Appendix 4E
Preliminary final Report
Name of Entity
ABN
Year Ended
Previous Corresponding Reporting Period
Wide Open Agriculture Limited
86 604 913 822
30 June 2020
30 June 2019
Results for Announcement to the Market
$’000
Percentage
increase/(decrease)
over previous
corresponding
period
Revenue from ordinary activities
(Loss) from ordinary activities after tax attributable to
members
Net (loss) for the period attributable to members
Dividends (distributions)
Final Dividend
Interim Dividend
Record date for determining entitlements to the dividends (if any) Not Applicable
It is not proposed to pay Dividends
It is not proposed to pay Dividends
Amount per security
2,236
(1,856)
(1,856)
29,869%
(11%)
(11%)
Franked amount per security
Dividends
Date the dividend is payable
Record date to determine entitlement to the
dividend
Amount per security
Total dividend
Amount per security of foreign sourced dividend or
distribution
Details of any dividend reinvestment plans in
operation
The last date for receipt of an election notice for
participation in any dividend reinvestment plans
No dividends
No dividends
-c
-c
-c
No dividends
No dividends
Net Tangible Assets per Security
Current Period
Net tangible asset backing per ordinary security
4.97c
Previous
corresponding
period
3.77c
The 30 June 2020 financial report dated 31 August 2020 forms part of and should be read in
conjunction with the Preliminary Final Report (Appendix 4E).
This report is based on financial statements that have been audited. The audit report is included in
the 30 June 2020 Annual Financial Report.
WIDE OPEN AGRICULTURE LIMITED
ABN 86 604 913 822
CONSOLIDATED FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2020
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 Consolidated Financial Statements
Director's Declaration
Independent Auditor’s Declaration
Independent Auditor’s Report
Additional ASX Information
1
2
19
20
21
23
24
54
55
56
60
CORPORATE DIRECTORY
DIRECTORS
Mr Anthony Maslin (Non-Executive Chairman)
Dr Ben Cole (Managing Director)
Mr Stuart McAlpine (Non-Executive Director)
Mr Hans Schut (Non-Executive Director) – resigned
11/11/2019
Ms Elizabeth Brennan (Non-Executive Director) -
joined 11/11/2019
Mr Ronnie Duncan (Non-Executive Director) - joined
03/12/2019
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 116, 1 Kyle Way
Claremont, Western Australia, 6010
Telephone: +61 8 6161 7412
WEBSITE
www.wideopenagriculture.com.au
SOLICITORS
Fairweather Corporate Lawyers
595 Stirling Highway
Cottesloe, Western Australia, 6011
AUDITORS
Stantons International Audit and Consulting Pty Ltd
Level 2, 1 Walker Avenue
West Perth, Western Australia, 6005
SHARE REGISTRY
Link Market Services Limited
QV1 Building
Level 12, 250 St Georges Terrace
Perth, Western Australia, 6000
Telephone: +61 1300 554 474 (within Australia)
STOCK EXCHANGE
Australian Securities Exchange
Central Park
152-158 St Georges Terrace
Perth Western Australia 6000
ASX CODE: WOA
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 2020.
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 proven entrepreneur with demonstrated strategic and
operational experience. Ben has over 16 years of experience working with companies with a proven
commitment to delivering strong results that deliver a positive environmental and social impact. Between 2008
to 2013 he founded, managed and sold a profitable, manufacturing company in Vietnam. Ben has extensive
international experience as a manager of market-based, public health projects totalling $30 million. Ben is a
Non-Executive Director of the not for profit Regional Regeneration Alliance. In the last three years, Ben was
not a director of any other publicly listed company.
Anthony Maslin – Non-Executive Chairman (appointed on 23 March 2015)
BBus (Fin and Ent)
Anthony started as a stockbroker 27 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 served as a Non-Executive Director of
Pancontinental Oil & Gas NL (ASX:PCL) and resigned 15 January 2016. Anthony is currently a Non-Executive
Director of Buxton Resources Ltd (ASX:BUX). 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. In
the last three years, Anthony was not a director of any other publicly listed company than those noted above.
Stuart McAlpine – Non-Executive Director (appointed 30 March 2016)
Stuart is a Wheatbelt farmer with 40 years’ experience in agriculture who is committed to the environmental
and social restoration of his region. He was co-founder of the Liebe Group, a farmer-led research and
development group, and the inaugural President. He instigated the Regional Repopulation Plan with the
Wheatbelt’s Dalwallinu Shire and Chaired the Regional Repopulation Advisory Committee. Stuart is also co-
founder and a Non-Executive Director of the not for profit Regional Regeneration Alliance and a Committee
Member of RegenWA, and a Member of the Australian Institute of Campany Directors. In the last three years,
Stuart was not a director of any other publicly listed company.
Hans Schut – Non-Executive Director (appointed 30 November 2018, ceased 11 November 2019)
Hans operates a consultancy firm called BDFC. He is a Chairman of the Supervisory Board of DE-on, a
provincial renewable energy fund in the Netherlands and serves on the investment committee of a large
construction equity fund for renewables in emerging markets. 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. In the last three years, Hans was not
a director of any other publicly listed company.
2
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
Elizabeth Brennan – Non Executive Director (appointed 11 November 2019)
Elizabeth currently coordinates a multidisciplinary agricultural research for development program in Papua
New Guinea on behalf of the Department of Foreign Affairs and Trade (DFAT) and the Australian Centre for
International Agricultural Research (ACIAR). Elizabeth has previously led the marketing strategy development
and implementation for one of the largest citrus operations in WA, Moora Citrus, as well as other international
fresh produce brands such as Bravo Apples™, Family Tree Farms and Fruitico. She is currently a Board
Director for the Rural, Regional and Remote Women’s Network of WA (RRR Network) and a Commissioner
for the Agricultural Produce Commission. Elizabeth is a Gradute of the Australian Institute of Company
Directors (GAICD), a Fellow with the Australian Rural Leadership Foundation (FARLF) and is currently
studying a Master of Food Security. In the last three years, Elizabeth was not a director of any other publicly
listed company.
Ronnie Duncan – Non Executive Director (appointed 03 December 2019)
Ronnie Duncan was the co-founder and Chairman of Meerkats, one of Australia’s leading branding,
communication and advertising agencies – named the 2019 Australia/New Zealand independent agency of
the year in the London International Advertising Awards – acquired by WPP AUSNZ Limited on 31 July 2020.
Ronnie Duncan has extensive experience in purpose-led, brand strategy development and implementation in
the food and energy sectors. Ronnie Duncan is a Committee Member of RegenWA – Western Australia’s
network of farmers and industry stakeholders committed to an ecological approach to farming that encourages
landscapes to renew themselves. In the last three years, Ronnie was not a director of any other publicly listed
company.
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)
Sam has over fifteen years’ experience in relation to public company responsibilities, including ASX and ASIC
compliance, control and implementation of corporate governance, statutory financial reporting, and
shareholder relations with both retail and institutional investors. He is currently the company secretary for a
number of ASX listed companies.
Lydia Fee (appointed on 28 September 2016)
Lydia has been a consultant at Straight Lines Consultancy for over nine years and is involved with a number
of ASX listed clients. She has extensive experience in financial reporting, compliance, corporate governance,
and marketing. Prior to that she worked at a boutique stockbroking firm, Mac Equity Partners. Lydia holds a
Bachelor of PR and Marketing from the University of Notre Dame, a Diploma in Business Legal Studies.
3
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
REVIEW OF OPERATIONS
The loss of the Group for the financial year after providing for income tax amounted to $1,856,115.
(2019: loss of $2,079,197).
We have continued to be on an exciting journey of transformation and it has been very satisfying to see the
level of growth achieved across our entire businesses. Since implementing a systematic and targeted growth
strategy in June 2019, the company has achieved four consecutive quarters of revenue growth across this
financial year. Furthermore, this growth has been achieved while operating in an external environment of
heightened uncertainty and volatility due to COVID-19.
The Wide Open Agriculture team has made real change and I am proud of what we have been able to achieve
this year. Together, we completed and progressed a number of initiatives to materially reshape our
organisation and support our evolution into becoming Australia’s leading regenerative food and agriculture
company. We accelerated domestic sales of our regenerative meat products, expanded and diversified our
product offering online and made critical steps towards launching an oat milk and plant-based protein product
for Australian and global markets.
All of this is clear evidence of our business strategy delivering results and we plan to continue generating
sustained shareholder value in 2020 and beyond.
Financial Results
Wide Open Agriculture achieved revenue of $1,446,639 for this financial year. 40% of this revenue was
delivered during the last quarter alone, whereby Q4 revenue increased 49% to $571,928 over Q3 FY 2020
results. This clearly illustrates we have built a resilient business model catering to the growing demand from
consumers as they incorporate ethical food into their daily diet. All sales were generated from Western
Australia.
We are now excited about the prospects of continuing to build local market share, penetrating new domestic
territories and launching a number of products globally over the next 12 months. Sales momentum is also
anticipated to continue across 2020 and beyond, providing a robust revenue foundation to reach our ultimate
goal of becoming profitable in the future.
Improving Wide Open Agriculture’s balance sheet, the Group successfully completed an $3.0 million capital
raise via the issue of 11,111,112 new fully paid ordinary shares at an issue price of $0.27 per share.
