk Committee
Nomination & Remuneration
Committee
J Murphy1
B Swain1
J O’Hara1
C Treasure2
Held during
time on Board
Attended
Held during
time on Board
Attended
Held during
time on Board
Attended
19
19
19
8
19
19
19
8
7
7
7
3
7
7
7
1
4
4
4
3
4
4
4
3
1Mr Murphy, Mr O’Hara and Mr Swain were on the Board for the entire financial year.
2Mr Treasure resigned from the Board effective 30 May 2022.
PRINCIPAL ACTIVITIES
The principal activities of the Group are the processing, manufacture and sale of 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.
SIGNIFICANT CHANGE IN STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group during the financial year, other than those outlined
in the Operating and Financial Review.
AFTER BALANCE DATE EVENTS
There are no matters or circumstances that have arisen since 31 December 2022, which have significantly affected the
Group’s operations, results or state of affairs, or may do so in future years.
TASFOODS ANNUAL REPORT 2022 3 3
DIRECTORS’ REPORT, CONT.
REMUNERATION REPORT
Message from the Chairman of the Remuneration & Nominations Committee
Dear Shareholder
On behalf of the Board, I am pleased to present the Remuneration Report for the financial year ended 31 December
2022, outlining the nature and amount of remuneration for Tasfood’s Non-Executive Directors and other Key
Management Personnel (“KMP”).
TasFood’s remuneration strategy is designed to be responsible and sufficiently competitive to attract and retain valued
Executives and directors who create value for shareholders whilst maintaining alignment with the short term and long
term objectives of the Company. In May 2022 Craig Treasure stepped down as Chair and Non-Executive Director of the
Company and John Murphy assumed the role of Non-Executive Acting Chair until he was formally appointed as Non-
Executive Chair on 26 August 2022. I wish to thank Craig for his leadership and contribution during his tenure. During
2022 Tasfoods CEO, Scott Hadley, continued to build the leadership team including key appointments in marketing,
Operations and Sales divisions to support sustainable business growth and implementation of strategic initiatives.
Adopting independent expert advice received early in the year, FY22 saw the implementation of new short term and
long term incentive plans designed to improve strategy alignment and support sustainability of returns for shareholders.
This included a grant of restricted equity to Directors in the form of sacrificed Board Fees as well as a one-off grant
aimed at retention of key Directors during the business turnaround. The new long term incentive plan was approved
by shareholders at the May 2022 AGM. It is especially important that any reward for Executives under the long-term
incentive plan is clearly linked to business performance and our shareholders’ expectations. The Board will, over the
course of FY23, consider what further improvements to remuneration governance, policies, procedures and practices
could be made, implement them, provide updates and respond to feedback in future Remuneration Reports.
We look forward to your comments, and support for remuneration related resolutions, at the upcoming AGM.
On behalf of the Committee, I recommend the Report to you.
Yours sincerely,
John O’Hara
Chair – Remuneration and Nomination Committee
TASFOODS ANNUAL REPORT 2022
3 4
DIRECTORS’ REPORT, CONT.
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 2022, 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 2022 the Company’s main activity related to developing Tasmanian branded food businesses (including Nichols
Poultry, Betta Milk, Meander Valley Dairy, Pyengana Dairy and Shima Wasabi).
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. 2022 fixed remuneration
4.4. 2022 short-term incentive arrangements
4.5. 2022 long-term incentive arrangements
4.6. KMPs 2022 short-term incentive arrangement results
4.7. Company financial performance
5. Executive contracts
6. Non-executive directors’ remuneration structure
6.1. Current fee levels and fee pool
6.2. 2022 long-term incentive arrangements
7. Restrictions on long-term incentive plan shares prior to vesting
8. Remuneration tables – Directors and KMP Executives
TASFOODS ANNUAL REPORT 2022
3 5
DIRECTORS’ REPORT, CONT.
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 2022 were:
Current Non-Executive Directors
Role
Appointment Date
John Murphy1
Ben Swain
John O’Hara
Non-executive Chair
Non-executive Director
Non-executive Director
Former Executive and Non-Executive Directors
Role
Craig Treasure2
Non-executive Chair
Current KMP Executives
Role
Scott Hadley
Shona Croucher
Chief Executive Officer
Chief Financial Officer
23 June 2021
4 June 2020
23 June 2021
End Date
30 May 2022
Appointment Date
1 October 2021
25 Octoer 2021
1 John Murphy was appointed Acting Chair on 31 May 2022, and appointed as Chair on 26 August 2022
2 Craig Treasure resigned as Directot and Chair on 30 May 2022
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:
n Assessment of necessary and desirable competencies of Board members;
n Review of Board succession plans to maintain an appropriate balance of skills, experience and expertise;
n 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
n Recommendations for the appointment or replacement of Directors.
Additional responsibilities of the Committee include reviewing and reporting to the Board on:
n 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;
n The review of the Audited Remuneration Report to be included in the annual report;
n Remuneration policies and practices for the Company generally;
n Superannuation arrangements;
n Board remuneration; and
n Such other matters as the Board may refer to the Committee from time to time.
TASFOODS ANNUAL REPORT 2022 3 6
DIRECTORS’ REPORT, CONT.
3. ENGAGEMENT OF REMUNERATION CONSULTANTS
The Nomination and Remuneration Committee periodically engages independent external consultants to advise
and assess KMP remuneration arrangements. During 2022 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.
During 1H22, the Remuneration Committee engaged Godfrey Remuneration Group Pty Ltd (GRG) to provide
supporting documentation for the implementation of the short term and long-term incentive plan (previously
designed by GRG in 2021). GRG was paid $29,000 for these services.
GRG have confirmed that any remuneration recommendations have been made free from undue influence by
members of the group’s key management personnel.
The following arrangements were made to ensure that the remuneration recommendations were free from undue
influence:
n GRG was engaged by, and reported directly to, the chair of the remuneration committee. The agreement for the
provision of remuneration consulting services was executed by the chair of the remuneration committee under
delegated authority on behalf of the Board.
n GRG’s report, including supporting documentation was provided directly to the chair of the remuneration
committee; and
n GRG was permitted to speak to management throughout the engagement to understand company processes,
practices and other business issues and obtain management perspectives. However, GRG was not permitted to
provide any member of management with a copy of their draft or final report that contained the remuneration
recommendations.
As a consequence, the Board is satisfied that the recommendations were made free from undue influence from any
members of the key management personnel.
TASFOODS ANNUAL REPORT 2022 3 7
DIRECTORS’ REPORT, CONT.
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, by providing a fixed
remuneration component together with specific short-term and long-term incentives (including equity based
remuneration to Directors) based on key performance areas affecting TasFoods financial results.
In the case of non-executive directors, their remuneration does not contain performance-based or ‘at risk’
components. Non-executive directors are paid fees (via both cash and a newly implemented salary sacrifice
mechanism) and are encouraged to hold shares in TasFoods.
4.1. Executive remuneration structure
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:
n Provide competitive rewards to attract high calibre Executives;
n Focus on creating sustained shareholder value;
n Place a portion of executive remuneration at risk by linking reward with the strategic goals and performance of the
Company;
n Differentiate individual rewards commensurate with contribution to overall results and according to individual
accountability, performance and potential; and
n Ensure total remuneration is competitive by market standards.
Executives’ total remuneration package may be comprised of the following elements:
n Total Fixed Remuneration (base salary and superannuation)
n At-Risk Remuneration:
• Short-Term Incentive (STI)
• Long-Term Incentive (LTI)
TASFOODS ANNUAL REPORT 2022 3 8
DIRECTORS’ REPORT, CONT.
4. REMUNERATION STRATEGY AND FRAMEWORK, CONTINUED.
4.1. Executive remuneration structure, continued.
Performance Condition
Remuneration Strategy/ Performance Link
Total Fixed
Remuneration (TFR)
• salary
• statutory
superannuation
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)
Annual incentive
opportunity
delivered in cash
Performance is measured against:
• Financial Group performance (i.e. sales revenue,
gross profit margin and EBITDA); and
• Non-Financial KPIs (i.e. WH&S (LTIFR)
and other operational KPIs).
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 2022 can be found in section 4.6.
Long Term
Incentive (LTI)
LTI awards for the 2022 grants were provided under
the LTIP approved by shareholders at the 2022 AGM.
An award of rights
with performance
assessed over 3 years
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 and profitable growth,
two measures (Total Shareholder Return (TSR) and
EBITDA growth) were chosen for the 2022 grant.
Fixed remuneration is set to attract, motivate
and 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.
TASFOODS ANNUAL REPORT 2022 3 9
DIRECTORS’ REPORT, CONT.
4. REMUNERATION STRATEGY AND FRAMEWORK, CONTINUED.
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 2022 were as follows:
TFR
Short Term
Incentive
(At-Target)1
Short Term
Incentive
(Stretch)2
Long Term
Incentive
(Target
Opportunity)3
Long Term
Incentive
(Maximum
Opportunity)
Current KMP Executives
Scott Hadley
Shona Croucher
$450,000
$292,000
50.0%
40.0%
75.0%
60.0%
90.0%
40.0%
180.0%
80.0%
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.
TASFOODS ANNUAL REPORT 2022 4 0
DIRECTORS’ REPORT, CONT.
4. REMUNERATION STRATEGY AND FRAMEWORK, CONTINUED.
4.2. Remuneration mix and linking pay to performance, continued.
38%
21%
41%
TFR
STI
LTI
23%
22%
55%
TFR
STI
LTI
Scott Hadley
Shona Croucher
4.3. 2022 fixed remuneration
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 2022 (and 31 December 2021)
can be found in the ‘Remuneration Tables’ section of this report.
