YOWIE GROUP LIMITED
ABN 98 084 370 669
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2024
For personal use only
CONTENTS
Page
Company Directory
1
Directors’ Report
2
Auditor’s Independence Declaration
26
Consolidated Statement of Profit or Loss and Other Comprehensive Income
27
Consolidated Statement of Financial Position
28
Consolidated Statement of Changes in Equity
29
Consolidated Statement of Cash Flows
30
Notes to the Consolidated Financial Statements
31
Consolidated Entity Disclosure Statement
68
Directors’ Declaration
69
Independent Auditor’s Report
70
ASX Additional Information
74
(Expressed in US Dollars (US$), unless stated otherwise)
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COMPANY DIRECTORY
1 | Page
DIRECTORS:
Mr Nicholas Bolton (Managing Director and Chief
Executive Officer)
Mr John Patton (Executive Chairman)
Mr Andrew Ranger (Executive Director)
Mr Scott Hobbs (Non-Executive Director)
KEY MANAGEMENT:
Mr Leo Valle (US Country Manager)
Mr Jarrod Milani (AUS Country Manager)
COMPANY
SECRETARY:
Mr John Patton
REGISTERED AND
PRINCIPAL OFFICE:
113 Bakers Road
Coburg North VIC 3058
ABN:
98 084 370 669
COMPANY WEBSITE ADDRESS:
www.yowie.com
AUDITORS:
RSM Australia
Level 32, Exchange Tower
2 The Esplanade
Perth WA 6000
SHARE REGISTRY:
Link Market Services Limited
Level 12, QV1 Building
250 St Georges Terrace
Perth WA 6000
Telephone: 1300 554 474 or +61 2 8280 7111
ASX CODE:
YOW
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DIRECTORS’ REPORT
2 | Page
Your Directors submit their report together with the financial report of Yowie Group Limited
(“the Company”) and the consolidated entity (“the Group”) for the year ended 30 June 2024.
DIRECTORS
The names and details of the Company’s Directors in office during the financial year and until
the date of this report are as follows. Directors were in office for this entire period unless
otherwise stated.
Mr Nicholas Bolton
Managing Director (appointed on 17 May 2024)
Chief Executive Officer (appointed on 17 May 2024)
Non-Executive Director (retired on 17 May 2024)
Mr Bolton has managed operational, investments and restructures assets in aviation, finance,
property, energy, shipping, infrastructure and IT sectors. Mr Bolton is focused on delivering
superior risk adjusted returns through active management and innovative solutions to
challenging issues for investors and banking industries.
Mr John Patton
Executive Chairman (appointed on 17 May 2024)
Non-Executive Director (retired on 17 May 2024)
Qualifications: B.Ec, CA (CAA), F Fin
Mr Patton is a chartered accountant with over 35 years of professional services and industry
experience. He was previously a Partner with Ernst & Young in the Transactions Advisory
Services division. Mr Patton has senior executive and extensive corporate finance credentials,
having been involved in over 150 corporate transactions.
Mr Andrew Ranger
Executive Director (appointed on 17 May 2024)
Mr Ranger is a technology entrepreneur and digital marketer with extensive experience in high-
growth startups, FMCG, and advisory roles. He was a co-founder of Memories Group Ltd and a
former Director of ACMI (Australian Centre for the Moving Image). Additionally, Andrew has
served as a government media advisor and has five years of experience as a marketing account
manager for the Chupa Chups brand across ANZ.
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DIRECTORS’ REPORT
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DIRECTORS (continued)
Mr Scott Hobbs
Non-Executive Director
Scott Hobbs has over 20 years of experience in FMCG, within retailers such as BIG W and
Metcash IGA, primarily in the management and development of various product categories
including confectionery. In addition to category and brand management, a large period has been
within the manufacturing sector of the confectionery industry and the subsequent sales
management of candy products to major Australian and International retailers.
Mr Sean Taylor
Executive Chairman (retired on 18 April 2024)
Mr Taylor has had an extensive career in Advertising/Media working at DDB Needham/Bond
Media/Southern Cross Media and Austereo prior to launching his own agency specialising in
FMCG and Licensing.
Mr Mark Schuessler
Chief Executive Officer (retired on 24 July 2023)
Managing Director (retired on 24 July 2023)
Qualifications: BSBA, MBA Finance
Mr Schuessler has more than 30 years of U.S. and international markets experience, having
previously worked with Doumak Inc., The Campbell Soup Company, Procter and Gamble.
As at the date of this report, the Company does not have an Audit, Remuneration or Nomination
Committee of the Board of Directors. The full Board, therefore, assumes the responsibilities of
these committees. As the Company develops, these committees may be established.
Directorships of other listed companies during the past three years
Name
Company
Ceased
Mr N Bolton
Keybridge Capital Limited
Current
Mr J Patton
Keybridge Capital Limited
Aurora Funds Management Limited, as Responsible
Entity of Aurora Global Income Trust 1
Metgasco Limited
Current
Resigned 22
November 2023
Mr A Ranger
No other directorships
-
Mr S Hobbs
No other directorships
-
1 Aurora Global Income Trust was delisted from ASX on 29 August 2023
Interests in the shares and options of the Company
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DIRECTORS’ REPORT
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DIRECTORS (continued)
As at the date of this report, the Directors (including their personal related parties) held the
following ordinary shares, options and rights over ordinary shares in the Company as set out
below.
Name
Number of
Ordinary Shares
Number of Options
Number of Rights
Mr N Bolton 1
-
-
-
Mr J Patton 2
26,526,643
-
-
Mr A Ranger
-
-
-
Mr S Hobbs
-
-
-
Total
26,526,643
-
-
1
Mr N Bolton disclosed in Appendix 3Y dated 12 May 2022 that he ceases to hold relevant interest in YOW
securities held by Keybridge Capital Limited pursuant to section 608(1) of the Corporations Act.
2
Indirectly held – Aurora Funds Management Limited in its capacity as responsible entity for HHY Fund.
COMPANY SECRETARY
Mr John Patton (appointed 31 August 2024)
Qualifications: B.Ec, CA (CAA), F Fin
Mr Patton is a chartered accountant with over 35 years of professional services and industry
experience. He was previously a Partner with Ernst & Young in the Transactions Advisory
Services division. Mr Patton has senior executive and extensive corporate finance credentials,
having been involved in over 150 corporate transactions.
Mr Neville Bassett AM (retired 31 August 2024)
Qualifications: BCom, FCA
Mr Bassett is a chartered accountant with more than 30 years of experience. He has been
involved with a diverse range of Australian public listed companies in directorial, company
secretarial and financial roles.
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DIRECTORS’ REPORT
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SENIOR EXECUTIVES
Mr Leo Valle
US Country Manager (appointed on 1 September 2023)
Mr Valle is a senior operations executive with extensive global experience in transforming
programs from concept to inventory. Over the years, he has held various roles in companies
such as Warner Lambert, Pfizer, Cadbury, Avon, Bombril and Mondelez. With a career spanning
multiple countries and fluency in three languages, Mr Valle has a deep understanding of diverse
cultures and business strategies.
Mr Jarrod Milani
AUS Country Manager (appointed on 9 October 2023)
Mr Milani has over 15 years of experience across FMCG and retail which gives him the ability to
manage ongoing relationships with suppliers, customers, and manufacturers to help the Group
meet its strategic objectives. He co-founded Forbidden Foods (ASX: FFF) and has previously
worked at Coles in various marketing-related roles including trade planning, growth projects,
eCommerce, and supplier engagement.
Mr Wayne Brekke
Chief Financial Officer (retired on 29 September 2023)
Qualifications: BBA, MBA Finance, CPA
Mr Brekke is a senior finance executive with over 30 years of broad US and international finance
experience. Mr Brekke has held extensive finance leadership positions in food, consumer
products and manufacturing with global companies such as, McDonald’s, Kraft Foods and AC
Nielsen.
Ms Cynthia Thayer
Chief Marketing Officer (retired on 5 June 2024)
Qualifications: BA
Ms Thayer has over 25 years of marketing expertise in key areas including brand architecture
development, market research, consumer packaged goods (CPG) advertising across traditional
and digital channels, retail and shopper marketing, licensing, toy design and new product
development. Ms Thayer also has broad marketing expertise in food, consumer products,
manufacturing and advertising agencies with the Chamberlain Group, TPN, Flair
Communications, Creata and the Marketing Store.
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DIRECTORS’ REPORT
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PRINCIPAL ACTIVITY
Yowie Group Limited is a beloved Australian brand and the leader in the USA for fully enclosed
surprise-inside chocolate treats. Our mission is to foster education about the natural world
through engaging consumer products that inspire learning and curiosity. In addition to our core
Yowie chocolate line, we have expanded into brand licensing with iconic names such as the NBA
(National Basketball Association), Bluey, NRL, and AFL. We are proud to own the Ernest Hillier
brand and factory, Australia’s oldest chocolate maker, further strengthening our commitment
to quality and heritage. Our vision is to continue growing our presence in the US, Australia, and
New Zealand, with plans for further international expansion.
OPERATING AND FINANCIAL REVIEW
(expressed in US Dollars, unless stated otherwise)
During the financial year, the Group continued to focus on building a strong sales and
distribution network both in the US and ANZ markets, with some updates below.
Sales and Distribution
• Group net sales for the year ended 30 June 2024 were $14.69 million, 11% higher than
the previous corresponding period. This was primarily due to Easter seasonal sales in
Australia, with over 10 different SKUs across our own Yowie brand and licensed brands,
including AFL, NRL and Bluey. Although the seasonal sales in Australia increased the
Group’s net sales, it increased the Group’s net loss for the year as promotional claims and
other selling costs exceeded initial estimates, including a poor Easter seasonal sales result
across all segments of the Australian retail landscape
• The Group remains committed to driving profitable sales growth through increased
distribution in both the US and Australia, expanding product offerings and developing
effective marketing and merchandising programs across key trade channels.
US
• Our US team has been focused on renewing their go-to-market strategy. This includes
finding new channels and markets, improving retail sales programs, and enhancing the
sales tools with the national sales broker network.
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DIRECTORS’ REPORT
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OPERATING AND FINANCIAL REVIEW (continued)
Sales and Distribution (continued)
• Yowie continued expanding its product offerings by introducing 2 new SKUs in the US:
1) YowiePop - a naturally flavoured 3D lollipop which can be dipped in a sour powder
and comes with a surprise-inside toy.
2) Giant Yowie – a half-pound version of our Yowie Surprise-Inside chocolate product,
with 2 surprise toys inside each Giant Yowie.
• Innovation remains a huge opportunity for Yowie North America given its access to
retailers nationally.
The Group secured non-exclusive licensing agreements to develop, manufacture and sell
confectionery lines containing National Basketball Association (NBA) themed Yowie toys
in the USA, Australia and New Zealand through to 30 September 2026.
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DIRECTORS’ REPORT
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OPERATING AND FINANCIAL REVIEW (continued)
Sales and Distribution (continued)
Australia
• In Australia, Yowie secured tier 1 brand merchandising agreements with Australian
Football League (AFL), Australian Rugby League (NRL) and BBC Studios Australia Pty Ltd
for the number 1 Australian Childrens TV show – Bluey.
Under these merchandising agreements, Yowie is permitted to design, manufacture,
promote and distribute seasonal confectionary in the key trading periods of Easter and
Christmas.
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DIRECTORS’ REPORT
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OPERATING AND FINANCIAL REVIEW (continued)
Acquisition of Ernest Hillier
• In August 2023, Yowie announced the acquisition of the Ernest Hillier chocolate business
for $0.24 million (AUD 0.375 million). Ernest Hillier is Australia’s first chocolate
manufacturer and oldest privately owned chocolatier, established in 1914.
• During the year, Yowie invested capital in improving the Ernest Hillier facility to an
industry acceptable operating standard, satisfying strict employee safety, food safety and
customer requirements. Multiple production runs for a tier 1 client were completed and
parts of our licensed Bluey range were produced in this facility.
Takeover Bid
• On 29 December 2023, Keybridge Capital Limited (“KBC”) announced an off-market
takeover bid for all the ordinary shares in Yowie Group Limited for cash consideration of
AUD 3.4 cents per share, with the bid closing on 26 April 2024. Acceptances received
under the bid resulted in KBC’s relevant interest in the Group increasing to 78.359%.
Corporate
• On 17 May 2024, the following appointments were made to the leadership team:
- Nicholas Bolton was appointed as Global Chief Executive Officer and Managing
Director of the Group;
- John Patton was appointed as Executive Chairman;
- Andrew Ranger was appointed as Executive Director; and
- Scott Hobbs remained as an independent Non-Executive Director.
The newly appointed senior management team have conducted a thorough cost review
of the business at the end of the financial year. As previously announced, the result of
this review has removed approximately $2.5 million of annualised costs from the business.
There are expected to be further cost savings achieved by eliminating negative margin
seasonal products from the offering suite.
• During the year, Mark Schuessler (Global CEO) and Wayne Brekke (Global CFO) retired
from the Yowie leadership.
• In North America, Leonidas Valle has been promoted from Vice President of Supply Chain
Operations to US Country Manager. Prior to Yowie, Leonidas was the Business
Development Director – Gums & Candy at Mondelēz International.
• In Australia, Jarrod Milani had been appointed as Country Manager. Jarrod was previously
the Chief Operating Officer at Forbidden Foods (FFF.ASX) and prior to that had various
marketing roles at Coles Group (ASX: COL). Jarrod is tasked with scaling the Yowie sales in
Australia, integrating the newly acquired Ernest Hillier operation into Yowie Group and
realising the full potential of the acquisition.