Dirty Clean Food
This year, we built a specialised, direct distribution platform and fully operational direct-to-consumer online
sales portal with the ability to scale globally. Considerable time and effort also went into building the branding
and marketing for Dirty Clean Food to become Australia’s go-to brand for ethical and regenerative food
products.
The initial launch of Dirty Clean Food’s distribution and marketing services focussed on the food service
industry across Perth and South-West WA. Our customer base has now grown from 20 customers to over 55
premium restaurants, cafes and meal kit companies.
4
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
In August 2019, the online sales portal www.dirtycleanfood.com.au was launched to offer home delivery to
customers across Perth’s metropolitan area. The online, home delivery sales channel experienced significant
growth in response to the WA Government’s state-wide COVID19 lock-down that commenced in March 2020.
Our offering has since expanded to include a range of regenerative, ethical products from aligned companies
including milk, rolled oats, flour, eggs, bread and honey.
A non-packer meat export licence was also issued to WOA by the Federal government’s Department of
Agriculture and Water Resources. The licence permits WOA to market and distribute meat into export markets
including South-East Asia.
New Products – Oat Milk and Lupin Protein
While our highest priority and commercial focus was to increase revenue, we also undertook a number of low
capital-intensive development projects which have encouraging potential commercial opportunities.
The team completed two industrial trials of our oat milk recipe and the final recipe has been received by our
European manufacturer. Laboratory testing confirmed that the finial recipe meets Dirty Clean Food’s nutritional
and taste criteria and has received positive feedback from Perth’s leading baristas, retailers and distributors
during market testing.
We were also awarded a $20,000 grant from the WA State Government. This grant will support a feasibility
study to construct a plant-based milk production facility using oats from WA farms committed to regenerative
principles. The assessment will provide critical metrics surrounding the commercial viability of the plant.
In May this year, the Company signed an agreement with Curtin University for the development and
commercialisation of a proprietary lupin protein technology. Australian Sweet Lupin is a high protein,
regenerative legume with 60% of global production occurring in Western Australia. CSIRO joined the project
in June and will assist development towards pilot-scale commercial production and provide a techno-economic
assessment.
Carbon Neutral Operations
Working together with customers, team members, community partners and suppliers, a number of
achievements have been made across the Group’s sustainability agenda in FY20, including an initiative to
measure, reduce and sequester carbon through regenerative farming practices and emission reductions.
As part of this initiative, we signed a Memorandum of Understanding (MoU) with the CBH Group (CBH) to
explore certification, marketing and global distribution of carbon neutral grain. The CBH Group is Australia’s
largest co-operative and a leader in the Australian grain industry. If successful, the project could lead to one
of the world’s first carbon neutral certified products for buyers seeking more sustainable grain alternatives.
The Board has set the target for WOA’s operations to be carbon neutral by 2023, with an intention to be climate
positive (sequestration of carbon exceeds emissions) soon after.
Corporate
The Board’s capacity in marketing, distribution and export was significantly lifted with the appointment of
Elizabeth Brennan and Ronnie Duncan. Elizabeth Brennan and Ronnie Duncan’s skillset and experience
aligns to our focus on marketing and distribution of regeneratively farmed animal and plant-based food
products to Australian and South-East Asian markets.
5
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
COVID-19 Pandemic Impact
In response to the COVID19 pandemic, the board also moved to closely align the interests of Directors and
management with shareholders whilst protecting our cash position during the uncertainty associated with the
onset of the pandemic. The Board agreed to accept a 20% fee reduction, with the balance paid in equity in
lieu of cash. I personally volunteered to a 30% pay reduction. These agreements were in place from April to
June 2020 and are subject to agreement at a general meeting to be held on 18 September 2020.
In mid-March 2020 the food service sector including restaurants and cafés were closed by the WA State
Government. This resulted in a loss of sales to the food service sector, which was rapidly absorbed by an
increase in online, home delivery sales. No impact has been experienced on the supply of livestock or with
our contract manufacturers in our processing and transportation supply chain. The Company has developed
a detailed COVID-19 response plan with a strong focus on protecting our employees and customers. The
response plan also details the social distancing, hand washing and health requirements for our warehouse
and cold storage facilities.
Cash Position
In June, the Company raised $3.0 million via the issue of 11,111,112 new fully paid ordinary shares at an issue
price of $0.27 per share. We were delighted that the capital raising was strongly supported by a number of our
existing shareholders and introduced a number of new, high net-worth investors to WOA’s share register.
Our cash position at 30 June 2020 was $4.4 million and the company remains adequately funded to accelerate
its growth initiatives and will continue to demonstrate appropriate fiscal restraint. We also signed an
amendment to the shareholder loan agreement with Commonland Foundation. The amendment confirms that
repayments will require ten equal instalments of A$81,186.30 per annum over a ten-year period. The first
instalment is due on 9 February, 2026. In addition, Commonland Foundation remains highly supportive of
Wide Open Agriculture’s mandate for large scale landscape regeneration through 4 Returns by providing
ongoing grant support.
PRINCIPLE ACTIVITIES
The principle activities of the Group during the financial year were the ongoing development of the farmland
portfolio and food brand.
EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD
Subsequent to the reporting date a number of option holders elected to exercise their options. The number of
options exercised up to the date of signing may be summarised as follows:
11/08/2020 – issued 200,000 fully paid ordinary shares and 200,000 unlisted options through exercising
200,000 unlisted options
14/08/2020 – issued 973,750 fully paid shares and 970,000 unlisted options through exercising 3,750 listed
options and 970,000 unlisted options
21/08/2020 – issued 7,922,895 fully paid ordinary shares and 2,630,000 unlisted options through exercising
3,417,895 listed options and 4,505,000 unlisted options
6
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
28/08/2020 – issued 390,500 fully paid ordinary shares through exercising 170,500 listed options and 220,000
unlisted options
Other than the matter described above, no matter or circumstance has arisen which has significantly affected
the operations of the Group, the results of the operations or the state of affairs of the Group.
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
EVNVIRONMENTAL 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.
DIRECTORS’ INTERESTS
As at the date of this report, the number of shares and options in the Company held by each Director of Wide
Open Agriculture Limited and other key management personnel of the Group, including their personally-related
entities, are as follows:
Specified Directors and Key
Management Personnel
Ben Cole
Anthony Maslin
Stuart McAlpine
Hans Schut1
Elizabeth Brennan
Ronnie Duncan
Shares
Listed Options
7,566,668
7,816,668
3,235,000
515,000
-
-
550,000
1,717,985
-
-
-
-
Unlisted
Options
1,000,000
500,000
-
1,000,000
-
-
1Hans Schut retired from the board on the 11th November 2019, however Hans remains as an adviser to the
audit and risk committee.
7
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
UNISSUED SHARES UNDER OPTIONS
As at the date of this report, the number unissued shares of the Group under option, are as follows:
Stream of Options
Expiry Date
Exercise Price
Number of options
Listed Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
30/06/2021
31/12/2021
08/01/2023
30/11/2022
31/03/2023
31/12/2023
30 cents
30 cents
25 cents
20 cents
15 cents
50 cents
8,443,062
200,000
1,500,000
1,750,000
4,130,000
3,150,000
19,173,062
On 22 November 2019 at the Annual General Meeting of Shareholder it was approved to issue Directors
2,000,000 unlisted options, exercisable at $0.20, expiring on 30 November 2022.
The terms and conditions of the options granted to directors are as follows:
Director
Grant
Number
Granted
Date
Exercise
Price
Fair Value at
Grant Date
Expiry
Date
Vesting
Hurdle
Anthony Maslin
22/11/2019
500,000
20 cents
$30,589
30/11/2022
Ben Cole
22/11/2019
1,000,000
20 cents
$61,177
30/11/2022
Stuart McAlpine
22/11/2019
250,000
20 cents
$15,294
30/11/2022
Hans Schut
22/11/2019
250,000
20 cents
$15,294
30/11/2022
Nil
Nil
Nil
Nil
2,000,000
$122,354
The terms and conditions of the options granted to consultants and subcontractors are as follows:
Consultant
Grant
Number
Granted
Date
Exercise
Price
Fair
Value
Expiry
Date
Vesting
Hurdle
Straight Lines
Holdings Pty Ltd
03/04/2020
250,000
15 cents
$20,930
31/03/2023
Oofy Prosser Pty Ltd1
03/04/2020
1,000,000
15 cents
$83,719
31/03/2023
Lydia Fee
03/04/2020
250,000
15 cents
$20,930
31/03/2023
Michael Wills
03/04/2020
400,000
15 cents
$33,488
31/03/2023
Paul Watts
03/04/2020
250,000
15 cents
$20,930
31/03/2023
Liam Cornelius
03/04/2020
250,000
15 cents
$20,930
31/03/2023
Matthew Reynolds
03/04/2020
200,000
15 cents
$16,743
31/03/2023
Scott Cuomo
03/04/2020
125,000
15 cents
$10,465
31/03/2023
Nil
Yes
Nil
Nil
Nil
Nil
Nil
Nil
2,725,000
$228,135
1Vesting hurdle of options issued to Oofy Prosser Pty Ltd are as follows; 50% on execution of binding option
agreement with WOA, and 50% on WOA electing a ‘go’ decision to proceed with Curtin University at end of
phase 3.