4.4. 2022 short-term incentive arrangements
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 – ccash 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).
TASFOODS ANNUAL REPORT 2022 4 1
DIRECTORS’ REPORT, CONT.
4. REMUNERATION STRATEGY AND FRAMEWORK, CONTINUED.
4.4. 2022 short-term incentive arrangements, continued.
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 2022 are set out in section 4.6.
4.5. 2022 long-term incentive arrangements
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
value creation (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 Executive 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 Performance Share Appreciation Rights (PSARs) 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 PSARs will be satisfied in Restricted Shares. The option
to settle in cash is only at the discretion of the Board.
Maximum number of Performance Rights: The maximum number of PSARs 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 the relative value of the PSAR. The value of a PSAR is calculated using the Black Scholes
option pricing model, and for the FY22 grant calculation, the value of the PSAR was determined to be $0.0298.
Measurement Period: The Measurement Period is the three financial years from 1 January 2022
to 31 December 2024.
Vesting Conditions: In order for PSARs 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 conditions in relation to the 2022 grant of PSARs are Total Shareholder Return (TSR) and EBITDA
growth as outlined below:
TASFOODS ANNUAL REPORT 2022 4 2
DIRECTORS’ REPORT, CONT.
4. REMUNERATION STRATEGY AND FRAMEWORK, CONTINUED.
Total Shareholder Return
The vesting percentages (of the grant/stretch/maximum level of LTI) to be determined by the following scale:
Performance Level
Absolute TSR (CAGR)
Indicative TFL Share price
% of Maximum vesting
Stretch
Between Target and Stretch
Target
25%
>19%, <25%
19%
$0.14
>$0.12 and <$0.14
$0.12
Between Threshold and Target
>14%, <19%
>$0.10 and <$0.12
Threshold
Below Threshold
14%
<14%
$0.10
<$0.10
100%
Pro-Rata
50%
Pro-Rata
25%
0%
The targets for share price growth are based on a starting share price of $0.07 (being the average share price of the
capital raisings undertaken by the Company in 1H 2022) which is a Compound Annual Growth Rate (CAGR) from
June 2022 of 19.6% to achieve ‘target’ share price and a CAGR of 26.0% to achieve ‘stretch’ share price.
Share Price will be determined by a ten 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.
EBITDA Growth
The Company’s compound annual growth in EBITDA, and achievement against the EBITDA Hurdle, will be determined
by the Board in its absolute discretion, having regard to matters it considers relevant. It is intended that EBITDA
for each relevant financial year will be calculated as EBITDA for that financial year, adjusted to exclude the costs of
servicing equity (other than dividends), adjusted for any bonus elements. For relevant financial years, the calculation
may be adjusted to take into account one-off items associated with equity raising, if considered appropriate by the
Board. The Board also reserves the right to make any other adjustments it thinks fit to the calculation of EBITDA having
regard to the impact of any other exceptional items.
Retesting: Retesting is not permitted under the terms of the Invitations.
Exercise Price: The exercise price for the PSARs is $0.066 however this price is notional and no amount needs
to be paid by the Participant in order to exercise the PSARs. Instead it is accounted for in the calculation of the
Exercised PSARs Value which is as follows:
(Share Price - Exercise Price) x Number of PSARs Exercised
Cessation of Employment: In the event of a termination of employment by the Company for cause, all unvested
PSARs will be forfeited unless otherwise determined by the Board.
Subject to the Rules, in other cases cessation of employment will generally result in pro-rata forfeiture of the PSARs
reflecting the remaining portion of the first year of the Measurement Period that will not be served, with the excess
staying on foot for testing at the end of the measurement period, unless otherwise determined by the Board.
Following a Participant ceasing employment with the Group, 90 days after the first date that all PSARs that the
Participant holds are fully vested and not subject to Exercise Restrictions, all PSARs they hold will be automatically
exercised on a date determined by the Board, unless otherwise specified in an Invitation or the Board determines
that they may be held for any remainder of the Term specified in the Invitation.
TASFOODS ANNUAL REPORT 2022 4 3
DIRECTORS’ REPORT, CONT.
4. REMUNERATION STRATEGY AND FRAMEWORK, CONTINUED.
4.6. KMPs 2022 short-term incentive arrangement results.
The measures and targets for the 2022 STI were set by the Board in February 2022 and were based on the
priorities for 2022. The key performance indicators were based upon stretch targets, with operating EBITDA set as
a hurdle requirement (or gate) for payment of the 2022 STI.
The following table shows the Company’s 2022 STI performance measures and weightings as applied to KMP.
Performance Measure
Description
Weighting
Comment
Operating EBITDA
Gross Profit Margin ($)
Gross Profit Margin (%)
WHS - Lost time injury
frequency rate (LTIFR)
Statutory EBITDA adjusted for
acquisition costs, capital raising
costs and incentive payments
Statutory gross profit margin in dollars
excluding biological asset movements
Statutory gross profit margin
percentage excluding biological
asset movements
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
Other Non-Financial Targets
Including capital management,
capability build and operational KPIs
4.7. Company financial performance
40%
20%
20%
5%
15%
EBITDA is seen as a key factor of
trading performance and operational
sustainability. Operating EBITDA is a
hurdle requirement for STI payments
The gross profit margin is seen as a key outcome
of sales effectiveness and operational efficiency
The gross profit margin is seen as a key outcome
of sales effectiveness and operational efficiency
Employees are a key asset to TasFoods and
their safety is paramount. A reduction in LTIFR
is a key outcome of the WHS program
A number of others non-financial KPIs were
set to focus on both capability and operational
efficiencies across the TasFoods business.
The following table shows the relationship between KMP Executives’ at-risk remuneration and TasFoods overall
financial performance:
Financial Year Ended 31 December
2022
2021
2020
2019
2018
Revenue ($000)
$70,587
$69,441
$67,436
$51,105
$38,920
Net (loss)/profit before tax ($'000)
($16,399)
($10,741)
($7,709)
($3,202)
($2,273)
Net (loss)/profit after tax ($'000)
($16,478)
($10,741)
($6,407)
($3,459)
($1,358)
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
$0.105
$0.040
$0.120
$0.105
-61.90%
-12.50%
$0.00
$0.00
(4.03)
(4.03)
0%
(3.05)
(3.05)
0%
$0.120
$0.120
0.00%
$0.00
(2.56)
(2.56)
N/A
$0.135
$0.120
-11.11%
$0.00
(1.48)
(1.48)
0%
$0.190
$0.135
-28.95%
$0.00
(0.67)
(0.67)
0%
The average STI payout as a % of the at-target for eligible KMP Executives for FY22 was 0% as the EBITDA hurdle was not met.
The EBITDA hurdle was also the gate for all non-financial STI awards.
TASFOODS ANNUAL REPORT 2022 4 4
DIRECTORS’ REPORT, CONT.
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
KMP Executives
Notice Period
by TasFoods
Notice Period
by Executive
Termination / Redundancy Payment
Scott Hadley
6 months
6 months
Shona Croucher
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 his role, or if he is made redundant then
he is entitled to a severance payment equivalent to 12 months’ salary.
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 2022 4 5
DIRECTORS’ REPORT, CONT.
6. NON-EXECUTIVE DIRECTORS’ REMUNERATION STRUCTURE
TasFoods remuneration policy for 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 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, (not including securities issued to a non-executive director) non-
executive director and the former 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 December 2021, based on the benchmark data of a market capitalisation
comparator group. During the 2022 financial year non-executive and the former Executive Chair’s directors’ fees
(inclusive of superannuation) were:
Director
John Murphy1
Ben Swain
John O’Hara
Former Directors
Craig Treasure2
Base Fee
Committee
Chair Fee
Fees sacrificed into
Equity in FY22
One-off Equity
grant in FY223
Total
70,000
45,000
45,000
70,000
-
-
-
-
28,000
28,000
28,000
69,300
69,300
69,300
167,300
142,300
142,300
70,000
1 John Murphy was appointed Chair on 26 August 2022. From 1 July 2022 his Directors fees increased from $45,000 pa to $70,000 pa to reflect appointment to the new role of Chair.
2 Craig Treasure ceased as NED/Chair on 30 May 2022.
3 Includes a one-off equity grant which was vested on grant and fully expensed in FY22.
The FY22 equity grant to Directors included a one-off retention component. As both the salary sacrificed equity
grant and the one-off equity grant vested immediately on grant date, the cost was fully expensed in FY22.
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 2022 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.
TASFOODS ANNUAL REPORT 2022
4 6
DIRECTORS’ REPORT, CONT.
6. NON-EXECUTIVE DIRECTORS’ REMUNERATION STRUCTURE, CONTINUED.
6.2. 2022 long-term incentive arrangements
The key elements of the Non-Executive Directors LTI plan are:
Participants: Non-Executive Directors of TasFoods Limited (NED’s)
Instrument: Performance Share Appreciation Rights (PSARs) which are an entitlement, when exercised, to a Share
or Restricted Share (a Share which is subject to disposal restrictions). Generally, it is expected that vested PSARs
will be satisfied in Restricted Shares. Grants of SARs under the TLRP are intended to be a component of Board Fees
that are part of the remuneration of NEDs, based on an exchange of future cash remuneration, in return for a future
grant of Share Appreciation Rights.
Maximum number of Performance Share Appreciation Rights: The maximum number of PSARs is calculated by
dividing the Annual Directors Cash Fee Sacrifice by the relative value of the PSAR. The value of a PSAR is calculated
using the Black Scholes option pricing model, and for the FY22 grant calculation, the value of the PSAR was
determined to be $0.0462.