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DIRECTORS’ REPORT
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OPERATING AND FINANCIAL REVIEW (continued)
Financial Overview
• The loss for the Group after providing for income tax was $2.64 million, compared to a
loss of $0.1 million in the previous year. A key reason for this result was due to losses
generated from the Australian seasonal sales as described above and operating losses
experienced by the newly acquired Ernest Hillier facility, with significant upgrades having
been implemented in critical areas including chocolate moulding, panning, enrobing,
bagging and jarring. With these improvements in place, the facility is actively onboarding
new clients in preparation for the upcoming peak production Christmas and Easter
seasons.
The loss last year also included the reversal of a prior period impairment of $1.05 million,
mostly related to manufacturing equipment which was previously impaired in FY2020.
• The net assets of the Group was $6.8 million at 30 June 2024, compared to $9.4 million in
the prior year. The reduction in net assets was attributable to the cash burn associated
with the operational losses described above.
• As at 30 June 2024 the Group’s consolidated cash position was $1.6 million (30 June 2023:
$7.4 million).
• The Group’s operating cash outflow for the year ended 30 June 2024 was $2.87 million,
compared to an outflow of $1.33 million in the prior year. The reason for this was
attributable to the same reasons described in the ‘Loss after income tax’ section above.
• The Group’s investing cash outflow included the upfront asset acquisition cost of the
Ernest Hillier chocolate business for $0.24 million (AUD 0.375 million).
• During the year, the Group provided a loan to the liquidator of PR Finance Group Limited
(“PRFG”) of AUD 1.5 million with interest rate of 12% p.a. to be utilised as cash security
for its recovery actions. Keybridge Capital Limited (“KBC”) has agreed to indemnify Yowie
Group Limited against any loss for the provision of this loan to PRFG. The initial term of
the loan is for a period of up to 4 months, subject to further agreement between the
parties.
The Group also entered into a reciprocal loan agreement with KBC where Yowie may
borrow a maximum principal up to AUD 5,000,000 from KBC, with interest rate of 10%
p.a., for its working capital purposes, or to earn a greater return on cash assets from time
to time, where funds are deposited with KBC at the 10% pa rate and limit. The loan is
unsecured and payable at call with no set maturity date. At the end of June 2024, Yowie
has USD 1.1m on deposit with KBC earning 10% p.a.
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DIRECTORS’ REPORT
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OPERATING AND FINANCIAL REVIEW (continued)
Financial Overview (continued)
• Capital, funding and liquidity are managed at the corporate level. A summary of the cash
flows for the Group is as follows:
Cash outflows used in:
US$
- Operating activities
(2.87 million)
- Investing activities
(2.84 million)
- Financing activities
(0.11 million)
Net cash outflows for the year
(5.82 million)
Opening cash
7.4 million
Effect of foreign exchange movements
(0.002 million)
Closing cash and cash equivalents balance
1.58 million
Material Business Risks
The material business risks faced by the Group which are likely to impact the financial prospects
of the Group include:
• Economic uncertainty – the uncertain macroeconomic conditions negatively impacted
consumer purchasing decisions on non-essential food items, including Yowie’s products,
resulting in the Group experiencing negative operating cash flows during the current
financial year. Should this trend continue, the Group is likely to further deplete its cash
reserves. The Group remains committed to driving profitable sales growth through
increased retail distribution in both the US and AUS; expanding product offerings; and
being competitive across all trade channels. Recent efforts to drive sales growth includes
obtaining non-exclusive licensing agreements to develop, manufacture and sell seasonal
confectionery products for Australian Football League (AFL), National Rugby League (NRL),
Bluey Seasonal Confectionery and NBA in the US.
• Supply chain disruption – the Group sources products and materials from some key
suppliers. The Group also has a contract manufacturing arrangement to produce Yowie
products in the United States. Any disruption to this supply chain dynamic could have a
material impact on the Group’s financial results. The Group continues to identify and
establish relationships with multiple suppliers to minimise any potential disruptions.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
In the opinion of the Directors, there were no matters that significantly affected the state of
affairs of the Group during the financial year, other than those referred to in the review of
operations.
DIVIDENDS
The Directors recommend that no amount be paid by way of dividend. No dividend has been
paid or declared since the end of the financial year.
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DIRECTORS’ REPORT
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DIRECTORS' MEETINGS
The number of meetings attended by each Director during the year was as follows:
Director
Eligible to Attend
Attended
Mr N Bolton
9
9
Mr J Patton
9
9
Mr A Ranger
1
1
Mr S Hobbs
9
9
Mr S Taylor
8
8
Mr M Schuessler
1
0
SHARES UNDER OPTION
There were no unissued ordinary shares under options or rights outstanding at 30 June 2024.
Shares issued as a result of the exercise of options or rights
No shares were issued as a result of the exercise of options during the year ended 30 June 2024,
including the period up to the date of this report.
10,800,000 shares were issued to Sean Taylor as a result of the vesting of service rights during
the year ended 30 June 2024.
EVENTS SUBSEQUENT TO BALANCE DATE
In July and November 2024, the Group provided additional loans of A$1,350,000 and A$750,000
respectively to Keybridge Capital Limited under the reciprocal loan agreement signed during the
year ended 30 June 2024. Refer to Note 11 for further details on the loan agreement.
Apart from the matters discussed above, no other matter or circumstance has arisen since 30
June 2024 that has significantly affected, or may significantly affect the Group’s operations, the
results of those operations, or the Group’s state of affairs in future financial years.
LIKELY DEVELOPMENTS
Information on likely developments in the operations of the Group is contained within the
operating and financial review.
ENVIRONMENTAL REGULATION
The Group is not subject to any significant environmental regulation under the United States
and Australian Commonwealth Federal or State law.
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DIRECTORS’ REPORT
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REMUNERATION REPORT (audited)
This Remuneration Report outlines the Director and Executive remuneration arrangements of
the Company and the Group in accordance with the requirements of the Corporations Act 2001
and its Regulations. For the purposes of this report, Key Management Personnel (KMP) of the
Group are defined as those persons having authority and responsibility for planning, directing
and controlling the major activities of the Company and the Group, directly or indirectly,
including any Director (whether Executive or otherwise) of the parent company.
The Directors present the Yowie Group Limited FY2024 remuneration report, outlining key
aspects of our remuneration policy and framework, and remuneration awarded this year.
The report is structured as follows:
(a)
Key management personnel (KMP) covered in this report
(b)
Remuneration policy and link to performance
(c)
Elements of remuneration
(d)
Remuneration expenses for KMP
(e)
Contractual arrangements for KMP
(f)
Equity instrument disclosures relating to Key Management Personnel
(a)
Key Management Personnel (KMP) covered in this report
Name
Position
Mr Nick Bolton
Managing Director and Chief Executive Officer (appointed on 17 May
2024
Non-Executive Director (retired on 17 May 2024)
Mr John Patton
Executive Chairman (appointed on 17 May 2024)
Non-Executive Director (retired on 17 May 2024)
Mr Andrew Ranger
Executive Director (appointed on 17 May 2024)
Mr Scott Hobbs
Non-Executive Director
Mr Sean Taylor
Executive Chairman (retired on 18 April 2024)
Mr Mark Schuessler
Chief Executive Officer (retired on 24 July 2023)
Managing Director (retired on 24 July 2023)
Mr Leo Valle
US Country Manager (appointed on 1 September 2023)
Mr Jarrod Milani
AUS Country Manager (appointed on 9 October 2023)
Mr Wayne Brekke
Chief Financial Officer (retired on 29 September 2023)
Ms Cynthia Thayer
Chief Marketing Officer (retired on 5 June 2024)
(b)
Remuneration policy and link to performance
The Board of Directors is responsible for determining and reviewing compensation
arrangements for the Directors and Executive officers. The Board will assess the appropriateness
of the nature and amount of emoluments of such officers on a periodic basis by reference to
relevant employment market conditions with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high-quality Board and Executive team.
From time to time, the Board engages an external remuneration consultant to assist with
reviewing the Group’s remuneration policy.
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DIRECTORS’ REPORT
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REMUNERATION REPORT (audited) (continued)
(b)
Remuneration policy and link to performance (continued)
In particular, the Board aims to ensure that remuneration practices are:
•
competitive and reasonable, enabling the Company to attract and retain key talent;
•
aligned to the Company’s strategic and business objectives and the creation of
shareholder value;
•
transparent and easily understood; and
•
acceptable to shareholders.
To assist in achieving these objectives, the Board has linked the nature and amount of executive
KMP remuneration to the Company’s financial and operational performance.
Executive KMP are those directly accountable for the operational management and strategic
direction of the Company.
Having regard to the number of members currently comprising the Company’s Board and the
stage of the Company’s development, the Company does not have a separately established
remuneration committee. The functions that would be performed by a remuneration committee
are currently performed by the full Board.
Remuneration framework
Element
Purpose
Fixed
annual
remuneration
(FR)
Provide competitive market salary including superannuation and non-
monetary benefits.
Short-term
incentives
(STI)
Reward available for meeting pre-determined performance hurdles within a
12-month time period.
Performance pay is ‘at risk’ such that if performance hurdles are not met, the
payment is not made, other than at the discretion of Directors to cover
unforeseen circumstances.
Performance pay may be paid in cash or in the form of share-based
compensation at the Board’s absolute discretion through participation in the
annual grants of service rights or performance rights where vesting is subject
to performance hurdles.
Long-term
incentives
(LTI)
Performance hurdles are aligned to long-term shareholder value.
Performance rights are ‘at risk’ such that if performance hurdles are not met,
the performance rights do not vest.
The long-term incentive once determined will be paid in cash or awarded as
fully vested service rights.
Performance rights are paid in the form of share-based compensation.
Service Rights
One-off issuance subject to Board’s discretion to attract and retain high calibre
employee. Vesting of rights subject to Employee remaining employed by the
Company on the vesting date.
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REMUNERATION REPORT (audited) (continued)
(b)
Remuneration policy and link to performance (continued)
Balancing short-term and long-term performance
Annual incentives are set at a maximum of 100% of fixed remuneration, to drive performance
without encouraging undue risk-taking. Long-term incentives are assessed over a two or three
year period and are designed for the achievement of long-term growth in shareholder returns.
Assessing performance
The Board is responsible for assessing performance against KPIs and determining the STI and LTI
to be paid. To assist in this assessment, the Board receives detailed reports on performance from
management, which are based on independently verifiable data such as financial measures,
market share and data from independently run surveys.
Minimum shareholding and holding conditions
All Directors and employees are encouraged to own shares in the Company. The Company does
not have a formal minimum shareholding policy or mandatory holding condition on awarded
shares. However, it is important to note that the nominal value of share rights is determined at
the commencement of the performance period motivating executives to hold shares and grow
shareholder value.
Use of remuneration consultants
On an as-needed basis, the Company may engage a remuneration consultant to provide various
services in relation to executive KMP remuneration. During the year ended 30 June 2024, the
Company has not engaged any remuneration consultants, however, has continued to adopt the
historical remuneration framework.
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REMUNERATION REPORT (audited) (continued)
(c)
Elements of remuneration
(i)
Fixed annual remuneration (FR)
Fixed remuneration consists of a base remuneration package, which includes Directors’ fees (in
the case of Directors), salaries, consulting fees, employer contributions to superannuation funds
and non-monetary benefits such as health insurance and tax advisory services.
Fixed remuneration levels for Directors and Executive officers will be reviewed annually, or on
promotion by the Board through a process that considers the individual’s personal development,
achievement of key performance objectives for the year, industry benchmarks wherever
possible and CPI data.
Total remuneration for Non-Executive Directors is determined by resolution of shareholders.
The Board determines actual payments to Directors and reviews their remuneration annually,
based on market relativities and the duties and accountabilities of the Directors. The maximum
available aggregate remuneration approved for Non-Executive Directors is A$200,000. Non-
Executive Directors do not receive any other retirement benefits other than a superannuation
guarantee contribution required by government regulation, which was 11% of their fees for the
year ended 30 June 2024.
Non-Executive Directors may provide specific consulting advice to the Company upon direction
from the Board. Remuneration for this work is made at market rates. No such advice was
provided in the year ended 30 June 2024.
(ii)
Short-term incentives (STI)
Feature
Description of STI
Max opportunity
100% of fixed remuneration or as stipulated in the respective employment contract.
Performance metrics
The STI metrics align with our strategic priorities of market competitiveness, achieving
financial budget, operational excellence, shareholder value and fostering talented and
engaged people.
Achievement of award
and Board’s discretion
The Board has discretion to adjust remuneration outcomes up or down to prevent any
inappropriate reward outcomes, including reducing (down to zero, if appropriate) any
deferred STI award.
Delivery of STI
100% of the STI award is paid in cash or equity, subject to meeting vesting conditions of
performance hurdles. The mode of delivery is at the discretion of the Board and, where
applicable, subject to shareholders’ approval.
Exercise price
Exercise price of options is determined based on premium to share price at which the
company’s shares are traded on the Australian Securities Exchange on date of the grant.
Exercise price of performance rights are generally nil.
Forfeiture and
termination
Options and performance rights will lapse if performance conditions are not met. Options
and performance rights will be forfeited on cessation of employment unless the Board
determines otherwise in its sole and absolute discretion, e.g. in the case of retirement due
to injury, disability, death or redundancy.
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DIRECTORS’ REPORT
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REMUNERATION REPORT (audited) (continued)
(c)
Elements of remuneration (continued)
(iii)
Long-term incentives (LTI)
Feature
Description of LTI
Max opportunity
100% of fixed remuneration or as stipulated in the respective employment contract.