8
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
The terms and conditions of the options granted under the Employee Incentive Scheme are as follows:
Number
Grant
Granted
Date
Exercise
Price
Risk Free
Rate
Fair
Value
Expiry
Date
Vesting Hurdle
03/04/2020 2,950,000 15 cents
0.26%
$246,972
31/03/2023
Nil
2,950,000
$246,972
The fair value of these options as shown in the above are based on the Black Scholes options pricing model.
On 1 April 2019 the Company lodged a Prospectus with ASX seeking to raise capital by way of a non-
renounceable rights offer on the basis of 1 entitlement option for every 4 shares held at an issue price of 1
cent per entitlement option. The listed options have an exercise price of $0.30 and an expiry date of 30 June
2021.
5,605,766 options were issued on 6 May 2019 raising $56,057. 1,687,591 shortfall options were subscribed
for raising a further $16,876 and the options were issued on 24 July 2019.
No other options have been issued in the time between the Balance Date of the Group and signing of the
Annual Report.
DIRECTORS’ ATTENDANCE AT BOARD AND COMMITTEE MEETINGS DURING THE YEAR
Name
Ben Cole
Anthony Maslin
Stuart McAlpine
Hans Schut1
Elizabeth Brennan
Ronnie Duncan
Board of Directors’
Meetings
No.
attended
8
8
6
3
5
5
No. eligible
to attend
8
8
8
3
5
5
Remuneration Committee Audit & Risk Committee
No.
attended
1
1
1
1
-
-
No. eligible
to attend
1
1
1
1
-
-
No.
attended
5
-
4
1
4
-
No. eligible
to attend
5
-
5
1
4
-
1Hans retired from the board on the 11 November 2019, however he remains an advisor to the Audit & Risk
Committee. During the year Hans was eligible to attend an additional 4 meetings of the Audit & Risk
Committee as an advisor, all 4 of which Hans attended in his capacity as advisor.
INDEMNIFICATION OF OFFICERS
The Company has paid premiums to insure the directors against liabilities for costs and expenses incurred by
them defending legal proceedings arising from their conduct while acting in the capacity of directors of the
Company, other than conduct involving a wilful breach of duty in relation to the Company.
9
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
PROCEEDINGS ON BEHALF OF THE COMPANY
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 part 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.
10
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
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.
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 their own remuneration. Non-executive directors receive share options and other incentives.
11
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
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 2020, no remuneration consultants were engaged.
Voting and comments made at the Company’s last Annual General Meeting
The Company received no specific feedback on its Remuneration Report at the 2019 Annual General
Meeting.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the
following tables.
The key management personnel of the consolidated entity consisted of the following directors of Wide Open
Agriculture Limited:
● Anthony Maslin - Non-Executive Chairman
● Ben Cole - Managing Director
● Hans Schut - Non-Executive Director (resigned 11 November 2019)
● Stuart McAlpine – Non-Executive Director
● Elizabeth Brennan – Non-Executive Director (appointed 11 November 2019)
● Ronnie Duncan – Non-Executive Director (appointed 03 December 2019)
During the reporting year, Hans Schut resigned from the board of directors, whilst Elizabeth Brennan and
Ronnie Duncan were appointed to the board of directors. There have been no changes in the composition of
the key management personnel since the end of the reporting period.
12
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
2020
Non-Executive Directors:
Anthony Maslin
Hans Schut1
Stuart McAlpine
Elizabeth Brennan
Ronnie Duncan
Executive Directors:
Ben Cole
Short-term benefits
Post-employment
benefits
Long-term
benefits
Share-based payments
Cash salary
Cash
and fees
bonus
$
$
Non-
monetary2
$
Super-
Long service
Equity-
settled
Equity-
settled
annuation
$
leave
$
shares
options
$
$
Total
$
43,265
6,108
22,500
12,500
10,000
154,748
249,121
-
-
-
-
-
-
-
12,500
-
7,500
7,500
7,500
4,110
-
2,138
1,188
950
-
-
-
-
-
12,765
14,644
6,979
47,765
23,030
6,979
-
-
-
-
-
-
-
30,589
15,294
15,294
-
-
90,464
21,402
47,432
21,188
18,450
61,177
250,313
122,354
449,249
1Hans Schut retired from the board on the 11 November 2019, however he remains an advisor to the audit and risk committee.
2For the three month period 1 April 2020 to 30 June 2020 the non-executive directors of the Group agreed to forgo a 20% reduction in cash salary and fees and
Executive Director Ben Cole agreed to a 30% reduction in salary, all in lieu of receiving shares in WOA equal to the value of cash salary and fees forgone.
Shares to be issued are subject to approval by the shareholders at a General Meeting to be held on 18 September 2020.
During the financial year, the Company paid a premium in respect of a contract insuring the directors of the Company, the Company Secretary and all executive
officers of the Company. The contract of insurance prohibits disclosure of the nature of the liability. As such, the premium paid has not been allocated to
individual directors.
13
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
2019
Non-Executive Directors:
Anthony Maslin1
Hans Schut
James Mackintosh2
Stuart McAlpine
Executive Directors:
Ben Cole1
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
$
88,400
15,000
-
30,000
174,851
308,251
-
-
-
-
-
-
-
-
-
-
-
-
4,750
-
-
2,850
14,483
22,083
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
93,150
15,000
-
32,850
189,334
330,334
1During the period Anthony Maslin was paid amounts owing to him under his contract of $38,400 and Ben Cole was paid amounts owing to him on his contract
of $21,200 in relation to the 2018 year for successfully completing WOA’s IPO.
2Mr Mackintosh forfeited all Directors fees during the year.
During the financial year, the Company paid a premium in respect of a contract insuring the directors of the Company, the Company Secretary and all executive
officers of the Company. The contract of insurance prohibits disclosure of the nature of the liability. As such, the premium paid has not been allocated to
individual directors.
14
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
2020
2019
2020
2019
-
-
-
-
-
-
-
-
-
-
-
-
34%
71%
32%
-
-
24%
-
-
-
-
-
-
Non-Executive Directors:
Anthony Maslin
Hans Schut
Stuart McAlpine
Elizabeth Brennan
Ronnie Duncan
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 (Amended 29 August 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.
15
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 2020. During the year the directors of the Group agreed to forgo cash salary and fees in
lieu of receiving shares in WOA equal to the value of cash salary and fees forgone. Shares to be issued are
subject to approval by the shareholders at the next Annual General Meeting.
Options
On 22 November 2019 at the Annual General Meeting of Shareholder it was approved to issue Directors
2,000,000 unlisted options, exercisable at $0.20, expiring on 30 November 2022. No other options were
issued to directors and other key management personnel as part of compensation during the year ended 30
June 2020. Options issued are as follows:
Director
Grant
Date
Number
Granted
Exercise
Price
Fair Value at
Grant Date
Expiry
Date
Number
Vested during
the year
Anthony Maslin
22/11/2019
500,000
20 cents
$30,589
30/11/2022
500,000
Ben Cole
22/11/2019
1,000,000
20 cents
$61,177
30/11/2022
1,000,000
Stuart McAlpine
22/11/2019
250,000
20 cents
$15,294
30/11/2022
Hans Schut
22/11/2019
250,000
20 cents
$15,294
30/11/2022
2,000,000
$122,354
250,000
250,000
2,000,000
Key management personal of the Group have not exercised any options during the year ended 30 June
2020.
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
Ordinary shares
Ben Cole
Anthony Maslin
Hans Schut
Stuart McAlpine
Elizabeth Brennan
Ronnie Duncan
7,566,668
7,816,668
515,000
2,000,000
-
-
17,898,336
-
-
-
-
-
-
-
16
-
-
-
-
-
-
-
515,000
7,566,668
7,816,668
-
-
-
-
-
-
-
- 17,898,336
2,000,000
-
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:
Balance at
the start of
the year
Granted
Expired/
forfeited/
Balance at
the end of
Exercised
other
the year
Options over ordinary shares
Ben Cole
Anthony Maslin
Hans Schut
Stuart McAlpine
Elizabeth Brennan
Ronnie Duncan
750,000
3,454,167
750,000
1,250,000
-
-
6,204,167
1,000,000
500,000
250,000
250,000
-
-
2,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,750,000
3,954,167
1,000,000
1,500,000
-
-
8,204,167
Other transactions with key management personnel and their related parties
During the financial year, the Group recognised rental income of $9,000 during the period for the lease of
farmland to McAlpine Farms and interest expense of $3,947 relating to the purchase of Kulinbah East Block
(refer to note 21). On 29 July 2016, the Group entered into a contract to acquire land from Buntine Holdings
Pty Ltd with a deferred consideration element. The price of the land was $323,879.13 and a deposit of
$50,000 paid on 29 July 2016 in the form of 1,000,000 shares at 0.05c each. A partial payment of $150,000
was made on 13 August 2018. The remaining consideration is to be paid in full no later than 8 years from 23
March 2016. Interest is paid at the annual rate of the RBA base rate plus 2.5%. 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 holds various agreements with a substantial shareholder, Commonland Foundation and its
subsidiary 4 Returns Landscape B.V. The total loan balance as at 30 June 2020 is $811,863 before
discounting to present value. (2019: $817,295). Further non-refundable project related grants amounting to
$135,000, $71,894 and $99,984 were received and included in income.
