ZOONO
GROUP
LIMITED
ANNUAL REPORT 2020
ZOONO GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 73 006 645 754
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2020
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CONTENTS
FINANCIAL DATA SUMMARY | 4
CEO’S REVIEW | 8
DIRECTORS’ REPORT | 10
REMUNERATION REPORT (AUDITED) | 16
AUDITOR’S INDEPENDENCE DECLARATION | 20
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME | 21
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION | 22
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | 23
CONSOLIDATED STATEMENT OF CASH FLOWS | 25
NOTES TO THE FINANCIAL STATEMENTS | 26
DIRECTORS’ DECLARATION | 44
AUDITOR’S INDEPENDENT REPORT | 45
STRATEGIC KEY ALLIANCE- ZOONO ANIMAL HEALTH | 49
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES | 50
CORPORATE DIRECTORY | 52
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FINANCIAL
DATA SUMMARY
FINANCIAL PERFORMANCE 30 JUNE 2020 NZ$
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TOTAL REVENUE
$38,329,369
PROFIT/(LOSS)
BEFORE TAX
$20,412,049
OPERATING EXPENSES
$8,092,337
OTHER REVENUE
$170,778
COST OF
SALES
$9,995,761
FINANCIAL PERFORMANCE 30 JUNE 2019 NZ$
PROFIT/(LOSS)
BEFORE TAX
$(2,418,984)
TOTAL REVENUE
$1,777,156
COST OF
SALES
$960,463
OTHER REVENUE
$136,142
OPERATING EXPENSES
$3,371,819
$38,329,369
GROSS PROFIT %
69.8%
73.9%
46.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
2018
2019
2020
5
REVENUE BY QUARTER NZ$
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$20,930,415
$15,683,974
$20,412,049
$0
$813,920
$901,060
Q1
Q2
Q3
Q4
TOTAL REVENUE NZ$
$45,000,000
$40,000,000
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
$2,429,707
$1,777,156
2018
2019
2020
GROSS PROFIT NZ$
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
$28,333,608
$1,695,240
$816,693
2018
2019
2020
PROFIT/(LOSS) BEFORE INCOME TAX NZ$
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$79,706
$0
2018
2019
2020
-$5,000,000
-$2,418,984
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ZOONO HEAD OFFICE NEW ZEALAND
OUR
TEAM
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ZOONO UNITED KINGDOM
ZOONO UNITED ARAB EMIRATES
DENNIS & HELENA MONTGOMERY
ALEXANDER ANDERSON
REGIONAL MANAGER ASEAN
TEAM ZOONO
ZOONO UNITED STATES OF AMERICA
JAMAL McCLEARY SPECIAL PROJECTS
PAUL MORRISON AUSTRALIA AND NZ MANAGER
DWAYNE DEAN OPERATIONS MANAGER
LEW MACKINNON CHIEF OPERATING OFFICER
EMMA SOWRY EXPORT SHIPPING COORDINATOR
7
SHANNEN COWMEADOW CUSTOMER SERVICES OFFICER
NADENE ERASMUS SOCIAL MEDIA & OPERATIONS SUPERVISOR (NZ)
PIP HOBSON MARKETING MANAGER
MICHAEL AND LLOYD
ASEAN AND CHINA MANAGERS
PAUL RAVLICH CHIEF FINANCIAL OFFICER
ROZANNE NIEMAND ASSISTANT ACCOUNTANT
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CEO’S
REVIEW
THE IDEA OF PROTECTING SURFACES FROM INFECTION AND CROSS
CONTAMINATION WAS NOVEL WHEN I STARTED THIS COMPANY. OTHER
TECHNOLOGIES WERE DESIGNED TO BE USED CONSTANTLY AND
CONSISTENTLY ALL DAY, EVERY DAY. THE IDEA OF SOMETHING THAT WAS
LONG LASTING WAS TOTALLY DIFFERENT AND IMMEDIATELY CAPTURED MY
IMAGINATION AND IN 2007, ZOONO GROUP WAS BORN.
In 2019, the Board made a strategic
decision to focus on the development of
a core group of B2B potential customers
in the key geographic regions (North
America, Europe, China and India) with
the capacity to drive sales growth for
the Company through consistent (and
repeated) orders for the Company’s
products.
The Company also made the decision
to defer all further pursuit of retail (B2C)
business (other than on-line sales). In
large part, the decision to change focus
was a recognition of the fact that the
Company simply did not have either the
funding necessary to build a retail brand
or, with its limited human resources, the
capacity to build a global retail business.
Consistent with the above approach,
the Company opened its UK/EU office
(located in the UK) in 2018. In FY19, it
reviewed its distribution arrangements in
many countries (including China) and, in
recent months has now opened an office
in Shanghai. We have also opened an
office in Dubai with Dennis Montgomery
heading up this region and we purchased
back the USA distributorship, which is
now running as a branch, similar to the
UK/EU office.
During the first six months of 2020 a lot
of work went into the animal health sector
through the Company’s partnership
with Zoono Animal Health and Apiam
Animal Health Limited (ASX:AHX). The
Partnership completed numerous tests;
collected large quantities of data and
gained global approvals, driving sales in
this sector.
And then along came COVID-19. Zoono
moved quickly to get international testing
completed to show our efficacy against
the virus surrogate, for both the hand
and surface product. The Australian
Therapeutic Goods Administration (TGA)
subsequently agreed to add Zoono’s Z-71
surface sanitiser to the approved list.
We also moved quickly to increase raw
material and plastic bottles globally, even
chartering an aircraft to fly bottles in from
China.