Performance metrics
The LTI metrics align with our strategic priorities of market competitiveness, achieving
financial budget, operational excellence and long-term shareholder value.
Delivery of LTI
100% of the LTI award is paid in cash or equity, subject to meeting vesting conditions of
performance hurdles. The mode of delivery is at the discretion of the Board and subject to
shareholders’ approval.
Exercise price
Exercise price of options is determined based on premium to share price at which the
company’s shares are traded on the Australian Securities Exchange on date of the grant.
Exercise price of service rights and performance rights are generally nil.
Forfeiture and
termination
Options and performance rights will lapse if performance conditions are not met. Options
and performance rights will be forfeited on cessation of employment unless the Board
determines otherwise in its sole and absolute discretion, e.g. in the case of retirement due
to injury, disability, death or redundancy.
(vi)
Service rights (SR)
Feature
Description of SR
Max opportunity
One off issuance subject to Board’s discretion to attract and retain high calibre employee.
Performance metrics
Subject to employee remains employed by the Company on the vesting date.
Delivery of SR
100% of the SR award is paid in cash or equity, subject to meeting vesting conditions of
performance hurdles. The mode of delivery is at the discretion of the Board and subject to
shareholders’ approval.
Exercise price
Exercise price of options is determined based on premium to share price at which the
company’s shares are traded on the Australian Securities Exchange on date of the grant.
Exercise price of service rights and performance rights are generally nil.
Forfeiture and
termination
Options and service rights will lapse if performance conditions are not met. Options and
performance rights will be forfeited on cessation of employment unless the Board
determines otherwise in its sole and absolute discretion, e.g. in the case of retirement due
to injury, disability, death or redundancy.
For personal use only
DIRECTORS’ REPORT
18 | Page
REMUNERATION REPORT (audited) (continued)
(c)
Elements of remuneration (continued)
Company performance
The table below shows the performance of the Company for the past five financial years.
FY2024
FY2023
FY2022
FY2021
FY2020
Total Income (US$)
14,687,885
13,285,268
15,605,658
12,578,381
11,026,691
Net Income / (Loss) (US$)
(2,640,430)
(102,947)
839,506
894,956
(8,132,605)
Return of Capital (US$)
-
-
-
6,066,311
2,981,926
Closing Share Price (A$)
0.027
0.026
0.046
0.041
0.035
Number of Shares
229,367,901
218,567,901
218,567,901
218,567,901
218,296,162
Market Capitalisation (A$)
6,192,933
5,682,765
10,054,123
8,961,284
7,640,366
(d)
Remuneration expenses for KMP
Remuneration packages may contain the following key elements:
a) Short-term benefits, including salary and fees, bonus and other benefits;
b) Post-employment benefits, including superannuation; and
c) Share-based payments, including options and rights granted as remuneration.
For personal use only
DIRECTORS’ REPORT
19 | Page
REMUNERATION REPORT (audited) (continued)
(d)
Remuneration expenses for KMP (continued)
The following table discloses the remuneration of the key management personnel during the financial year:
FY2024
Short-Term Benefits
Post-
Employment
Superannuation
Share-based Payments 1
Other
Services 2
Termination
Payments
Total
Performance
based
Salary and
Fees
Bonus
Performance-
based
Service-
based
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)
(%)
Directors
Mr N Bolton 3
94,520
-
6,944
-
-
-
-
101,464
-
Mr J Patton 3
59,327
-
6,526
-
-
16,598
-
82,451
-
Mr A Ranger
18,258
-
2,008
-
-
-
-
20,266
-
Mr S Hobbs 3
30,731
-
3,380
-
-
-
-
34,111
-
Mr S Taylor
-
-
-
-
71,797
-
-
71,797
-
Mr M Schuessler
18,612
-
-
-
-
-
107,533
126,145
-
Senior Executives
Mr L Valle 4
215,500
-
-
-
-
-
-
215,500
-
Mr J Milani
67,201
-
7,392
-
-
-
-
74,593
-
Mr W Brekke
57,028
-
-
-
-
-
-
57,028
-
Ms C Thayer
214,895
-
-
-
-
-
37,100
251,995
-
Total
776,072
-
26,250
-
71,797
16,598
144,633
1,035,350
-
1
Calculated in accordance with AASB 2 Share-based Payments. Refer to Note 17.
2
This refers to remuneration for additional services performed by KMP.
3
The remuneration for N Bolton, J Patton and S Hobbs were revised on 17 May 2024 following additional responsibilities they have assumed.
Refer to section (e) below for the details of their new remuneration package.
4
Mr L Valle’s remuneration reflected his salary when he became KMP starting from 1 September 2023.
r personal use only
DIRECTORS’ REPORT
20 | Page
REMUNERATION REPORT (audited) (continued)
(d)
Remuneration expenses for KMP (continued)
FY2023
Short-Term Benefits
Post-
Employment
Superannuation
Share-based Payments 1
Other
Services
Termination
Payments
Total
Performance
based
Salary and
Fees
Bonus
Performance-
based
Service-
based
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)
(%)
Directors
Mr S Taylor
-
-
-
-
134,955
-
-
134,955
-
Mr M Schuessler
322,600
-
-
-
-
-
-
322,600
-
Mr N Bolton
30,297
-
3,181
-
-
-
-
33,478
-
Mr J Patton
30,297
-
3,181
-
-
-
-
33,478
-
Mr S Hobbs
30,297
-
3,181
-
-
-
-
33,478
-
Senior Executives
Mr W Brekke
207,600
-
-
-
-
-
-
207,600
-
Ms C Thayer
222,600
-
-
-
-
-
-
222,600
-
Total
843,691
-
9,543
-
134,955
-
-
988,189
-
1
Calculated in accordance with AASB 2 Share-based Payments. Refer to Note 17.
r personal use only
DIRECTORS’ REPORT
21 | Page
REMUNERATION REPORT (audited) (continued)
(d)
Remuneration expenses for KMP (continued)
Share-based compensation to key management personnel
The Yowie Employee Incentive Plan (EIP) which had an approval period of three years, expired
on 23 November 2018. In the event that the Company wishes to issue equity securities under an
EIP, a new EIP will need to be approved by shareholders.
No options or rights granted to key management personnel as remuneration during the year.
No options vested, exercised or lapsed during the year.
10,800,000 shares were issued to Sean Taylor as a result of the vesting of service rights during
the year ended 30 June 2024.
(e)
Contractual arrangements for KMP
Remuneration and other terms of employment for Executives are formalised in a service
agreement. The KMP are remunerated on a total fixed remuneration (TFR) basis inclusive of
superannuation and allowances.
Position
Executive
Total Annual Fixed
Remuneration
Contract
Duration
Termination Clause
Managing Director
and Chief Executive
Officer
Nick Bolton
US$566,150 + maximum
superannuation contribution
in a financial year
3 years
3 months’ notice
Executive Chairman
John Patton
US$270,833 + maximum
superannuation contribution
in a financial year
3 years
3 months’ notice
Executive Director
Andrew Ranger
A$200,000
Ongoing
1 months notice
Non-Executive
Director
Scott Hobbs
A$60,000 + superannuation
Ongoing
Duration of the contract
is ongoing
US Country
Manager
Leo Valle
US$258,600
Ongoing
14 days’ notice
AUS Country
Manager
Jarrod Milani
A$140,000 + superannuation
Ongoing
4 weeks’ notice
For personal use only
DIRECTORS’ REPORT
22 | Page
REMUNERATION REPORT (audited) (continued)
(f)
Equity Instrument Disclosures relating to Key Management Personnel
(i)
Option Holdings
No options over ordinary shares in the Company were held during the financial year by any of
the KMP and their personally related parties.
(ii)
Rights Holdings
The number of performance rights and service rights in the Company held during the financial
year by each KMP, including their personally related parties, is set out in the following table.
Name
Balance at
Start of
Year
Granted as
Remuneration
Exercised
Lapsed/
Forfeited
Balance at End
of Year
(No)
(No)
(No)
(No)
(No)
Directors
Mr N Bolton
-
-
-
-
-
Mr J Patton
-
-
-
-
-
Mr A Ranger
-
-
-
-
-
Mr S Hobbs
-
-
-
-
-
Mr S Taylor
10,800,000
-
(10,800,000)
-
-
Mr M Schuessler
-
-
-
-
-
Senior Executives
Mr L Valle
-
-
-
-
-
Mr J Milani
-
-
-
-
-
Mr W Brekke
-
-
-
-
-
Ms C Thayer
-
-
-
-
-
Total
10,800,000
-
(10,800,000)
-
-
For personal use only
DIRECTORS’ REPORT
23 | Page
REMUNERATION REPORT (audited) (continued)
(f)
Equity Instrument Disclosures relating to Key Management Personnel (continued)
(iii)
Share Holdings (Ordinary Shares)
The number of shares in the Company held during the financial year by each KMP, including their
personally related parties, is set out in the following table. No shares were granted during the
reporting year as compensation.
Name
Balance at
Start of
Year
Acquisition
Disposal
Exercise of
Options/
Rights
Other
Changes 1
Balance at
End of Year
(No)
(No)
(No)
(No)
(No)
(No)
Directors
Mr N Bolton 2
-
-
-
-
-
-
Mr J Patton 3
26,526,643
-
-
-
-
26,526,643
Mr A Ranger
-
-
-
-
-
-
Mr S Hobbs
-
-
-
-
-
-
Mr S Taylor
1,375,212
499,013
-
10,800,000
(12,674,225)
-
Mr M Schuessler
1,208,248
-
-
-
(1,208,248)
-
Senior Executives
Mr L Valle 4
-
142,511
(142,511)
-
-
-
Mr J Milani
-
130,000
-
-
-
130,000
Mr W Brekke
-
-
-
-
-
-
Ms C Thayer
-
-
-
-
-
-
Total
29,110,103
771,524
(142,511)
10,800,000
(13,882,473)
26,656,643
1
This movement refers to the shareholding of KMP at the commencement or resignation during the year.
Disclosure of a KMP’s equity holding is not required subsequent to his resignation.
2
Mr N Bolton disclosed in Appendix 3Y dated 12 May 2022 that he ceases to hold relevant interest in YOW
securities held by Keybridge Capital Limited pursuant to section 608(1) of the Corporations Act.
3
Mr Patton indirectly held 26,526,643 shares through Aurora Funds Management Limited in its capacity as
responsible entity for HHY Fund.
4
Mr L Valle’s shareholding pertains to his holdings prior to being designated as a KMP in the current financial
year.
Loans to and other transactions with key management personnel
There was a loan receivable from Keybridge Capital Limited, the related party of N Bolton and J
Patton, of US$1,100,715 (A$1,650,000) as of 30 June 2024 (2023: Nil). Refer to Note 11 of the
financial statements for details.
There was a loan receivable from the liquidator of PR Finance Group Limited (“PRFG”) of US$1
million (A$1.5 million) as of 30 June 2024 with interest rate of 12% p.a. to be utilised as cash
security for its recovery actions (2023: Nil). Keybridge Capital Limited (“KBC”), the related party
of N Bolton and J Patton has agreed to indemnify the Group against any loss for the provision of
this loan to PRFG. Refer to Note 11 of the financial statements for details.
For personal use only
DIRECTORS’ REPORT
24 | Page
REMUNERATION REPORT (audited) (continued)
There was a reimbursement of US$11,567 paid to Keybridge Capital Limited relating to past legal
costs incurred by Keybridge in relation to the appointment of N Bolton and J Patton to Yowie’s
Board in 2020 and 2021.
END OF AUDITED REMUNERATION REPORT
For personal use only
DIRECTORS’ REPORT
25 | Page
INDEMNITY AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, the Company maintained an insurance policy which indemnifies the
Directors and Officers of Yowie Group Limited in respect of any liability incurred in connection
with the performance of their duties as Directors or Officers of the Company to the extent
permitted by the Corporations Act 2001. The Company's insurers have prohibited disclosure of
the amount of the premium payable and the level of indemnification under the insurance
contract.
INDEMNITY AND INSURANCE OF AUDITOR
The Company has not, during or since the end of the financial year, indemnified or agreed to
indemnify the auditor of the Company or any related entity against a liability incurred by the
auditor.
NON-AUDIT SERVICES
Details of amounts paid or payable to the auditor for non-audit services provided during the
year are outlined in Note 21 to the financial statements. The Directors are satisfied that the
provision of non-audit services is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services do not compromise the auditor’s
independence as all non-audit services have been reviewed to ensure that they do not impact
the integrity and objectivity of the auditor and none of the services undermine the general
principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional
Accountants issued by the Accounting Professional & Ethical Standards Board.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration is included on page 26 of the financial report.
Signed in accordance with a resolution of the Directors.
John Patton
Executive Chairman
12 December 2024
For personal use only
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the
members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm
which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
RSM Australia Partners
Level 32 Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Yowie Group Limited for the year ended 30 June 2024, 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.
