WIDE OPEN AGRICULTURE LIMITED
ABN 86 604 913 822
CONSOLIDATED FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2018
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
CONTENTS
Corporate Directory
Director's Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Director's Declaration
Independent Auditor’s Declaration
Independent Auditor’s Report
Additional ASX Information
1
2
17
18
19
20
21
46
47
48
51
CORPORATE DIRECTORY
DIRECTORS
Mr Anthony Maslin (Non-Executive Chairman)
Dr Ben Cole (Managing Director)
Mr Stuart McAlpine (Non-Executive Director)
Dr James Mackintosh (Non-Executive Director)
SOLICITORS
Fairweather Corporate Lawyers
595 Stirling Highway
Cottesloe, Western Australia, 6011
ALTERNATE DIRECTOR
Mr Hans Schut (Alternate Director for Dr James
Mackintosh)
AUDITORS
Stantons International Securities Pty Ltd
Level 2, 1 Walker Avenue
West Perth, Western Australia, 6005
SHARE REGISTRY
Link Market Services Limited
Level 4, 152 St Georges Terrace
Perth, Western Australia, 6000
Telephone: 1800 502 355 (within Australia)
STOCK EXCHANGE
Australian Securities Exchange
Central Park
152-158 St Georges Terrace
Perth Western Australia 6000
ASX CODE: WOA
JOINT COMPANY SECRETARIES
Mr Sam Wright
Ms Lydia Fee
BUSINESS OFFICE
5 Brooking Street
Williams, Western Australia, 6391
Email: info@wideopenagriculture.com.au
REGISTERED OFFICE
Suite 39, 1 Freshwater Parade
Claremont, Western Australia, 6010
Telephone: +61 8 6161 7412
WEBSITE
www.wideopenagriculture.com.au
1
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
Your directors present this report on Wide Open Agriculture Limited (the “Company” or “WOA”) and its
subsidiaries (“Consolidated Entity” or “Group”) for the year ended 30 June 2018.
DIRECTORS
The name of the directors in office at any time during, or since the end of the year are:
Ben Cole – Managing Director (appointed on 23 March 2015)
B.Env.Sc (Hons) Phd
With a PhD in environmental engineering, Ben is a social enterprise expert who has extensive international
experience as a Grant Manager of market-based, water supply and sanitation projects, totalling up to $30
million. Between 2008 and 2013 he founded, managed and sold a profitable, social enterprise – Karibon - in
Vietnam. A genuine start-up from invention through to sales, Ben gained valuable experience in business
development and management.
Anthony Maslin – Non-Executive Chairman (appointed on 23 March 2015)
BBus (Fin and Ent)
Anthony started as a stockbroker 25 years ago managing capital raisings and providing ethical investment
advice. In 1998 he founded Solar Energy Systems Ltd (now Solco Ltd), which became the first solar energy
company to list on the ASX. Since then he has consulted to and managed various listed companies, including
five years as Managing Director of Buxton Resources Ltd. Anthony also co-founded community art hub the
Artspace Collective and the Mo, Evie and Otis Maslin Foundation, which focuses on early intervention for
dyslexia.
James Mackintosh – Non Executive Director (appointed 24 July 2015)
James has more than 10 years experience as a corporate finance professional in New Zealand, the UK and
the Netherlands. James was formerly a Director at KPMG Deal Advisory in Amsterdam where he also co-led
KPMG’s financial modelling practice in the Netherlands. James holds a PhD in chemistry and co-owns an
Australian based wine company. James is the Managing Director of 4 Returns Projects B.V, the 100%
subsidiary of WOA shareholder Commonland Foundation and represents Commonland on the WOA Board.
Johannes Schut – Non-Executive Director (appointed 23 July 2015) - alternate Director for James Mackintosh
Johannes operates a consultancy firm called BDFC which supports organisations such as Commonland and
Triodos Bank with business development and financing advice. He is a Chairman of the Supervisory Board of
DE-on, a provincial renewable energy fund in the Netherlands. Hans worked with industrial companies
(Vredestein and DRU in the Netherlands) and a Dutch energy utility (NUON) for 16 years, before embarking
on a career as a banker and investor at the European Triodos Bank for 17 years. As a former managing director
of Triodos Investment Management, the impact-investing arm of Triodos Bank, he has developed and
managed various impact investment funds with activities in Europe and emerging markets. He holds a degree
in Industrial Design Engineering from Delft Technical University in the Netherlands.
2
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
Stuart McAlpine – Non-Executive Director (appointed 30 March 2016)
Stuart is a Wheatbelt farmer with over 35 years’ experience in agriculture who is committed to the
environmental and social restoration of his region. He was co-founder of the Liebe Group and inaugural
President. He instigated the Regional Repopulation Plan with the Wheatbelt’s Dalwallinu Shire and Chaired
the Regional Repopulation Advisory Committee.
Directors have been in office since the start of the year to the date of this report unless otherwise stated.
COMPANY SECRETARY
The name of the Company Secretaries in office at any time during, or since the end of the year are:
Sam Wright (appointed on 28 September 2016)
Lydia Fee (appointed on 28 September 2016)
REVIEW OF OPERATIONS
The loss of the Group for the financial year after providing for income tax amounted to $1,296,319
(2017: loss of $901,692).
Significant changes and events affecting the Group during the financial year have been:
The Company currently has three subsidiaries and continues to develop these business streams:
a) Protected Cropping Holdings – Protected cropping and associated open field operations to grow
premium vegetables;
b) Food for Reasons ™- Food brand to market and distribute food produce and
c) Land for Reasons – a regenerative farmland management business
Protected Cropping Holdings
From October 2017 to March 2018, the Group completed its second growing period of horticultural activities
in the retractable roof protected cropping system of 5,186m2 in Arthur River near Wagin, Western Australia.
To date, the Group has focused on growing grape and roma tomatoes.
The protected cropping operations work in conjunction with the ‘Food for Reasons’ food brand by supplying
premium vegetables and produce to the food brand operations.
Food for Reasons ™
The Group has established distribution and marketing channels in Western Australia through its Food for
Reasons brand. Sales of the fresh premium produce began in April 2017 through online, retail and wholesale
avenues. Retail sales include branded and packaged Grape, Roma and Medley tomato boxes, supplying
directly to restaurants and supermarkets located in Perth.
3
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
Land for Reasons
The strategy for the regenerative farmland management business is for the Group to manage West Australian
Wheatbelt farmland that will be farmed by experienced farmers applying regenerative farming practices and
based on the ‘4 returns’ framework. The Group has established the East Kulinbah Project on land of 310
hectares, it has entered into a land purchase and lease agreement.
Subsequent to this, the Group has signed a land management agreement on a separate property (refer to
Events Subsequent to the End of the Reporting Period - page 4).
OTHER SIGNIFICANT CHANGES
On 12 April 2018 the Group submitted their Initial Prospectus Offer (IPO) to ASIC.
The Group entered into various agreements with a substantial shareholder, Commonland Foundation and its
subsidiary 4 Returns Projects B.V. This includes an interest free loan for $305,000 on 8 January 2018 and an
IPO contingency loan of $100,000 on 22 February 2018. Post reporting period the Group repaid the $100,000
IPO contingency loan. An agreement for additional funding of $325,000 was provided by Commonland
Foundation on 20 April 2018 however there is no requirement to repayment this amount. The amount is
included in the income in the current financial year (note 2).
PRINCIPAL ACTIVITIES
The principal activities of the Group during the financial year were the establishment and undertaking of
diversified, regenerative farming practices in the Wheatbelt of Western Australia; in particular, horticultural
activities.
EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD
The following matters or circumstances have arisen since the end of the financial year which significantly affect
or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of
the Group in future financial years:
Successful Listing of Wide Open Agriculture on ASX
On 6 July 2018, the Group was pleased to announce that following its oversubscribed IPO raising of $5 million,
it commenced trading on the Australian Stock Exchange under ASX code “WOA”.