Through this period the Company
received a lot of publicity and sales
exploded, both in B2B and B2C markets.
After a record month for sales in April
2020, things have settled into a more
orderly sales pattern.
Zoono has now partnered with many
recognised household name multinational
companies, like Initial Rentokil, Atalian
Servest, First Group, Bunzl, Qantas
Airlines and many others some who wish
to remain confidential.
We had already been knocking on the
doors of a lot of these companies over
several years, so it was gratifying to get
them over the line.
We have had huge success in
transportation, particularly in trains
and buses, including the London
CEO’S
REVIEW
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profitability continue to grow for years to
come.
We value our shareholder base, which is
now extensive, with many shareholders
also being customers. Your board and
management team are committed to
commercialising our range of products
across as many trade sectors as we can,
and appointing distributor partners who
have the infrastructure, business links
and skills in each of our chosen markets.
We would like to thank all shareholders,
staff and stakeholders in our business
and confirm that we are working hard to
maximise the potential of our products
and returns to shareholders.
PAUL HYSLOP
MANAGING DIRECTOR/CEO
Underground and UK Land Trains.
Zoono also entered into many new sales
and distribution agreements globally.
Zoono also moved very early to sort out
supply chain issues, moving to making
our own plastic moulds for bottles so
we can make our own bottles and also
commissioning a new chemical reactor so
we can manufacture our own raw material
to alleviate any future supply issues.
Zoono is now on a global growth curve,
opening strategic offices and warehouses
and employing key people globally to
manage the growth.
Importantly, the Company is adequately
funded to execute its strategic growth
plan in FY21 and beyond. At the
end of the year, the Company had
NZ$10,323,216 cash at bank, stock
of NZ$13,202,029 and receivables of
NZ$9,229,419.
Zoono is also in a position to pay a
maiden dividend of 3c per share ($AUD)
for the 2020 financial year.
The Company will continue to invest in
and test its products against various
pathogens and complete trials with
other potential customers across various
industries, including childcare, transport,
animal health, facilities management and
consumer goods globally. Again, this is
being done with the clear expectation
of signing further long-term distribution
agreements which will see the Company’s
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DIRECTORS’
REPORT
YOUR DIRECTORS PRESENT THEIR REPORT ON ZOONO GROUP LIMITED (‘COMPANY’) AND ITS CONTROLLED
ENTITIES (TOGETHER CALLED THE ‘GROUP’ OR THE ‘CONSOLIDATED ENTITY’) FOR THE FINANCIAL YEAR ENDED 30
JUNE 2020. ALL NUMBERS STATED IN THIS REPORT ARE IN NEW ZEALAND DOLLARS, UNLESS OTHERWISE STATED
OR CONVERTED AT THE EXCHANGE RATES PROVIDED.
DIRECTORS
The names of directors in office at any
time during or since the end of the year
are:
MR. PAUL HYSLOP
Managing Director
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MR. DON CLARKE
Non-Executive Director
MS. ELISSA HANSEN
Non-Executive Director
MR. JON LAMB
Chairman (resigned 9 July 2019)
Directors have been in office for all of the
reporting period and to the date of this
report unless otherwise stated.
COMPANY SECRETARY
Ms. Elissa Hansen
PRINCIPAL ACTIVITIES
The principal activities of the
consolidated entity during the year
were to develop and sell a range of
antimicrobial products in multiple
countries.
OPERATING RESULT
The Group recorded an after-tax
profit of NZ$16,641,700 (2019: Loss
NZ$2,418,984) for the financial year.
REVIEW OF OPERATIONS
FY20 has been a year of two distinctive
halves for the Zoono Group. Having
made the decision to focus on B2B and
defer pursuit of retail, the company was
able to focus on putting the building
blocks into place, even though sales
suffered somewhat initially.
Agreements with Microsonic and Turtle
Wax Inc. for the car wash, automotive
and cruise industries, and The Z Factor
Limited for the supply of its proprietary
poultry formulation utilising Zoono Z71
Microbe Shield, were the catalyst for
growth into the B2B market.
These were followed by onboarding
Midas Pharma GmbH in Europe and
new distributor and supply agreements
in multiple countries including Denmark,
Sweden, Bosnia and Herzegovina,
Germany, UK, South Africa, New
Zealand, Australia, and USA.
With increased enquiry and product
demand originating from the UK and
Europe, opening an office in the UK to
service these markets proved to be a
strategic move.
Zoono Poultry (previously known as
The Z Factor) made significant progress
following successful trials with African
Swine Flu in China and subsequently
became Zoono Animal Health Limited
as it became clear applications in the
veterinary market are wide and varied.
They entered a distribution agreement
with Apiam Animal Health Limited (ASX:
AHX), which covers veterinary markets in
Australia and USA.
Early 2020 saw the emergence in China
of Covid-19, and the well-publicised
impacts of that virus on human health. As
a result the Company was inundated by
public and shareholder enquiry.
With the efficacy of Zoono’s technology
and products against viruses and
bacteria proven, the major issue facing
the Company this year was how to cope
with the influx of orders.
To keep ahead of the game the Company:
ramped up production; relocated to a
substantially larger warehouse and office
facility; ordered 4 million bottles to keep
up with demand; increased raw material
supplies to make 3 million litres of
products; and hired more staff.
As New Zealand went into lockdown
in late March, Zoono continued as an
essential service supplying local and
international businesses in healthcare,
aged care, food production, government
and personal health and hygiene.
Increased demand necessitated the
commencement of manufacturing
significant quantities of product in the UK
and USA.