RSM AUSTRALIA
Perth, WA
TUTU PHONG
Dated: 12 December 2024
Partner
For personal use only
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
27 | Page
Note
Consolidated
2024
2023
US$
US$
Sale of goods
14,687,885
13,285,268
Cost of sales
(8,472,625)
(6,867,906)
Gross profit
6,215,260
6,417,362
Other income
4
207,878
153,869
Selling and distribution
(5,380,186)
(4,090,618)
Marketing
(877,102)
(965,402)
Administration
5
(2,594,313)
(2,523,163)
Finance costs
(17,838)
-
Foreign exchange losses
(17,639)
(76,539)
Write-down of inventory
10
(301,358)
(66,383)
Reversal of plant and equipment impaired in prior years
12
130,474
1,052,115
Loss before income tax
(2,634,824)
(98,759)
Income tax expense
6
(5,606)
(4,188)
Loss after income tax for the year
(2,640,430)
(102,947)
Other comprehensive income for the year
Items that may be reclassified subsequently to profit or loss
Movement in foreign currency translation reserve
19,041
11,021
Total comprehensive loss for the year
net of tax attributable to members of the Company
(2,621,389)
(91,926)
Profit per share attributable to members of the Company
Basic loss per share (cents)
7
(1.20)
(0.05)
Diluted loss per share (cents)
7
(1.20)
(0.05)
This consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes to the financial statements.
For personal use only
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
28 | Page
Note
Consolidated
2024
2023
US$
US$
Current Assets
Cash and cash equivalents
18(a)
1,577,918
7,401,682
Trade and other receivables
8
2,201,931
1,237,618
Prepayments
9
1,126,372
798,659
Inventories
10
3,708,782
3,531,557
Total Current Assets
8,615,003
12,969,516
Non-Current Assets
Loan receivables
11
2,131,588
-
Plant and equipment
12
402,872
192,953
Intangible assets
13
235,203
123,378
Right-of-use assets
14
208,966
-
Other non-current assets
91,679
-
Total Non-Current Assets
3,070,308
316,331
Total Assets
11,685,311
13,285,847
Current Liabilities
Trade and other payables
15
4,552,114
3,859,307
Provisions
62,698
57,117
Lease liabilities
211,183
-
Unearned income
352
-
Total Current Liabilities
4,826,347
3,916,424
Non-Current Liabilities
Lease liabilities
39,133
-
Total Non-Current Liabilities
39,133
-
Total Liabilities
4,865,480
3,916,424
Net Assets
6,819,831
9,369,423
Equity
Issued capital
16(a)
46,950,875
46,687,677
Reserves
16(d)
(324,065)
(90,060)
Accumulated losses
(39,806,979)
(37,228,194)
Total Equity
6,819,831
9,369,423
This consolidated statement of financial position should be read in conjunction
with the accompanying notes to the financial statements.
For personal use only
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
29 | Page
Consolidated
Note
Issued
capital
Share-
based
payment
reserve
Foreign
currency
translation
reserve
Accumulated
losses
Total
US$
US$
US$
US$
US$
Balance as at 1 July 2022
46,687,677
2,120,570
(2,356,606)
(37,125,247)
9,326,394
Loss for the year
-
-
-
(102,947)
(102,947)
Other comprehensive income
Foreign currency translation
-
-
11,021
-
11,021
Total comprehensive income
for the year
-
-
11,021
(102,947)
(91,926)
Transactions with owners
recorded directly in equity
Share-based payments
17(d)
-
134,955
-
-
134,955
Balance as at 30 June 2023
46,687,677
2,255,525
(2,345,585)
(37,228,194)
9,369,423
Balance as at 1 July 2023
46,687,677
2,255,525
(2,345,585)
(37,228,194)
9,369,423
Loss for the year
-
-
-
(2,640,430)
(2,640,430)
Other comprehensive income
Foreign currency translation
-
-
19,041
-
19,041
Total comprehensive income
for the year
-
-
19,041
(2,640,430)
(2,621,389)
Transactions with owners
recorded directly in equity
Conversion of service rights
16(b)
263,198
(263,198)
-
-
-
Share-based payments
17(d)
-
71,797
-
-
71,797
Expired service rights
-
(61,645)
-
61,645
-
Balance as at 30 June 2024
46,950,875
2,002,479
(2,326,544)
(39,806,979)
6,819,831
This consolidated statement of changes in equity should be read in conjunction
with the accompanying notes to the financial statements.
For personal use only
CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE YEAR ENDED 30 JUNE 2024
30 | Page
Note
Consolidated
2024
2023
US$
US$
Cash flow from operating activities
Receipts from customers
13,032,485
12,865,986
Other receipts
11,173
6
Payments to suppliers and employees
(16,012,370)
(14,343,326)
Interest received
116,106
153,863
Interest paid
(12,270)
-
Income taxes paid
(5,606)
(4,188)
Net cash flows used in operating activities
18(b)
(2,870,482)
(1,327,659)
Cash flow from investing activities
Loan to other entity
(2,101,837)
-
Payments for plant and equipment
(368,516)
(28,990)
Payments for intangible assets
(282,098)
(73,091)
Payments for security deposit
(91,679)
-
Refund of deposit for plant and equipment
-
719,794
Net cash outflows used in investing activities
(2,844,130)
617,713
Cash flow from financing activities
Payment of finance lease liabilities
(111,819)
-
Net cash outflows used in financing activities
(111,819)
-
Net decrease in cash and cash equivalents
(5,826,431)
(709,946)
Cash and cash equivalents at beginning of the year
7,401,682
8,177,210
Effect of foreign exchange movements
2,667
(65,582)
Cash and cash equivalents at end of the year
18(a)
1,577,918
7,401,682
This consolidated statement of cash flows should be read in conjunction
with the accompanying notes to the financial statements.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
31 | Page
1.
CORPORATE INFORMATION
Yowie Group Limited (“the Company”) is a public company limited by shares incorporated
and domiciled in Australia, whose shares are publicly traded on the Australian Securities
Exchange.
These financial statements are presented in United States Dollars. The financial report
was authorised for issue by the Directors on 12 December 2024 in accordance with a
resolution of the Directors.
The nature of the operations and principal activities of the Company are described in the
Directors’ Report on page 6.
2.
BASIS OF PREPARATION
The financial statements are a general-purpose financial report which has been prepared
in accordance with the requirements of the Corporations Act 2001 and Australian
Accounting Standards and Accounting Interpretations. The financial statements have
been prepared on a historical cost basis. Yowie Group Limited is a for-profit entity for the
purpose of preparing these financial statements.
The financial statements of the Group also comply with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
Going Concern
The financial statements have been prepared on the going concern basis that
contemplates the continuity of normal business activities and the realisation of assets and
extinguishment of liabilities in the ordinary course of business.
As disclosed in the financial statements, the Group incurred a net loss after tax of
$2,640,430 and had net cash outflows from operating and investing activities of
$2,870,482 and $2,844,130 respectively, for the year ended 30 June 2024.
The Directors believe that there are reasonable grounds to believe that the Group will be
able to continue as a going concern and that it is appropriate to adopt the going concern
basis in the preparation of the financial report, after consideration of the following
factors:
a. The Group has entered into a reciprocal loan agreement with Keybridge Capital
Limited (“KBC”), where Yowie may borrow a maximum principal up to AUD
5,000,000 from KBC, at an interest rate of 10% p.a., for working capital purposes,
or to earn a greater return on cash assets from time to time, where funds are
deposited with KBC at the 10% p.a. rate and limit. The loan is unsecured and
payable at call with no set maturity date. At at 30 June 2024, Yowie has US$1.1
million on deposit with KBC earning 10% p.a.;
b. The Group has received a letter of financial support from its largest shareholder,
Keybridge Capital Limited to provide the necessary financial support for the
Group to continue as a going concern;
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
32 | Page
2.
BASIS OF PREPARATION (continued)
c. The Group may also consider raising additional capital if required; and
d. As previously announced, following the closure of the takeover bid for the
Company, the new management team has conducted a review of the business
operations and has removed approximately US$2.5 million of annualised costs
from the business. There are expected to be further cost savings achieved by
eliminating negative margin seasonal products from the offering suite.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
33 | Page
3.
SEGMENT REPORTING
The Group has only one reportable segment, which relates to the operations of its
confectionery business, with production carried out under a contract manufacturing
arrangement. The net result is presented on a consolidated basis.
Geographic segment
2024
2023
US$
US$
Net sales
United States
11,415,618
11,695,658
Australia
3,272,267
1,589,610
14,687,885
13,285,268
Non-current assets
United States
369,456
316,331
Australia
569,264
-
938,720
316,331
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
34 | Page
3.
SEGMENT REPORTING (continued)
Major customer information
The revenue from major customers set out below arises from the sale of Yowie chocolate
confectionery product.
Consolidated
2024
2023
US$
US$
Major customer 1
3,741,415
3,929,769
% of Total Net Sales
25%
30%
Major customer 2
3,220,540
-
% of Total Net Sales
22%
-
4. OTHER INCOME
Consolidated
2024
2023
US$
US$
Interest income
145,857
153,863
Other income
62,021
6
207,878
153,869
5.
ADMINISTRATION
Consolidated
2024
2023
US$
US$
Administration expenses include:
Employee benefits
1,016,489
1,111,326
Business development and travel
48,005
42,291
Legal, tax, listing, compliance and insurance
767,746
743,777
Share-based payments
71,797
134,955
Depreciation and amortisation
318,639
96,088
Rent and outgoings
163,485
49,401
Lawsuit settlement
10,000
190,000
Other administrative expenses
198,152
155,325
2,594,313
2,523,163
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
35 | Page
6.
TAXATION
(a)
The major components of income tax expense are:
Consolidated
2024
2023
US$
US$
Current income tax expense
5,606
4,188
Adjustments for current tax of prior periods
-
-
Total current tax expense
5,606
4,188
Deferred income tax
Decrease in deferred tax assets
-
-
-
-
Income tax expense reported in the statement of profit
and loss and other comprehensive income
5,606
4,188
(b)
The prima facie tax on operating loss differs from the income tax provided in the
accounts as follows:
Consolidated
2024
2023
US$
US$
(Loss)/profit from ordinary activities before tax
(2,634,824)
(98,759)
Prima facie tax (benefit)/expense on (loss)/profit
at 25%
658,706
24,690
Effect of different tax rates on overseas losses
259,180
(201,930)
DTA on overseas tax losses no longer available
-
(162,394)
Income tax benefit not recognised
(923,492)
335,446
Income tax expense
(5,606)
(4,188)
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
36 | Page
6.
TAXATION (continued)
(c)
Deferred income tax at 30 June relates to the following:
Consolidated
2024
2023
US$
US$
Deferred tax assets
Share issue and acquisition costs
12,755
5,532
Inventory
6,398
(18,984)
Intercompany loans – unrealised foreign exchange losses
969,294
994,181
Provisions and accruals
508,116
543,582
Right-of-use assets
62,579
-
Other
1,171
-
Revenue tax losses
8,973,261
8,012,902
Deferred tax assets used to offset deferred tax liabilities
(949,149)
(875,588)
Deferred tax assets not brought to account 1
(9,584,425)
(8,661,625)
-
-
Deferred tax liabilities
Plant and equipment
52,241
39,772
Other assets
63,161
38,987
Intercompany loans – unrealised foreign exchange gains
833,747
796,829
Deferred tax assets used to offset deferred tax liabilities
(949,149)
(875,588)
-
-
1
Deferred tax assets have not been brought to account to the extent that it is not probable within the
immediate future that taxable profits will be available against which deductible temporary differences
can be utilised. This also applies to deferred tax assets for unused tax losses carried forward.
The Group’s unrecognised tax losses in Australia of US$3,108,870 (tax effect of
US$12,435,478 ) and Hong Kong of US$3,410,432 (tax effect of US$20,669,283) are
available for offset against future profits subject to continuing to meet the relevant
statutory tests. The Parent Company and its Australian subsidiary have formed a tax
consolidated group. Unrecognised tax losses in the US of US$2,453,960 (tax effect of
US$10,473,897 ) can be used for up to 20 years.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
37 | Page
7.
PROFIT OR LOSS PER SHARE
Classification of securities as ordinary shares
The Company has only one category of ordinary shares included in basic earnings per
share.
Classification of securities as potential ordinary shares
There are currently no securities to be classified as dilutive potential ordinary shares on
issue.
Consolidated
2024
2023
Number
Number
Weighted average number of ordinary shares used
in the calculation of basic and diluted earnings per
share
220,810,524
218,567,901
US$
US$
Basic and diluted loss attributable to ordinary
equity holders of the parent
(2,640,430)
(102,947)
Basic and diluted loss per share (cents)
(1.20)
(0.05)
8.
TRADE AND OTHER RECEIVABLES
Consolidated
2024
2023
US$
US$
Current
Trade debtors
2,165,540
1,232,267
GST receivable
36,391
5,351
2,201,931
1,237,618
Trade debtors generally have 30-day terms. GST receivables have repayment terms
applicable under the relevant government authority. No amounts are past due or
impaired. The maximum exposure to credit risk at the reporting date is the carrying
amount of each class of receivables mentioned above. The Group’s exposure to risks is
summarised in Note 24.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
38 | Page
9.
PREPAYMENTS
Consolidated
2024
2023
US$
US$
Current
Prepayments – raw materials
784,649
598,429
Prepayments – other
341,723
200,230
1,126,372
798,659
10.
INVENTORIES
Consolidated
2024
2023
US$
US$
Current
Raw materials
1,744,228
1,823,380
Work in progress
72,039
81,260
Finished goods
2,143,868
1,943,322
Allowance for disposal
(251,353)
(316,405)
3,708,782
3,531,557
(i)
Inventories are valued at the lower of cost or net realisable value.
(ii) Inventories recognised as an expense to cost of sales during the year ended 30 June 2024
amounted to US$8,472,625 (2023: US$6,867,906).
(iii) Net write-downs (reversal of write-downs) of inventories to net realisable value during the
year ended 30 June 2024 amounted to US$301,358 (2023: US$66,383).
Movement in the allowance for disposal of inventories is set out below.