Following listing, the Group is now in a position to develop and expand operations to include a network of
farms and protected cropping systems across Western Australia’s Wheatbelt.
Funds raised will be used to assist WOA to reach its goal of vertical integration from production through to
distribution of premium produce and food products throughout Australia and ultimately, into Asia through our
food brand, Food for Reasons™.
4
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
Wide Open Agriculture signs Farmland Management Agreement on $4.35M property
On 20 August 2018, the Group announced that that it has entered into a 10-year Farmland Management
Agreement (Agreement) with Netherlands-based investors Handover B.V. and Wheatbelt-based regenerative
farmers.
Under the Agreement, WOA through 100%-owned subsidiary Land for Reasons Pty Ltd (LFR), will provide the
1,787 hectare property in Western Australia’s Shire of Kojonup with financial reporting, monitoring and
administration of the 4 Returns* in return for a 20% profit share and 20% capital appreciation over the 10-year
life of the Agreement.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Likely developments in the operations of the Group and the expected results of those operations in future
financial years have not been included in this report as the inclusion of such information is likely to result in
unreasonable prejudice to the Group.
ENVIRONMENTAL REGULATION
The Group's operations are not regulated by any significant environmental regulation under a law of the
Commonwealth or of a state or territory.
DIVIDENDS
No dividends were paid during the year and no recommendation is made as to the dividends.
The directors do not recommend the payment of a dividend.
OPTIONS
On 16 February 2018 at a General Meeting of Shareholder it was approved to issue 3,750,000 unlisted options,
exercisable at $0.30, expiring on 30 June 2021.
On 22 February 2018 the directors approved to issue brokers and promoters with options in relation to the
IPO. 5,000,000 unlisted options were issued with an exercise price of $0.30.
5
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
The terms and conditions of the options granted to directors are as follows:
Director
Grant
Number
Granted
Date
Exercise
Price
Fair
Value
Expiry
Date
Vesting
Hurdle
Anthony Maslin
16/02/2018
1,500,000
30 cents
$87,330
30/06/2021
Ben Cole
16/02/2018
750,000
30 cents
$43,665
30/06/2021
Stuart McAlpine
16/02/2018
750,000
30 cents
$43,665
30/06/2021
Johannes Schut
16/02/2018
750,000
30 cents
$43,665
30/06/2021
Nil
Nil
Nil
Nil
3,750,000
$218,325
The terms and conditions of the options granted to brokers and promoters are as follows:
Director
Grant
Number
Granted
Date
Exercise
Price
Fair
Value
Expiry
Date
Vesting
Hurdle
Sam Wright
Lydia Fee
22/02/2018
500,000
30 cents
$29,000
30/06/2021
22/02/2018
500,000
30 cents
$29,000
30/06/2021
Mac Equity Partners
22/02/2018
2,000,000
30 cents
$164,000
31/12/2021
Euroz Limited
22/02/2018
1,000,000
30 cents
$82,000
31/12/2021
Oracle Capital
22/02/2018
1,000,000
30 cents
$82,000
31/12/2021
Nil
Nil
Nil
Nil
Nil
5,000,000
$386,000
The fair value of these options as shown in the above are based on the Black Scholes options pricing model
and the following:
Share price at date granted
Risk free rate
Volatility factor
Dividend Yield
12 cents
2.12%
100%
Nil
DIRECTORS’ ATTENDANCE AT BOARD AND COMMITTEE MEETINGS DURING THE YEAR
Name
Ben Cole
Anthony Maslin
James Mackintosh
Stuart McAlpine
Johannes Schut
Board of Directors’ Meetings
No. attended
10
9
9
10
7
6
No. eligible to attend
10
10
10
10
10
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
INDEMNIFICATION OF OFFICERS
No indemnities have been given or insurance premiums paid, during or since the end of the financial year, for
any person who is or has been an officer or auditor of the Group.
REMUNERATION REPORT (AUDITED)
The remuneration report details the key management personnel remuneration arrangements for the
consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
● Principles used to determine the nature and amount of remuneration
● Details of remuneration
● Service agreements
● Share-based compensation
● Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the consolidated entity's executive reward framework is to ensure reward for performance is
competitive and appropriate for the results delivered. The framework aligns executive reward with the
achievement of strategic objectives and the creation of value for shareholders, and it is considered to conform
to the market best practice for the delivery of reward. The Board of Directors ('the Board') ensures that
executive reward satisfies the following key criteria for good reward governance practices:
●
●
●
●
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
The reward framework is designed to promote superior performance and long-term commitment to the Group.
The main principles of the policy are:
● Remuneration is reasonable and fair, taking into account the Group’s obligations at law, the competitive
●
market in which the Group operates and the relative size and scale of the Group’s business;
Individual reward should be linked to clearly specified performance targets which should be aligned to the
Group’s short term and long-term performance objectives; and
● Executives should be rewarded for both financial and non-financial performance
In accordance with best practice corporate governance, the structure of non-executive director and executive
director remuneration is separate.
7
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
Non-executive directors remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-
executive directors' fees and payments are reviewed annually by the Remuneration Committee. The
Remuneration Committee may, from time to time, receive advice from independent remuneration consultants
to ensure non-executive directors' fees and payments are appropriate and in line with the market. The
chairman's fees are determined independently to the fees of other non-executive directors based on
comparative roles in the external market. The chairman is not present at any discussions relating to the
determination of his own remuneration. Non-executive directors do not receive share options or other
incentives.
ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by
a general meeting. The most recent determination was at the Annual General Meeting held on 14 February
2017, where the shareholders approved a maximum annual aggregate remuneration of $300,000.
Executive remuneration
The consolidated entity aims to reward executives based on their position and responsibility, with a level and
mix of remuneration which has both fixed and variable components.
The executive remuneration and reward framework has four components:
●
●
●
●
base pay and non-monetary benefits
short-term performance incentives
share-based payments
other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed
annually by the Remuneration Committee based on individual and business unit performance, the overall
performance of the consolidated entity and comparable market remunerations.
Executives may receive their fixed remuneration in the form of cash, payable monthly.
The short-term incentives ('STI') program is designed to align the targets of the business units with the
performance hurdles of executives. Executives are eligible to participate in a profit participation plan if deemed
appropriate.
The long-term incentives ('LTI') include long service leave and share-based payments. Executives may
participate in share option schemes with the prior approval of the shareholders.
Use of remuneration consultants
During the financial year ended 30 June 2018, no remuneration consultants were engaged.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the
following tables.
8
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
The key management personnel of the consolidated entity consisted of the following directors of Wide Open
Agriculture Limited:
● Anthony Maslin - Non-Executive Chairman
● Ben Cole - Managing Director
●
●
● Stuart McAlpine – Non-Executive
Johannes Schut - Non-Executive Director
James Mackintosh – Non-Executive Director
There have been no changes in the composition of the key management personnel since the end of the
reporting period.