End of remuneration report.
17
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTOR'S REPORT
CORPORATE GOVERNANCE
The Consolidated Group’s corporate governance policies and practices are available on the website
http://www.wideopenagriculture.com.au
NON-AUDIT SERVICES
There were no non-audit services provided by the Group’s auditors, Stantons International Audit & Consulting
Pty Ltd, during the year ended 30 June 2020.
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2020 has been received and can be
found on page 55.
Signed for and on behalf of the board in accordance with a resolution of the directors:
Director:
_________________________________________________________
Dr Ben Cole
Dated this 31st August 2020
18
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 2020
Note
2020
$
2019
$
2
2
13
20
10
15
9
3
19
Revenue
Cost of goods sold
Gross Profit
Other Income
Fair Value Gain on Revaluation of Loan
Fair Value Movement of Biological Assets
Auditor’s remuneration
Consultancy Fees
Depreciation Expense
Impairment Expense
Employee Benefits Cost
Share Based Payments
Selling Expenses
Share of Loss of an Equity-accounted Investment, net of tax
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
Items that may be reclassified subsequently to profit or loss
Total other comprehensive income for the year
1,446,639
(1,179,637)
267,002
489,274
296,365
4,104
(44,000)
(216,457)
(36,007)
-
(1,249,498)
(615,365)
(165,177)
(14,040)
(572,316)
50,664
(39,108)
11,556
255,044
-
-
(35,904)
(358,105)
(147,628)
(456,220)
(734,968)
(28,013)
(885)
-
(584,074)
(1,856,115)
(2,079,197)
-
(1,856,115)
-
(2,079,197)
-
-
-
-
-
-
Total comprehensive loss for the year
(1,856,115)
(2,079,197)
Total comprehensive loss attributable to members of the
entity
Basic loss per share (cents)
Diluted loss per share (cents)
(1,856,115)
(2,079,197)
(2.56)
(2.95)
(2.56)
(2.95)
26
26
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
19
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
Note
2020
$
2019
$
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Biological Assets
Inventory
Prepayments
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Equity-accounted Investments
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
NON-CURRENT LIABILITIES
Borrowings and other financial liabilities
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Options – Unlisted
Options – Listed
Accumulated losses
TOTAL EQUITY
4
5
8
7
6
9
10
6
11
12
13
13
12
14
15
15
16
4,431,385
35,668
169,713
17,751
183,823
4,838,340
3,280,077
-
21,572
31,214
46,623
3,379,486
85,960
129,937
200,000
415,897
-
117,371
200,000
317,371
5,254,237
3,696,857
290,480
51,432
-
341,912
515,498
15,633
531,131
873,043
169,061
44,764
1,876
215,701
817,295
-
817,295
1,032,996
4,381,194
2,663,861
9,636,717
1,218,401
72,820
6,666,094
632,338
56,058
(6,546,744)
4,381,194
(4,690,629)
2,663,861
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
20
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
2020
As at the beginning of the year
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Transactions with owners, in their capacity as owners, and other
transfers
Shares issued
Shares issued on listed options exercised
Shares issued on employee share options exercised
Shares issued for employee services rendered
Shares issued for services
Capital raising costs
Options issued – Share based payments
Options issued – Listed options
Options exercised
At 30 June 2020
Attributable to equity holders of the Group
Issued
Capital
$
Unlisted
Options
$
Listed
Options
Accumulated
Losses
Total Equity
$
$
$
6,666,094
-
632,338
-
56,058
-
(4,690,629)
(1,856,115)
2,663,861
(1,856,115)
-
-
3,000,000
2,659
81,802
25,542
13,500
(152,880)
-
-
-
-
-
-
-
-
-
-
-
615,365
-
(29,302)
-
-
-
-
-
-
-
-
-
16,876
(114)
-
-
(1,856,115)
(1,856,115)
-
-
-
-
-
-
-
-
-
3,000,000
2,659
81,802
25,542
13,500
(152,880)
615,365
16,876
(29,416)
9,636,717
1,218,401
72,820
(6,546,744)
4,381,194
21
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
2019
As at the beginning of the year
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Transactions with owners, in their capacity as owners, and other
transfers
Shares issued
Capital raising costs
Options issued – Share based payment
Options issued – Listed options
At 30 June 2019
Issued
Capital
$
Unlisted
Options
$
6,666,094
-
604,325
-
-
-
-
-
-
-
-
-
-
-
28,013
-
6,666,094
632,338
Attributable to equity holders of the Group
Listed
Options
Accumulated
Losses
Total Equity
$
-
-
-
-
-
-
-
56,058
56,058
$
$
(2,611,432)
(2,079,197)
4,658,987
(2,079,197)
-
-
(2,079,197)
(2,079,197)
-
-
-
-
-
-
28,013
56,058
(4,690,629)
2,663,861
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
22
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers and employees
Receipts from rental income
Interest received
Interest and other costs of finance paid
Reimbursements from Commonland
Government grants received
Note
2020
$
2019
$
1,368,375
83,098
(3,464,719)
(1,742,375)
15,000
45,236
(9,475)
9,358
50,000
-
56,584
-
-
-
Net cash flows (used in) operating activities
18
(1,986,225)
(1,602,693)
Cash Flows from Investing Activities
Payment for deposit on hand
Proceeds from sale of PPE
Payments for acquisition of PPE
Purchase of investment in equity-accounted investments
Net cash flows (used in) investing activities
10
10
Cash Flows from Financing Activities
Proceeds from issue of capital (net of issue costs)
(Repayment)/Proceeds of borrowings
Grants received
Net cash flows generated from (used in) financing activities
-
6,364
(54,331)
(100,000)
(147,967)
2,915,190
(5,432)
375,742
3,285,500
(150,000)
2,600
(43,693)
-
(191,093)
(84,649)
(100,000)
133,000
(51,649)
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
1,151,308
3,280,077
(1,845,435)
5,125,512
Cash and cash equivalents at the end of the financial year
4
4,431,385
3,280,077
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
23
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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 31st August 2020 by the directors of the Group.
Significant Accounting Policies
New and Amended Accounting Standards Adopted by the Group
The Group has adopted AASB 16 Leases which became effective for financial reporting periods
commencing on or after 1 July 2019.
AASB 16 Leases
AASB 16 replaces AASB 117 Leases. AASB 16 sets out a comprehensive model for the identification
of lease arrangements and their treatment in the financial statements of both lessees and lessors.
AASB 16 applies a control model for the identification of leases, distinguishing between leases and
service contracts on the basis of whether there is an identified asset controlled by the customer.
The Group has applied the new Standard effective from 1 July 2019 using the modified retrospective
approach. Under this method, the cumulative effect of initial application is recognised as an adjustment
to the opening balance of retained earnings at 1 July 2019 and comparatives are not restated.
24
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Accounting Policies continued
b. Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the
Company as at 30 June 2020 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.
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 2020, the Group had net assets of $4,381,194, cash and cash equivalents of $4,431,385
and net working capital of $4,496,428. The Group had incurred a loss for the year ended 30 June 2020
of $1,856,115.
25
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Accounting Policies continued
d. Leases
AASB 16 Leases – Accounting Policies applied from 1 July 2019
The Group as lessee
At inception of a contract, the Group assesses if the contract contains or is a lease. If there is a lease
present, a right-of-use asset and a corresponding liability are recognised by the Group where the
Group is a lessee. However, all contracts that are classified as short-term leases (i.e. leases with a
remaining lease term of 12 months or less) and leases of low-value assets are recognised as an
operating expense on a straight-line basis over the term of the lease.
Initially, the lease liability is measured at the present value of the lease payments still to be paid at the
commencement date. The lease payments are discounted at the interest rate implicit in the lease. If
this rate cannot be readily determined, the Group uses incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as follows:
fixed lease payments less any lease incentives;
variable lease payments that depend on the index of the rate, initially measured using the
index or rate at the commencement date;
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options if the lessee is reasonably certain to exercise the
options;
lease payments under extension profits, if the lessee is reasonably certain to exercise the
options; and
payments of penalties for terminating the lease, if the lease term reflects the exercise of
options to terminate the lease.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, any lease
payments made at or before the commencement date and initial direct costs. The subsequent
measurement of the right-of-use asset is at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset,
whichever is the shortest.
Where a lease transfers ownership of the underlying asset or the costs of the right-of-use asset reflects
that the Group anticipates exercising a purchase option, the specific asset is depreciated over the
useful life of the underlying asset.
The Group does not currently have any leases that would require recognition of a right-of-use asset in
the current reporting period.
26
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Accounting Policies continued
e. 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.
f. Financial Instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the financial instrument. Financial instruments (except for trade receivables)
are measured initially at fair value adjusted by transactions costs, except for those carried “at fair value
through profit or loss”, in which case transaction costs are expensed to profit or loss. Where available,
quoted prices in an active market are used to determine the fair value. In other circumstances,
valuation techniques are adopted. Subsequent measurement of financial assets and financial liabilities
are described below.