Term: The SARs have a term that ends on 31 December 2026, and if not exercised within the term the SARs will lapse.
Vesting Conditions: The SARs are fully vested at Grant, but are subject to Specified Disposal Restrictions that
facilitate long term holding of equity interests.
Specified Disposal Restrictions: A Specified Disposal Restriction applies to the PSARs (and resulting Restricted
Shares that may flow from exercising them) such that the Restricted Shares may not be disposed of until the earlier of:
• the Participant ceasing to hold office or employment with the Company, and
• the elapsing of 15 years from the Grant Date.
Exercise Price: The exercise price for the PSARs is $0.065 however this price is notional and no amount needs
to be paid by the Participant in order to exercise the PSARs. Instead it is accounted for in the calculation of the
Exercised PSARs Value which is as follows:
(Share Price - Exercise Price) x Number of PSARs Exercised
Exercise Restriction: An exercise restriction applies to the SARs until 31 December 2024.
Cessation of Holding the office of NED: If a Participant ceases to hold the office of NED or employed position
with the Company and is not immediately re-appointed, Exercise Restrictions and Specified Disposal restrictions
attaching to Restricted Shares will cease to apply at the date of cessation of holding the office of NED and the
Company will remove any CHESS holding lock.
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.
TASFOODS ANNUAL REPORT 2022 4 7
DIRECTORS’ REPORT, CONT.
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 2022
Short Term Employee Benefits
Year
Salary/
Fees
STI
Payment
Non-
monetary
benefits
Long Term
Employee
Benefits
Annual Leave
and Long
Service
Leave
Post-employment Benefits
Share Based Payments
Superannuation
Long term
employment
benefits
Shares
Share
Appreciation
Rights/
Options
Total
Performance
Related %
Current
Non-Executive
Directors
$
John Murphy1
2022
52,175
2021
21,519
Ben Swain
2022
40,770
2021
41,114
John O'Hara
2022
45,000
2021
23,548
Former
Executive
Chair and
Non-executive
Directors
Craig Treasure2
2022
26,278
2021
63,955
Roger McBain
2022
-
2021
19,478
Current KMP
Executives
Scott Hadley3
2022
426,432
2021
108,248
Shona Croucher4
2022
267,179
2021
49,314
Former KMP
Executives
Jane Bennett5
2022
-
2021
368,244
Donna Wilson5
2022
-
2021
227,418
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
$
5,428
2,152
4,230
4,061
-
-
2,681
6,317
-
1,850
27,881
7,065
25,246
5,983
14,595
24,608
3,034
4,532
-
-
13,561
36,266
-
-
14,142
20,636
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
$
79,609
137,212
-
23,671
79,609
124,609
-
45,175
79,609
124,609
-
23,548
-
-
-
-
28,959
70,272
-
21,328
119,046
598,605
20,531
141,827
26,439
332,821
-
56,880
-
-
21,221
439,292
-
-
15,326
277,522
%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
1 John Murphy was appointed to Acting Chair on 31 May 2022 and Chair on 26 August 2022.
2 Craig Treasure ceased as Chair effective from 30 May 2022. An equity grant to Craig was not put to vote at the 2022 AGM due to his resignation as a Director on 30 May 2022.
3 The 2021 share based payment amount for Scott Hadley has been amended to amortise the fair value of the award over the 3 year service period it is to be earned. In prior years an estimate of the fair
value of the award was amortised for 3 years from his employment contract date. The 2021 share based payment amount has decreased by $16,119.
4 Due to the resignation of Shona Croucher on 7 December 2022, the FY22 value of share based payments includes acceleration to her estimated departure date in 2023.
5 The 2021 share based payment for the former KMP executives Jane Bennett and Donna Wilson have been amended to accelerate their SBP expense to the end of their employment. The 2021 share based
payment amounts have increased $10,540 and $7,686 respectively.
TASFOODS ANNUAL REPORT 2022
4 8
DIRECTORS’ REPORT, CONT.
8. REMUNERATION TABLES – DIRECTORS AND KMP EXECUTIVES, CONTINUED.
Table B: Shareholdings
Current Non-Executive Directors
John Murphy
Ben Swain
John O'Hara
Former Executive Chair and
Non-executive Directors
Craig Treasure1
Current KMP Executives
Scott Hadley
Shona Croucher
Year
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Shares
held at
Start of Year
Net other
changes
Shares
held at
End of Year
No.
-
-
-
-
No.
-
-
1,150,000
428,571
1,578,571
1,150,000
-
-
721,861
721,861
-
-
-
-
-
-
-
-
-
-
-
-
-
1,150,000
-
-
721,861
721,861
-
-
-
-
1 number of shares disclosed as being held at end of year is reflective of the number of shares held at the time of cessation of employment.
TASFOODS ANNUAL REPORT 2022 4 9
DIRECTORS’ REPORT, CONT.
8. REMUNERATION TABLES – DIRECTORS AND KMP EXECUTIVES, CONTINUED.
Table C: Movements during 2022 in performance rights or options over shares in the Company held,
directly, indirectly or beneficially, by each KMP, including their related parties.
Current Executive
Chair and Non-
executive Directors
John Murphy
Ben Swain
John O'Hara
Former Executive
Chair and Non-
executive Directors
Craig Treasure
Former KMP
Executives
Scott Hadley
Shona Croucher
Year
2022
2021
2022
2021
2022
2021
2021
2020
Year
2022
2021
2022
2021
Share
Appreciation
Rights
held at
Start of Year
Granted as
remuneration
Vested and
exercisable
Exercised
during the
reporting
period
Forfeited
Share
Appreciation
Rights
held at
End of Year
No.
No.
No.
No.
No.
-
-
-
-
-
-
-
-
2,106,061
-
2,106,061
-
2,106,061
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Performance
Share
Appreciation
Rights or
Options
held at
Start of Year
No.
Granted as
remuneration
Vested and
exercisable
Exercised
during the
reporting
period
Forfeited
5,000,000
27,181,208
-
-
-
5,000,000
7,838,926
-
No.
-
-
-
-
No.
-
-
-
-
No.
-
-
-
-
2,106,061
-
2,106,061
-
2,106,061
-
-
-
Performance
Share
Appreciation
Rights or
Options
held at
End of Year
No.
32,181,208
5,000,000
7,838,926
-
TASFOODS ANNUAL REPORT 2022 5 0
DIRECTORS’ REPORT, CONT.
8. REMUNERATION TABLES – DIRECTORS AND KMP EXECUTIVES, CONTINUED.
Table D: Share-based payments granted as remuneration to KMP
Year Grant Date
Number
Granted
Exercise
Price
Expiry
Date
Date when
Options/
SAR's
may be
exercised
Value of
Performance
Share
Appreciation
Rights or
Options
Granted
Unamortised
amount as at
31 December
2022
Number
Vested
Percentage
of Grant
Forfeited
Current
Non-executive
Directors
No.
$
No.
John Murphy
2022 30-May-22 2,106,061
$0.065 30-May-27 31-Dec-24
79,609
2021
Nil
Ben Swain
2022 30-May-22 2,106,061
$0.065 30-May-27 31-Dec-24
79,609
2021
Nil
John O'Hara
2022 30-May-22 2,106,061
$0.065 30-May-27 31-Dec-24
79,609
0
0
0
2021
Nil
Current KMP
Executives
Scott Hadley
2022
7-Jun-22
27,181,208
$0.066 7-Jun-27
31-Dec-24
649,631
73,842
2021
27-Aug-21
5,000,000
$0.10
283,750
Shona Croucher
2022
7-Jun-22
7,838,926
$0.066 7-Jun-27
31-Dec-24
187,350
181,094
5,505
2021
Nil
0
0
0
0
0
0
No.
0%
0%
0%
0%
0%
0%
End of Remuneration Report (Audited)
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 2022
5 1
DIRECTORS’ REPORT, CONT.
SHARE OPTIONS AND PERFORMANCE RIGHTS
Share Options and Performance Rights over ordinary shares of TasFoods Limited at the date of this report
are as follows:
Grant Date Grant Instrument
Expiry Date
Exercise Price
Number Granted
30-May-22
Share Appreciation Rights
31-Dec-26
$ 0.065
6,318,183
7-Jun-22
Performance Share Appreciation Rights
7-Jun-27
$ 0.066
40,187,920
No.
27-Aug-21 Options
27-Aug-21 Options
6-Sep-21
Performance Rights
27-Aug-26
27-Aug-26
$ 0.010
$ 0.010
6-Sep-26
$ -
2,500,000
2,500,000
1,851,707
53,357,810
Further details regarding share options and performance rights 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 237 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 assurances services
2022
$
2021
$
278,500
-
278,500
172.250
-
172,250
TASFOODS ANNUAL REPORT 2022
5 2
DIRECTORS’ REPORT, CONT.
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 48 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/
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
John Murphy
Non-Executive Chair
27 February 2023
TASFOODS ANNUAL REPORT 2022 5 3
Auditor’s Independence Declaration
As lead auditor for the audit of TasFoods Limited for the year ended 31 December 2022, 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.
Brad Peake
Partner
PricewaterhouseCoopers
Melbourne
27 February 2023
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.