Zoono signed a number of new
distribution agreements in the UK and
Europe, including with UK based, global
distribution companies operating in
the hygiene and sanitisation markets:
Rentokil Initial plc; Bunzl Health and
Hygiene; and Atalian Servest Ltd.
In addition, UK Police, London
Underground, and UK and German
mainline trains and stations started using
Zoono products in the fight against
Covid-19. The UK team continues
to work closely with major global
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channel partners across the facilities
management, transport, and healthcare
sectors, and have now moved to larger
premises to support the bulk activities for
the UK and Europe.
In Australia, the Therapeutic Goods
Administration (TGA) approved an
amendment to allow Zoono to claim
that Zoono Z-71 Microbe Shied Surface
Sanitiser is an effective disinfectant for
hard surfaces against germs, bacteria
and Covid-19.
Zoono individual wipes became part of
the Qantas “Fly Well” programme and
significant sales (via Zoono’s channel
partner, WINC) were made into the
childcare / education sectors, with more
sectors, including aged care and public
transport, also being targeted.
The company signed a distribution
agreement with Johns Lyng Group (ASX:
JLG) and Zoono Channel partner, Clear
Facilities, reported strong growth in the
food manufacturing/processing and
corporate sectors.
After earlier closing the online NZ store
due to unprecedented demand, the
Company re-opened this in late April.
Packing and shipping of consumer orders
were outsourced to a third-party logistics
company (3PL) in New Zealand, and the
same strategy has since been employed
for the Australian market.
Production and order fulfilment capabilities
were increased to meet demand and
raw material supplies were been secured
for well into the future. Zoono is now
blending and packaging across multiple
facilities in NZ, USA and UK.
Packaging manufacturing has been
established in New Zealand to reduce
the Company’s dependency on imports.
It also introduced recyclable refill packs
in the UK and further innovations along
these lines are planned.
In China, Zoono has reshaped its
business taking direct control of
its China business and building a
business development team to focus
on relationships with channel partners
rather than utilising distributors, with
consequent expected benefits in the form
of reduced costs and better margins.
A direct deal with Ali Baba in China and
will see the opening of an international
online store on Ali Baba to be followed
later by a TMall flagship store. Zoono
has also made in-roads into the hospital
and school market in China. It has also
picked up significant business in Hong
Kong, including Hong Kong airport,
through a channel partners.
Zoono has bought out its US distributor
and is now selling directly in the USA
through a newly established, wholly
owned subsidiary, Zoono Holdings USA
LLC. Growing Zoono’s North American
business over the next 2 to 3 years is the
primary goal, with increased resources
being allocated to support this strategic
initiative from H1 of FY21 onwards.
Replicating the success of the UK
operation in the North American market
(and Mexico) is the initial aim. Expansion
into South America is on the agenda when
resources and business permit. Several
new distribution agreements have already
been signed with US based partners.
The Company has appointed its former
Middle East agent, Dennis Montgomery,
as its Regional Manager with
responsibility for the Middle East, Africa,
Turkey, India, Pakistan and Bangladesh.
Based in the UAE, the Company intends
to build a business development team
around him to grow its business in
the region. Several new distribution
agreements have already been signed.
Significant business is also underway in
the veterinary and animal health sector,
through Zoono’s channel partners, Zoono
Animal Health and Apiam (ASX: AHX),
particularly in New Zealand, Australia,
USA, UK, Ireland, Portugal, Hungary and
Germany. Pig and poultry are forming
the core of this business, where Zoono
products have already been shown to be
very effective against several viral and
bacterial groups affecting this sector,
including African swine fever.
The Company continues negotiations
with new customers and distributors
internationally as it builds its global
antimicrobial protection business.
FINANCIAL PERFORMANCE
In the 12 months to 30 June 2020,
the Group experienced an increase in
revenue of NZ$36,552,213 (2056.8%
increase) to NZ$38,329,369 over the
FY19 year.
Gross Profit achieved was
NZ$28,333,608 (73.9% of revenue) in the
current year compared to NZ$816,693
(46.0% of revenue) in the previous year.
The increase in Gross Profit was due
to increased revenues, and the mix of
products sold which positively affected
the margins.
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dividend will be paid on 21st September
2020 with a record date of entitlement of
7th September 2020.
No other matters or circumstances have
arisen since the end of the financial
year which significantly affected or may
significantly affect the operations of the
consolidated group, the results of those
operations, or the state of affairs of the
consolidated group in future financial
years.
LIKELY DEVELOPMENTS, PROSPECTS
AND BUSINESS STRATEGIES
The consolidated entity will continue
its strategy to focus on the progressive
expansion of the sale and marketing of its
product line.
ENVIRONMENTAL REGULATIONS
The Group’s operations are minimally
affected by environmental regulations.
NEW ACCOUNTING STANDARDS
IMPLEMENTED
The Group has implemented one new
Accounting Standard that is applicable
for the current reporting period.
AASB 16: Leases has been applied
retrospectively, with the cumulative
effect of initially applying the Standard
recognised as an adjustment to the
opening balance of retained earnings at
1 July 2019. Therefore, the comparative
information has not been restated and
continues to be reported under AASB
117: Leases.
NEW ACCOUNTING STANDARDS FOR
APPLICATION IN FUTURE PERIODS
The AASB has issued a number of new
and amended Accounting Standards
and Interpretations that have mandatory
application dates for future reporting
periods, some of which are relevant
to the Group. The Group has decided
not to early adopt any of the new and
amended pronouncement as the Group
assessed that the new and amended
pronouncements have no material impact
on the Group.
The second half FY20 revenues achieved
was NZ$36,614,389 with Gross Profit for
the second half at NZ$27,440,165 (74.9%
of revenue) and Net Profit before tax for
the second half at NZ$21,139,993 (57.7%
of revenue).