9
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
2018
Non-Executive Directors:
Anthony Maslin1
Johannes Schut
James Mackintosh
Stuart McAlpine
Executive Directors:
Ben Cole2
Short-term benefits
Post-employment
benefits
Long-term
benefits
Share-based payments
Cash salary
Cash
and fees
bonus
$
$
Non-
monetary
$
Super-
Long service
Equity-
settled
Equity-
settled
annuation
$
leave
$
shares
options
$
$
Total
$
-
-
-
-
87,611
87,611
-
-
-
-
-
-
-
-
-
-
-
-
3,648
-
-
-
10,070
13,718
-
-
-
-
-
-
-
-
-
-
-
-
87,330
43,665
-
43,665
90,978
43,665
-
43,665
43,665
141,346
218,325
319,654
1During the period Anthony Maslin forfeited amounts owing to him under his contract of $38,400
2 During the period Ben Cole forfeited amounts owing to him under his contract of $21,200
10
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
2017
Non-Executive Directors:
Anthony Maslin
Johannes Schut
James Mackintosh
Stuart McAlpine
Executive Directors:
Ben Cole
Short-term benefits
Post-employment
benefits
Long-term
benefits
Share-based payments
Cash salary
Cash
and fees
bonus
$
$
Non-
monetary
$
Super-
Long service
Equity-
settled
Equity-
settled
annuation
$
leave
$
shares
options
$
$
Total
$
-
-
-
-
79,466
79,466
-
-
-
-
-
-
38,400
-
-
-
22,367
60,767
-
-
-
-
9,339
9,339
-
-
-
-
-
-
41,600
-
-
-
20,000
61,600
-
-
-
-
-
-
80,000
-
-
-
131,172
211,172
11
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
Proportion of
remuneration
performance based
Value of share-based
payments as a proportion
of remuneration
2018
2017
2018
2017
-
-
-
-
-
-
-
-
-
-
96
100
-
100
52
-
-
-
31
15
Non-Executive Directors:
Anthony Maslin
Johannes Schut
James Mackintosh
Stuart McAlpine
Executive Directors:
Ben Cole
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service
agreements. Details of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Ben Cole
Managing Director
6 July 2018
Until terminated by either party
Base salary $165,000 plus superannuation, to be reviewed annually by
the Board of directors. 6 month termination notice by either party, LTI
arrangements from time to time on terms to be decided by the Board and
approved by shareholders.
Key management personnel have no entitlement to termination payments in the event of removal for
misconduct.
12
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
Share-based compensation
Issue of shares
No shares were issued to directors and other key management personnel as part of compensation during the
year ended 30 June 2018.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors
and other key management personnel in this financial year or future reporting years are as follows:
Name
Anthony Maslin
Ben Cole
Stuart McAlpine
Johannes Schut
Number of
options
granted
1,500,000
750,000
750,000
750,000
3,750,000
Grant date
Expiry date
Exercise price
Fair value
16/02/2018
16/02/2018
16/02/2018
16/02/2018
30/06/2021
30/06/2021
30/06/2021
30/06/2021
30 cents
30 cents
30 cents
30 cents
$87,330
$43,665
$43,665
$43,665
$218,325
Vesting
Hurdle
Nil
Nil
Nil
Nil
Options granted carry no dividend or voting rights.
The fair value of these options as shown in the above are based on the Black Scholes options pricing
model and the following:
Share price at date granted
Risk free rate
Volatility factor
Dividend Yield
12 cents
2.12%
100%
Nil
13
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
Values of options over ordinary shares granted, exercised and lapsed for directors and other key
management personnel as part of compensation during the year ended 30 June 2018 are set out below:
Value of
Value of
Value of
options
granted
during the
options
exercised
during the
Remuneration
consisting of
options
options
lapsed
during the
for the
Name
Anthony Maslin
Ben Cole
Stuart McAlpine
Johannes Schut
year
$
year
$
year
$
year
%
87,330
43,665
43,665
43,665
-
-
-
-
-
-
-
-
96%
31%
100%
100%
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of
key management personnel of the consolidated entity, including their personally related parties, is set out
below:
Balance at Received
the start of as part of
the year
remuneration Additions
Disposals/
other
Balance at
the end of
the year
7,566,668
7,816,668
515,000
-
-
-
-
(500,000)
-
2,000,000
(500,000) 17,898,336
Ordinary shares
Ben Cole
Anthony Maslin
Johannes Schut
James Mackintosh
Stuart McAlpine
7,566,668
7,766,668
500,000
500,000
2,000,000
18,333,336
-
-
-
-
-
-
-
50,000
15,000
-
-
65,000
14
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
Option holding
The number of options over ordinary shares in the Company held during the financial year by each director
and other members of key management personnel of the consolidated entity, including their personally
related parties, is set out below:
Options over ordinary shares
Ben Cole
Anthony Maslin
Johannes Schut
James Mackintosh
Stuart McAlpine
Balance at
the start of
the year
Granted
Expired/
forfeited/
Balance at
the end of
Exercised
other
the year
-
-
-
-
-
-
750,000
1,500,000
750,0000
-
750,000
3,750,000
-
-
-
-
-
-
-
-
-
-
-
-
750,000
1,500,000
750,0000
-
750,000
3,750,000
Other transactions with key management personnel and their related parties
During the financial year, the Group recognised rental income of $13,500 during the period for the lease of
farm land to McAlpine Farms and interest expense of $18,259 relating to the purchase of Kulinbah East Block
(refer to note 18). McAlpine Farms is owned by Stuart McAlpine, a current Director of the Group. All
transactions were made on normal commercial terms and conditions no more favourable than those available
to other parties unless otherwise stated.
The Group entered into various agreements with a substantial shareholder, Commonland Foundation and its
subsidiary 4 Returns Projects B.V. James Mackintosh is the Managing Director of 4 Returns Projects B.V as
well as a Director of the Group. Johannes Schut is an alternate Director for James Mackintosh. The Group
received $353,250 (EUR 225,000) from Commonland Foundation as a shareholder loan during the period.
Additionally, the Group entered into a loan agreement with 4 Returns Projects B.V., during the period. The
total loan funding made available by 4 Returns Projects B.V. to, and received by, the Group per the agreement
was $305,000. No interest is payable on these loans and are payable in single lump sum amounts 5 years
after the respective dates of the execution of the loans. In addition, the Group entered into an IPO contingency
loan arrangement with Commonland Foundation of $100,000 on 22 February 2018. Post reporting period the
Group repaid the $100,000 IPO contingency loan. The total loan balance as at 30 June 2018 is $917,295
(2017: $246,806). Commonland Foundation also reimbursed the Group for $137,474 of expenditure incurred
directly related to Commonland Foundation’s activities. A further $325,000 non-refundable amount was
received and included in income.
This concludes the remuneration report, which has been audited.
15
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
PROCEEDINGS ON BEHALF OF THE GROUP
No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in any
proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all
or any part of those proceedings.
The Group was not a party to any such proceedings during the year.
CORPORATE GOVERNANCE
The Consolidated Group’s corporate governance policies and practices are available on the website
http://www.wideopenagriculture.com.au
NON-AUDIT SERVICES
Stantons International Audit & Consulting Pty Ltd, was appointed to prepare an investigating accountants
report for the prospectus. Refer to note 15 for auditor’s remuneration. Stantons International Audit &
Consulting Pty Ltd were paid $10,139 excluding GST for these services.
The board has established, subsequent to year-end, certain procedures to ensure that the provision of non-
audit services are compatible with, and do not compromise, the auditor independence requirements of the
Corporations Act 2001. These procedures include:
•
•
Non-audit services are subject to the corporate governance procedures adopted by the Group and will be
reviewed by the audit committee to ensure they do not impact the integrity and objectivity of the auditor;
and
Ensuring non-audit services do not involve reviewing or auditing the auditor’s own work, acting in a
management or decision-making capacity for the consolidated Group, acting as an advocate for the
Consolidated Group or jointly sharing risks and rewards.
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2018 has been received and can be
found on page 47.