TASFOODS ANNUAL REPORT 2022
tasfoods.com.au
5 4
FINANCIAL
REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes In Equity
Consolidated Statement of Cash Flows
Notes to Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
55
56
57
58
59
96
97
102
TA S F O O D S A N N U A L R E P O R T 2 0 2 2
5 5
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For the Year Ended 31 December 2022
Revenue from operations
Other income
Fair value adjustment of biological assets
Impairment
Raw materials used
Employment and contractor expense
Freight
Occupancy costs
Depreciation and amortisation
Finance costs
Insurance
Legal and professional fees
Marketing and event expenses
Repairs and maintenance
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:
Owners of TasFoods Limited
Total comprehensive income for the year is attributable to:
Owners of TasFoods Limited
Note
6
6
10
13
7
8
2022
$'000
70,587
1,028
375
(6,835)
(41,863)
(22,296)
(5,472)
(1,520)
(2,099)
(542)
(796)
(856)
(610)
(1,463)
(4,037)
(16,399)
(79)
(16,478)
-
(16,478)
2021
$’000
69,441
626
(76)
(3,907)
(40,840)
(20,230)
(5,048)
(1,422)
(2,037)
(314)
(591)
(637)
(730)
(1,091)
(3,885)
(10,741)
-
(10,741)
-
(10,741)
-
(16,478)
-
(10,741)
(16,478)
(16,478)
(10,741)
(10,741)
(16,478)
(16,478)
(10,741)
(10,741)
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)
4
4
4
4
(4.03)
(4.03)
(4.03)
(4.03)
(3.05)
(3.05)
(3.05)
(3.05)
The above statement should be read in conjunction with the accompanying notes
TASFOODS ANNUAL REPORT 2022
5 6
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2022
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
2022
$'000
2021
$’000
19
9
10
11
12a
12b
13
10
8
14
15
12b
16
15
12b
16
8
17
18
351
4,734
2,557
4,574
1,144
13,360
23,713
1,541
556
14
-
25,824
39,184
11,645
1,022
373
1,362
14,402
4,739
1,494
219
-
6,452
20,854
1,450
4,973
2,145
4,647
976
14,191
25,904
1,418
7,195
30
-
34,547
48,738
9,605
1,047
193
1,365
12,210
6,422
1,339
169
-
7,930
20,140
18,330
28,598
66,834
1,121
(49,625)
18,330
61,053
691
(33,146)
28,598
The above statement should be read in conjunction with the accompanying notes
TASFOODS ANNUAL REPORT 2022
5 7
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year Ended 31 December 2022
At 1 January 2021
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Issue of shares
Share issue costs
Share-based payment expense
As at 31 December 2021
At 1 January 2022
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Issue of shares
Share issue costs
Share-based payment expense
As at 31 December 2021
Contributed
Equity
$’000
Reserves
$’000
Accumulated
Losses
$’000
61,054
-
-
-
-
-
-
61,054
61,054
-
-
-
5,964
(184)
-
66,834
594
-
-
-
-
-
97
691
691
-
-
-
-
-
430
1,121
(22,406)
(10,741)
-
(10,741)
-
-
-
(33,147)
(33,147)
(16,478)
-
(16,478)
-
-
-
(49,625)
Total
$’000
39,241
(10,741)
-
(10,741)
-
-
97
28,598
28,598
(16,478)
-
(16,478)
5,964
(184)
430
18,330
The above statement should be read in conjunction with the accompanying notes
TASFOODS ANNUAL REPORT 2022
5 8
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended 31 December 2022
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Other
Net cash used in operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for leases
Payments for other non-current assets
Proceeds from sale of property, plant, and equipment
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 borrowing payments
Principal elements of lease payments
Transaction costs related to borrowings
Net cash provided by financing activities
Net (decrease)/increase in cash held
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Note
2022
$'000
2021
$’000
19
71,722
(76,987)
1
(435)
(111)
(5,810)
(972)
-
-
1,593
621
5,964
(153)
925
(2,304)
(320)
(21)
4,091
69,587
(73,969)
1
(127)
51
(4,457)
(2,436)
-
(159)
-
(2,595)
-
(14)
2,136
(450)
(392)
(23)
1,257
(1,098)
(5,795)
19
1,450
351
7,245
1,450
The above statement should be read in conjunction with the accompanying notes
TASFOODS ANNUAL REPORT 2022
5 9
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
For the Year Ended 31 December 2022
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 27 February 2023 by the Directors of the Company.
All press releases and other information are available on our website www.tasfoods.com.au.
Going Concern
These financial statements have been prepared on the basis the Company is a going concern.
For the year ended 31 December 2022 the consolidated entity incurred losses of $16.48 million after tax (2021: $10.74 million) and incurred net cash
outflows from operations of $5.81 million (2021: $4.84 million). At 31 December 2022, the consolidated entity had cash and cash equivalents on
hand of $0.35 million (31 December 2021: $1.45 million), external borrowings of $5.76 million (31 December 2021: $7.47 million) and unused finance
facilities of $3.26 million. The consolidated entity was in a net current liability position of $1.04 million (31 December 2021: net current asset position
of $1.98 million).
The ability of the Company to continue as a going concern is dependent on the continuing implementation of its strategic initiatives, a disciplined
approach to managing input cost increases and other profitability enhancement initiatives and obtaining funding from alternative sources should
it be required to ensure the Company can continue to meet its working capital requirements. The strategic objectives include:
• Implementation of the new Dairy and Poultry business ways of working, focusing on consolidation of logistics networks and warehousing
efficiencies, and implementation of further cost savings/ways of working improvements across both divisions (including wastage reduction and
yield improvement initiatives).
• Finalisation of the implementation of an integrated ERP system for the Dairy business unit which will facilitate the integration of the businesses,
provide cost saving opportunities and allow the Dairy business to operate as an integrated dairy unit.
• On-going assessment of customer and product profitability with low or negative margin products exited.
• Increasing gross margins through negotiated sales price increases with customers and execution of identified cost savings over raw material
inputs, distribution and logistics.
• Continued new product development in the dairy business focussed on both the Pyengana and Meander Valley Dairy brands.
• Continued acceleration of mainland growth initiatives and customer acquisition.
• Implementation of the 2023 Marketing and Brand Investment Plans. Focussed marketing on a simplified brand pyramid to build brand
awareness of key brands.
• Continued adoption of the developed capital management framework and a disciplined approach to assessing all opportunities to ensure
strategic alignment, financial return, risk management and capability to execute.
Some progress was made during 2022 towards the above strategies, noting the benefits of which were already evident in 2H 2022. Initiatives
include SKU rationlisation of low volume/loss making products, successful implementation of price rises in 2022, implementation of minimum
order quantities as well as implementation of a number of distribution network profit improvement strategies in in 2H 2022. The Directors are of the
opinion the Company will be successful in the continued implementation of further enhancements to the above strategic objectives during 2023.
The consolidated entity's ability to repay current borrowings and meet its working capital requirements is based on a forecast EBITDA and cash
flow requirements, which is based on meeting sales forecasts and margin. Partial debt repayment has also occured as part of the sale and lease
back arrangements. The Company's bank overdraft facility will decrease from $3.26m to $2.56m at 30 June 2023. To the extent further asset
sales occur, some of the net proceeds generated by the sale will be used to further repay debt.
The consolidated entity's forecasted EBITDA is based on a combination of historic trends, engagement with key customers and internal demand
analysis and includes judgement in relation to future pricing and demand for new products. Future forecasts incorporate recently agreed price
increases with additional growth to be achieved through increased brand awareness and increased distribution, whilst costs will be managed
through a combination of previously implemented restructuring activities and cost reduction strategies to be employed across the business, the
exiting of unprofitable business operations and SKU rationalisation.
Given the risk associated with the timing and quantum of profitability improvement initiatives and the agricultural risk associated with key drivers
of input costs and gross profit margins, there is material uncertainty which may cast significant doubt on the Company’s ability to continue as a
going concern, and therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.
Based on the forecast the Directors believe the Company is well positioned to achieve its EBITDA forecast, cash flow forecasts, and working
capital requirements. Accordingly, the consolidated annual report has been prepared on a going concern basis.
TASFOODS ANNUAL REPORT 2022 6 0
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
2. SIGNIFICANT CHANGES IN THE CURRENT REPORTING PERIOD
During December 2022 and January 2023, a sale and lease-back arrangement occurred in relation to the two non-core distribution properties
owned by Van Diemen's Land Dairy Pty Ltd. A portion of the proceeds was used to repay term debt with ANZ.
Other than the above, there were no significant changes in the state of affairs of the Group during the financial year.
There have been no changes in accounting policies since the previous financial report at 31 December 2021.
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 four 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 from the sale of poultry meat products sold under the Nichols Poultry and Nichols Kitchen brands.
• The Shared Services 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 Horticulture Segment, which comprises 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.
Consolidated - 2022
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:
Liabilities
Segment liabilities
Deferred tax liability/(asset)
Total liabilities
Dairy
$'000
Poultry Horticulture
$’000
$’000
Shared
Services
$’000
30,553
660
31,213
39,535
323
39,858
391
32
423
108
12
120
(3,354)
(5,480)
(117)
(7,449)
Total
$’000
70,587
1,028
71,615
(16,399)
-
(16,399)
(79)
(16,478)
(3,756)
1,499
(2,578)
44,020
39,185
-
39,185
6,422
11,740
160
2,532
20,854
-
20,854
TASFOODS ANNUAL REPORT 2022
6 1
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
3. SEGMENT INFORMATION, CONT.
Consolidated - 2021
Revenue
Total segment sales revenue
Other income
Segment profit/(loss)
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:
Liabilities
Segment liabilities
Deferred tax liability/(asset)
Total liabilities
Dairy
$'000
Poultry Horticulture
$’000
$’000
Shared
Services
$’000
30,362
134
30,496
38,636
448
39,083
392
20
412
51
24
76
(1,367)
(3,563)
(59)
(5,752)
383
8,194
(2,586)
42,749
5,580
12,544
55
1,961
Total
$’000
69,441
626
70,067
(10,741)
(10,741)
0
(10,741)
48,738
-
48,738
20,140
-
20,140
TASFOODS ANNUAL REPORT 2022
6 2
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
SHAREHOLDER RETURNS
4. EARNINGS PER SHARE
Basic loss per share
Diluted loss per share
Net (loss)/profit from continuing operations attributable to the shareholders
of TasFoods Limited used in calculation of basic and diluted earnings per share for:
All operations
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
Information Concerning the Classification of Securities
Potential ordinary shares:
2022
Cents
(4.03)
(4.03)
2022
$’000
2021
Cents
(3.05)
(3.05)
2021
$’000
(16,478)
(10,741)
2022
Number
2021
Number
408,941,536
351,902,660
408,941,536
351,902,660
a) There were no options (other than those referred to in note 29) or other forms of potential shares on issue at 31 December 2022
(31 December 2021: Nil).
b) Options granted (as referred to in note 29) are not included in the calculation of diluted earnings per share as the share price as at 31
December 2022 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 shareholders, 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 shareholders, 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.