Operating costs increased by
NZ$4,720,518 (140.0% increase)
compared to FY19 primarily as a result of
the increase in revenues with additional
staff taken on board to cope with the
demand and commissions paid to
distributors and agents to accelerate
revenues.
NZ$7,197,888 despite substantially
increasing stock levels during the year to
anticipate future demand (movement of
NZ$12,698,904 over FY19).
DIVIDENDS
No dividends were paid since the start
of the financial year.
FINANCIAL REVIEW
Zoono Group Limited made significant
strategic, operational and financial
progress during the year.
On a consolidated basis, the Group
delivered:
The consolidated Group net profit after
tax for the year was NZ$16,659,442
compared to a loss of NZ$2,418,984 in
the previous year (a turnaround in net
profit after tax of NZ$19,078,426).
CASH GENERATION
AND CAPITAL MANAGEMENT
Operating cash flow was achieved
with a net cash inflow of NZ$8,091,196
in the current year, an increase of
NZ$10,972,743 on the previous year.
This was predominately due to higher
revenues resulting in higher receipts
from customers and distributors being
achieved coupled with strong financial
management and credit control.
The increase in cash received from
customers and distributors was also
as a result of cash received from our
distributors in the current and prior
years for pre-paid stock. This meant
we had sales during the financial year
for which cash was received in the
current and prior years. Our Income in
advance account in the balance sheet
as a result of these sales increased
from NZ$323,661 to NZ$1,319,723 – a
movement of NZ$996,062.
The Consolidated Group issued 200,000
fully paid ordinary shares in the Company
at a deemed price of A$1.77 per share
for a total consideration of NZ$378,628
to the UK/EU Regional Manager as part
of his remuneration package and also
issued 100,000 fully paid ordinary shares
in the Company at a deemed price of
A$2.45 per share for a total consideration
of NZ$262,032 to the UAE Regional
Manager as part of his remuneration
package.
The Group ended the year solidly
with NZ$10,323,216 in cash reserves
compared to NZ$3,125,328 in
the previous year, an increase of
• Revenue: NZ$38.3m +2,056.8% (FY19:
NZ$1.8m)
• EBITDA: NZ$20.6m +944.5% (FY19:
NZ$(2.4)m))
BALANCE SHEET
The Group continues to maintain a strong
balance sheet position with net assets
of NZ$21.0m representing an annual
increase of NZ$17.1m.
The increased net asset position is
materially due to the Group’s trading
profits during the year.
EMPLOYEE OPTIONS
During the year, the Company issued
the following options to non-director
employees:
GRANT DATE
16 December 2019
EXERCISE PRICE
A$0.25
EXPIRY DATE
16 December 2023
NUMBER OF OPTIONS ISSUED
2,000,000
Option holders do not have any rights to
participate in any issue of shares or other
interests of the Company or any other
entity.
SIGNIFICANT CHANGES
IN THE STATE OF AFFAIRS
There were no significant changes in the
state of affairs of the Group during the
financial year.
MATTERS SUBSEQUENT TO THE END
OF THE FINANCIAL YEAR
The Board has approved a final dividend
of 3 cents per share ($AUD). The final
INFORMATION ON DIRECTORS
MR. PAUL HYSLOP
MANAGING DIRECTOR
MR. DON CLARKE
LLB (Hons)
INDEPENDENT NON-EXECUTIVE
DIRECTOR
MS. ELISSA HANSEN
B.Comm, Grad Dip Applied Corporate
Governance, GAICD and FGIA
INDEPENDENT NON-EXECUTIVE
DIRECTOR
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Elissa has over 21 years of experience
advising boards and management on
corporate governance, compliance,
investor relations and other corporate
related issues. She is a Chartered
Secretary who brings best practice
governance advice, ensuring compliance
with the Listing Rules, Corporations Act
and other relevant legislation.
SPECIAL RESPONSIBILITIES:
Company Secretary; member of the Audit
and Risk Committee
INTERESTS IN SHARES AND OPTIONS:
276,000 Ordinary shares
DIRECTORSHIPS OF OTHER LISTED
COMPANIES IN THE PAST THREE
YEARS:
Non-executive director, Torian Resources
Limited (appointed December 2015;
resigned 20 April 2018)
Don was a Partner of Minter Ellison’s
Melbourne Corporate Group, from 1988-
2015. He currently acts as a consultant to
them. Don has advised leading corporate
clients on broad corporation law issues
focused on equity capital markets, private
equity, mergers and acquisitions and
corporate restructures.
He is able to draw on his first-hand
experience as a corporate lawyer
and a Director, of Directors’ duties
and responsibilities and best practice
corporate governance, when advising on
the legal and practical issues faced at
head office and board level.
SPECIAL RESPONSIBILITIES:
Chairman of the Audit and Risk
Committee
INTERESTS IN SHARES AND OPTIONS:
270,000 Ordinary shares
DIRECTORSHIPS OF OTHER LISTED
COMPANIES IN THE PAST THREE
YEARS:
Non-Executive Director, Webjet Limited
(appointed January 2008)
Non-Executive Director, Contango
Income Generator Limited (appointed
August 2014)
Paul founded Zoono Group in 2007 to
address the need for a highly effective,
alternative method of combating bacteria
and microbes and quickly realised the
business opportunity surrounding this
technology. Prior to establishing Zoono,
Paul was involved in several successful
entrepreneurial ventures ranging from
the establishment of a successful private
car sales business in Auckland in 1990,
to real estate development and business
brokerage. He also set up a franchise
business in the USA 2002 – 2005.