Signed for and on behalf of the board in accordance with a resolution of the directors:
Director:
_________________________________________________________
Dr Ben Cole
Dated this 28th September 2018
16
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Note
2018
$
2017
$
Revenue and other Income
Cost of goods sold
Auditor’s remuneration
Consultancy Fees
Depreciation Expense
Employee Benefits Cost
Share Based Payments
Other administration expenses
Loss for the year before income tax expense
Income tax expense
Loss after tax from continuing operations
Other comprehensive income:
Items that will not be reclassified to profit or loss
2
15
14
Items that may be reclassified subsequently to profit or loss
Total other comprehensive income for the year
Total comprehensive loss for the year
Total comprehensive loss attributable to members of the
entity
Basic loss per share (cents)
20
Diluted loss per share (cents)
552,577
(63,249)
(26,524)
(209,786)
(173,707)
(540,959)
(218,325)
(616,346)
(1,296,319)
-
(1,296,319)
-
-
-
66,256
(52,481)
(8,000)
(125,207)
(74,873)
(510,321)
-
(197,066)
(901,692)
-
(901,692)
-
-
-
(1,296,319)
(901,692)
(1,296,319)
(901,692)
(2.86)
(2.67)
(2.2)
(2.2)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
17
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
Note
2018
$
2017
$
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property Plant and Equipment
Other non-current assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Provisions
Borrowings and other financial liabilities
TOTAL CURRENT LIABILITIES
NET ASSETS
EQUITY
Issued capital
Options reserve
Accumulated losses
TOTAL EQUITY
3
4
5
4
6
7
8
9
10
11
5,125,512
22,016
5,147,528
680,802
175,000
855,802
335,878
161,461
497,339
800,799
-
800,799
6,003,330
1,298,138
361,806
41,242
941,295
1,344,343
152,575
21,384
301,405
475,364
4,658,987
822,774
6,666,094
604,325
(2,611,432)
4,658,987
2,137,887
-
(1,315,113)
822,774
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
18
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
2018
Issued
Capital
$
As at the beginning of the year
2,137,887
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
Shares issued
Capital raising costs
Options reserve
At 30 June 2018
-
-
-
5,036,000
(507,793)
Attributable to equity holders of the Group
Options
Reserve
Accumulated
Losses
Total Equity
$
-
-
-
-
$
$
(1,315,113)
(1,296,319)
-
822,774
(1,296,319)
-
(1,296,319)
(1,296,319)
-
-
-
5,036,000
(507,793)
604,325
-
604,325
6,666,094
604,325
(2,611,432)
4,658,987
2017
Issued
Capital
$
As at the beginning of the year
647,128
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
-
-
-
Contributions of equity
At 30 June 2017
1,490,759
2,137,887
Attributable to equity holders of the Group
Total Equity
Options
Reserve
Accumulated
Losses
$
-
-
-
-
-
-
$
$
(413,421)
(901,692)
-
233,707
(901,692)
-
(901,692)
(901,692)
-
1,490,759
(1,315,113)
822,774
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
19
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
Cash Flows from Operating Activities
Payments to suppliers
Receipts from customers
Funds received from Commonland
Interest received
Note
2018
$
(1,086,379)
261,851
325,000
102
2017
$
(810,090)
24,759
-
327
Net cash flows used in operating activities
13
(499,426)
(785,005)
Cash Flows from Investing Activities
Payments for acquisition of PPE
Net cash used in investing activities
Cash Flows from Financing Activities
(104,378)
(104,378)
(760,470)
(760,470)
Proceeds from issue of securities (net of issue costs)
4,823,480
1,335,409
Proceeds from borrowings
Grant received
485,889
84,070
174,625
42,000
Net cash flows generated from financing activities
5,393,439
1,552,034
Net increase in cash and cash equivalents
4,789,634
6,559
Cash and cash equivalents at the beginning of the
financial year
Cash and cash equivalents at the end of the
financial year
335,878
329,319
3
5,125,512
335,878
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
20
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
1
Statement of Significant Accounting Policies
The financial statements cover Wide Open Agriculture Limited and its subsidiaries as a consolidated
Group. Wide Open Agriculture Limited is a company limited by shares, incorporated and domiciled in
Australia.
a. Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in
accordance with Australian Accounting Standards (including Australian Accounting Interpretations) of
the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The company is
a for-profit entity for financial reporting purposes under Australian Accounting Standards.
Australian Accounting Standards set out accounting policies that the AASB has concluded would
result in financial statements containing relevant and reliable information about transactions, events
and conditions. Compliance with Australian Accounting Standards ensures that the financial
statements and notes also comply with International Financial Reporting Standards as issued by the
IASB. Material accounting policies adopted in the preparation of these financial statements are
presented below and have been consistently applied unless stated otherwise.
The financial statements, except for the cash flow information, have been prepared on an accruals
basis and are based on historical costs, modified, where applicable, by the measurement at fair value
of selected non-current assets, financial assets and financial liabilities. The amounts presented in the
financial statements have been rounded to the nearest dollar.
The financial statements were authorised for issue on 28th September 2018 by the directors of the
Group.
Accounting Policies
The Group has consistently applied the following accounting policies to all periods presented in the
financial statements. The Group has considered the implications of new and amended Accounting
Standards applicable for annual reporting periods beginning after 1 January 2017 but determined that
their application to the financial statements is either not relevant or material.
b. Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the
Company as at 30 June 2018 and the results of all subsidiaries for the year then ended. The Company
and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated
entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its power to direct
the activities of the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the consolidated entity. They are de-consolidated from the date that control ceases.
21
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Accounting Policies continued
Intercompany transactions, balances and unrealised gains on transactions between entities in the
consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction
provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with the policies adopted by the consolidated
entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change
in ownership interest, without the loss of control, is accounted for as an equity transaction, where the
difference between the consideration transferred and the book value of the share of the non-controlling
interest acquired is recognised directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement
of profit or loss and other comprehensive income, statement of financial position and statement of
changes in equity of the consolidated entity. Losses incurred by the consolidated entity are attributed
to the non-controlling interest in full, even if that results in a deficit balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including
goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative
translation differences recognised in equity. The consolidated entity recognises the fair value of the
consideration received and the fair value of any investment retained together with any gain or loss in
profit or loss.
c. Going Concern
The consolidated financial statements of the Group have been prepared on a going concern basis
which anticipates the ability of the entity to meet its obligations in the normal course of business.
At 30 June 2018, the Group had net assets of $4,658,987, cash and cash equivalents of $5,125,512
and net working capital of $3,803,185. The Group had incurred a loss for the year ended 30 June
2018 of $1,296,319.
The ability of the Group to continue as a going concern and meet its planned operational,
administration and other commitments is dependent upon the Group raising further working capital
and/or successfully operating its greenhouse. In the event that the Group is not successful in raising
further equity or operating its greenhouse, the Group may not be able to meet its liabilities as and
when they fall due and the realisable value of the Group’s non-current assets may be significantly less
than book values.
22
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Accounting Policies continued
d. Foreign Currency Translation
The financial statements are presented in Australian dollars, which is the Group’s functional and
presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at financial year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net
investment is disposed of.
e. Financial Instruments
(i) Non-derivative financial assets
The Group initially recognises loans and receivables on the date that they are originated. All other
financial assets (including assets designated at fair value through profit or loss) are recognised initially
on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset
expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a
transaction in which substantially all the risks and rewards of ownership of the financial asset are
transferred. Any interest in transferred financial assets that is created or retained by the Group is
recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of financial
position when, and only when, the Group has a legal right to offset the amounts and intends either to
settle on a net basis or to realise the asset and settle the liability simultaneously.
The Group has the following non-derivative financial assets: loans and receivables, and cash and
cash equivalents.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in
an active market. Such assets are recognised initially at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition loans and receivables are measured at amortised
cost using the effective interest method, less any impairment losses.
Loans and receivables comprise trade and other receivables.
23
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Accounting Policies continued
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and deposits with original maturities of three
months or less from the acquisition date that are subject to an insignificant risk of changes in their fair
value, and are used by the Group in the management of its short-term commitments.
(ii) Non-derivative financial liabilities
The Group initially recognises debt securities issued and subordinated liabilities on the date that they
are originated. All other financial liabilities (including liabilities designated at fair value through profit
or loss) are recognised initially on the trade date at which the Group becomes a party to the contractual
provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged or
cancelled or expire.