Trade receivables are initially measured at the transaction price if the receivables do not contain a
significant financing component in accordance with AASB 15.
Financial assets are derecognised when the contractual rights to the cash flows from the financial
asset expire, or when the financial asset and all substantial risks and rewards are transferred. A
financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and subsequent measurement
Financial assets
Except for those trade receivables that do not contain a significant financing component and are
measured at the transaction price in accordance with AASB 15, all financial assets are initially
measured at fair value adjusted for transaction costs (where applicable).
27
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Accounting Policies continued
For the purpose of subsequent measurement, financial assets other than those designated and
effective as hedging instruments, are classified into the following categories upon initial recognition:
-
-
-
amortised cost;
fair value through other comprehensive income (FVOCI); and
fair value through profit or loss (FVPL).
Classifications are determined by both:
- The contractual cash flow characteristics of the financial assets; and
- The entities business model for managing the financial asset.
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are
not designated as FVPL):
-
-
they are held within a business model whose objective is to hold the financial assets and
collect its contractual cash flows; and
the contractual terms of the financial assets give rise to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method.
Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash
equivalents, trade and most other receivables fall into this category of financial instruments
Financial assets at fair value through other comprehensive income
The Group measures debt instruments at fair value through other comprehensive income (OCI) if both
of the following conditions are met:
- The contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding; and
- The financial asset is held within a business model with the objective of both holding to collect
contractual cash flows and selling the financial asset.
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and
impairment losses or reversals are recognised in the statement of profit or loss and computed in the
same manner as for financial assets measured at amortised cost. The remaining fair value changes
are recognised in OCI.
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity
instruments designated at fair value through OCI when they meet the definition of equity under AASB
132 Financial Instruments: Presentation and are not held for trading.
28
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Accounting Policies continued
Financial assets at fair value through profit or loss (FVPL)
Financial assets at fair value through profit or loss include financial assets held for trading, financial
assets designated upon initial recognition at fair value through profit or loss, or financial assets
mandatorily required to be measured at fair value. Financial assets are classified as held for trading if
they are acquired for the purpose of selling or repurchasing in the near term.
Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit
or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an
effective hedge, as appropriate.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction
costs unless the Group designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method
except for derivatives and financial liabilities designated at FVPL, which are carried subsequently at
fair value with gains or losses recognised in profit or loss.
All interest-related charges and, if applicable, gains and losses arising on changes in fair value are
recognised in profit or loss.
Impairment
The Group assesses on a forward-looking basis the expected credit losses associated with its debt
instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on
whether there has been a significant increase in credit risk. For trade receivables, the Group applies
the simplified approach permitted by AASB, which requires expected lifetime losses to be recognised
from initial recognition of the receivables.
g. 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.
29
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Accounting Policies continued
The depreciation rate used for each class of depreciable asset is:
Asset Class
Plant & Equipment
Capital Work-in-Progress
Land & Buildings
Depreciation Rate
30% Diminishing Value
-
20% Diminishing Value
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.
h. 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.
i. 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.
30
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Accounting Policies continued
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.
j. 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.
k.
Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable
value on a 'first in first out' basis. Cost comprises of direct materials and delivery costs, direct labour,
import duties and other taxes, an appropriate proportion of variable and fixed overhead expenditure
based on normal operating capacity. Costs of purchased inventory are determined after deducting
rebates and discounts received or receivable.
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and
delivery costs, net of rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.
l. Investments
An associate is an entity over which the Group has significant influence. Significant influence is the
power to participate in the financial and operating policy decisions of the entity but does not control
or have joint control of those policies. Investments in associates are accounted for in the
consolidated financial statements by applying the equity method of accounting, whereby the
investment is initially recognised at cost (including transaction costs) and adjusted thereafter for the
post-acquisition change in the Group’s share of net assets of the associate. In addition, the Group’s
share of the profit or loss and other comprehensive income is included in the consolidated financial
statements.
The carrying amount of the investment includes, when applicable, goodwill relating to the associate.
Any discount on acquisition, whereby the Group’s share of the net fair value of the associate
exceeds the cost of investment, is recognised in profit or loss in the period in which the investment is
acquired.
Profits and losses resulting from transactions between the Group and the associate are eliminated to
the extent of the Group’s interest in the associate.
31
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Accounting Policies continued
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the
Group discontinues recognising its share of further losses unless it has incurred legal or constructive
obligations or made payments on behalf of the associate. When the associate subsequently makes
profits, the Group will resume recognising its share of those profits once its share of the profits
equals the share of the losses not recognised.
The requirements of AASB 128: Investments in Associates and Joint Ventures and AASB 9:
Financial Instruments are applied to determine whether it is necessary to recognise any impairment
loss with respect to the Group’s investment in an associate or a joint venture. When necessary, the
entire carrying amount of the investment (including goodwill) is tested for impairment in accordance
with AASB 136: Impairment of Assets as a single asset by comparing its recoverable amount (higher
of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss
recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss
is recognised in accordance with AASB 136 to the extent that the recoverable amount of the
investment subsequently increases.
m. Revenue and Other Income
Revenue arises mainly from sale of fresh produce, grants, and rentals over the farm property. To
determine whether to recognise revenue, the Group follows a 5-step process:
Identifying the contract with a customer
i.
Identifying the performance obligations
ii.
Determining the transaction price
iii.
Allocating the transaction price to the performance obligations
iv.
Recognising revenue when/as performance obligation(s) are satisfied.
v.
The revenue excludes any amounts collected on behalf of third parties (GST).
I. Sale of goods
Revenue is recognised when control of the asset is transferred to the customer, generally, on delivery
of the goods.
Interest revenue is recognised when received.
II.
All revenue is stated net of the amount of goods and services tax (GST).
III. Grant revenue
Grants are recognised at their fair value where there is a reasonable assurance that the grant will be
received, and the Company will comply with all attached conditions. Grants relating to costs are
deferred and recognised in the profit or loss over the period necessary to match them with the costs
that they are intended to compensate. Grants relating to the purchase of property, plant and equipment
are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-
line basis over the expected lives of the related assets.
The cash flow boost is an incentive provided by the Commonwealth Government to eligible employers
to provide economic support during the COVID-19 pandemic and is accounted for on a cash receipts
basis.
32
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Accounting Policies continued
n. 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.
o. 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. No borrowing costs were recognised by the Group during the year.
p. 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.
q. 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 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.
33
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Accounting Policies continued
r. 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.
Cash flows are presented on a gross basis. The GST components of cash flows arising from
investing or financing activities which are recoverable from, or payable to, the ATO are presented as
operating cash flows included in receipts from customers or payments to suppliers.
s. 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.
34
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Accounting Policies continued
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.
t. Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial period.
u. 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 sales and marketing of fresh produce 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.
v. 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.
Share based payments to employees and directors are valued using the Black Scholes valuation
model and expensed over the vesting period.
w. 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.
35
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Accounting Policies continued
(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.
(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.
x. 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 1 (v). 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.
(iii) Impairment
An impairment loss is recognised for the amount by which the assets’ or cash-generating unit’s
carrying amount exceeds its recoverable amount. To determine the recoverable amount,
management estimates expected future cash flows from each cash-generating unit and determines a
suitable interest rate in order to calculate the present value of those cash flows. In the process of
measuring expected future cash flows management makes assumptions about future operating
results. These assumptions relate to future events and circumstances. The actual results may vary,
and may cause significant adjustments to the Company’s assets within the next financial year.
Determining the applicable discount rate also involves estimating the appropriate adjustment to
market risk and the appropriate adjustment to asset-specific risk factors.
36
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Accounting Policies continued
(iv) Useful lives of depreciable assets
Management reviews the useful lives of depreciable assets at each reporting date, based on the
expected utility of the assets to the Company.
y.
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.
z. 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.
aa. 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 cattle
(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.
37
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
2
Revenue and Other Income
Revenue
Dirty Clean Food revenues
Total Revenue
Other Income
Rent Received1
Grants & Incentives2
Interest Income
Consulting Fees
Gain on Disposal of Assets
Other Income3
Total Other Income
2020
$
1,446,639
1,446,639
9,000
425,151
39,381
5,796
606
9,340
489,274
1,935,913
2019
$
50,664
50,664
9,000
133,000
65,481
-
-
47,563
255,044
305,708
1 Rent received is from McAlpine Farms which is owned by Stuart McAlpine (note 21).
2Grants and incentives received relate to Commonland grant funding received for carrying out 4 Returns work
and to fund investments in Agtalent. Also included is COVID-19 government stimulus grants.
3Other revenue comprises funds received from Commonland Foundation with no obligation to repay, treated
as income.
3
Other Expenses
Foreign Currency Gains & Losses
General Expenses
Insurance
Legal
Vehicle Expenses
Office Expenses
Production Development & Marketing
Regulatory Costs
Rent
Staffing Expenses
Travel
2020
$
1,134
100,597
39,155
18,000
36,625
20,400
96,439
209,656
23,601
11,680
15,029
572,316
2019
$
989
74,517
25,456
13,110
11,560
46,767
122,743
226,972
13,612
18,245
30,103
584,074*
* Other Expenses have been reclassified and summarised. As a result, the comparative figures relating to
2019 have been reclassified and differ from the disclosure in the 2019 Annual Report.