Extremely adept at dealing with
businesses and consumers alike, he
co-established the Business Brokerage
Division at Bayley’s Real Estate – one
of the largest real estate and business
brokerages in New Zealand, where he
was twice awarded the “Salesman of the
Year” award.
Paul’s experience in business
development dates back to the 1970s,
when he started a personal-care services
business after high school, grew it
into eight locations and later sold it
to his employees. He has also been a
commercial flying instructor and Airline
pilot, having flown commuter planes for
Eagle Air, owned by Air New Zealand.
SPECIAL RESPONSIBILITIES:
Managing Director
INTERESTS IN SHARES AND OPTIONS:
66,558,000 Ordinary shares
DIRECTORSHIPS OF OTHER LISTED
COMPANIES IN THE PAST THREE
YEARS:
None.
ZOONO GROUP LIMITED ANNUAL REPORT 2020
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MEETINGS OF DIRECTORS
The number of board meetings of Zoono Group Limited directors held during the
financial year ended 30 June 2020, and the number of meetings attended by each
director were:
DIRECTORS
MEETINGS
AUDIT & RISK COMMITTEE
MEETINGS
ATTENDED
ELIGIBLE TO ATTEND
ATTENDED
ELIGIBLE TO ATTEND
Jon Lamb
Paul Hyslop
Don Clarke
Elissa Hansen
-
5
5
5
5
5
5
-
-
2
2
-
2
2
INDEMNIFICATION AND INSURANCE OF DIRECTORS, OFFICERS AND AUDITOR
The Group has entered into an agreement to indemnify directors and officers during
the financial year and has taken out an insurance policy to insure each of the directors
and officers or former directors and officers against liabilities for costs and expenses
incurred by them in defending any legal proceedings arising out of their conduct while
acting in the capacity of director or officer of the Group, other than conduct involving
a wilful breach of duty in relation to the Group. Indemnity has not been provided for
auditors. Insurance premiums of NZ$120,607 have been paid or accrued by the Group.
REGULATION
Zoono and it proposed products are subject to various laws and regulations including
but not limited to accounting standards, tax laws, environmental laws, product
content requirement, labelling/packaging, regulations and customs regulations.
Changes in these laws and regulations (including interpretation and enforcement)
could adversely affect the Group financial performance. Laws and regulations are
specific to each geographic location. In this regard, there is a risk that a certain
product may not be able to be supplied in another jurisdiction because it fails to meet
that jurisdictions regulatory requirements (e.g. product registration requirements).
Failure of the Group to remain up to date with these various regulatory requirements,
could adversely affect the Group financial performance.
There were no regulatory issues that arose during the 12 months to 30 June 2020.
PROCEEDINGS ON BEHALF OF THE GROUP
Qingdao Zoono Biotech Company Limited instigated legal proceedings against Zoono
on 20 May 2019 citing breach of contract under a distribution agreement entered into
on 29 May 2013. Zoono lodged a counter claim which stated; Qingdao breached
the distribution agreement by not meeting the minimum annual volumes under the
agreement and making disparaging comments about Zoono and its products. The
Group’s insurers have accepted the claim against Paul Hyslop but will only meet 50%
of the claim against the Company, less any insurance excess payable.
The Company took the plaintiff to Court and were awarded costs and the plaintiff was
ordered to pay costs and has failed to do so.
The Directors do not believe the outcome of the proceedings will have a material
effect on the financial statements as Zoono’s counter claim exceeds Qingadao’s
claim.
CORPORATE GOVERNANCE
The directors are responsible for the corporate governance practices of the Group.
The main corporate governance practices that were in operation during the financial
year are set out in the Corporate Governance section of the Company’s website at
http://zoono.com/corporate-governance/.
NON-AUDIT SERVICES
The directors are satisfied that the provision of non-audit services during the year is
compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. The directors are satisfied that the services disclosed below
did not compromise the external auditor’s independence for the following reasons:
• all non-audit services are reviewed and approved by the full board prior to
commencement to ensure they do not adversely affect the integrity and objectivity
of the auditor; and
• the nature of the services provided do not compromise the general principles
relating to auditor independence in accordance with APES 110: Code of Ethics for
Professional Accountants set by the Accounting Professional and Ethical Standards
Board.
There were Nil non-audit services rendered during the year ended 30 June 2020.
An independence declaration has been provided by the Group’s auditor, Hall Chadwick. A copy of this declaration is attached to,
and forms part of, the financial report for the financial year ended 30 June 2020.
Signed in accordance with a resolution of the directors.
MR. PAUL HYSLOP
MANAGING DIRECTOR/CEO
20 August 2020
15
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REMUNERATION
REPORT (AUDITED)
THE REMUNERATION REPORT IS SET OUT UNDER THE FOLLOWING MAIN HEADINGS:
1.
2.
3.
4.
PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
DETAILS OF REMUNERATION
SERVICES AGREEMENTS
SHARE-BASED COMPENSATION
THE INFORMATION PROVIDED UNDER HEADINGS 1 TO 4 INCLUDES REMUNERATION DISCLOSURES THAT ARE
REQUIRED UNDER ACCOUNTING STANDARD AASB 124 RELATED PARTY DISCLOSURES. THESE DISCLOSURES
HAVE BEEN TRANSFERRED FROM THE FINANCIAL REPORT AND HAVE BEEN AUDITED.
1. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF
REMUNERATION
The performance of the consolidated group depends upon the quality and
commitment of the directors and executives. The philosophy of the directors in
determining remuneration levels is to:
16
• set competitive remuneration packages to attract and retain high calibre
employees;
• link executive rewards to shareholder value creation; and
• establish appropriate demanding performance hurdles for variable executive
remuneration.