The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such
financial liabilities are recognised initially at fair value less any directly attributable transaction costs.
Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the
effective interest rate method.
Other financial liabilities comprise trade and other payables and borrowings and other financial
liabilities.
(iii) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary
shares and share options are recognised as a deduction from equity, net of any tax effects.
f. Property, plant & equipment
Land and buildings are shown at historical cost, unless stated otherwise, less subsequent depreciation
and impairment for buildings. The cost of self-constructed assets includes the cost of materials, direct
labour, the initial estimate, where relevant, of the costs of dismantling and removing the items and
restoring the site on which they are located, and an appropriate proportion of production overheads.
Plant and equipment is stated at historical cost less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a diminishing value basis to write off the net cost of each item of property,
plant and equipment (excluding land) over their expected useful lives. Items valued at cost under
$1,000 are immediately deducted.
24
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Accounting Policies continued
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate,
at each reporting date.
Leasehold improvements and plant and equipment under lease are depreciated over the unexpired
period of the lease or the estimated useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future
economic benefit to the consolidated entity. Gains and losses between the carrying amount and the
disposal proceeds are taken to profit or loss. Any revaluation surplus reserve relating to the item
disposed of is transferred directly to retained profits.
Capital expenditure on assets under construction and not yet ready for use by the Group is reflected
as a distinct item in capital works in progress until the period of completion. Upon completion, the
asset is reclassified and shown as distinct item in fixed assets.
g. Impairment of Assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset
may be impaired. The assessment will include considering external and internal sources of
information, including dividends received from subsidiaries, associates or jointly controlled entities
deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is carried
out on the asset by comparing the recoverable amount of the asset, being the higher of the asset's
fair value less costs to sell and value in use to the asset's carrying amount. Any excess of the asset's
carrying amount over its recoverable amount is recognised immediately in profit or loss unless the
asset is carried at a revalued amount in accordance with another Standard (e.g. in accordance with
the revaluation model in AASB 116). Any impairment loss of a revalued asset is treated as a
revaluation decrease in accordance with that Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
25
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Accounting Policies continued
h. Trade and Other Receivables
Trade receivables are recognised initially at the transaction price (i.e. cost) and are subsequently
measured at cost less provision for impairment. 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.
At the end of each reporting period, the carrying amount of trade and other receivables are reviewed
to determine whether there is any objective evidence that the amounts are not recoverable. If so, an
impairment loss is recognised immediately in statement of comprehensive income.
i. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term
highly liquid investments with original maturities of three months or less, and bank overdrafts.
Overdrafts are shown within short-term borrowings in current liabilities on the statement of financial
position.
j. Revenue and Other Income
Revenue is measured at the fair value of the consideration received or receivable after taking into
account any trade discounts and volume rebates allowed. For this purpose, deferred consideration is
not discounted to present values when recognising revenue.
I. Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed
to the buyer and can be measured reliably. Risks and rewards are considered passed to the buyer at
the time of delivery of the goods to the customer.
Interest revenue is recognised when received.
II.
All revenue is stated net of the amount of goods and services tax (GST).
III. Grant revenue is recognised when received.
All revenue is stated net of the amount of goods and services tax (GST).
k. Trade and Other Payables
Trade and other payables represent the liabilities at the end of the reporting period for goods and
services received by the Group that remain unpaid.
Trade payables are recognised at their transaction price. Trade payables are obligations on the basis
of normal credit terms.
26
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Accounting Policies continued
l. Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of
transaction costs. They are subsequently measured at amortised cost using the effective interest
method.
m. Provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation
as a result of a past event, it is probable the consolidated entity will be required to settle the obligation,
and a reliable estimate can be made of the amount 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 account the risks and uncertainties surrounding the obligation. If the time
value of money is material, provisions are discounted using a current pre-tax rate specific to the
liability. The increase in the provision resulting from the passage of time is recognised as a finance
cost.
n. Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service
leave expected to be settled wholly within 12 months of the reporting date are measured at the
amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the
reporting date are measured at the present value of expected future payments to be made in respect
of services provided by employees up to the reporting date using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee departures
and periods of service. Expected future payments are discounted using market yields at the reporting
date on corporate bonds with terms to maturity and currency that match, as closely as possible, the
estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they
are incurred.
27
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Accounting Policies continued
o. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount
of GST incurred is not recoverable from the Australian Tax Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables
in the statement of financial position.
p. Income Tax
The income tax expense for the period is the tax payable on the current period's taxable income based
on the income tax rate applicable in Australia adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences between the tax bases of assets and liabilities and their carrying
amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected
to apply when the assets are recovered or liabilities are settled, based on those tax rates which are
enacted or substantively enacted in Australia. The relevant tax rates are applied to the cumulative
amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability.
An exception is made for certain temporary differences arising from the initial recognition of an asset
or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences
if they arose on goodwill or in a transaction, other than a business combination, that at the time of the
transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only
if it is probable that future taxable amounts will be available to utilise those temporary differences and
losses. The carrying amount of deferred income tax assets is reviewed at each balance sheet date
and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised
to the extent that it has become probable that future taxable profit will allow the deferred tax asset to
be recovered.
Current and deferred tax balances attributable to amounts recognised directly in equity are also
recognised directly in equity.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set
off current tax assets against tax liabilities and the deferred tax liabilities relate to the same taxable
entity and the same taxation authority.
28
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Accounting Policies continued
q. Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial period.
r. Segment Reporting
The Group operates in the agriculture industry in Australia. For management purposes, the Group is
organised into one main operating segment which involves horticulture activities in Australia. All of the
Group’s activities are interrelated and discrete financial information is reported to the Board (Chief
Operating Decision Maker) as a single segment. Accordingly, all significant operating decisions are
based upon analysis of the Group as one segment. The financial results from this segment are
equivalent to the financial statements of the Group as a whole.
s. Share Based Payments
The Group makes payments to selected suppliers in the form of equity settled share based payments,
where shares are issued in exchange for goods or services, the amounts of which are determined by
reference to the value of the underlying goods or services exchanged.
t. Financial Risk Management
The Group’s activities expose it to a variety of financial risks; market risk, credit risk, liquidity risk and
cash flow interest risk. The Group’s overall risk management program focuses on the unpredictability
of financial markets and seeks to minimise potential adverse effects on the financial performance of
the Group.
(i) Market risk
Currently the Group is not exposed to any significant market risk.
(ii) Credit risk
The Group currently has no significant concentrations of credit risk.
(iii) Liquidity risk
The Group manages its liquidity risk by monitoring its cash reserves and forecast spending.
Management is cognisant of the future demands for liquid finance resources to finance the Group’s
current and future operations.
(iv) Cash flow interest risk
The Group is not exposed to any significant interest risk. The shareholders loan is interest free with
no fixed term of repayment.
29
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Accounting Policies continued
(v) Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign
currency risk through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and
financial liabilities denominated in a currency that is not the entity's functional currency. The risk is
measured using sensitivity analysis and cash flow forecasting.
u. Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that may have a financial impact on the Group and that
are believed to be reasonable under the circumstances.
(i) Accounting for share based payments
The Group’s accounting policy is stated in note s. The values of these share based payments are
based on the market values of the goods or services acquired by the share based payments.
(ii) Recoverability of Deferred Tax Assets
Judgement is required in determining whether deferred tax assets are recognised on the statement of
financial position. Deferred tax assets, including those arising from un-utilised tax losses require
management to assess the likelihood that the Group will generate taxable earnings in future periods,
in order to utilise recognised deferred tax assets. Estimates of future taxable income are based on
forecast cash flows from operations and the application of existing tax laws in Australia. To the extent
that future cash flows and taxable income differ significantly from estimates, the ability of the Group
to realise the net deferred tax assets recorded at the reporting date could be impacted. At balance
date the net deferred tax assets are not recognised on the statement of financial position.