38
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
4
Cash and Cash Equivalents
Cash at bank
Cash on deposit
5
Biological Assets
Current
Cattle Livestock
2020
$
2019
$
2,919,326
1,512,059
4,431,385
680,077
2,600,000
3,280,077
35,668
35,668
-
-
Cattle livestock comprises of cattle purchased for processing and sale in the first half of the 2021 financial
year. Cattle are held on agistment at a property in South Western Australia.
6
Trade and Other Receivables
2020
$
2019
$
Current
Accounts receivable
Provision for Doubtful Debts
GST receivable
Initial Equity Issued
Accrued Revenue
Bonds & Deposits
Non-Current
Deposit (refer to note 21)
7
Prepayments
Workers Compensation
Rent
Insurances
Other
115,224
(10,332)
72,285
3
6,043
600
183,823
26,667
-
-
3
17,898
2,055
46,623
200,000
200,000
200,000
200,000
1,448
-
16,303
-
17,751
2,500
3,682
19,581
5,451
31,214
39
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
8
Inventory
Fresh & Frozen Meat
Rolled Oats
Packaging
Goods in transit
2020
$
101,247
43,693
5,346
19,427
169,713
2019
$
13,782
-
-
7,790
21,572
Fresh & frozen meat comprises of beef, lamb and other items sold via the sales and marketing operation,
Dirty Clean Food. Rolled oats are to be converted to oat milk and are held at a storage facility in Perth and
Dirty Clean Food’s oat milk manufacturing partner in Europe.
9
Investments
Farmfolk Services Pty Ltd
Cost accounted for
Share of loss for the period
100,000
(14,040)
85,960
-
-
-
The carrying amount of investments have been accounted for at the balance date using the equity method
provided for in AASB 128. The Group’s share of the changes in the carrying amount of investments has been
recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income. Wide Open
Agriculture own 20% of the issued capital of Farmfolk Services Pty Ltd.
10
Property, Plant and Equipment
2020
Net book value
At beginning of the year
Additions
Disposal
Impairment
Reclassification
Depreciation for the year
At 30 June 2020
2019
At beginning of the year
Additions
Disposal
Impairment
Depreciation for the year
At 30 June 2019
Plant and
equipment
$
116,398
51,412
(5,758)
-
3,892
(36,007)
129,937
Capital works
in progress
$
973
2,919
-
-
(3,892)
-
-
Land and
Buildings
$
-
-
-
-
-
-
-
Total
$
117,371
54,331
(5,758)
-
-
(36,007)
129,937
-
973
-
-
-
973
549,841
17,122
-
(456,220)
(110,743)
-
680,802
43,694
(3,278)
(456,220)
(147,627)
117,371
130,961
25,599
(3,278)
-
(36,884)
116,398
40
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
11
Trade and Other Payables
Current
Trade creditors
Accruals
Employee liabilities
Other
Unearned Revenue – Gift Cards
2020
$
136,792
52,378
101,010
-
300
290,480
2019
$
37,330
81,304
24,155
26,272
-
169,061
At the reporting date none of the payables were past due. The normal credit terms from suppliers is between
14 and 21 days.
12
Provisions
Current
Annual Leave
Non-Current
Long Service Leave
13
Borrowings and other financial liabilities
Current
Amounts received for capital raising
Non-Current
Shareholder loan – Gross Liability
Less: Fair value gain on revaluation
51,432
44,764
15,633
-
-
1,876
811,863
(296,365)
515,498
817,295
-
817,295
The loan is between Wide Open Agriculture Ltd and Commonland (a related party) and is interest free. On 18
May 2020 the loan was renegotiated with Commonland to a longer settlement period. As such, at 30 June
2020 the loan has been revalued using the commercial interest rate of 4.5%. The resulting gain has been
accounted through profit and loss. Refer to note 21 for further details of the loan.
41
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
14
Issued Capital
Ordinary Shares
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
(b) Movement in Ordinary shares on issue
2020
$
10,297,390
(660,673)
9,636,717
2020
Number
70,579,249
11,629,525
-
82,208,774
Opening Balance as at 1 July 2019
Shares Issued
Shares Issued
Shares Issued
Options Exercised
Options Exercised
No. Of shares
70,579,249
11,111,112
141,978
18,285
350,000
8,150
Issue
Price
$
0.27
0.24
0.30
0.15
0.30
2019
$
7,173,887
(507,793)
6,666,094
2020
$
6,666,094
3,123,503
(152,880)
9,636,717
Total
$
6,666,094
3,000,000
33,542
5,500
81,802
2,659
Less: Transaction Costs
Balance as at 30 June 2020
-
-
(152,880)
82,208,774
9,636,717
Opening Balance as at 1 July 2018
Balance as at 30 June 2019
Issue
Price
$
No. Of shares
70,579,249
70,579,249
Total
$
6,666,094
6,666,094
42
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
15
Options
(a) Unlisted Options
Balance at beginning of year
Options issued
Options exercised transferred to issued capital
Balance at end of year
(b) Listed Options
Balance at beginning of year
Options issued
Options exercised transferred to issued capital
Balance at end of year
2020
$
632,338
615,365
(29,302)
1,218,401
2020
$
56,058
16,876
(114)
72,820
2019
$
604,325
28,013
-
632,338
2019
$
-
56,058
-
56,058
During 1 April to 2 May 2019, the Company completed a pro-rata non-renounceable entitlement issue.
A total of 5,605,766 Applications were received under the Offer raising $56,057 for the Company.
As per Section 4.4 of the Prospectus, the Directors reserved the right within 3 months of the Closing
Date, to issue the Shortfall at the discretion of the Directors on the same terms as being offered to
Eligible Shareholders under the Prospectus. 1,687,591 Shortfall Options were subscribed for raising a
further $16,876 and the Options were issued on 24 July 2019.
On 22 November 2019 at the Annual General Meeting of Shareholder it was approved to issue
Directors 2,000,000 unlisted options, exercisable at $0.20, expiring on 30 November 2022.
On 3 April 2020, 5,765,000 unlisted options were issued to employees for nil consideration under the
employee incentive scheme. The options have an exercise price of $0.15 and an expiry date of 31
March 2023.
Set out below are summaries of options granted:
2020
Grant Date Expiry Date
Exercise
Price
Opening
Balance
Granted
Exercised
30/06/2021
16/02/2018
30/06/2021
22/02/2018
31/12/2021
22/02/2018
11/01/2019
08/01/2023
05/02/2019 08/01/2023
08/01/2023
28/03/2019
30/06/2021*
02/05/2019
30/06/2021*
24/07/2019
30/11/2022
22/11/2019
31/03/2023
03/04/2020
* Listed options
$0.30
$0.30
$0.30
$0.25
$0.25
$0.25
$0.30
$0.30
$0.20
$0.15
3,750,000
1,000,000
4,000,000
900,000
300,000
300,000
5,605,766
-
-
-
15,855,766
-
-
-
-
-
-
-
-
2,000,000
5,675,000
7,675,000
-
-
-
-
-
-
(8,150)
-
-
(350,000)
(358,150)
Expired/
forfeited/
other
-
-
-
-
-
-
-
1,687,591
-
-
1,687,591
Closing
Balance
3,750,000
1,000,000
4,000,000
900,000
300,000
300,000
5,597,616
1,687,591
2,000,000
5,325,000
24,860,207
43
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
2019
Grant
Date
Expiry Date
Exercise
Price
Opening
Balance
Granted
Exercised
16/02/2018 30/06/2021
22/02/2018 30/06/2021
22/02/2018 31/12/2021
11/01/2019 08/01/2023
05/02/2019 08/01/2023
28/03/2019 08/01/2023
02/05/2019 30/06/2021*
* Listed options
$0.30
$0.30
$0.30
$0.25
$0.25
$0.25
$0.30
3,750,000
1,000,000
4,000,000
-
-
-
-
-
-
-
900,000
300,000
300,000
-
8,750,000
1,500,000
-
-
-
-
-
-
-
-
Expired/
forfeited/
other
-
-
-
-
-
-
5,605,766
Closing
Balance
3,750,000
1,000,000
4,000,000
900,000
300,000
300,000
5,605,766
5,605,766
15,855,766
Options issued in the form of share based payments are valued using the Black-Scholes model. For
options granted during the current financial year, the valuation model inputs used to determine the fair
value at the grant date, are as follows:
Grant
Date
Expiry Date
Share
Price
Exercise
Price
Volatility
Dividend
Yield
22/11/2019 30/11/2022
03/04/2020 31/03/2023
$0.155
$0.140
$0.200
$0.150
69.99%
99.40%
0%
0%
Risk-free
interest
rate
0.77%
0.26%
16
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
2020
$
(4,690,629)
(1,856,115)
(6,546,744)
Fair value at
grant date
$0.061
$0.084
2019
$
(2,611,432)
(2,079,197)
(4,690,629)
17
Financial Risk Management
Capital management
The Group’s objective when managing capital is to safeguard its ability to continue as a going
concern so that it can continue to provide returns for shareholders and benefits to other stakeholders
and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or
adjust the capital structure, the Group may adjust the amount of dividends paid, return capital to
shareholders, issue new shares or sell assets to reduce debt.