Balance at the beginning of the year
(316,405)
(257,029)
Disposal
114,573
-
Reversal
-
55,197
Additional allowance
(49,521)
(114,573)
Balance at the end of the year
(251,353)
(316,405)
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
39 | Page
11.
LOAN RECEIVABLES
Consolidated
2024
2023
US$
US$
Non-Current
Loan to Keybridge Capital Limited 1
1,100,715
-
Loan to other entity 2
1,001,122
-
Interest accrued on loans
29,751
2,131,588
-
1
The Group entered into a reciprocal loan agreement with Keybridge Capital Limited (“KBC”)
where Yowie may borrow a maximum principal of up to AUD 5,000,000 from KBC, with an
interest rate of 10% p.a., for working capital purposes, or to earn a greater return on cash
assets from time to time. The loan is unsecured and payable at call with no set maturity date.
As at 30 June 2024, the Group has US$1.1 million (A$1.65 million) on deposit with KBC.
2
The Group provided a loan to the liquidator of PR Finance Group Limited (“PRFG”) of US$1
million (A$1.5 million) with interest rate of 12% p.a. to be utilised as cash security for its
recovery actions. Keybridge Capital Limited (“KBC”) has agreed to indemnify the Group against
any loss for the provision of this loan to PRFG. The initial term of the loan is for a period of up
to 4 months, subject to further agreement between the parties.
12.
PLANT AND EQUIPMENT
Consolidated
2024
2023
US$
US$
Manufacturing plant and equipment
Cost
4,394,244
4,080,756
Accumulated depreciation
(1,845,345)
(1,555,827)
Accumulated impairment losses
(2,154,455)
(2,334,929)
394,444
190,000
Manufacturing plant and equipment under
construction
Cost
-
-
Accumulated impairment losses
-
-
-
-
Office equipment
Cost
9,985
18,447
Accumulated depreciation
(1,557)
(15,494)
8,428
2,953
Total plant and equipment
402,872
192,953
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
40 | Page
12.
PLANT AND EQUIPMENT (continued)
Movements in the carrying amount of each class are set out below.
Consolidated
2024
2023
US$
US$
Manufacturing plant and equipment
Balance at the beginning of the year
190,000
217,387
Additions 1
313,488
27,512
Disposal
-
(22,405)
Depreciation
(289,135)
(387,220)
Net reversal of impairment
180,474
354,726
Foreign exchange adjustment
(383)
-
Carrying amount at the end of the year
394,444
190,000
Manufacturing plant and equipment under
construction
Balance at the beginning of the year
-
-
Deposit refund
-
(719,794)
Additions
50,000
-
Disposal
-
-
(Impairment) / reversal of impairment
(50,000)
719,794
Carrying amount at the end of the year
-
-
Office equipment
Balance at the beginning of the year
2,953
3,717
Additions
11,519
1,478
Depreciation
(3,976)
(2,242)
Disposals
(2,046)
-
Foreign exchange adjustment
(22)
-
Carrying amount at the end of the year
8,428
2,953
Total impairment and amounts written off
Reversal of impairment 2
130,474
1,052,115
Amounts written off
50,000
-
180,474
1,052,115
1
US$0.24 million of the additions during the year ended 30 June 2024 relates to acquisition of assets of
Ernest Hillier chocolate business.
2
Reversal of impairment during the year ended 30 June 2024 of $0.13 million (2023: $0.33 million) relates
to the reversal of impairment on manufacturing equipment which was recorded in FY2020 following the
identification of impairment indicators during that period. The Group was able to utilise the asset,
resulting in the recognition of depreciation and reversal of a portion of the impairment.
The remaining $0.72 million of reversal of impairment during the year ended 30 June 2023 related to the
refund for deposit on manufacturing equipment which was previously impaired in FY2020.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
41 | Page
13.
INTANGIBLE ASSETS
Consolidated
2024
2023
US$
US$
Rights and licenses 1
Cost
225,398
225,398
Accumulated impairment losses
(225,398)
(225,398)
-
-
Software
Cost
193,675
370,424
Accumulated amortisation
(125,561)
(302,310)
Accumulated impairment losses
(68,114)
(68,114)
-
-
Product development 2
Cost
1,484,830
1,205,023
Accumulated amortisation
(1,249,627)
(1,081,645)
235,203
123,378
Total intangible assets
235,203
123,378
1
Rights and licenses relate to the Yowie trademark which management has assessed as having an indefinite
useful life.
2
Product development relates to capitalised costs associated with the development of Yowie collectables.
Movements in the carrying amount of each class are set out below.
Consolidated
2024
2023
US$
US$
Product development
Balance at the beginning of the year
123,378
141,841
Additions
279,807
75,383
Amortisation
(167,982)
(93,846)
Carrying amount at the end of the year
235,203
123,378
14.
RIGHT-OF-USE ASSETS
Consolidated
2024
2023
US$
US$
Non-Current
Buildings – right-of-use
356,567
-
Accumulated amortisation
(147,601)
-
208,966
-
The Group leases buildings for its Ernest Hillier manufacturing facility in Australia until
April 2026, with options to extend. The corresponding finance lease liabilities are
recognised as liability on the consolidated statement of financial position.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
42 | Page
Movements in the carrying amount of right-in-use assets are set out below.
Consolidated
2024
2023
Right-of-use assets
US$
US$
Balance at the beginning of the year
-
-
Additions
350,473
-
Amortisation
(145,078)
-
Foreign exchange adjustment
3,571
-
Carrying amount at the end of the year
208,966
-
15.
TRADE AND OTHER PAYABLES
Consolidated
2024
2023
US$
US$
Current
Trade payables and accruals
2,680,376
1,369,096
Rebate allowances 1
1,882,079
2,491,092
Other
(10,341)
(881)
4,552,114
3,859,307
1
Rebate allowances include estimated accrual for promotional discounts, prompt payment discounts and
spoilage of goods. Refer to Note 25(y) for key accounting estimate on rebate allowances.
Trade creditor amounts represent liabilities for goods and services provided to the Group
prior to the end of the financial year and which are unpaid. The amounts are unsecured
and are usually paid within 30 days of recognition. The Group’s exposure to risks is
summarised in Note 24.
16.
ISSUED CAPITAL AND RESERVES
(a)
Issued capital
Consolidated
2024
2023
US$
US$
Ordinary shares, fully paid
46,950,875
46,687,677
(b)
Movements in share capital
US$
Number
As at 1 July 2022
46,687,677
218,567,901
Conversion of rights
-
-
Share issue costs
-
-
As at 30 June 2023
46,687,677
218,567,901
Conversion of rights
263,198
10,800,000
Share issue costs
-
-
As at 30 June 2024
46,950,875
229,367,901
(c)
Terms and conditions of issued capital
Holders of ordinary shares are entitled to receive dividends as declared from time to time
and are entitled to one vote per share at shareholders’ meetings.
In the event of winding up of the Company, ordinary shareholders rank after all other
shareholders and creditors and are fully entitled to any proceeds of liquidation.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
43 | Page
16.
ISSUED CAPITAL AND RESERVES (continued)
(d)
Nature and purpose of reserves
Share-based payment reserve
The share-based premium reserve is used to recognise the value of options, service rights
and performance rights issued as share-based payments.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising
from the translation balances of entities which have functional currency other than USD.
Consolidated
2024
2023
US$
US$
Share-based payment reserve
2,002,479
2,255,525
Foreign currency translation reserve
(2,326,544)
(2,345,585)
(324,065)
(90,060)
(e)
Capital management
When managing capital, management’s objective is to ensure the Group continues as a
going concern as well as to generate optimal returns to shareholders and benefits for
other stakeholders. Management also aims to maintain a capital structure that ensures
the lowest cost of capital available to the entity. The Company under the direction of
management may issue new shares to provide for future development activity. The Group
currently has no debt other than trade payables.
17.
SHARE-BASED PAYMENTS
(a)
Weighted average exercise prices
There were neither movement in outstanding share-based payment options during the
year nor were there any outstanding share-based payment options at balance date.
(b)
Remaining contractual life
There were no share-based payment options outstanding as at 30 June 2024 (2023: nil).
The weighted average remaining contractual life for the share-based payment rights
outstanding as at 30 June 2024 was nil (2023: 3.44 years).
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
44 | Page
17.
SHARE-BASED PAYMENTS (continued)
(c)
Outstanding share options and rights under share-based payments
There were no share-based payment options outstanding as at 30 June 2024 (2023: nil).
Service rights outstanding at the end of the year have the following expiry date:
Type
Grant Date
Vesting Date
Expiry Date
Rights
30 June 2024
Rights
30 June 2023
Service rights
8 Dec 2021
8 Dec 2022
8 Dec 2026
-
3,600,000
Service rights
8 Dec 2021
8 Dec 2023
8 Dec 2026
-
3,600,000
Service rights
8 Dec 2021
8 Dec 2024
8 Dec 2026
-
3,600,000
(d)
Expenses arising from share-based payment transactions
The share-based payments expense for the year is US$71,797 (2023: $134,955). The
Group recognises the share-based payments expense over the vesting period for any
options and rights granted.
Consolidated
2024
2023
US$
US$
Rights issued to KMPs
71,797
134,955
Options and rights issued to KMPs, other employees and consultants were issued as
remuneration for future services. The Group fair valued the instruments granted.
(e)
Fair values
No new rights or options were issued during the year ended 30 June 2024 (2023: nil).
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
45 | Page
18.
CASH FLOW RECONCILIATION
(a)
Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents include cash
at bank and deposits at call.
Cash and cash equivalents at the end of the year as shown in the statement of cash flow
are reconciled to the related item in the statement of financial position as follows:
Consolidated
2024
2023
US$
US$
Cash at bank
1,577,918
1,335,030
Short-term deposits
-
6,066,652
1,577,918
7,401,682
(b)
Reconciliation of operating profit after income tax to net cash used in operating
activities
Consolidated
2024
2023
US$
US$
Operating (loss)/profit after income tax
(2,640,430)
(102,947)
Adjusted for:
Depreciation and amortisation as per profit or loss
318,639
96,088
Depreciation and amortisation in cost of sales and
closing inventories
289,135
387,220
Share-based payments
71,797
134,955
Foreign exchange loss
5,726
76,539
Write-down of inventory
301,358
66,383
Loss on disposal of asset
2,041
22,404
Reversal of impairment of non-current asset
(130,474)
(1,074,519)
Changes in operating assets and liabilities:
Trade and other receivables
(964,313)
278,057
Prepayments
(327,713)
(97,058)
Inventories
(478,583)
(973,274)
Trade and other payables
688,672
(67,770)
Finance lease liabilities
(12,270)
-
Provisions
5,581
19,535
Unearned revenue
352
(93,272)
Net cash used in operating activities
(2,870,482)
(1,327,659)
(c)
Non-cash investing and financing activities
Additions to the right-of-use assets
356,567
-
Shares issued to employee
263,198
-
619,765
-
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
46 | Page
19.
RELATED PARTY DISCLOSURES
(a)
Compensation of key management personnel
Consolidated
2024
2023
US$
US$
Short-term benefits
776,072
843,691
Post-employment benefits
26,250
9,543
Share-based payments expensed
71,797
134,955
Other services
16,598
-
Termination payments
144,633
-
1,035,350
988,189
(b)
Other transactions with key management personnel and its related parties
There was a loan receivable from Keybridge Capital Limited, the related party of N Bolton
and J Patton, of US$1,100,715 (A$1,650,000) as of 30 June 2024 (2023: Nil). Refer to Note
11 of the financial statements for details.
There was a loan receivable from the liquidator of PR Finance Group Limited (“PRFG”) of
US$1 million (A$1.5 million) as of 30 June 2024 with interest rate of 12% p.a. to be utilised
as cash security for its recovery actions (2023: Nil). Keybridge Capital Limited (“KBC”), the
related party of N Bolton and J Patton has agreed to indemnify the Group against any loss
for the provision of this loan to PRFG. Refer to Note 11 of the financial statements for
details.
There was a reimbursement of US$11,567 paid to Keybridge Capital Limited relating to
past legal costs incurred by Keybridge in relation to the appointment of N Bolton and J
Patton to Yowie’s Board in 2020 and 2021.
20.
COMMITMENTS AND CONTINGENCIES
(a)
Commitments
The Group entered into merchandising agreements with BBC Studios, AFL, NRL and NBA.
Future minimum guaranteed royalty fees are as follows:
Consolidated
2024
2023
US$
US$
Within one year
100,000
114,208
After one year but not more than five years
1,072,428
488,040
More than five years
-
-
1,172,428
602,248
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
47 | Page
20.
COMMITMENTS AND CONTINGENCIES (continued)
(b)
Contingencies
Yowie North America Inc. (“YNA”), a wholly owned subsidiary of the Group, has previously
brought claims against Whetstone Chocolate Factory (“WCF”) and Atlantic Candy
Company (“ACC”) for the release and return of the RASCH “Type FI” wrapping machine
(“Wrapper”) owned by the Group and located at ACC’s facility, as well as for monetary
damages. YNA negotiated a settlement agreement with ACC for the release and return of
the wrapper and the wrapper has been returned.
In this same case (which has, since the last report, been consolidated with the other
pending Florida state court action), ACC, Whetstone Industries (“WI”), and Henry M.
Whetstone, Jr. (“Whetstone”) have filed counterclaims against YNA alleging that YNA
breached the Manufacturing Agreement, the Patent Agreement, violated the Florida
Uniform Trade Secrets Act (“FUTSA”), breached fiduciary duties owed to WI and ACC, and
fraudulently induced ACC, WI, and Whetstone to enter into amendments to the
Manufacturing and Patent Agreements.