Given the small size of the Group’s board, and the current development stage of the
Company, a separate Remuneration Committee has not been established to review
and make recommendations to the full Board on the Group’s remuneration policies,
procedures and practices. As the Company develops, the Group may establish a
Remuneration Committee to undertake this role.
The full Board oversees the Group remuneration policies, procedures and practices
and defines the individual packages offered to executive directors and key
management personal.
The board may consider engaging an independent remuneration consultant, to advise
the board on appropriate levels of remuneration relative to its industry peer group.
In accordance with Corporate Governance best practice (Recommendation 8.2),
the structure of non- executive director and executive remuneration is separate and
distinct as follows.
A. NON-EXECUTIVE DIRECTORS’ REMUNERATION FIXED REMUNERATION:
The Board seeks to set non-executive directors’ remuneration at a level that provides
the Group with the ability to attract and retain directors of a high calibre, whilst
incurring a cost that is acceptable to shareholders.
The ASX Listing Rules specify that the aggregate remuneration of non-executive
directors shall be determined from time to time by a general meeting. The amount of
aggregate remuneration and the manner in which it is apportioned amongst directors
is reviewed annually. The Board considers advice from shareholders and takes into
account the fees paid to non-executive directors of comparable companies, when
undertaking the annual review process.
Directors’ remuneration is inclusive of committee fees. The following net annual fees
paid to non- executive directors are:
FIXED FEES
(NZ$)
1 JULY 2019 - 30 JUNE 2020
$
1 JULY 2018 - 30 JUNE 2019
$
Chairman’s Fee
Base Fee
Non-executive directors
-
$65,2312
$144,0001
$63,9832
NOTES:
1. The net annual fee paid was Nil (2019: AU$60,000) to each director and
has been converted at an average exchange rate of 1.0664 for 2019. An additional
Executive Chairman’s fee of AU$75,035 which has also been converted at an
average exchange rate of 1.0664 was also paid in the prior year.
2. The net annual fee was AU$61,667 (2019: AU$60,000) to each director and has
been converted at an average exchange rate of 1.0578 (2019: 1.0664).
B. COMPANY EXECUTIVE AND EXECUTIVE DIRECTOR REMUNERATION
Remuneration for executives and executive directors consists of fixed remuneration,
short-term incentive payments and options issued.
FIXED REMUNERATION:
Fixed remuneration is reviewed annually by the directors. The process consists of a
review of relevant comparative remuneration in the employment market and within the
Group. The Group may engage an independent remuneration consultant, to advise
the board on appropriate levels of remuneration for the Group’s Executive Directors
relative to its industry peer group.
2. DETAILS OF REMUNERATION
Details of the remuneration of the Key Management Personnel (as defined in AASB
124 Related Party Disclosures) are set out in Table 1 which follows.
The Key Management Personnel of Zoono Group Limited, including the directors and
the following consolidated group executives, have authority and responsibility for
planning, directing and controlling the activities of the consolidated group.
Lew MacKinnon -
-
Paul Ravlich
Chief Operating Officer
Chief Financial Officer
These executives together with the directors comprise the named relevant
consolidated group executives who make or participate in making decisions that
affect the whole, or a substantial part, of the business or who have the capacity to
affect significantly the Group’s financial standing.
17
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TABLE 1: DETAILS OF REMUNERATION – DIRECTORS AND KEY MANAGEMENT PERSONNEL.
SHORT-TERM
BENEFITS
OTHER
BENEFITS
SHARE BASED
PAYMENTS
TOTAL
Cash Salary
& Fees
$NZD
STI
Payments
$NZD
Termination
Benefits
$NZD
Prescribed
Benefits
$NZD
Shares
$NZD
$NZD
PERCENTAGE
PERFORMANCE
BASED BONUS
PAYMENTS
PERCENTAGE
SHARE-BASED
PAYMENTS
Year ended 30 June 2020
Executive directors
Paul Hyslop
Non-Executive directors
Don Clarke
Elissa Hansen
Other key management personnel
Lew MacKinnon
Paul Ravlich
18
Total
377,938
50,000
65,231
65,231
-
-
126,415
201,800
7,000
-
836,615
57,000
-
-
-
-
-
-
-
-
-
-
6,102
6,102
-
-
-
427,938
11.68%
65,231
65,231
-
-
91,506
64,054
224,921
271,956
3.11%
-
155,560
1,055,277
5.40%
-
-
-
40.68%
23.55%
14.74%
TABLE 2: DETAILS OF REMUNERATION – DIRECTORS AND KEY MANAGEMENT PERSONNEL.
SHORT-TERM
BENEFITS
OTHER
BENEFITS
SHARE BASED
PAYMENTS
TOTAL
Cash Salary
& Fees
$NZD
STI
Payments
$NZD
Termination
Benefits
$NZD
Prescribed
Benefits
$NZD
Shares
$NZD
$NZD
PERCENTAGE
PERFORMANCE
BASED BONUS
PAYMENTS
PERCENTAGE
SHARE-BASED
PAYMENTS
Year ended 30 June 2019
Executive directors
Jon Lamb
Paul Hyslop
Non-Executive directors
Don Clarke
Elissa Hansen
Other key management personnel
Lew MacKinnon
Paul Ravlich
Total
144,000
377,938
63,983
108,771
124,107
205,197
1,023,996
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,102
6,102
-
-
-
-
-
-
-
144,000
377,938
63,983
108,771
124,107
211,299
1,030,098
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1. Elissa Hansen’s remuneration includes director remuneration of AU$60,000 per annum together with fees charged for Company secretarial services at a rate
of AU$3,500 per month, converted to NZ$ at an average exchange rate of 1.0664.