Given the nature of the business, the Group monitors capital on the basis of current business
operations and cash flow requirements. There were no changes in the Group’s approach to capital
management during the year.
The Group's financial instruments consist mainly of deposits with banks, accounts receivable and
payable and borrowings.
44
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
The totals for each category of financial instruments, measured in accordance with AASB 9 Financial
Instruments as detailed in the accounting policies to these financial statements are as follows:
Financial Instruments
2020
Financial Assets
Cash and cash equivalents
Trade and other receivables
Bonds and deposits
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
$
2,919,326
1,512,059
- 4,431,385
-
200,000
-
600
183,823
183,823
-
200,600
3,119,326
1,512,659
183,823 4,815,808
0.75%
1.82%
-
-
-
-
-
-
-
242,724
242,724
515,498
515,498
758,222
758,222
The fair value of the above financial instruments approximates their carrying values.
Financial Instruments
2019
Financial Assets
Cash and cash equivalents
Trade and other receivables
Bonds and deposits
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
$
680,077
2,600,000
- 3,280,077
-
200,000
880,077
-
2,055
44,568
44,568
-
202,055
2,602,055
44,568 3,526,700
0.89%
1.56%
-
-
-
-
169,060
169,060
819,171
819,171
988,231
988,231
-
-
-
45
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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 2020.
Financial risk management objectives
In common with all other businesses, the Group is exposed to risks that arise from its use of financial
instruments. This note describes the Group’s objectives, policies and processes for managing those
risks and the methods used to measure them. Further quantitative information in respect of those
risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them
from previous periods unless otherwise stated in this note.
The board has overall responsibility for the determination of the Group’s risk management
objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the
authority for designing and operating processes that ensure the effective implementation of the
objectives and policies to the Group’s finance function. The Group’s risk management policies and
objectives are therefore designed to minimise the potential impacts of these risks on the Group
where such impacts may be material. The board receives monthly financial reports through which
it reviews the effectiveness of the processes put in place and the appropriateness of the objectives
and policies it sets. The overall objective of the board is to set policies that seek to reduce risk as
far as possible without unduly affecting the Group’s competitiveness and flexibility.
a. Market risk
Market risk for the Group arises from the use of interest-bearing financial instruments. It
is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in interest rate (see b. below)
b.
Interest rate risk management
Interest rate risk arises on cash and cash equivalents and receivables from related parties.
The Group does not enter into any derivative instruments to mitigate this risk. As this is
not considered a significant risk for the Group, no policies are in place to formally mitigate
this risk.
46
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Interest rate sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest
rates for both derivatives and non-derivative instruments at the end on the reporting
period.
If interest rates had been 100 basis points higher/lower and all other variables were held
constant, the Group’s loss for the year ended 30 June 2020 would decrease/increase by
$19,230.
c. Foreign currency risk management
The Group undertakes transactions denominated in foreign currencies; consequently,
exposures to exchange rate fluctuations arise. At 30 June 2020, the Company has no
cash denominated in other foreign currencies. Exchange rate exposures are managed
within approved policy parameters utilising forward foreign exchange contracts. As at 30
June 2020, the Group has not entered in any forward foreign exchange contracts.
d. Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations
resulting in financial loss to the Group. The Group has adopted a policy of dealing with
creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a
means of mitigating the risk of financial loss from defaults.
The credit risk on liquid funds is limited because the counterparties are banks with high
credit-ratings assigned by international credit-rating agencies.
e. Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of directors, which
has established 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 by maintaining adequate banking facilities, by
continuously monitoring forecast and actual cash flows, and by matching the maturity
profiles of financial assets and liabilities.
Contractual cash flows
Carrying
Amount
Less than
1 month
1-3
months
3-12
months
1 year to
5 years
$
$
$
$
$
Total
contractual
cash flows
$
242,724
242,724
169,060
169,060
-
-
-
-
-
-
242,724
169,060
2020
Trade and other
payables
2019
Trade and other
payables
47
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
18 Reconciliation of Loss after Tax to Net Cash Outflow from Operating Activities
Loss after income tax
Grants received
Fair Value Gain on Revaluation of Loan
Share Based Payments
Non-Cash Employee Benefit Costs
(Gain)/Loss on sale of PPE
Unrealised currency (gain)/loss
Impairment
Share of loss from associate
Depreciation
Changes in assets and liabilities
(Increase)/Decrease in operating receivables
(Increase)/Decrease in inventory
(Increase)/Decrease in biological assets
Increase/(Decrease) in operating payables
Increase/(Decrease) in provisions
2020
$
2019
$
(1,856,115)
(2,079,197)
(375,151)
(296,365)
615,365
39,042
(606)
(67)
-
14,040
36,007
(123,737)
(148,141)
(35,668)
122,870
22,301
(133,000)
-
28,013
-
678
-
456,220
-
147,628
(55,821)
(21,572)
-
50,836
3,522
Net cash (outflows) from operating activities
(1,986,225)
(1,602,693)
19
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% (2019:
27.5%)
Temporary differences
Permanent differences
Adjustments for prior periods
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
Adjustment recognised for prior periods
Total
Potential benefit at 27.5%
48
(1,856,115)
(2,079,197)
(510,432)
(33,521)
(12,855)
-
556,808
-
-
5,079,587
121,895
(139,417)
5,062,065
1,392,068
(571,779)
81,875
9,209
(63,387)
544,082
-
-
3,229,911
184,046
(237,229)
3,176,728
873,600
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
20 Remuneration of Auditors
Audit Services
Stantons International – Audit of financial report
Non-Audit Services
Stantons International – Investigating accountants report
2020
$
2019
$
44,000
35,904
-
44,000
-
35,904
21 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 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
On the 18 May 2020, the Group renegotiated a loan agreement with Commonland, replacing the
previous facility due to be paid in full on the 9 February 2026. The details are as follow:
Loan amount $811,863
-
- Repayable in ten equal annual instalments of $81,186.30
- The first instalment due on 9 February 2026 with subsequent instalments payable each year
on 9 February, with the final instalment due on 9 February 2035
- No interest payable
Not longer than one year
Longer than one year, but not longer than five years
Longer than five years
2020
$
176,389
123,879
811,863
2019
$
109,956
173,879
817,295
1,112,131
1,101,130
Operating Lease Commitment
7,536
9,956
Commitments for expenditure in 2020 within one year represent payment of funds to Curtin University
and CSIRO for work relating to development and commercialisation of proprietary lupin protein
technology, Agtalent for project management services, and payment for office lease costs.
49
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Commitments for expenditure in 2020 Longer than one year, but not longer than five years represent
deferred consideration of purchase of Kulinbah East Block from Buntine Holdings Pty Ltd
Commitments for expenditure in 2020 over five years represent Shareholder Loan from
Commonland, the first of ten equal annual repayment instalments being due on 9 February 2026.
Operating lease commitments represent funds due for rent of the Williams Community Resource
Centre, being $208 per week for 12 weeks, commenced 1 July 2020, and rent of an office in Margaret
River for $210 per week for six months
Other than the interests disclosed above there were no further contingencies as at 30 June 2020.
23
Key Management Personnel Remuneration
Key management personnel include persons having the authority and responsibility for planning,
directing and controlling the activities of the Group as a whole. The compensation made to directors
and other members of key management personnel of the Group during the year ended 30 June 2020
is disclosed in the Remuneration Report included in the Directors’ Report. A summary of the key
management personnel remuneration is as follows.
Short-term employee benefits1
Post-employment benefits
Long term benefits
Share based payments
2020
$
296,886
23,030
6,979
122,354
449,249
2019
$
308,251
22,083
-
-
330,334
1Short-term employee benefits include unlisted options issued to the Directors of the Group which
was approved at the 2019 Annual General Meeting of Shareholders, and shares equal to the value
of cash salary and fees forgone by the Directors during the year which is subject to approval by the
shareholders at the next Annual General Meeting.
24
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.
On 29 July 2016, the Group entered into a contract to acquire land from Buntine Holdings Pty Ltd
with a deferred consideration element. Refer to note 21 for further details.
50
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
The Group recognised rental income of $9,000 (2019: $9,000) during the period for the lease of
farmland to McAlpine Farms and interest expense of $3,947 relating to the purchase of Kulinbah
East Block. McAlpine Farms is owned by Stuart McAlpine, a current Director of the Group.
During the year the Company renegotiated a loan agreement with Commonland, replacing the
previous facility which was due within five years. The new loan is for $811,863 with the first instalment
payable on 9 February 2026 and no interest is payable.
The Group repaid an IPO contingency loan arrangement with Commonland Foundation of $100,000
on 27 July 2018. The total loan balance as at 30 June 2020 is $811,863 before discounted to present
value (2019: $817,295). Further non-refundable amounts of $135,000, $71,894 & $99,984 were
received and included in income.