For its claim of the breach of the Manufacturing Agreement, ACC and WI (as the purported
successor-in-interest to the Manufacturing Agreement) allege that the Manufacturing
Agreement was a requirements contract that required YNA to manufacture with ACC and
WI until the agreement expired in 2027; however, YNA believes this is inconsistent with
the plain language in the Manufacturing Agreement which only requires YNA to
manufacture with ACC and WI when YNA is using Whetstone’s patents to produce its
chocolate and toy combination products.
For its claim for breach of the Patent Agreement, Whetstone alleges that YNA owes him
royalty fees from that time until 2027 under the Patent Technology and License
Agreement regardless of whether the Company uses Whetstone’s patent. Because the
Company is no longer using Mr. Whetstone’s (now expired) patent in its manufacturing
process (and hasn’t for several years), it believes that there is no legal basis under YNA’s
contract with Mr. Whetstone to pay him any royalty. For its FUTSA claim, WI and ACC
claim that YNA impermissible appropriated the technology from its manufacturing line to
start its line with Madelaine. YNA rejects this as false and notes that the manufacturing
line used at Madelaine is much newer and modern than WI’s and ACC’s manufacturing
lines. For its breach of fiduciary duty claim, WI and ACC claim that YNA owed fiduciary
duties to them, but this is inconsistent with Florida law which does not apply fiduciary
duties in situation like these. Finally, for its fraudulent inducement claim, there is no
support for any claim that YNA (or any of its agents) acted to coerce WI and ACC to enter
into any amendment agreements.
Both parties filed and argued cross-motions for summary judgment on issues related to
the Patent Agreement in October 2017. On 13 September 2018, the Court entered an
order denying both parties motions for summary judgment. On 8 July 2022, the parties
agreed to dismiss WI’s and Whetstone’s FUTSA, fiduciary duty, and fraudulent
inducement claims. YNA filed a second motion for summary judgment on the remaining
claims on 14 June 2022. This motion was denied on 3 August 2022. A trial was set for
August 2022 but was continued by the Court to 29 November 2022 and 1 December 2022.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
48 | Page
20.
COMMITMENTS AND CONTINGENCIES (continued)
(b)
Contingencies (continued)
The trial proceeded on those dates and the Court ordered post-trial briefing which was
completed in January 2023.
On 7 February 2023, the Court entered its Verdict Following Non-Jury Trial. The Verdict
found in YNA’s favour on all claims brought by Whetstone pursuant to the Patent
Agreement and awarded Whetstone no damages. On WI’s Manufacturing Agreement
claims, the Court rejected all of WI’s claims that YNA was required to manufacture with
WI for the duration of the Manufacturing Agreement and pay fixed costs and lost profits
to WI. The Court did find that YNA owed WI payment on two invoices that were left unpaid
for the period in which YNA was still manufacturing with WI. These invoices total
$114,579.97 with prejudgment interest at 9% per annum. Pursuant to the Court’s
direction, a Final Judgment was executed by the parties 22 March 2023. WI and
Whetstone subsequently filed a notice of appeal of this Final Judgment on 21 April 2023,
and YNA filed a cross-appeal of the Final Judgment on 8 May 2023.
Each of the parties also filed their own motions for attorney’s fees and costs after the
Final Judgment was entered on 21 April 2023. This issue was fully briefed and came before
the Court for a hearing on 6 July 2023. After the parties submitted proposed orders, the
Court entered an order on 4 August 2023 which granted YNA’s motion for attorney’s fees
and costs against Whetstone related to the Patent Agreement but denied YNA’s motion
for attorney’s fees and costs against WI and granted WI’s motion for attorney’s fees and
costs against YNA related to the Manufacturing Agreement. YNA believes that the Court
failed to appropriately evaluate YNA’s attorney’s fee and cost request in light of YNA
defeating WI’s claims for millions of dollars in fixed costs and lost profits after YNA moved
its manufacturing to Madelaine and Florida law. On 5 September 2023, Yowie filed its
Notice of Appeal of the Court’s order on attorney’s fees and costs denying YNA’s motion
for attorney’s fees and costs against WI related to the Manufacturing Agreement.
The Court has indicated it will defer ruling on the amount of attorney’s fees and costs until
the conclusion of the appeals. On appeal, the briefing for both appeals concluded in May
2024. An oral argument is set on the “main appeal” for 19 September 2024. No oral
argument has been set yet on the attorney fee appeal. YNA expects the Court of Appeals
to rule on both pending appeals in calendar year Q4 2024 or Q1 2025. For all the above
causes of action, YNA has disclaimed liability and is defending the action. YNA considers
no additional provision is warranted in relation to this counterclaim.
Management is not able to reliably estimate the ultimate settlement amounts at this time
nor does management believe any material payments would be made as a result of these
cases, and therefore no provision in relation to the claim has been recognised in the
financial statements. The Company will incur ongoing legal costs due to these cases.
However, due to inherent uncertainties, no accurate quantification of any cost, or timing
of such cost, which may arise from the legal proceedings, no provision has been made for
legal costs.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
49 | Page
21.
AUDITOR’S REMUNERATION
The auditor of the Group is RSM Australia (2023: RSM Australia).
Consolidated
2024
2023
US$
US$
Amounts received or due and receivable:
RSM Australia
Audit and review of financial reports
59,976
59,286
22.
PARENT ENTITY 39429372INFORMATION
(a)
Parent Entity Financial Information (Yowie Group Limited)
2024
2023
US$
US$
Current assets
1,078,030
3,571,893
Non-current assets
3,209,350
500,824
Total assets
4,287,380
4,072,717
Current liabilities
985,708
149,610
Non-current liabilities
-
-
Total liabilities
985,708
149,610
Net assets
3,301,672
3,923,107
Issued capital
48,521,185
48,257,987
Reserves
(5,790,141)
(5,663,138)
Accumulated losses
(39,429,372)
(38,671,742)
Total equity
3,301,672
3,923,107
Loss of the parent entity
(819,277)
(427,186)
Total comprehensive loss of the parent entity
(693,234)
(1,546,714)
(b)
Commitment and Contingencies of the Parent Entity
The parent entity had no contingent liabilities as at 30 June 2024 (30 June 2023: Nil).
Refer to Note 20 for a discussion of commitments of the parent entity and the
contingencies of the Group.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
50 | Page
22.
PARENT ENTITY AND SUBSIDIARY INFORMATION (continued)
(c)
Subsidiaries
Entity Name
Country of Incorporation
Percentage Interest
2024
2023
%
%
Yowie Enterprises Pty Ltd
Australia
100
100
EH Operations Pty Ltd
Australia
100
-
Yowie North America, Inc.
USA
100
100
Yowie Natural World, Inc.
USA
100
100
Yowie Hong Kong Holdings Limited
Hong Kong (China)
100
100
23.
SUBSEQUENT EVENTS
In July and November 2024, the Group provided additional loans of A$1,350,000 and
A$750,000 respectively to Keybridge Capital Limited under the reciprocal loan agreement
signed during the year ended 30 June 2024. Refer to Note 11 for further details on the
loan agreement.
Apart from the matters discussed above, no other matter or circumstance has arisen since
30 June 2024 that has significantly affected, or may significantly affect the Group’s
operations, the results of those operations, or the Group’s state of affairs in future
financial years.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
51 | Page
24.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise cash and cash equivalents,
receivables and payables.
The net fair values of the financial assets and liabilities at reporting date of the Group
approximate the carrying amounts in the financial statements, except where specifically
stated.
The Group manages its exposure to key financial risks, including interest rate, foreign
currency risk, credit risk and liquidity risk in accordance with the Group’s financial risk
management policy. The objective of the policy is to support the delivery of the Group’s
financial targets whilst protecting future financial security.
The main risks arising from the Group's financial instruments are interest rate risk, foreign
currency risk, credit risk and liquidity risk. The Group uses different methods to measure
and manage different types of risks to which it is exposed. These include monitoring levels
of exposure to interest rate and foreign exchange risk and assessments of market
forecasts for interest rate and foreign exchange rates. Liquidity risk is monitored through
the development of future rolling cash flow forecasts.
The Board reviews and agrees policies for managing each of these risks as summarised
below.
Primary responsibility for identification and control of financial risks rests with the Board.
The Board reviews and agrees policies for managing each of the risks identified below.
Risk exposures and responses
Interest rate risk
The Group's exposure to market interest rates relates primarily to the Group’s cash and
short-term deposits.
At reporting date, the Group had the following financial assets exposed to Australian
variable interest rate risk that are not designated in cash flow hedges:
Consolidated
2024
2023
US$
US$
Cash at bank
-
6,252,272
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
52 | Page
24.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Risk exposures and responses (continued)
The following sensitivity analysis is based on the interest rate risk exposures in existence
at the reporting date.
At reporting date, if interest rates had moved as illustrated in the table below, with all
other variables held constant, post-tax profit and equity would have been affected as
follows:
Post tax profit
Equity
Higher / (lower)
Higher / (lower)
2024
2023
2024
2023
US$
US$
US$
US$
+1.35% (2023: +2.5%)
9,011
156,307
9,011
156,307
-1.35% (2023: -2.5%)
(9,011)-
(156,307)
(9,011)
(156,307)
The movements are due to higher or lower interest revenue from cash balances. A
sensitivity of 1.35% (2023: 2.50%) is considered reasonable given the current level of both
short-term and long-term Australian Dollar interest rates.
Foreign currency risk
As a result of the Australian entities having a functional currency in Australian Dollar which
is different to the Group’s presentation currency of US Dollar, the Group’s statement of
financial position can be affected significantly by movements in the Australian Dollar/US
Dollar exchange rate.
The Group also has transactional currency exposures. Such exposure arises from sales or
purchases by an operating entity in currencies other than the functional currency.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
53 | Page
24.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Risk exposures and responses (continued)
Operational transactions are denominated in US Dollar. The Group’s approach is to target
specific levels at which to convert Australian Dollar to United States Dollar by entering
into either spot or short-term forward exchange contracts. The Group does not enter into
transactions that qualify as hedging for hedge accounting purposes, with the exception of
a number of spot and short-term forward exchange contracts in relation to working
capital management.
The assets and liabilities of the US and Hong Kong subsidiaries are held in the functional
currency of these subsidiaries, which is US Dollar.
At 30 June, the US Dollar equivalence of assets and liabilities held in Australian Dollar and
subject to foreign exchange risk are as follows:
Consolidated
2024
2023
US$
US$
Assets and liabilities of entities with AUD functional
currencies
Assets
Cash and cash equivalents
1,154,993
3,551,031
Trade and other receivables
147,333
5,352
Prepayments
94,227
45,445
Inventories
213,398
-
Loan receivables
2,131,588
-
Right-of-use assets
208,966
-
Plant and equipment
268,619
-
Other non-current assets
91,679
-
Total Assets
4,310,803
3,601,828
Liabilities
Trade and other payables
1,334,638
92,492
Provisions
62,698
57,117
Finance lease liabilities
250,315
-
Unearned income
352
-
Total Liabilities
1,648,003
149,609
Intercompany loans are denominated in Australian Dollar and US Dollar. These loans are
eliminated upon consolidation.
At 30 June, the effects on post tax profit or loss and equity from a change in the Australian
Dollar/US Dollar exchange rate would be as follows:
Profit or loss
Equity
Higher / (lower)
Higher / (lower)
2024
2023
2024
2023
US$
US$
US$
US$
Exchange Rate +10% (2022: +10%)
-
-
(242,072)
(313,837)
Exchange Rate -10% (2022: -10%)
-
-
242,072
313,837
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
54 | Page
24.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Risk exposures and responses (continued)
Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash
equivalents and trade and other receivables. The Group's exposure to credit risk arises
from potential default of the counter party, with a maximum exposure equal to the
carrying amount of these instruments.
The Group does not hold any credit derivatives to offset its credit exposure. It holds its
cash deposits with major banks with high credit ratings.
Cash at bank and short-term bank deposits
Consolidated
2024
2023
US$
US$
AAA rated banks
-
-
AA rated banks
1,154,993
6,378,035
A rated banks
422,925
1,023,647
1,577,918
7,401,682
Liquidity risk
Liquidity risk is the risk that the Group may encounter difficulty in meeting its financial
obligations. The Group’s objective is to maintain adequate funding to meet its needs,
currently represented by cash and short-term deposits sufficient to meet the Group’s
current cash requirements.
Maturity analysis for financial liabilities
Consolidated
2024
2023
US$
US$
Within one year
4,826,347
3,859,307
Between one and five years
39,133
-
4,865,480
3,859,307
Contractual cash flows for financial liabilities are the same as carrying value.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
55 | Page
25.
SUMMARY OF MATERIAL ACCOUNTING POLICIES
(a)
New and amended accounting standards adopted by the Group
The Group has adopted all of the new and revised Standards and Interpretations,
including amendments to the existing standards issued by the Australian Accounting
Standards Board (the AASB) that are relevant to their operations and effective for the
current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory
have not been early adopted.
(b)
New accounting standards and interpretations issued but not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or
amended but are not yet mandatory, have not been early adopted by the Group for the
annual reporting period ended 30 June 2024. The Group has not yet assessed the impact
of these new or amended Accounting Standards and Interpretations.
(c)
Basis of consolidation
The consolidated financial statements comprise the financial statements of Yowie Group
Limited and its subsidiaries (“the Group”) as at 30 June 2024.
Subsidiaries are entities over which the Group has the power to govern the financial and
operating policies so as to obtain benefits from their activities. The existence and effect
of potential voting rights that are currently exercisable or convertible are considered
when assessing whether the group controls another entity.