TASFOODS ANNUAL REPORT 2022
6 3
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
5. DIVIDENDS TO SHAREHOLDERS
No dividends have been paid or declared during the year ended 31 December 2022 (31 December 2021: Nil).
PROFIT AND LOSS INFORMATION
6. REVENUE
Revenue from continuing operations
Sales revenue
Other income
Interest received
Profit/Loss on Sale of Property, Plant & Equipment
Sundry income
2022
$’000
2021
$’000
70,587
69,441
-
664
364
1,028
-
3
623
626
Profit on sale of property, plant and equipment includes sale of non-core property assets of $0.614 million. Sundry income includes freight
recovered, fuel tax credits, rent received, freight equalisation recoveries received as well as other sundry items.
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).
Revenue is recognised when control of the goods transfer to the customer i.e when the goods have been delivered to a customer pursuant to a
sales order. 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.
A gain on Sale of Property, Plant and Equipment is recognised when title has transferred and the purchaser has the right to control the asset.
Revenue on sale of freehold land and buildings is recognised when title has transferred and the purchaser has the right to control the asset.
Interest revenue
Interest revenue is recognised on a proportional basis using the effective interest rate method.
TASFOODS ANNUAL REPORT 2022
6 4
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
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
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% (2021: 30%)
Tax effect of amounts which are not deductible in calculating taxable income
Deferred tax on taxable losses not brought to account
(b) Income tax benefit recognised directly in equity during the period
Deferred tax arising from share issue costs
2022
$’000
2021
$’000
19,051
1,233
430
1,582
22,296
18,366
395
97
1,372
20,230
2022
$’000
2021
$’000
-
-
-
(1,842)
1,842
-
(16,399)
(4,920)
142
4,857
79
(79)
(79)
-
-
-
238
(238)
-
(10,741)
(3,222)
1,198
2,024
-
-
-
TASFOODS ANNUAL REPORT 2022
6 5
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
8. INCOME TAX, CONT.
(c) Deferred tax balances
Taxable and deductible temporary differences arise from the following:
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
Acquisition costs
Lease liability
Gross deferred tax liabilities:
Biological assets
Inventory
Property, plant and equipment
Intangibles
Other
Net deferred tax asset/(liability)
Unused tax losses
Opening
Balance
$000
Charged to
Income
$000
Charged
to Equity
$000
Closing
Balance
$000
484
36
99
11
-
-
2,743
-
96
30
3,499
(733)
(36)
(684)
(2,040)
(7)
(3,499)
-
83
22
11
9
240
-
(2,274)
-
-
68
(1,842)
(134)
31
14
2,040
(110)
(1,842)
-
567
57
110
20
240
-
469
-
96
98
1,657
(867)
(5)
(669)
-
(116)
-
-
-
(1,657)
-
The Group has recognised tax losses in the year ended 31 December 2022 only to the extent of the Groups taxable temporary differences. After
recognition of these losses the Group had a further $45.85 million of carry forward tax losses for which no deferred tax asset has been recognised
(31 December 2021: $29.59 million). The losses relate to both Group’s current operations and 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 finalise the application of the continuity of ownership and continuity of business tests.
(d) Tax losses
Unused tax losses for which no deferred tax asset has been recognised:
Capital losses
Revenue losses
Potential tax benefit at 30%
2022
$’000
-
45,852
45,852
2021
$’000
-
29,589
29,589
13,752
8,877
TASFOODS ANNUAL REPORT 2022
6 6
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
8. INCOME TAX, CONT.
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
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
2022
$’000
2021
$’000
4,487
(67)
313
4,734
4,120
(47)
900
4,973
47
20
67
774
296
131
1,201
13
34
47
744
55
91
890
TASFOODS ANNUAL REPORT 2022
6 7
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
9. TRADE AND OTHER RECEIVABLES, CONT.
Recognition and measurement
Trade receivables include amounts due from customers for goods sold and services performed in the ordinary course of business. Receivables
expected to be collected within 12 months of the end of the reporting period are classified as current assets. All other receivables are classified as
non-current assets.
Trade receivables are initially recognised at fair value and subsequently recognised less any expected loss allowance. The Group applies the
AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To
measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the number of days
outstanding. The expected loss rates applied are based upon the payment sales profiles over a 12-month period and the historical credit losses
experienced in this period. Historical loss rates are adjusted to reflect current and forward-looking information including macroeconomic factors
affecting the ability of the customers to settle the receivables.
The loss allowance is determined as follows for trade receivables:
31 December 2022
Expected Loss Rate
Trade Receivables Gross Carrying Amount ($’000)
Loss Allowance ($’000)
31 December 2021
Expected Loss Rate
Trade Receivables Gross Carrying Amount ($’000)
Loss Allowance ($’000)
Current
30 days
60 days
90+ days
Total
0%
3,285
-
0%
744
-
0%
296
-
51%
131
67
4,487
67
Current
30 days
60 days
90+ days
Total
0%
3,231
-
0%
744
-
0%
55
-
51%
91
47
4,120
47
The amount of the impairment loss is recognised in the consolidated statement of profit or 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.
TASFOODS ANNUAL REPORT 2022
6 8
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
10. BIOLOGICAL ASSETS
Balance as at 1 January 2021
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 2021
Current
Non-current
Balance as at 1 January 2022
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 2022
Current
Non-current
Poultry
$’000
Goats
$’000
Wasabi
Plants
$’000
2,037
2,029
(2,037)
(113)
1,916
1,916
-
1,916
1,916
1,929
(1,916)
298
2,227
2,227
-
2,227
167
-
(135)
(32)
-
-
-
-
-
-
-
-
-
-
-
-
172
20
(2)
69
259
229
30
259
259
37
(28)
77
345
331
14
345
Total
$’000
2,376
2,049
(2,174)
(76)
2,175
2,145
30
2,175
2,175
4,459
(4,438)
375
2,571
2,558
14
2,571
(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 2022, the Group held 510,494 live poultry (2021: 517,693), 7,847 mature wasabi plants (2021: 6,650) and 1,489 immature
wasabi plants (2021: 2,543) that are less than 12 months of age and not suitable for harvest.
TASFOODS ANNUAL REPORT 2022
6 9
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
10. BIOLOGICAL ASSETS, CONT.
Poultry
For live poultry with an age of below 26 days (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 age of greater than 26 days 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 2022, with all other variables held constant, the Group’s net profit/(loss) for the
period would have been impacted by $88,201 (2021: $78,867) by a pricing or dressed weight increase/decrease of 5%.
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. On 31 December 2022 the Group’s wasabi plants were an average of 27 months of age
(31 December 2021: 22 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.
AASB 141 Agriculture applies to all biological assets (excluding bearer plants) and agricultural produce at the point of sale, and is applied to the
valuation of the wasabi crop (the biological asset) as well as harvested material. Changes in market conditions due to COVID-19 and the resulting
change in product sales mix necessitated a review of the crop valuation focused on fair value less costs to sell in June 2020. This review resulted
in a movement in fair value of biological assets of $1.179 million (recorded in 30 June 2020), primarily driven by a reduction in the selling price
per kilogram as the Company transitions from high value fresh wasabi sales, towards industrial and ingredient powder commodity markets. The
write-down was non-cash in nature and did not impact the biomass of the wasabi crop available for future use.
Based on market prices and estimated yields utilised within the valuation methodology at 31 December 2022, with all other variables held
constant, the Group’s net profit/(loss) for the period would have been impacted by $17,177 (31 December 2021: $12,901) by a price increase/
decrease of 5%.
TASFOODS ANNUAL REPORT 2022 7 0
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
10. BIOLOGICAL ASSETS, CONT.
Fair value measurement
Recurring fair value measurements
- Poultry
- Wasabi plants
Total biological assets recognised at fair value
Recurring fair value measurements
- Poultry
- Wasabi plants
Total biological assets recognised at fair value
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
2022
-
-
-
2,227
-
2,227
-
345
345
2,227
345
2,571
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
2021
-
-
-
1,916
-
1,916
-
259
259
1,916
259
2,175
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:
0.28 kilograms (31 December 2021: 0.37 kilograms)
An increase/decrease in yield would result in a direct
increase/decrease in the fair value
AASB 141 Agriculture applies to all biological assets (excluding bearer plants) and agricultural produce at the point of sale, and is applied to the
valuation of the wasabi crop (the biological asset) as well as harvested material.
TASFOODS ANNUAL REPORT 2022
7 1
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
11. INVENTORY
Finished goods
Raw materials and packaging
Other
Recognition and measurement
2022
$’000
2021
$’000
1,641
2,363
570
4,574
1,921
2,244
482
4,647
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: valued at purchase cost.