Additionally, future changes in tax laws in Australia could limit the ability of the Group to obtain tax
deductions in future periods.
v. New accounting standards for application in future periods
Accounting Standards issued by the AASB that are not yet mandatorily applicable to the Group,
together with an assessment of the potential impact of such pronouncements on the Group when
adopted in future periods, are discussed below:
30
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Accounting Policies continued
AASB 9: Financial Instruments and associated Amending Standards (applicable for annual reporting
period commencing 1 January 2018)
The Standard will be applicable retrospectively (subject to the provisions on hedge accounting outlined
below) and includes revised requirements for the classification and measurement of financial
instruments, revised recognition and derecognition requirements for financial instruments and
simplified requirements for hedge accounting.
The key changes that may affect the Group on initial application include certain simplifications to the
classification of financial assets, simplifications to the accounting of embedded derivatives, upfront
accounting for expected credit loss, and the irrevocable election to recognise gains and losses on
investments in equity instruments that are not held for trading in other comprehensive income. AASB
9 also introduces a new model for hedge accounting that will allow greater flexibility in the ability to
hedge risk, particularly with respect to hedges of non-financial items. Should the entity elect to change
its hedge policies in line with the new hedge accounting requirements of the Standard, the application
of such accounting would be largely prospective.
The directors anticipate that the adoption of AASB 9 will not have a material impact on the Group’s
financial instruments.
AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods
commencing on or after 1 January 2018).
When effective, this Standard will replace the current accounting requirements applicable to revenue
with a single, principles-based model. Apart from a limited number of exceptions, including leases, the
new revenue model in AASB 15 will apply to all contracts with customers as well as non-monetary
exchanges between entities in the same line of business to facilitate sales to customers and potential
customers.
The core principle of the Standard is that an entity will recognise revenue to depict the transfer of
promised goods or services to customers in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for the goods or services. To achieve this objective, AASB
15 provides the following five-step process:
-
-
-
-
-
identify the contract(s) with a customer;
identify the performance obligations in the contract(s);
determine the transaction price;
allocate the transaction price to the performance obligations in the contract(s); and
recognise revenue when (or as) the performance obligations are satisfied.
This Standard will require retrospective restatement, as well as enhanced disclosures regarding
revenue.
31
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Accounting Policies continued
The directors anticipate that the adoption of AASB 15 will not have a material impact on the Group’s
revenue recognition and disclosures).
AASB 16: Leases (applicable to annual reporting periods commencing on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in
AASB 117: Leases and related interpretations. AASB 16 introduces a single lessee accounting model
that eliminates the requirement for leases to be classified as either operating leases or finance leases.
Lessor accounting remains similar to current practice.
The main changes introduced by the new Standard are as follows:
-
-
-
-
-
recognition of the right-to-use asset and liability for all leases (excluding short term leases
with less than 12 months of tenure and leases relating to low value assets);
depreciating the right-to-use assets in line with AASB 116: Property, Plant and Equipment in
profit or loss and unwinding of the liability in principal and interest components;
inclusion of variable lease payments that depend on an index or a rate in the initial
measurement of the lease liability using the index or rate at the commencement date;
application of a practical expedient to permit a lessee to elect not to separate non-lease
components and instead account for all components as a lease; and
additional disclosure requirements.
▪
▪
The transitional provisions of AASB 16 allow a lease to either retrospectively apply the Standard to
comparatives in line with AASB 108 or recognise the cumulative effect of retrospective application as
an adjustment to opening equity at the date of initial application.
Although the directors anticipate that the adoption of AASB 16 may have an impact on the Group's
financial statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
w. Issued Capital
Ordinary shares are classified as equity. Issued and paid up capital is recognised at the fair value of
the consideration received by the Group.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
32
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Accounting Policies continued
x. Agricultural produce and consumables on hand
Agricultural produce, such as harvested produce, is recognised on harvest and is stated at the lower
of cost (determined on application of AASB 141 Agriculture) and net realisable value.
Consumables such as unspread fertiliser and other farming implements on hand at balance date are
recognised at the lower of cost or net realisable value.
y. Biological assets
Recognition and Measurement
Biological assets are measured at their face value less costs to sell at each reporting date. The fair
value is determined as the net present value of cashflows expected to be generated by these crops
(including a risk adjustment factor). Where fair value cannot be measured reliably, biological assets
are measured at cost.
Net increments and decrements in the fair value of the growing assets are recognised as income or
expense in the statement of profit/loss and other comprehensive income determined as:
- The difference between the total fair value of the biological assets recognised at the beginning
of the reporting period and the total fair value of the biological assets recognised at reporting
date.
- Costs incurred in maintaining or enhancing the biological assets recognised at the beginning
of the reporting period and the total fair value of the biological assets recognised at the
reporting date.
- The market value of the produce picked during the reporting period is measured at their fair
value less estimated costs to be incurred up until the time of picking. Market price is
determined based on underlying market prices of the product.
All cost incurred in relation to the development of biological assets in the current financial year have
been expensed to the Statement of profit and loss and other comprehensive income as the Group
has not yet commercialised its operations.
33
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2
Revenue and Other Income
Horticulture revenues
Rent received1
Grants received
Interest received
Other Revenue2
Total Revenue
2018
$
34,590
13,500
105,070
102
399,315
552,577
2017
$
29,629
15,300
21,000
327
-
66,256
1 Rent received is from McAlpine Farms which is co-owned by Stuart McAlpine (note 18).
2 Other revenue comprises funds received from Commonland Foundation with no obligation to
repay, treated as income.
3
Cash and Cash Equivalents
Cash at bank
Cash on deposit
4
Trade and Other Receivables
Current
Accounts receivable
GST receivable
Prepayments
Loans to Employees & Associates
Initial Equity issue
Deposit for purchase of Kulinbah East Block, Buntine
WA
First Right of Refusal to purchase Kulinbah West, and
Cooinda Properties, Buntine WA
Non-Current
Deposit
4,470,623
654,889
5,125,512
8,166
3,273
10,475
99
3
-
-
22,016
175,000
175,000
335,878
-
335,878
64,286
21,230
942
-
3
50,000
25,000
161,461
-
-
At the reporting date none of the receivables were past due and impaired. The unpaid share capital
does not have specific repayments terms and is interest free.
34
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
5
Property, Plant and Equipment
2018
Net book value
At beginning of the year
Additions
Disposal
Reclassification
Depreciation for the year
At 30 June 2018
2017
Net book value
At beginning of the year
Additions
Disposal
Reclassification
Depreciation for the year
At 30 June 2017
Plant and
equipment
$
Capital works
in progress
$
147,965
23,919
(531)
-
(40,392)
130,961
-
9,479
-
(9,479)
-
-
Land and
Buildings
$
652,834
20,843
-
9,479
(133,315)
549,841
Plant and
equipment
$
Capital works
in progress
$
Land and
Buildings
$
6,482
163,742
(5,500)
-
(16,759)
147,965
58,054
532,379
-
(590,433)
-
-
-
120,515
-
590,433
(58,114)
652,834
6
Trade and Other Payables
Current
Trade creditors
Accruals
Employee liabilities
Share applications refundable
2018
$
138,770
190,253
12,823
19,960
361,806
Total
$
800,799
54,241
(531)
-
(173,707)
680,802
Total
$
64,536
816,636
(5,500)
-
(74,873)
800,799
2017
$
68,752
39,045
44,776
-
152,573
At the reporting date none of the payables were past due. The normal credit terms from suppliers is
14 days.