The financial statements of the subsidiaries are prepared for the same reporting period
as the parent company, using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and
transactions, income and expenses and profits and losses resulting from intra-group
transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is obtained by the
Group and cease to be consolidated from the date on which control is transferred out of
the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of
accounting. The acquisition method of accounting involves recognising at acquisition
date, separately from goodwill, the identifiable assets acquired, the liabilities assumed
and any non-controlling interest in the acquiree. The identifiable assets acquired and the
liabilities assumed are measured at their acquisition date fair values.
The difference between the above items and the fair value of consideration (including the
fair value of any pre-existing investment in the acquiree) is goodwill or discount on
acquisition.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
56 | Page
25.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
Non-controlling interests not held by the Group are allocated their share of net profit after
tax in the statement of profit or loss and other comprehensive income and are presented
within equity in the consolidated statement of financial position, separately from parent
shareholders’ equity.
(d)
Foreign currency translation
Functional and presentation currency
The functional currency of Yowie Group Limited and Yowie Enterprises Pty Ltd is
Australian Dollar (AUD). The functional currency of the other entities is United States
Dollar (USD).
The presentation currency of Yowie Group Limited is United States Dollar (USD).
Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency by
applying the exchange rates ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at the rate of exchange
ruling at the reporting date.
All exchange differences in the consolidated financial report are taken to the statement
of profit or loss and other comprehensive income.
Group companies
The results and financial position of foreign operations (none of which has the currency
of a hyperinflationary economy) that have a functional currency different from the
presentation currency are translated into the presentation currency as follows:
• assets and liabilities for each statement of financial position presented are
translated at the closing rate at the date of that statement of financial position;
• income and expenses for each statement of profit or loss and other comprehensive
income are translated at average exchange rates, unless this is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction
dates, in which case income and expenses are translated at the dates of the
transactions; and
• all resulting exchange differences are recognised in the statement of profit or loss
and other comprehensive income.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
57 | Page
25.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(e)
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank
and in hand and short-term deposits with an original maturity of three months or less that
are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash
and cash equivalents as defined above, net of outstanding bank overdrafts. Bank
overdrafts are included within interest-bearing loans and borrowings in current liabilities
on the statement of financial position.
(f)
Trade and other receivables
Trade receivables, which generally have 30-60 day terms, are recognised initially at fair
value and subsequently measured at amortised cost using the effective interest method,
less an allowance for any uncollectible amounts. Refer to Note 25(u) for details on
assessment of uncollectible amounts.
(g)
Inventories
Inventories are measured at the lower of cost or net realisable value. Raw material
inventories are accounted for at purchase cost on a weighted average cost basis. Finished
goods and work in progress are accounted for at the purchase cost of direct materials plus
manufacturing costs, including depreciation of manufacturing equipment. Net realisable
value is the estimated selling price in the ordinary course of business, less estimated costs
of completion and the estimated costs necessary to make the sale.
(h)
Property, plant and equipment
Plant and equipment is stated at cost, less accumulated depreciation and accumulated
impairment losses.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
58 | Page
25.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(h)
Property, plant and equipment (continued)
The carrying amount of plant and equipment is reviewed annually to ensure it is not in
excess of the recoverable amount from these assets. The recoverable amount is assessed
on the basis of the expected net cash flows that will be received from the assets
employment and subsequent disposal. The expected net cash flows have been discounted
to their present values in determining recoverable amounts.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can be measured reliably. All
other repairs and maintenance are charged to profit or loss during the financial period in
which they are incurred.
Depreciation is calculated over the useful lives to the Group of the assets, commencing
from the time the asset is held ready for use, as follows:
Class
Depreciation method
Manufacturing plant and equipment
Units of production basis
Office equipment
Straight line basis over 2.5 years
(i)
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost.
Following initial recognition, intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses. Internally generated intangible assets,
excluding capitalised development costs, are expensed to profit and loss as incurred.
Intangible assets with finite lives are amortised over the useful economic life and assessed
for impairment whenever there is an indication that the intangible asset may be impaired.
Rights and licenses
The Group made cash payments to purchase rights and licenses and they are valued at
cost. They are assessed as having an indefinite useful life.
Product development
Expenditure on product development is recognised as an intangible asset when the Group
can demonstrate:
• the technical feasibility of completing the intangible asset so that it will be available
for use or sale
• its intention to complete and its ability to use or sell the asset
• how the asset will generate future economic benefits
• the availability of resources to complete the asset
• the ability to reliably measure expenditure during development.
Product development costs are recorded as intangible assets and amortised using the
units of production method from the point at which the asset is available for use.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
59 | Page
25.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(i)
Intangible assets (continued)
Software
Costs associated with maintaining software programmes are recognised as an expense as
incurred.
Development costs that are directly attributable to the design and testing of identifiable
and unique software products controlled by the group are recognised as intangible assets
when the following criteria are met:
• it is technically feasible to complete the software so that it will be available for use
• management intends to complete the software and use or sell it
• there is an ability to use or sell the software
• it can be demonstrated how the software will generate probable future economic
benefits
• adequate technical, financial and other resources to complete the development
and to use or sell the software are available, and
• the expenditure attributable to the software during its development can be reliably
measured.
Other directly attributable costs that are capitalised as part of the software include
employee costs and an appropriate portion of other directly attributable costs.
Software costs are recorded as intangible assets and amortised from the point at which
the asset is available for use over 3 years.
(j)
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use
asset is measured at cost, which comprises the initial amount of the lease liability,
adjusted for, as applicable, any lease payments made at or before the commencement
date net of any lease incentives received, any initial direct costs incurred, and, except
where included in the cost of inventories, an estimate of costs expected to be incurred
for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of
the lease or the estimated useful life of the asset, whichever is the shorter. Where the
Group expects to obtain ownership of the leased asset at the end of the lease term, the
depreciation is over its estimated useful life. Right-of use assets are subject to impairment
or adjusted for any remeasurement of lease liabilities.
(k)
Trade and other payables
Trade payables and other payables are carried at amortised cost. They represent liabilities
for goods and services provided to the Group prior to the end of the financial year that
are unpaid and arise when the Group becomes obliged to make future payments in
respect of the purchase of these goods and services. The amounts are unsecured and are
usually paid within 30 days of recognition.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
60 | Page
25.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(l)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive)
as a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of
the amount of the obligation.
Provisions are measured at the present value of management’s best estimate of the
expenditure required to settle the present obligation at the reporting date. If the effect
of the time value of money is material, provisions are discounted using a current pre-tax
rate that reflects the time value of money and the risks specific to the liability.
(m)
Issued capital
Ordinary shares are classified as equity. 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.
(n)
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is
initially recognised at the present value of the lease payments to be made over the term
of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot
be readily determined, the consolidated entity's incremental borrowing rate. Lease
payments comprise of fixed payments less any lease incentives receivable, variable lease
payments that depend on an index or a rate, amounts expected to be paid under residual
value guarantees, exercise price of a purchase option when the exercise of the option is
reasonably certain to occur, and any anticipated termination penalties. The variable lease
payments that do not depend on an index or a rate are expensed in the period in which
they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The
carrying amounts are remeasured if there is a change in the following: future lease
payments arising from a change in an index or a rate used; residual guarantee; lease term;
certainty of a purchase option and termination penalties. When a lease liability is
remeasured, an adjustment is made to the corresponding right-of use asset, or to profit
or loss if the carrying amount of the right-of-use asset is fully written down.
(o)
Revenue recognition
The Group recognises revenue predominately from the sale of goods.
Sale of goods
Revenue is recognised when control of the product is transferred, being either when the
product is delivered to the customer or, in some instance, when the customer picks up
the product, and there is no unfulfilled obligation that could affect the customer’s
acceptance of the products.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
61 | Page
25.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(o)
Revenue recognition (continued)
Revenue from sales is recognised based on the arrangement between the customer and
the Group. The arrangements in place do not commit customers to purchasing a specified
quantity nor commit Yowie to deliver the same but set out the terms and conditions that
apply between the parties at the time an order is placed by a customer and accepted by
the Group. The terms and conditions cover, as appropriate to the customer, pricing,
settlement of liabilities, rebate allowances and any other negotiated performance
obligations.
The rebate allowances relate to the customers right to claim promotional discounts and
spoilage of goods. At the point of sale, promotional discounts, spoilage allowance and
corresponding adjustment to revenue is recognised for those allowances expected to be
claimed by customers. The Group uses its accumulated historical experience and,
whenever available, mutually agreed terms to estimate the rebate allowances on a per
customer basis.
No element of financing is present in the pricing arrangement. Settlement terms are
generally credit terms of 30 to 60 days. Terms reflect negotiations with customers,
policies, procedures and controls held by each business unit as it relates to customer
credit risk. For customers who purchase on credit, a receivable is recognised when the
products are delivered or picked up as this is the point in time that the consideration is
unconditional because only the passage of time is required before the payment is due.
Revenue from sale of goods is recognised at a point in time.
Interest revenue
Revenue is recognised as interest accrues using the effective interest method. This is a
method of calculating the amortised cost of a financial asset and allocating the interest
revenue over the relevant period using the effective interest rate, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial
asset to the net carrying amount of the financial asset.
(p)
Income tax and other taxes
Current tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the taxation authorities based on the
current period’s taxable income. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted by the reporting date.
Deferred income tax is provided on all temporary differences at the reporting date
between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
62 | Page
25.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(p)
Income tax and other taxes (continued)
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill
or of an asset or liability in a transaction that is not a business combination and
that, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss; or
• when the taxable temporary difference is associated with investments in
subsidiaries, associates or interests in joint ventures, and the timing of the reversal
of the temporary differences can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-
forward of unused tax credits and unused tax losses, to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences and the
carry-forward of unused tax credits and unused tax losses can be utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is not
a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
• when the deductible temporary difference is associated with investments in
subsidiaries, associates or interests in joint ventures, in which case a deferred tax
asset is only recognised to the extent that it is probable that the temporary
difference will reverse in the foreseeable future and taxable profit will be available
against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting 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 reporting 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.
Deferred income tax assets and liabilities are measured at the tax rates that are expected
to apply to the year when the asset is realised or the liability is settled, based on tax rates
(and tax laws) that have been enacted or substantively enacted at the reporting date.
Current and deferred income tax is recognised in the statement of financial position,
except to the extent that it relates to items recognised in other comprehensive income or
direct in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity respectively.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
63 | Page
25.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(p)
Income tax and other taxes (continued)
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right
exists to set off current tax assets against current tax liabilities and the deferred tax assets
and liabilities relate to the same taxable entity and the same taxation authority.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST,
unless the GST incurred is not recoverable from the taxation authority. In this case, it is
recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST recoverable or
payable. The net amount of GST recoverable from, or payable to, the taxation authority
is included with other receivables or payables in the statement of financial position.
Cash flows are included in the consolidated statement of cash flows on a gross basis. The
GST components of cash flows arising from investing and financing activities which are
recoverable from or payable to taxation authorities are classified as operating cash flows.
(q)
Share-based payment transactions
The Group provides benefits to directors, employees and consultants in the form of share-
based payment transactions, whereby services are rendered in exchange for shares or
rights over shares (‘equity-settled transactions’).
The cost of these equity-settled transactions with directors, employees and consultants is
measured by reference to the fair value at the date at which they are granted. The fair
value is determined using an appropriate valuation model.
No expense is recognised for awards that do not ultimately vest, except for equity-settled
transactions for which vesting is conditional upon a market or non-vesting condition.
These are treated as vesting irrespective of whether or not the market or non-vesting
condition is satisfied, provided that all other performance and/or service conditions are
satisfied.
The cost of equity-settled transactions is recognised, together with a corresponding
increase in equity, over the period in which the performance and/or service conditions
are fulfilled.
If the terms of an equity-settled award are modified, as a minimum an expense is
recognised as if the terms had not been modified. An additional expense is recognised for
any modification that increases the total fair value of the share- based arrangement, or is
otherwise beneficial to the recipient, as measured at the date of modification.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
64 | Page
25.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(q)
Share-based payment transactions (continued)
If an equity-settled award is cancelled, it is treated as if it had vested on the date of
cancellation, and any expense not yet recognised for the award is recognised
immediately. However, if a new award is substituted for the cancelled award and
designated as a replacement award on the date that it is granted, the cancelled and new
award are treated as if they were a modification of the original award, as described in the
previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution
in the computation of diluted loss per share.
(r)
Earnings / loss per share
Basic earnings / loss per share is calculated as net profit or loss attributable to members
of the parent entity, adjusted to exclude any costs of servicing equity (other than
dividends), divided by the weighted average number of ordinary shares of the Company,
adjusted for any bonus element.
Diluted loss per share is calculated as net profit or loss attributable to members of the
parent, adjusted for:
• costs of servicing equity (other than dividends);
• the after tax effect of dividends and interest associated with dilutive potential
ordinary shares that have been recognised as expenses; and
• other non-discretionary changes in revenues or expenses during the period that
would result from the dilution of potential ordinary shares.
divided by the weighted average number of ordinary shares and dilutive potential
ordinary shares, adjusted for any bonus element.
(s)
Financial instruments
Financial assets
AASB 9 has three classification categories for financial assets; amortised cost, fair value
through other comprehensive income (FVOCI) and fair value through profit or loss.