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
2022
$’000
2021
$’000
15,260
(1,784)
13,476
16,639
(7,155)
9,484
290
(224)
67
692
(318)
374
312
16,021
(1,435)
14,586
16,311
(5,871)
10,440
256
(194)
62
913
(370)
543
273
Total Property, Plant and Equipment
23,713
25,904
TASFOODS ANNUAL REPORT 2022
7 2
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
12. PROPERTY, PLANT AND EQUIPMENT, CONT.
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
13,186
1,748
-
-
(348)
14,586
14,586
69
-
(830)
(349)
13,476
10,987
821
-
-
(1,368)
10,440
10,440
432
-
(105)
(1,283)
9,484
61
28
-
-
(27)
62
62
35
-
-
(29)
67
535
105
-
-
(97)
543
543
19
-
(238)
50
374
539
1,876
(2,142)
-
-
273
25,308
4,578
(2,142)
-
(1,840)
25,904
273
39
-
-
-
312
25,904
594
-
(1,174)
(1,611)
23,713
Carrying value
As at 1 January 2021
Additions
Capitalisation to asset categories
Disposals
Depreciation expense
Balance as at 31 December 2021
As at 1 January 2022
Additions
Capitalisation to asset categories
Disposals
Depreciation expense
Balance as at 31 December 2022
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%
5-50%
10-50%
13.33-20%
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. During the year a sale and lease-back
transaction occured in relation to one of the non-core properties owned by Van Diemen's Land Dairy Pty Ltd.
TASFOODS ANNUAL REPORT 2022
7 3
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
12. PROPERTY, PLANT AND EQUIPMENT, CONT.
(b) Right of Use Assets and Lease Liabilities
Right of Use Assets
Recognised right-of-use assets relate to the following types of assets:
Right of use assets
Land and buildings
Motor vehicles
Total right-of-use assets
31 December
2022
$’000
31 December
2021
$'000
1,166
375
1,541
1,418
-
1,418
Set out below are the carrying amounts of the Group’s right-of-use assets and the movements during the period:
Balance at 1 January
Additions
Disposals
Depreciation expense
Net carrying amount at 31 December 2022
Balance at 1 January
Additions
Disposals
Depreciation expense
Net carrying amount at 31 December 2021
Lease Liabilities
Current
Non-Current
Right-of-use assets
Land and buildings
$’000
Motor vehicles
$’000
Total
$’000
1,418
360
(400)
(212)
1,166
-
409
(33)
375
1,418
769
-400
(246)
1,541
Right-of-use assets
Land and buildings
$’000
Motor vehicles
$’000
Total
$’000
968
647
0
(197)
1,418
-
-
-
-
-
968
647
-
(197)
1,418
31 December
2022
$’000
31 December
2021
$’000
373
1,494
1,867
193
1,339
1,532
TASFOODS ANNUAL REPORT 2022
7 4
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
12. PROPERTY, PLANT AND EQUIPMENT, CONT.
Recognition and measurement
The Group leases property. Rental contracts are typically agreed for periods of 2 years to 5 years, but may have options to extend as described
below.
Contracts agreed 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.
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:
• 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.
TASFOODS ANNUAL REPORT 2022 75
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
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
Impairment and amortisation during the year
Carrying amount at end
2022
$'000
-
4
552
556
17,553
(16,997)
556
7,195
192
(6,831)
556
2021
$’000
-
6,835
360
7,195
17,341
(10,146)
7,195
10,953
160
(3,918)
7,195
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. Water rights are considered to have an indefinite life and intellectual
property is amortised over 5 years.
Intangible assets are assessed as having an indefinite useful life are allocated to the Group’s cash generating units (CGUs) as follows:
2022
2021
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Goodwill
Brands &
Trademarks
Other
Total
Goodwill
Dairy
Poultry
Corporate and Other
Total
-
-
-
-
-
-
4
4
-
196
356
552
-
196
360
556
-
-
-
-
Brands &
Trademarks
3,925
2,910
-
6,835
Other
Total
1
194
166
361
3,925
3,104
166
7,195
TASFOODS ANNUAL REPORT 2022
7 6
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
13. INTANGIBLE ASSETS, CONT.
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, 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.
Recoverable amount of goodwill and indefinite life intangibles
In accordance with the Company’s accounting policy, impairment testing has been undertaken at 31 December 2022 in accordance with AASB
136 Impairment of Assets 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 external market information, financial budgets and forecasts approved by management covering a five-year period before any fair value
adjustments for biological assets.
TASFOODS ANNUAL REPORT 2022 7 7
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
13. INTANGIBLE ASSETS, CONT.
Key assumptions used in the value-in-use calculations for the dairy CGU include:
Dairy
Sales Growth Rate (5 year avg)
Production Costs (5 year avg)
Indirect Cost Growth Rate per annum
Long-term Growth Rate
Pre-tax Discount Rate
31 December
2022
31 December
2021
6.2%
67.8%
5.0%
2.5%
16.1%
4.3%
65.3%
5.0%
2.5%
15.4%
Based on the above assumptions the recoverable amount of the CGU at 31 December 2022 is estimated to be $9.8 million, which is a deficit of
$3.8 million when compared to the CGU’s carrying amount of $13.7 million.
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 external market information, 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:
Poultry
Sales Growth Rate (5 year avg)
Production Costs (5 year avg)
Indirect Cost Growth Rate per annum
Long-term Growth Rate
Pre-tax Discount Rate
31 December
2022
31 December
2021
6.9%
79.5%
5.0%
2.5%
16.1%
6.7%
76.1%
5.0%
2.5%
15.4%
Based on the above assumptions the recoverable amount of the CGU at 31 December 2022 is estimated to be $14.7 million, which is a deficit of
$2.8 million when compared to the CGU’s carrying amount of $17.5 million.
Changes to Key Inputs
Changes to key inputs within the value-in-use calculations include:
• Sales Growth Rate –Sales growth rates were reduced at 31 December 2022 to reflect both market growth rates and historical CGU growth
rates achieved.
• Production Costs – Production costs as a percentage of revenue are forecast to decrease over the forecast period which is reflective of gross
margin improvement through a focus on value chain profitability, customer profitability and management of input costs inline with
• Managements revised strategy.
• Long-term Growth Rate – Was maintained at 2.5% which is in line with the Reserve Bank of Australia’s economic outlook.
• Pre-tax Discount Rate – The discount rate represents the current market assessment of the risks relating to the relevant CGU. In performing
the value in use calculations for the CGU, the group has applied a pre-tax discount rate of 16.1% (11.3% post tax). The discount rate includes
a risk premium to allow for overall uncertainty in the wider economy, together with company specific risks related to operations in the
agricultural industry.
TASFOODS ANNUAL REPORT 2022
7 8
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
13. INTANGIBLE ASSETS, CONT.
Review outcome
Based on the above an impairment charge is being recognised to reduce the value of brands and trademarks of both the Dairy and Poultry
CGU to nil. This conclusion is based on a current assessment of industry growth rates, market inflationary pressures and volatility in
commodity pricing which form the basis of key inputs into the modelling.
LIABILITIES
14. TRADE AND OTHER PAYABLES
Trade and other payables
Recognition and measurement
2022
$'000
11,645
11,645
2021
$’000
9,605
9,605
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.
15. BORROWINGS
Current
Bank Overdraft
Bank Loans
Other
Non-Current
Bank Loans
Total borrowings
2022
$'000
2021
$’000
-
473
549
1,022
4,739
4,739
5,761
-
592
455
1,047
6,422
6,422
7,469
TASFOODS ANNUAL REPORT 2022
7 9
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
15. BORROWINGS, CONT.
Financing arrangements
Commitments in relation to financing arrangements are payable as follows:
At 31 December 2022
Non-derivatives
Trade payables
Bank Overdraft
Bank Loans
Other
Finance lease liabilities (refer to note 12b)
At 31 December 2021
Non-derivatives
Trade payables
Bank Overdraft
Bank Loans
Other
Available facilities:
Equipment Finance Liabilities (refer to note 12b)
Bank Bill Facility
Bank Loan Facilities
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
11,645
-
473
549
-
12,667
9,605
-
592
455
10,652
-
-
4,739
-
-
4,739
-
-
6,422
-
6,422
-
-
-
-
-
-
-
-
-
-
-
11,645
-
5,212
549
-
17,407
9,605
-
7,014
455
17,074
11,645
-
5,212
549
-
17,407
9,605
-
7,014
455
17,074
2022
$’000
2021
$’000
Limit
1,183
3,500
1,712
3,260
9,655
Undrawn
Balance
-
-
-
3,260
3,260
Limit
-
3,000
4,014
2,500
9,514
Undrawn
Balance
-
-
-
2,500
2,500
The bank overdraft facility with ANZ was increased to $3.26 million in November 2022. The facility will reduce to $2.56m from July 2023. As
part of the sale and leaseback arrangements regarding non-core property assets, a reduction in ANZ term debt facilities of $1.0 million was made
during December 2022. The largest bank loan, $3.5m, is due for repayment on 29 June 2026.
Recognition and measurement
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost.
Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in 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.
TASFOODS ANNUAL REPORT 2022
8 0
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
15. BORROWINGS, CONT.
Secured liabilities and assets pledged as security
The Group has a number of finance facilities with ANZ which were renewed during the reporting period. Available facilities include overdrafts,
a bank bill and bank loan facilities which are secured by mortgage over the property and water rights owned by Nichols Poultry Pty Ltd and
property owned by Van Diemen’s Land Dairy Pty Ltd. The facilities are also secured by a general security agreement over the property of Nichols
Poultry Pty Ltd and Van Diemen’s Land Dairy Pty Ltd not otherwise secured.