35
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
7
Provisions
Current
Annual Leave
8
Borrowings and other financial liabilities
Shareholder loan
Insurance Premium Funding
Unexpended Grant
Amounts received for share subscriptions
2018
$
41,242
41,242
917,295
-
-
24,000
941,295
2017
$
21,384
21,384
246,806
3,899
21,000
29,700
301,405
The shareholder loan comprises various loans of which one is interest free and repayable upon
successfully listing. Refer note 18 for further details.
9
Issued Capital
Fully Paid Ordinary Shares: 70,579,249 (2017:
45,279,249)
Capital Raising Costs
There are no externally imposed capital requirements.
(a) Issued and Paid up capital
Issued Capital
Ordinary shares (opening)
Fully paid issued shares
Less transaction costs
Total issued capital
7,173,887
2,137,887
(507,793)
6,666,094
-
2,137,887
2018
Number
45,279,249
25,300,000
-
70,579,249
2018
$
2,137,887
5,036,000
(507,793)
6,666,094
36
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
9
Issued Capital (cont.)
(b) Movement in Ordinary shares on issue
Opening Balance as at 1 July 2017
IPO Shares Issued
Share Issue (in lieu of services)
Less: Transaction Costs
Balance as at 30 June 2018
Opening Balance as at 1 July 2016
Share Issue
Share Issue
Balance as at 30 June 2017
10
Option Reserve
Balance at beginning of year
Options issued
Balance at end of year
No. Of shares
Issue
Price
$
45,279,249
25,000,000
300,000
-
70,579,249
31,902,505
1,635,000
11,741,744
45,279,249
0.20
0.12
0.05
0.12
2018
$
-
604,325
604,325
Total
$
2,137,887
5,000,000
36,000
(507,793)
6,666,094
647,128
81,750
1,409,009
2,137,887
2017
$
-
-
-
The Share option reserve represents the fair value of share options granted. The estimate of fair
value of the services received is based on the Black-Scholes model. The calculated fair value is
based on parameters as set out in the Directors report.
11
Accumulated Losses
Accumulated losses at the beginning of the financial
year
Net loss attributable to members of the Group
Accumulated losses at the end of the financial year
2018
$
(1,315,113)
(1,296,319)
(2,611,432)
2017
$
(413,421)
(901,692)
(1,315,113)
37
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
12
Financial Risk Management
The Group's financial instruments consist mainly of deposits with banks, accounts receivable and
payable and borrowings.
The totals for each category of financial instruments, measured in accordance with AASB 139 as
detailed in the accounting policies to these financial statements are as follows:
Financial Instruments
2018
Financial Assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
Weighted average interest rate for
the year
Financial Liabilities
Trade and other payables
Borrowings & other financial
liabilities
Total financial liabilities
Floating
Interest Rate
$
Fixed Interest
Rate
$
Non-interest
bearing
$
Total
$
5,125,512
-
5,125,512
-
-
-
-
-
-
-
-
-
- 5,125,512
11,541
11,541
11,541 5,137,053
361,806
361,806
941,295
941,295
1,303,101 1,303,101
38
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
12
Financial Risk Management (cont.)
Financial Instruments
2017
Financial Assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
Weighted average interest rate
for the year
Financial liabilities
Borrowings & other financial
liabilities
Trade and other payables
Total financial liabilities
Floating
Interest Rate
$
Fixed Interest
Rate
$
Non-interest
bearing
$
Total
$
335,878
-
335,878
-
-
-
-
-
-
-
-
-
-
335,878
160,519
160,519
160,519
496,397
301,405
301,405
152,575
152,575
453,980
453,980
Financial Risk Management Policies
The director's overall risk management strategy seeks to assist the Group in meeting its financial
targets, whilst minimising potential adverse effects on financial performance.
Risk management policies are approved and reviewed by the Board of Directors on a regular basis.
These included the credit risk policies and future cash flow requirements.
The main purpose of non-derivative financial instruments is to raise finance for Group operations.
The Group does not have any derivative instruments at 30 June 2018.
39
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
13
Reconciliation of Loss after Tax to Net Cash Outflow from Operating
Activities
Loss after income tax
Grants received
Share Based Payments
Share Based Payments – Secretarial Fees
Depreciation
Changes in assets and liabilities
Decrease / (Increase) in operating receivables
Increase in operating payables
Increase in provisions
Net cash inflows / (outflows) from operating
activities
14
Income Tax Expense
Reconciliation between tax expense and pre-tax loss:
Accounting Profit/(Loss) before income tax
Tax at the domestic income tax rate of 27.5% (2017:
27.5%)
Temporary differences
Permanent differences
Income tax benefit not recognised
Recoupment of Prior period tax losses
Income tax expenses/(benefit)
Unrecognised temporary differences
Unused tax losses for which no deferred tax asset
recognised
Temporary difference
Total
Potential benefit at 27.5%
2018
$
(1,296,319)
(105,070)
218,325
90,727
173,707
139,445
259,901
19,858
2017
$
(901,692)
(21,000)
72,650
-
74,873
(76,166)
50,901
15,429
(499,426)
(785,005)
(1,296,319)
(901,692)
(356,488)
(247,965)
19,576
122,460
214,452
-
-
1,594,789
71,184
1,665,973
458,142
-
4,275
243,690
-
-
956,519
(70,373)
886,146
243,690
40
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
15
Remuneration of Auditors
Audit Services
Stantons International – Audit of financial report
Non-Audit Services
Stantons International – Investigating accountants report
2018
$
16,385
10,139
26,524
2017
$
8,000
-
8,000
16
Commitments for expenditure and contingencies
On 29 July 2016, the Group entered into a contract to acquire land from Buntine Holdings Pty Ltd with
a deferred consideration element. The details are:
- Price of the land was $323,879.13
- Deposit of $50,000 paid on 29 July 2016 in the form of 1,000,000 shares at 0.05c each
- Partial payment of $150,000 was made on 13 August 2018
- Remaining consideration to be paid in full no later than 8 years from 23 March 2016
-
Interest to be paid on this outstanding amount of $273,879 at the annual rate of the RBA base
rate plus 2.5%. This has been treated as operational expense as Right of access and use.
- The land has not been accounted for in fixed assets
Not longer than one year
Longer than one year, but not longer than five years
Longer than five years
2018
$
141,668
477,703
148,879
768,250
2017
$
17,635
-
273,879
291,514
Operating Lease Commitment
-
-
Commitments for expenditure in 2018 within one year represent remaining funds due for the
greenhouse purchased on 24 June 2016, being 10% of purchase price of $121,680 USD. Exchange
rate used $0.73AUD:$1USD. (Exchange rate June 2017 $0.69AUD:$1USD)
Commitments for expenditure in 2018 over five years represent deferred consideration of purchase of
Kulinbah East Block from Buntine Holdings Pty Ltd.
Other than the interests disclosed above there were no further contingencies as at 30 June 2018.
41
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
17
Key Management Personnel
Remuneration
2018
Anthony Maslin1
Ben Cole
James Mackintosh
Stuart McAlpine
Johannes Schut
Cash
$
-
87,611
-
-
-
87,611
Equity
$
87,330
43,665
-
43,665
43,665
218,325
Total
$
87,330
131,276
-
43,665
43,665
305,936
1During the period Anthony Maslin forfeited amounts owing to him under his contract of $38,400
2017
Anthony Maslin
Ben Cole
Stuart McAlpine
Johannes Schut
James Mackintosh
Cash
$
-
79,466
-
-
-
Equity
$
41,600
20,000
-
-
-
Total
$
41,600
99,466
-
-
-
79,466
61,600
141,066
42
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
18
Related Party Transactions
Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
The Group recognised rental income of $13,500 (2017: $15,300) during the period for the lease of
farm land to McAlpine Farms and interest expense of $18,259 relating to the purchase of Kulinbah
East Block. McAlpine Farms is owned by Stuart McAlpine, a current Director of the Group.