25
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 2020, including their personally related parties, is set out below:
2020
Name
Balance at 1
July 2019
Granted as
compensation
Issued as
repayment
of loan
Bought &
(Sold)
Balance at
30 June
2020
Ben Cole
7,566,668
Anthony Maslin
7,816,668
Hans Schut
515,000
Stuart McAlpine 2,000,000
Elizabeth Brennan
Ronnie Duncan
-
-
Total
17,898,336
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,566,668
7,816,668
515,000
2,000,000
-
-
17,898,336
The Number of shares held by Directors and Key Management Personnel of the Group during the
year ended 30 June 2019, including their personally related parties, is set out below:
2019
Name
Balance at 1
July 2018
Granted as
compensation
Issued as
repayment
of loan
Bought &
(Sold)
Balance at
30 June
2019
7,566,668
Ben Cole
7,816,668
Anthony Maslin
Hans Schut
515,000
Stuart McAlpine 2,000,000
17,898,336
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,566,668
7,816,668
515,000
2,000,000
17,898,336
51
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
26
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
2020
$
(2.56)
(2.56)
2019
$
(2.95)
(2.95)
(1,856,115)
72,442,200
(2,079,197)
70,579,249
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 2020 is the same as basic
earning/(loss) per share.
27
Significant Events After the Reporting Date
Subsequent to the reporting date a number of option holders elected to exercise their options. The
number of options exercised up to the date of signing may be summarised as follows:
11/08/2020 – issued 200,000 fully paid ordinary shares and 200,000 unlisted options through
exercising 200,000 unlisted options
14/08/2020 – issued 973,750 fully paid shares and 970,000 unlisted options through exercising 3,750
listed options and 970,000 unlisted options
21/08/2020 – issued 7,922,895 fully paid ordinary shares and 2,630,000 unlisted options through
exercising 3,417,895 listed options and 4,505,000 unlisted options
28/08/2020 – issued 390,500 fully paid ordinary shares through exercising 170,500 listed options
and 220,000 unlisted options
Other than the matter described above, no matter or circumstance has arisen which has significantly
affected the operations of the Group, the results of the operations or the state of affairs of the Group.
28
Controlled Entities Disclosure
Controlled Entities
Parent Entity
Wide Open Agriculture Ltd
Subsidiaries
Dirty Clean Food Pty Ltd
Wide Open Land Pty Ltd
Wide Open Hemp Pty Ltd
Country of Incorporation Ownership Interest
2019
2020
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
52
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
29
Parent Entity Disclosures
Wide Open Agriculture Ltd
Statement of Financial Position
Current Assets
Non-Current Assets
Total Assets
Current Liabilities
Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued Capital
Listed Option Reserve
Unlisted Option Reserve
Accumulated Losses
Total Equity
2020
$
4,838,340
415,897
5,254,237
341,912
531,131
873,043
4,381,194
9,636,717
72,820
1,218,401
(6,546,744)
4,381,194
2019
$
3,379,486
317,371
3,696,857
215,701
817,295
1,032,996
2,663,861
6,666,094
56,058
632,338
(4,690,629)
2,663,861
Loss attributable to equity holders of the company
(1,856,115)
(2,079,197)
Commitments
Within one year
Between 12 months and 5 years
Longer than 5 years
176,389
123,879
811,863
1,112,131
109,956
173,879
817,295
1,101,130
Operating Lease Commitments
7,536
9,956
Contingent Liabilities
Responsibility for all contingent liabilities of the group are held by the parent entity. Please refer to
Note 21 for further information.
53
WIDE OPEN AGRICULTURE LIMITED
ABN 866 049 138 22
DIRECTORS’ DECLARATION
The directors of the Company declare that:
(a)
(b)
1.
2.
3.
4.
The consolidated financial statements and notes, as set out on pages 19 to 53, are in
accordance with the Corporations Act 2001 and:
complying with Australian Accounting Standards (including the Australian accounting
interpretations), the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
give a true and fair view of the Group’s financial position as at 30 June 2020 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.
The directors have been given the declarations required by s.295A of the Corporations Act
2001.
This declaration is made in accordance with a resolution of the directors.
Director:
____________________
Dr Ben Cole
Dated this 31st day of August 2020
54
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
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
31 August 2020
Board of Directors
Wide Open Agriculture Limited
Suite 116, 1 Kyle Way,
CLAREMONT, WA, 6010
Dear Directors
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 2020, 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) and its
subsidiaries (Group), which comprises the consolidated statement of financial position as at 30 June 2020, and the
consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in
equity and the consolidated 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 Group’s financial position as at 30 June 2020 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 Group 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 year. 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.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements and are therefore the 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.
Liability limited by a scheme approved
under Professional Standards Legislation
The following matters have been identified as a key audit matters.
Key Audit Matters
Share-based payments - $615,365
(Refer to note 15 — Options)
The share based payment expense has been deemed
a key audit matter due to the judgement involved in
determine the inputs to the valuation model and the
fact that this is material to the financial statement for
the year ended 30 June 2020.
As referred to in Note 15 to the financial statements,
the Company granted share options to directors,
employees and consultants during the year. These
options have different vesting conditions. Further to
this some options granted in prior year vested during
the year.
These options are subject to the measurement and
recognition criterial of AASB Share-base Payment.
There are various inputs applied to the model used to
calculate
the options and
management’s judgements in determining the vesting
conditions.
fair value of
the
Valuation of Related Party Loan
Refer to Note 13 — Borrowings and other financial
liabilities and note 21— Commitments for expenditure
and contingencies
At the reporting date, the Company had an interest-
free loan from Commonland, a significant shareholder
amounting to $811,863. During the current financial
year, the Company renegotiated the repayment terms
of the loan such that the loan is repayable in ten equal
annual
in
February 2026.
instalments of $81,186 commencing
As the loan is not on arm's length terms and is within
the scope of scope of AASB 139 Financial
Instruments: Recognition and Measurement, the fair
value of the loan needs to be determined and the loan
recognised at fair value (plus directly attributable
transaction costs).
We have determined the valuation of the related-party
loan as a key audit matter due to the complexity of the
accounting treatment and calculations required for the
recognition and valuation of the related-party loan and
judgement involved in estimating the comparable
market
the
rates used
concessional related-party loans.
to discount
interest
How the matter was addressed in the audit
Our audit procedures
following:
included,
inter alia,
the
i. Obtaining a reconciliation of the share based
payments in existence during the year;
ii. Enquiring with management whether there
have been any new options granted during
the
relevant
documentation and announcements;
agreeing
year
and
to
iii. Obtaining management’s calculations of the
fair value of options issued and assessing the
inputs used in the model;
iv. Assessing the amounts recognised during the
year against the vesting conditions of the
options;
v. Enquiring with management about the vesting
of options granted
in prior periods and
assessing the amounts recognised in the
current year against the original terms of the
options issued in prior periods; and
vi. Ensuring disclosures made in the financial
statements are complete and in accordance
with accounting standards.
Our audit procedures
following:
included,
inter alia,
the
i. Reviewed the amended agreement with the
lender and agree the loan balance to the
confirmation at 30 June 2020;
ii. evaluated
the application of
the Group’s
accounting policy in respect of recognition
and measurement of financial liabilities;
iii. evaluated the methodology adopted by the
Company to determine the market interest
rate used in the fair valuation of related-party
loans; and
iv. reviewed the valuation performed by the
Company to determine the fair value of the
loan and ensured that the future cashflows
(repayments) are in accordance with the
renegotiated agreement and, challenging the
estimated market interest rate used; and
vii. Ensuring disclosures made in the financial
statements are complete and in accordance
with accounting standards.
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 2020, but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form
of assurance opinion 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, 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 11 to 17 of the directors’ report for the year ended 30
June 2020. 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 2020 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
31 August 2020
ADDITIONAL ASX INFORMATION
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 August 2020:
a) Distribution of Securities
b) Distribution of WOAO Securities
c) 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 RAE
COMMONLAND FOUNDATION
ANTHONY MASLIN
BEN COLE
16,437,644
12,000,000
7,816,668
7,566,668
%
18.00
13.14
8.56
8.29
60
d) Twenty largest shareholders (ASX:WOA)
The name of the twenty largest holders of securities are:
Rank
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
16
17
18
19
20
FANJA PON & HANS RAVE
COMMONLAND FOUNDATION
MR BEN COLE
MR ANTHONY MASLIN & MS MARITE NORRIS
STUART MCALPINE
MR ANTHONY MASLIN & MS MARITE NORRIS
HELMSHOEVE HOLDING B.V.
MRS FANJA PON
MR & MRS VAN CAMPEN
ICE COLD INVESTMENTS PTY LTD
MS JUNMEI WU
MR BEN COLE
MR SCOTT ANDRE CUOMO
MR STEPHEN SEUNG KIL TAK
TOPSFIELD PTY LTD
MR JAMES STIRLING WHYTE
ZERO NOMINEES PTY LTD
STRAIGHT LINES HOLDINGS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BDFC HOLDING BV
NORMAN PATER
24 Aug 2020
%IC
14,379,037
12,000,000
15.75
13.14
6,316,668
4,750,000
3,235,000
2,916,668
2,476,112
2,058,607
2,000,000
1,468,749
1,315,743
1,250,000
1,125,000
1,082,000
1,011,112
1,000,000
1,000,000
948,917
630,678
515,000
500,000
6.92
5.20
3.54
3.19
2.71
2.25
2.19
1.61
1.44
1.37
1.23
1.19
1.11
1.10
1.10
1.04
0.69
0.56
0.55
Total
Balance of register
Grand total
61,979,291
29,326,128
91,305,419
67.88
32.12
100.00
61