Financial covenants
At the start of the financial year the Company was required to comply with an interest cover ratio financial covenant, which had an assessment
date of 31 December 2022. In July 2022, ANZ agreed to remove all debt covenants in relation to the ANZ facility.
16. PROVISIONS
Current
Employee benefits
Other provisions
Non-current
Employee benefits
2022
$’000
2021
$’000
1,362
-
1,362
219
219
1,365
-
1,365
169
169
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.
TASFOODS ANNUAL REPORT 2022
8 1
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
16. PROVISIONS, CONT.
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.
EQUITY
17. CONTRIBUTED EQUITY
Number of Shares
Share Capital
Ordinary shares - fully paid (no par value)
437,095,516
351,902,660
Total share capital
2022
2021
2022
$'000
66,834
66,834
Movements in ordinary share capital:
Date
1/1/22
Details
Balance at beginning of period
Share Issue
Deferred tax arising from share issue costs
Terms and Conditions of Issued Capital
Ordinary Shares
Ordinary Shares
351,902,660
85,192,856
-
437,095,516
2021
$'000
61,053
61,053
$’000
61,053
5,702
79
66,834
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
TASFOODS ANNUAL REPORT 2022 8 2
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
17. CONTRIBUTED EQUITY, CONT.
Share Options and Performance Rights
Share options and 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 5,000,000 share options on issue, 42,039,627 performance rights and 6,318,183 share appreciation rights granted as at 31
December 2022 (2021: 5,000,000 share options and 1,653,571 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.
18. RESERVES
Employee share option reserve
Nature and Purpose of Reserves
Employee share option reserve
2022
$’000
2021
$’000
1,121
1,121
691
691
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
2022
$’000
2021
$’000
691
430
1,121
594
97
691
TASFOODS ANNUAL REPORT 2022
8 3
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
OTHER NOTES
19. ADDITIONAL CASH FLOW INFORMATION
Cash and cash equivalents
Recognition and measurement
2022
$’000
2021
$’000
351
1,450
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
(a) Reconciliation of cash and cash equivalents to the statement of cash flows:
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
2022
$’000
2021
$’000
351
-
351
1,450
-
1,450
TASFOODS ANNUAL REPORT 2022
8 4
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
19. ADDITIONAL CASH FLOW INFORMATION, CONT.
b) Reconciliation of operating profit after income tax to net cash flows from operating activities:
Net loss after income tax
Depreciation and amortisation
Impairment
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) Non-cash activities
There were no non-cash financing activities.
20. FINANCIAL RISK MANAGEMENT
2022
$'000
2021
$’000
(16,478)
(10,741)
2,099
6,835
(375)
430
95
(647)
239
74
(169)
-
2,040
47
(5,810)
2,037
3,907
76
97
47
173
(480)
(143)
(70)
-
430
210
(4,457)
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 analysis 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. 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.
TASFOODS ANNUAL REPORT 2022
8 5
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
20. FINANCIAL RISK MANAGEMENT, CONT.
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 depends on the purpose for which the investments were
acquired. Management determines the classification of its financial instruments at the time of initial recognition.
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 principal 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
2022
$’000
2021
$’000
351
351
1,450
1,450
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 2022, 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:
Judgements of reasonably possible movements
+ 0.5% (50 basis points)
- 0.5% (50 basis points)
2022
$’000
2021
$’000
20
(20)
26
(26)
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.
TASFOODS ANNUAL REPORT 2022
8 6
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
20. FINANCIAL RISK MANAGEMENT, CONT.
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 $20.854 million (2021: $20.140 million) of which $14.402 million (2021: $12.211 million) is recorded as current
liabilities, and Total Current Assets of $13.361 million (2021: $14.191 million) of which $0.351 million (2021: $1.450 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. Refer to
Note 1 for information in relation to initiatives that will allow management to achieve their EBITDA forecasts, cash flow forecasts and net working
capital requirements.
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.
TASFOODS ANNUAL REPORT 2022 8 7
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
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
2022
$’000
5,761
11,645
17,407
(351)
17,055
25,165
66,834
2021
$’000
7,469
9,605
17,074
(1,450)
15,624
28,598
61,053
Gearing ratio (total debt / total equity)
69.2%
59.7%
The Group is not subject to any externally imposed capital requirements, other than those referred to in Note 15.
TASFOODS ANNUAL REPORT 2022
8 8
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
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
Deed of Cross Guarantee
2022
$'000
2021
$’000
28,849
4,431
33,280
3,297
467
3,764
29,516
66,834
1,121
(38,439)
29,516
4,942
(9,506)
(9,506)
28,316
3,572
31,888
2,862
264
3,126
28,762
61,053
691
(32,982)
28,762
5,185
(8,078)
(8,078)
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 2022 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.
TASFOODS ANNUAL REPORT 2022
8 9
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
23. SUBSIDIARIES
Country of Incorporation
Principal Activity
Equity Holding
Van Diemen's Land Dairy Pty Ltd
Nichols Poultry Pty Ltd
Shima Wasabi Pty Ltd
Tasmanian Food Co Dairy Pty Ltd
Australia
Australia
Australia
Australia
Dairy
Poultry
Wasabi
Dairy
2022
%
100%
100%
100%
100%
2021
%
100%
100%
100%
100%
UNRECOGNISED ITEMS
24. 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.
25. 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
2022
$’000
2021
$’000
-
-
-
-
-
-
-
-
TASFOODS ANNUAL REPORT 2022
9 0
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
26. EVENTS OCCURRING AFTER REPORTING DATE
During January 2023, a sale and lease-back arrangement occurred in relation to the Hobart based non-core distribution property owned by Van
Diemen’s Land Dairy Pty Ltd. From the proceeds received, $1.2 million was used to repay term debt facilities with ANZ in January 2023. To the
extent further asset sales occur, some of the net proceeds generated by the sale will be used to further repay debt.
Other than the above, 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
27. 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
28. 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
29. SHARE BASED PAYMENTS
Performance Rights
(a) Share based payment arrangements
2022
$
2021
$
900,310
62,193
384,312
-
1,346,815
828,640
81,797
54,971
132,000
1,097,408
2022
$
2021
$
278,500
-
278,500
172,250
-
172,250
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.
TASFOODS ANNUAL REPORT 2022
9 1
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
29. SHARE BASED PAYMENTS, CONT.
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 vesting conditions as follows:
• 50% of the grant is based on Total Shareholder Return (TSR) growth and
• 50% of the grant is based on EBITDA growth.
Vesting percentages for the TSR hurdle (threshold/stretch/maximum level of LTI) are to be determined by the following scale:
Performance Level
Absolute TSR (CAGR)
Indicative TFL Share price
% of Maximum vesting
Stretch
25%
$0.14
Between Target and Stretch
>19%, <25%
>$0.12 and <$0.14
Target
19%
$0.12
Between Threshold and Target
>14%, <19%
>$0.10 and <$0.12
Threshold
Below Threshold
14%
<14%
$0.10
<$0.10
100%
Pro-Rata
50%
Pro-Rata
25%
0%
The targets for share price growth are based on a starting share price of $0.07 (being the average share price of the capital raisings undertaken
by the Company in 1H 2022) which is a Compound Annual Growth Rate (CAGR) from June 2022 of 19.6% to achieve ‘target’ share price and a
CAGR of 26.0% 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.
EBITDA Growth
Vesting percentages for the EBITDA hurdle (threshold/stretch/maximum level of LTI) are to be determined by the following scale:
Performance Level
Absolute EBITDA growth
% of Maximum vesting
Stretch
Between Target and Stretch
Target
Between Threshold and Target
Threshold
36.0%
>23%, >36%
23%
>8%, <23%
8%
100%
Pro-Rata
50%
Pro-Rata
25%
The targets for EBITDA growth are based on the Company’s budget for the 2022 year.
The Company's compound annual growth in EBITDA, and achievement against the EBITDA Hurdle, will be determined by the Board in its
absolute discretion, having regard to matters it considers relevant. It is intended that EBITDA for each relevant financial year will be calculated
as EBITDA for that financial year, adjusted to exclude the costs of servicing equity (other than dividends), adjusted for any bonus elements.
For relevant financial years, the calculation may be adjusted to take into account one-off items associated with equity raising, if considered
appropriate by the Board. The Board also reserves the right to make any other adjustments it thinks fit to the calculation of EBITDA having regard
to the impact of any other exceptional items.
TASFOODS ANNUAL REPORT 2022 9 2
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
29. SHARE BASED PAYMENTS, CONT.
Grant to Non-Executive Directors
Following shareholder approval in May 2021, the Directors sacrificed cash fees in return for a grant of Performance Share Appreciation Rights
(PSARs). The SARs are fully vested at Grant, but are subject to Specified Disposal Restrictions that facilitate long term holding of equity interests.
b. Performance rights granted
Below is a summary of Share Appreciation Rights and Performance Rights granted under the LTIP.
2022
Grant
Date
7/6/22
7/6/22
30/5/22
6/9/21
24/10/19
2021
Grant
Date
6/9/21
24/10/19
Equity
Intrument
Performance
Share
Appreciation
Rights
Performance
Share
Appreciation
Rights
Share
Appreciation
Rights
Performance
Rights
Performance
Rights
Equity
Intrument
Performance
Rights
Performance
Rights
Performance Period
From
To
Balance
at start of
Year
Granted
During Year
Forfeited
Vested
Balance at
End of Year
Fair Value
per Share
1/1/22
31/12/25
-
20,093,960
-
-
20,093,960
$0.032
1/1/22
31/12/25
20,093,960
20,093,960
$0.016
1/1/22
31/12/22
-
6,318,183
1/1/21
31/12/23
1,851,707
1/1/19
31/12/21
1,653,571
-
-
-
-
(1,653,571)
-
-
-
6,318,183
$0.038
1,851,707
$0.037
-
$0.042
Performance Period
From
To
Balance
at start of
Year
Granted
During Year
Forfeited
Vested
Balance at
End of Year
Fair Value
per Share
1/1/21
31/12/23
-
1,851,707
1/1/19
31/12/21
1,653,571
-
-
-
-
-
1,851,707
$0.037
1,653,571
$0.042
The Share Appreciation Rights and Performance Rights hold no voting or dividend rights and are not transferable.