The Group received $353,250 (EUR 225,000) from Commonland Foundation as a shareholder loan
during the period. Additionally, the Group entered into a loan agreement with 4 Returns Projects B.V.,
a subsidiary of Commonland Foundation, during the period. The total loan funding made available by
4 Returns Projects B.V. to, and received by, the Group per the agreement was $305,000. No interest
is payable on these loans and are payable in single lump sum amounts 5 years after the respective
dates of the execution of the loans. In addition, the Group entered into an IPO contingency loan
arrangement with Commonland Foundation of $100,000 on 22 February 2018. Post reporting period
the Group repaid the $100,000 IPO contingency loan. The total loan balance as at 30 June 2018 is
$917,295 (2017: $246,806). Commonland Foundation also reimbursed the Group for $137,474 of
expenditure incurred directly related to Commonland Foundation’s activities. A further $325,000 non-
refundable amount was received and included in income. Commonland Foundation are a substantial
shareholder of the Group and have appointed James Mackintosh as their representative Director and
Johannes Schut as an alternate Director for James Mackintosh.
43
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
19
Equity Instruments Disclosure - Key Management Personnel
The Number of shares held by Directors and Key Management Personnel of the Group during the
year ended 30 June 2018, including their personally related parties, is set out below:
2018
Name
Balance at 1
July 2017
Granted as
compensation
Issued as
repayment of
loan
Bought &
(Sold)
Balance at
30 June
2018
Ben Cole
7,566,668
Anthony Maslin
7,766,668
James Mackintosh
Johannes Schut
500,000
500,000
Stuart McAlpine 2,000,000
Total
18,333,336
-
-
-
-
-
-
-
-
-
-
-
-
-
7,566,668
50,000
7,816,668
(500,000)
-
15,000
515,000
-
2,000,000
(435,000) 17,898,336
The Number of shares held by Directors and Key Management Personnel of the Group during the
year ended 30 June 2017, including their personally related parties, is set out below:
2017
Name
Balance at 1
July 2016
Granted as
compensation
Issued as
land
consideration
Bought &
(Sold)
Balance at
30 June
2017
7,400,001
Ben Cole
7,320,001
Anthony Maslin
500,000
James Mackintosh
500,000
Johannes Schut
Stuart McAlpine 2,000,000
17,720,002
Total
166,667
346,667
-
-
-
513,334
-
-
-
-
-
-
-
100,000
-
-
-
7,566,668
7,766,668
500,000
500,000
2,000,000
100,000 18,333,336
44
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
20
Basic and Diluted Earning/(Loss) per Share
Basic loss per share (cents)
Diluted loss per share (cents)
Loss attributable to members of Wide Open Agriculture
Ltd
Weighted average number of shares outstanding
Weighted average number of shares & options
outstanding
2018
$
(2.86)
(2.67)
2017
$
(2.23)
(2.23)
(1,296,319)
45,348,564
(901,692)
40,468,483
48,478,701
40,468,483
The Group has no ordinary share capital in respect of potential ordinary shares which would lead to
diluted earnings per share that shows an inferior view of the earnings per share. For this reason, the
diluted earning/(loss) per share for the year ended 30 June 2018 is the same as basic earning/(loss)
per share.
21
Significant Events After the Reporting Date
There have been various events which have arisen since 30 June 2018 which will significantly affect
the operations of the Group and the state of affairs of the Group in subsequent financial years.
Successful Listing of Wide Open Agriculture on ASX
On 6 July 2018, the Group was pleased to announce that following its oversubscribed IPO raising $5
million, it commenced trading on the Australian Stock Exchange under ASX code “WOA”.
Wide Open Agriculture signs Farmland Management Agreement on $4.35M property
On 20 August 2018, the Group announced that that it has entered into a 10-year Farmland
Management Agreement (Agreement) with Netherlands-based investors Handover B.V. and
Wheatbelt-based regenerative farmers.
Under the Agreement, WOA through 100%-owned subsidiary Land for Reasons Pty Ltd (LFR) - will
provide the 1,787 hectare property in Western Australia’s Shire of Kojonup with financial reporting,
monitoring and administration of the 4 Returns* in return for a 20% profit share and 20% capital
appreciation over the 10-year life of the Agreement.
45
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTORS’ DECLARATION
The directors of the Group declare that:
(a)
(b)
1.
2.
3.
The consolidated financial statements and notes, as set out on pages 17 to 45, are in accordance
with the Corporations Act 2001 and:
comply with Accounting Standards; and
give a true and fair view of the Group’s financial position as at 30 June 2018 and its performance
for the year ended on that date;
In the director's opinion there are reasonable grounds to believe that the Group will be able to
pay its debts as and when they become due and payable.
The consolidated financial report also complies with International Reporting Standards.
This declaration is made in accordance with a resolution of the directors.
Director:
____________________
Dr Ben Cole
Dated this 28th day of September 2018
46
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
28 September 2018
Board of Directors
Wide Open Agriculture Limited
Suite 39,1 Freshwater Parade,
CLAREMONT, WA 6010
Dear Directors
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
RE: WIDE OPEN AGRICULTURE LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Wide Open Agriculture Limited.
As Audit Director for the audit of the financial statements of Wide Open Agriculture Limited for the
year ended 30 June 2018, I declare that to the best of my knowledge and belief, there have been
no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
(ii)
any applicable code of professional conduct in relation to the audit.
Yours sincerely
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LIMITED
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
Liability limited by a scheme approved
under Professional Standards Legislation
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
WIDE OPEN AGRICULTURE LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Wide Open Agriculture Limited (the Company), which
comprises the statement of financial position as at 30 June 2018, and the statement of profit or loss and other
comprehensive income, statement of changes in equity and the statement of cash flows for the year then ended,
notes comprising a summary of significant accounting policies and other explanatory information and the directors’
declaration.
In our opinion:
(a)
the financial report of Wide Open Agriculture Limited is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Company’s financial position as at 30 June 2018 and of its
performance for the year ended on that date; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
the financial report of the Company also complies with International Financial Reporting Standards as
disclosed in note 1(a).
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
are independent of the Group in accordance with the auditor independence requirements of the Corporations Act
2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110: Code of
Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We
have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 of the current period. These 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.
We have determined that there were no key audit matters in relation to this audit
Other Information
The directors are responsible for the other information. The other information comprises the information included in
the Group’s annual report for the year ended 30 June 2018, 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 opinion thereon.
Liability limited by a scheme approved
under Professional Standards Legislation
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, 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 Company or to cease operations, or has 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 this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation of the financial report that gives a true and fair view in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity's internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor's report to the related disclosures in the financial report or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going
concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the financial report.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in Internal control that we identify during our audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements. We
also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in the
audit of the financial report of the current period and are therefore key audit matters. We describe these matters in
our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 7 to 15 of the directors’ report for the year ended 30
June 2018. 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
Opinion on the Remuneration Report
In our opinion, the Remuneration Report of Wide Open Agriculture Limited for the year ended 30 June 2018 complies
with section 300A of the Corporations Act 2001.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
28 September 2018
SHAREHOLDER INFORMATION
Additional information required by the Australian Stock Exchange and not shown elsewhere in this report is as
follows. The information is current as at 25 September 2018:
a) Distribution of Securities
b) Substantial holders
The names of substantial shareholders in accordance with section 671B of the Corporations Act 2001 are:
Holder
Number of Shares
FANJA PON & HANS RAVE
COMMONLAND FOUNDATION
ANTHONY MASLIN
BEN COLE
12,419,037
12,000,000
7,666,668
7,566,668
%
17.60
17.00
10.86
10.72
51
c) Twenty largest shareholders (ASX:WOA)
The name of the twenty largest holders of securities are:
52