The classification is based on the business model under which the financial asset is
managed and its contractual cash flows. Compared to AASB 139, the FVOCI and amortised
cost categories have been added and the held-to-maturity, loans and receivables and
available for sale classification categories have been removed. The Group only have
financial assets measured at amortised cost.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
65 | Page
25.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
(s)
Financial instruments (continued)
Amortised cost
A financial asset is measured at amortised cost if both of the following conditions are met:
(i)
the financial asset is held within a business model whose objective is to hold
financial assets in order to collect contractual cash flows; and
(ii)
the contractual terms of the financial asset give rise on specified dates to cash
flows that meet the sole payment of principal and interest (SPPI) requirements.
Impairment of financial assets
The Group assesses on a forward-looking basis the expected credit losses associated with
its debt instruments carried at amortised cost. The impairment methodology applied
depends on whether there has been a significant increase in credit risk. For trade
receivables, contract debtors and lease receivables, the Group applies the simplified
approach permitted by AASB 9, which requires expected lifetime losses to be recognised
from initial recognition of the receivables.
Financial liabilities
AASB 9 largely retains the existing requirements of AASB 139 for the classification and
measurement of financial liabilities. Financial liabilities are measured at amortised cost,
except for those financial liabilities that are designated to be measured at fair value
through profit or loss.
Trade and other payables
Liabilities are recognised for amounts to be paid for goods or services received. Trade
payables are settled on terms aligned with the normal commercial terms in operations.
(t)
Impairment of assets
At each reporting date, the Group reviews the carrying values of tangible assets and
intangible assets to determine whether there is any indication that those assets have been
impaired. If such an indication exists, the recoverable amount of the asset, being the
higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s
carrying value. Any excess of the asset’s carrying value over its recoverable amount is
expensed to profit or loss.
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.
(u)
Segment disclosures
Operating segments are presented in a manner consistent with the management reports
provided to the chief operating decision makers, which are currently represented by the
full Board.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
66 | Page
25.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
The Group has only one reportable segment, which relates to the operations of its
confectionery business. All production and sales to date have taken place in the United
States, with production carried out under a contract manufacturing arrangement. The net
result is presented on a consolidated basis.
(v)
Government grants
Government grants are not recognised until there is reasonable assurance that the Group
will comply with the conditions attaching to them and that the grants will be received.
A forgivable loan from government is treated as a government grant when there is
reasonable assurance that the Group will meet the terms for forgiveness of the loan.
Government grants are recognised in profit or loss on a systematic basis over the periods
in which the Group recognises as expenses the related costs for which the grants are
intended to compensate.
(w)
Material accounting judgements, estimates and assumptions
The preparation of the Group’s consolidated financial statements requires management
to make judgements, estimates and assumptions that affect the reported amounts in the
financial statements. Management bases its judgements and estimates on historical
experience and on other factors it believes to be reasonable under the circumstances.
Actual results may differ from these estimates under different assumptions and
conditions and may materially affect financial results or the financial position reported in
future periods.
Management has identified the following critical accounting policies for which significant
judgements, estimates and assumptions are made.
Share-based payments
The Group measures the cost of equity-settled transactions by reference to the fair value
of the equity instruments at the date at which they are granted. Estimating fair value for
share-based payment transactions requires determining the most appropriate valuation
model, which is dependent on the terms and conditions of the grant. The estimate also
requires making assumptions about the most appropriate inputs to the valuation model,
including the expected life of the share option, volatility and dividend yield. The
assumptions and models used for estimating fair value for share-based payment
transactions are disclosed in Note 15.
Income taxes
Judgement is required in assessing whether deferred tax assets are recognised in the
statement of financial position. Deferred tax assets are recognised only when it is
considered more likely than not that they will be recovered, which is dependent on the
generation of sufficient future taxable profits. Assumptions about the generation of
future taxable profits depend on management’s estimates of future cash flows.
Judgements are also required about the application of income tax legislation.
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
67 | Page
25.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
Allowance for disposal of inventories
The allowance for disposal of inventories assessment requires a degree of estimation and
judgement. The level of the allowance is assessed by taking into account the recent sales
experience, the ageing of inventories, future production plans and their alignment with
the remaining term of any applicable contract manufacturing agreements, as well as any
and other factors that affect inventory obsolescence. To the extent that these judgements
and estimates prove incorrect, the Group may be exposed to potential additional
inventory write-downs or reversals in future periods.
Rebate allowances
The rebate allowances relate to the customers right to claim promotional discounts and
spoilage of goods. At the point of sale, promotional discounts, spoilage allowance and
corresponding adjustment to revenue is recognised for those allowances expected to be
claimed by customers. The Group uses its accumulated historical experience and,
whenever available, mutually agreed terms to estimate the rebate allowances on a per
customer basis.
For personal use only
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
AS AT 30 JUNE 2024
68 | Page
Entity Name
Entity Type
Ownership
Interest
Country of
Incorporation
Tax Residency
Yowie Group Limited
Body corporate
100%
Australia
Australia
Yowie Enterprises Pty Ltd
Body corporate
100%
Australia
Australia
EH Operations Pty Ltd
Body corporate
100%
Australia
Australia
Yowie North America, Inc.
Body corporate
100%
USA
USA
Yowie Natural World, Inc.
Body corporate
100%
USA
USA
Yowie Hong Kong Holdings Limited
Body corporate
100%
Hong Kong (China)
Hong Kong (China)
For personal use only
DIRECTORS’ DECLARATION
69 | Page
In accordance with a resolution of the directors of Yowie Group Limited, I state that:
1.
In the opinion of the Directors:
(a)
the financial statements and notes of the consolidated entity are in accordance with
the Corporations Act 2001, including:
(i)
giving a true and fair view of the consolidated entity’s financial position as at
30 June 2024 and of its performance for the year ended on that date; and
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and
other mandatory professional reporting requirements; and
(b)
there are reasonable grounds to believe that the consolidated entity will be able to
pay its debts as and when they become due and payable.
(c)
the information disclosed in the attached consolidated entity disclosure statement
is true and correct.
2.
This declaration has been made after receiving the declarations required to be made to
the directors in accordance with section 295A of the Corporations Act 2001
Note 2 confirms that the financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
On behalf of the Board
John Patton
Executive Chairman
12 December 2024
For personal use only
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the
members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm
which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
RSM Australia Partners
Level 32 Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF YOWIE GROUP LIMITED
Opinion
We have audited the financial report of Yowie Group Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2024, the consolidated statement
of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including
material accounting policy information, the consolidated entity disclosure statement and the directors' declaration.
In our opinion, the accompanying financial report of the Group 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 2024 and of its financial
performance for the year then ended; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
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 (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
For personal use only
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Going Concern
Refer to Note 2 in the financial statements
The Group incurred a net loss after tax of $2,640,430
and had net cash outflows from operating and
investing activities of $2,870,482 and $2,844,130
respectively, for the year ended 30 June 2024.
The directors have prepared the financial report on
a going concern basis and believe that it is
reasonably foreseeable that the Group will continue
as a going concern.
We determined going concern to be a key audit
matter due to the significant judgements involved in
preparing the cash flow forecast and the potential
material impact of the results of management’s
assessment.
Our audit procedures included:
•
Evaluating the current financial position of the
Group;
•
Evaluating
management’s
assessment
and
assumptions made in relation to the Group’s ability
to continue as a going concern;
•
Assessing the appropriateness and mathematical
accuracy of the cash flow forecast prepared by
management;
•
Challenging the reasonableness of the key
assumptions used in the cash flow forecast; and
•
Assessing the disclosures in the financial report.
Revenue
Statement of Profit or Loss and Other Comprehensive Income
Revenue was considered a key audit matter as it is
the most significant account balance in the
statement of profit or loss and other comprehensive
income.
For the year ended 30 June 2024, the Group
recognised revenue from the sale of goods of
$14,687,885.
Significant judgement is required in determining the
timing of revenue recognition, given the shipping
terms and the related timing of when control passes
to the end customer.
Our audit procedures included:
•
Assessing whether the revenue recognition policies
are in compliance with Australian Accounting
Standards;
•
Evaluating and testing the operating effectiveness of
the Group’s controls related to revenue recognition;
•
Performing substantive analytical review procedures
which involved setting expectations of revenue and
gross profit margins by using historical data and
budgets;
•
On a sample basis, agreeing a selection of sales
invoices and delivery documentation to address the
risks of occurrence and accuracy of the revenue
recognised; and
•
Testing a sample of sales transactions before and
after the reporting date to ensure that revenue is
recognised in the correct financial period.
For personal use only
Loan Receivables
Refer to Note 11 in the financial statements
The Group has loan receivables with a carrying
value of $2,131,588 as at 30 June 2024.
We considered this to be a key audit matter due to
the significant management judgments involved to
determine the carrying value of the loan receivables
amount at the reporting date.
Our audit procedures included:
•
Reviewing agreements to understand the terms and
conditions;
•
Obtaining confirmation from borrowers to verify the
loan balance at the reporting date;
•
Evaluating
management's
assumptions
in
assessing the recoverability of the loan receivables
as at reporting date; and
•
Assessing the disclosures in the financial report..
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 2024 but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, 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:
a.
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001; and
b.
the consolidated entity disclosure statement that is true and correct in accordance with the Corporations
Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i.
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view
and is free from material misstatement, whether due to fraud or error; and
ii.
the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
For personal use only
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.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar2_2020.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors' report for the year ended 30 June 2024.
In our opinion, the Remuneration Report of Yowie Group Limited, for the year ended 30 June 2024, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA
Perth, WA
TUTU PHONG
Dated: 12 December 2024
Partner
For personal use only
ASX ADDITIONAL INFORMATION
74 | Page
Additional information as required by the Australian Securities Exchange Listing Rules and not
disclosed elsewhere in this report is set out below. This information is current as at 15 August
2024.
Distribution of Quoted Securities
Ranges
No. of Holders of
Ordinary Shares
No. of
Ordinary Shares
1 - 1,000
967
233,388
1,001 - 5,000
435
1,217,331
5,001 - 10,000
190
1,511,294
10,001 – 100,000
423
14,319,947
100,000 and over
91
212,085,941
Total
2,106
229,367,901
There were 1,757 shareholders holding less than a marketable parcel of ordinary shares.
Quoted and Unquoted Equity Securities
Equity Security
Quoted
Unquoted
Ordinary shares
229,367,901
-
For personal use only
ASX ADDITIONAL INFORMATION
75 | Page
Unlisted Employee/Consultant Options/Rights
Nil
Twenty Largest Holders of Ordinary Shares
Name
Shares Held
Percentage
%
1
KEYBRIDGE CAPITAL LIMITED
143,137,854
62.41
2
BNP PARIBAS NOMINEES PTY LTD
28,814,630
12.56
3
CITICORP NOMINEES PTY LIMITED
10,163,633
4.43
4
4F INVESTMENTS PTY LTD
2,709,604
1.18
5
DR GREGORY BRYAN MAKIN
1,657,027
0.72
6
AGRI EXPORT AUSTRALIA PTY LTD
1,448,689
0.63
7
CARISTO INVESTMENT MANAGEMENT PTY LTD
1,063,514
0.46
8
SISTARO PTY LTD
837,500
0.37
9
MR GREGORY COLIN SMART & MRS CHERIE LYNN
SMART
779,842
0.34
10
MR KEVIN DANIEL LEARY & MRS HELEN PATRICIA
LEARY
750,000
0.33
10
MR JOHN CHARLES WALTERS & MS BERNADETTE
MARIE PARKER
750,000
0.33
11
MR RICHARD FRANCIS COUGHLAN
737,009
0.32
12
LAVA LIMITED
735,947
0.32
13
MR BRETT JOHN BARTON
690,000
0.30
14
MR THOMAS ZACHARY COLLINS
600,000
0.26
15
MR BRETT JOHN BARTON
580,317
0.25
16
CATALYST KP PTY LTD
575,630
0.25
17
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE)
PTY LIMITED
552,639
0.24
18
MR THOMAS TSCHUI & MRS ROSEMARY TSCHUI
533,500
0.23
19
MR JOSHUA SEAN DAVID BELL
503,000
0.22
20
DR MICHAEL KIM
500,000
0.22
20
MR DARRELL JOHN CROUCH & MRS JOSEPHINE ROSINA
CROUCH
500,000
0.22
TOTAL
198,620,335
86.59
For personal use only
ASX ADDITIONAL INFORMATION
76 | Page
Substantial Shareholders
Substantial shareholders who have notified the Company in accordance with section 671B of
the Corporations Act 2001 are as follows:
Shareholder
No. of Shares
Percentage
%
Aurora Funds Management Limited in its capacity as
responsible entity of HHY Fund
26,526,643
12.14
Keybridge Capital Limited
179,689,829
78.34
Wilson Asset Management Group
179,689,829
78.34
For personal use only
ASX ADDITIONAL INFORMATION
77 | Page
Voting Rights
Ordinary shares carry one vote per share. There are no voting rights attached to the options in
the Company.
Stock Exchange
The Company is listed on the Australian Securities Exchange and has been allocated the code
“YOW”. The “Home Exchange” is Perth.
On-market Buy-back
There is no current on-market buy-back.
Other Information
Yowie Group Limited is incorporated and domiciled in Australia and is a publicly listed company
limited by shares.
Corporate Governance Statement
The Board of Directors of the Company is responsible for the Corporate Governance of the
Company. The Board is committed to achieving and demonstrating the highest standard of
corporate governance applied in a manner that is appropriate to the Company’s circumstances.
The Company has taken note of the Corporate Governance Principles and Recommendations
4th edition, which became effective for the first full financial year commencing on or after 1
January 2020.
The Company’s Corporate Governance Statement is current as of the date of this report and it
has been approved by the Board. The Corporate Governance Statement is available on the
Company’s website at: www.yowieworld.com
For personal use only