TASFOODS ANNUAL REPORT 2022 9 3
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
29. SHARE BASED PAYMENTS, CONT.
c. Fair value of performance rights granted
For the performance rights granted during the 2022 financial year, the fair value was measured at the grant date of 30 May 2022 for the Non-
Executive Directors and 7 June 2022 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 Non-Executive Directors, Chief Executive Officer and senior
management for the year ended 31 December 2022 is $320,625 (31 December 2021: $11,419).
Share Options
a. Share options granted
Share options outstanding at 31 December 2022 are as follows:
Options - 2022
Grant Date
Expiry Date
Exercise Price
27/08/2021
1/10/2024
27/08/2021
1/10/2024
$0.10
$0.10
Balance at
start of Year
2,500,000
2,500,000
5,000,000
Granted
Exercised
Expired/
forfeited/ other
Balance at
End of Year
2,500,000
2,500,000
5,000,000
Weighted average exercise price
-
-
-
$ 0.10
b. Fair value of share options granted
For share options granted during the 2021 financial year, the fair value was measured at the grant date of 27 August 2021.
The fair value of the options 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 2022 is $110,700 (31 December 2021: $74,349).
c. Share Options at 31 December 2022
There are 5,000,000 share options held by KMP as at 31 December 2022.
TASFOODS ANNUAL REPORT 2022 9 4
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
29. SHARE BASED PAYMENTS, CONT.
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/Share Appreciation 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 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).
30. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
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 2022. 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.
(b) Compliance with IFRS
The financial statements comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB).
(c) Historical Cost Convention
The financial statements have been prepared under the historical cost convention. All amounts are presented in Australian dollars unless
otherwise noted.
(d) Principles of Consolidation
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;
• 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.
TASFOODS ANNUAL REPORT 2022 9 5
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS, CONT.
30. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONT.
(e) Critical Accounting Estimates, Judgements and Errors
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.
(f ) Comparatives
Where necessary, comparative information has been reclassified and repositioned for consistency with current year disclosures.
(g) New Standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2020 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.
(h) Rounding Amounts
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 2022 9 6
DIRECTORS’ DECLARATION
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.
ii.
Giving a true and fair view of the Group’s financial position as at 31 December 2022 and of its performance for the year ended on
that date; and
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.
3.
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
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 2022.
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.
John Murphy
Non-Executive Chair
27 February 2023
TASFOODS ANNUAL REPORT 2022
9 7
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 2022 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:
(cid:3511)
(cid:3511)
(cid:3511)
(cid:3511)
(cid:3511)
(cid:3511)
the consolidated statement of financial position as at 31 December 2022
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 the consolidated financial statements, which include significant accounting policies
and other explanatory information
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 & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999
Liability limited by a scheme approved under Professional Standards Legislation.
TASFOODS ANNUAL REPORT 2022
9 8
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report, which indicates that the Group incurred a net loss
of $16.48 million and a net cash outflow from operations of $5.81 million during the year ended 31
December 2022 and as of that date had net current liabilities of $1.04 million. These conditions, along
with other matters set forth in Note 1, indicate that a material uncertainty exists that may cast
significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in
respect of this matter.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Materiality
(cid:3511) For the purpose of our audit we used overall Group materiality of $700,000, 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.
(cid:3511) 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.
(cid:3511) 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 a growth phase.
(cid:3511) We utilised a 1% threshold based on our professional judgement, noting it is within the range of commonly
acceptable thresholds.
TASFOODS ANNUAL REPORT 2022
9 9
Audit Scope
(cid:3511) Our audit focused on where the Group made subjective judgements; for example, significant accounting
estimates involving assumptions and inherently uncertain future events.
(cid:3511) 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 Horticulture and shared services business units.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the
Audit and Risk Committee.
In addition to the matter described in the Material uncertainty related to going concern section, we
have determined the matter described below to be the key audit matters to be communicated in our
report.
Key audit matter
How our audit addressed the key audit matter
Valuation of indefinite lived intangible assets
(Refer to note 13)
We performed the following procedures, amongst
others, in respect of the Dairy and Poultry CGUs:
During the period, the Group held indefinite lived
intangible assets comprised of brands and trademarks
($6.8 million) across its Dairy and Poultry Cash
Generating Units (CGUs). Under Australian Accounting
Standards, the Group is required to assess indefinite
life intangible assets for impairment at least annually.
At 31 December 2022 the Group assessed the carrying
value of the assets based on the value-in-use
methodology using forecast future cash flows,
discounted to present value. The impairment
assessment resulted in impairment losses of $2.9
million for the Poultry CGU and $3.9 million for the
Dairy CGU, as disclosed in note 13, reducing the brand
value, patents and trademarks balance to nil for these
CGUs.
The impairment assessment involved significant
judgements, including sales growth rate, production
costs, indirect cost growth rate per annum, long-term
growth rate and pre-tax discount rate.
This was a key audit matter due to the financial
significance of the indefinite lived intangibles and the
(cid:120) 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.
(cid:120) Assessed whether each CGU appropriately
included all directly attributable assets and
liabilities.
(cid:120) Assessed whether the valuation methodology,
which utilised discounted cash flow models to
estimate the recoverable amount of each
CGU, was consistent with Australian
Accounting Standards.
Tested the mathematical accuracy of key data
in the models and compared key data to the
latest budget, third party information or
historical actual costs.
(cid:120)
(cid:120) With the assistance of PwC valuation experts,
assessed whether the discount rates used in
the models were appropriate by comparing
them to market data, comparable companies
and industry research.
(cid:120) Evaluated the reasonableness of the
disclosures made in note 13 considering the
requirements of Australian Accounting
Standards.
TASFOODS ANNUAL REPORT 2022
1 0 0
Key audit matter
How our audit addressed the key audit matter
significant judgements and assumptions applied in
estimating future cash flows,
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 2022, but does not include
the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf.
This description forms part of our auditor's report.
TASFOODS ANNUAL REPORT 2022
1 0 1
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 33 to 50 of the directors’ report for the
year ended 31 December 2022.
In our opinion, the remuneration report of TasFoods Limited for the year ended 31 December 2022
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Brad Peake
Partner
Melbourne
27 February 2023
TASFOODS ANNUAL REPORT 2022
1 0 2
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 13 February 2023.
A. DISTRIBUTION OF EQUITY SECURITIES
Analysis of numbers of equity security holders by size of holding:
HOLDING DISTRIBUTION
As at 13 February 2023
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
Unmarketable Parcels
Securities
413,954,840
20,278,983
1,648,460
1,139,696
73,537
437,095,516
3,777,448
%
94.71
4.64
0.38
0.26
0.02
100.00
0.86
No of Holders
248
534
208
362
237
1,589
883
%
15.61
33.61
13.09
22.78
14.92
100.00
55.57
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
Units
Percentage %
1
2
3
4
5
6
7
8
9
MUTUAL TRUST
Includes entities associated with JANET CAMERON
NATIONAL NOMINEES LIMITED
Includes TASPLAN SUPERANNUATION FUND
CVC LIMITED
97,295,851
81,517,736
63,269,514
MELBOURNE SECURITIES CORPORATION
47,908,375
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
HELBERN INVESTMENTS PTY LTD
MR JIMMY THOMAS AND MS IVY RUTH PONNIAH
NICHOLS INVESTMENTS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
10
SHANE ALEXANDER NOBLE
10,612,126
10,400,000
8,382,684
5,117,496
3,158,630
2,968,055
22.26
18.65
14.47
10.96
2.43
2.38
1.92
1.17
0.72
0.68
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SHAREHOLDER INFORMATION
B. EQUITY SECURITY HOLDERS, CONT.
Rank
Name
Units
Percentage %
11
12
13
14
15
16
17
18
19
BARANA PTY LTD
DARIUS ISAAC
QUALITY LIFE PTY LTD
ELPHINSTONE HOLDINGS PTY LTD
BOB WILSON
BENJAMIN SCOTT SWAIN & ANN YEO RUM SWAIN
A.C.N. 136 965 538 PTY LTD
CHARDON LODGE PTY LTD
Entity associated with Jane Frances Bennett
CUSTODIAL SERVICES LIMITED
(various private holders)
20
ALISON SHIRLEY WHITELEY
Totals: Top 20 holders of TFL ORDINARY FULLY PAID
Total Remaining Holders Balance
Total Holders Balance
2,891,718
2,810,316
2,541,070
2,000,000
1,600,000
1,578,571
1,575,776
1,351,086
1,306,001
1,250,000
349,535,005
87,560,511
437,095,516
As at 13 FEBRUARY 2023, the 20 largest shareholders held ordinary shares representing 79.97% 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
Melbourne Securities Corporation
Number Of Shares Held
97,295,851
63,269,514
55,493,605
47,908,375
0.66
0.64
0.58
0.46
0.37
0.36
0.36
0.31
0.30
0.29
%
22.26
14.48
13.90
10.79
C. VOTING RIGHTS
The voting rights attached to ordinary shares are set out below:
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.
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tasfoods.com.au
TASFOODS ANNUAL REPORT 2022