19
Share options of 500,000 were issued
on 16 December 2019, vesting on 16
December 2020, exercisable at A$0.25
and expiring 16 December 2023.
PAUL RAVLICH
CHIEF FINANCIAL OFFICER
Base Remuneration:
Other Benefits: Entitlement to a cash
payment of up to $40,000 contingent on
the Group achieving budgeted results in
the year.
$220,000
Employment Conditions
Commencement Date:
Term:
Review:
1 May 2017
One year
Annually
Share options of 350,000 were issued
on 16 December 2019, vesting on 16
December 2020, exercisable at A$0.25
and expiring 16 December 2023.
4. VOTING AND COMMENTS MADE
AT THE COMPANY LAST ANNUAL
GENERAL MEETING
The resolution to adopt Zoono Group
Limited’s Remuneration Report for the
financial year ended 30 June 2019 was
passed by way of a poll with a 91% ‘yes’
vote. The Company received no specific
feedback on Remuneration Report either
at the Annual General Meeting or at other
times.
3. SERVICE AGREEMENTS
The following is a summary of the current
major provisions of the agreements
relating to remuneration of Executive
Directors in NZ Dollars:
JON LAMB
EXECUTIVE CHAIRMAN
(Resigned 9 July 2019)
Jon Lamb was Executive Chairman of the
Group during the year until his resignation
in July 2019 and and considered a key
member of the Group’s management
team.
Employment Conditions
Commencement Date:
Term:
Review:
26 April 2017
One year
Annually
PAUL HYSLOP
MANAGING DIRECTOR
Paul Hyslop is the Managing Director
of the Group and is considered a key
member of the Group’s management
team. Paul is founder of Zoono.
Employment Conditions
Commencement Date:
Term:
Review:
26 April 2017
Two years
Annually
INDEPENDENT REVIEW
To ensure the Group complied with
industry best practice in relation to the
remuneration of its executive directors,
the non-executive directors of the Group
will consider engaging the services of
a remuneration consultant to conduct
an independent assessment of the
remuneration packages negotiated with
its executive director.
LEW MACKINNON
CHIEF OPERATIONS OFFICER
Base Remuneration:
Other Benefits:
Use of a company vehicle.
$120,000
Employment Conditions
Commencement Date:
Term:
Review:
1 June 2017
One year
Annually
ZOONO GROUP LIMITED ANNUAL REPORT 2020
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AUDITOR’S INDEPENDENCE
DECLARATION
ZOONO GROUP LIMITED AND CONTROLLED ENTITIES
ABN 73 006 645 754
AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF ZOONO GROUP LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide
the following declaration of independence to the directors of Zoono Group Limited. As
the lead audit partner for the audit of the financial report of Zoono Group Limited for the
year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there
have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
20
(ii)
any applicable code of professional conduct in relation to the audit.
HALL CHADWICK (NSW)
Level 40, 2 Park Street
Sydney NSW 2000
DREW TOWNSEND
Partner
Dated: 20 August 2020
CONSOLIDATED STATEMENT OF
PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2020
NOTES
5
5
18
6
7
24
24
Revenue
Cost of sales
Gross profit
Other revenue
Administration expenses
Depreciation/Amortisation expenses
Directors’ fee
Employee costs
Finance costs
Management fee
Professional fees
Share based payment
Selling and distribution expenses
Marketing expenses
Listing expenses and other acquisition costs
Other expenses
Profit/(Loss) before Income Tax
Income tax expense
Profit/(Loss) attributable to members
Other comprehensive income:
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Total other comprehensive income
Total comprehensive profit/(loss) attributable to members
Profit per share attributable to the
ordinary equity holders of the company
Basic profit/(loss) per share (cents)
Diluted profit/(loss) per share (cents)
The accompanying notes form part of these financial statements
2020
NZ$
38,329,369
(9,995,761)
28,333,608
170,778
(101,738)
(197,437)
(129,859)
(2,179,100)
(52,559)
(430,006)
(1,098,020)
(366,026)
(1,748,361)
(267,972)
(206,528)
(1,314,731)
20,412,049
(3,752,607)
16,659,442
(538,246)
(538,246)
16,121,196
2019
NZ$
1,777,156
(960,463)
816,693
136,142
(46,495)
(90,012)
(271,967)
(1,070,819)
(10,140)
(377,938)
(591,881)
-
(290,018)
(197,874)
(94,741)
(329,934)
(2,418,984)
-
(2,418,984)
(28,736)
(28,736)
(2,447,720)
21
10.20
10.13
(1.48)
(1.48)
ZOONO GROUP LIMITED ANNUAL REPORT 2020
CONSOLIDATED
STATEMENT OF
FINANCIAL POSITION
AS AT 30 JUNE 2020
0
2
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NOTES
23(a)
9
10
14
11
12
13
15
13
16
13
16
17
18
8
2020
NZ$
10,323,216
9,229,419
13,202,029
176,027
32,930,691
229,355
37,226
1,500,255
1,766,836
34,697,527
8,419,895
201,157
-
3,752,607
12,373,659
2019
NZ$
3,125,328
820,299
503,125
64,250
4,513,002
113,349
69,604
-
182,953
4,695,955
751,592
-
22,853
-
774,445
1,359,022
-
-
1,359,022
13,732,681
20,964,846
12,461,800
(97,140)
8,600,186
20,964,846
68,923
68,923
843,368
3,852,587
11,821,140
75,080
(8,043,633)
3,852,587
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Intangible assets
Right of use assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
22
CURRENT LIABILITIES
Trade and other payables
Lease liabilities
Borrowings
Current tax liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities
Borrowings
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated profits/(losses)
TOTAL EQUITY
The accompanying notes form part of these financial statements
CONSOLIDATED
STATEMENT OF
CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2020
ISSUED
CAPITAL
RESERVES
ACCUMULATED
PROFITS
TOTAL
NOTE
ORDINARY
SHARES
NZ$
FOREIGN
CURRENCY
TRANSLATION
NZ$
SHARE BASED
PAYMENT
RESERVE
NZ$
Balance at 1 July 2019
11,821,140
75,080
Cumulative adjustments upon
adoption of new accounting
standard – AASB 16
-
-
Balance at 1 July 2019 (restated)
11,821,140
75,080
Profit for the full year
Other comprehensive income
for the full year
Total comprehensive income/(loss)
for the full year
Transactions with owners in their
capacity as owners:
Shares issued during the full year,
net of issue costs
Share based payments
Total transactions with owners
-
-
-
-
(538,246)
(538,246)
17
18
640,660
-
640,660
-
-
-
Balance at 30 June 2020
12,461,800
(463,166)
-
-
-
-
-
-
-
366,026
366,026
366,026
NZ$
NZ$
(8,043,633)
3,852,587
(15,623)
(15,623)
(8,059,256)
3,836,964
16,659,442
16,659,442
-
(538,246)
16,659,442
16,121,196
23
-
-
-
640,660
366,026
1,006,686
8,600,186
20,964,846
The accompanying notes form part of these financial statements
ZOONO GROUP LIMITED ANNUAL REPORT 2020
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CONSOLIDATED
STATEMENT OF
CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019
ISSUED
CAPITAL
RESERVES
ACCUMULATED
LOSSES
TOTAL
NOTE
ORDINARY
SHARES
NZ$
FOREIGN
CURRENCY
TRANSLATION
NZ$
NZ$
NZ$
Balance at 1 July 2018
11,781,716
103,816
(5,624,649)
6,260,883
Loss for the year
Other comprehensive income for the year
Total comprehensive income/(loss) for the year
-
-
-
-
(2,418,984)
(2,418,984)
(28,736)
-
(28,736)
(28,736)
(2,418,984)
(2,447,720)
Transactions with owners in their capacity as owners
Shares issued during the year, net of issue costs
17
Total transactions with owners
Balance at 30 June 2019
24
39,424
39,424
-
-
-
-
39,424
39,424
11,821,140
75,080
(8,043,633)
3,852,587
The accompanying notes form part of these financial statements
CONSOLIDATED
STATEMENT OF
CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers
Payments to suppliers and employees
Interest received
Finance cost
NOTES
2020
NZ$
2019
NZ$
30,998,938
(22,946,152)
90,969
(52,559)
1,129,303
(4,117,836)
117,126
(10,140)
Net cash provided/(used in) operating activities
23(b)
8,091,196
(2,881,547)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for property, plant and equipment
Amounts provided to/(from) third party
Net cash provided/(used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Share issue costs
Repayment of borrowings and lease liabilities
Net cash provided/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Effects of foreign exchange on cash balance
Cash and cash equivalents at beginning of year
(137,398)
-
(137,398)
-
(195,975)
(195,975)
7,757,823
(559,935)
3,125,328
Cash and cash equivalents at end of year
23(a)
10,323,216
25
(34,359)
-
(34,359)
(1,884)
(25,620)
(27,504)
(2,943,410)
(27,575)
6,096,313
3,125,328
The accompanying notes form part of these financial statements
ZOONO GROUP LIMITED ANNUAL REPORT 2020
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26
NOTES TO
THE FINANCIAL
STATEMENTS
1. NATURE OF OPERATIONS
Zoono Group Limited and Subsidiaries
(the Group) principal activities included
the research, development and sale
of a range of antimicrobial products in
multiple countries.
2. GENERAL INFORMATION AND
STATEMENT OF COMPLIANCE
The consolidated financial statements
are a general-purpose financial report
that has been prepared in accordance
with Australian Accounting Standards,
Australian Accounting Interpretations,
other authoritative pronouncements of
the Australian Accounting Standards
Board and the Corporations Act 2001.
Compliance with Australia Accounting
Standards results in full compliance with
the International Financial Reporting
Standards (‘IFRS’) as issued by the
International Accounting Standards Board
(IASB). For the purposes of preparing the
Consolidated Financial Statement, the
Company is a for-profit entity.
Zoono Group Limited (the Company) is
the Ultimate Parent Company, Zoono
Group Limited is a Public Company
incorporated in Australia and domiciled
in New Zealand. The Company registered
address is Level 12, 225 George Street
Sydney NSW 2000 Australia.
The Consolidated financial statements of
the Group as at and for the year ended 30
June 2020 comprise the Company and
its subsidiaries (together referred to as
the ‘Group’ or ‘Consolidated entity’). The
consolidated financial statements for the
year ended 30 June 2020 were approved
and authorised for issue by the board of
Directors on 20 August 2020.
Except for cash flow information, the
consolidated financial statements have
been prepared on an accrual basis and
are based on historical costs modified,
where applicable, by the measurements
at fair value of selected non-current
assets, financial assets and financial
liabilities.
Statement of Cash Flows
The statement of cash flows comprises
the cash balance of Zoono Limited,
Zoono Group Limited and Zoono
Holdings Limited at the beginning of the
financial year, and the cash transactions
of the consolidated Group for the
12-month period.
3. CHANGES IN ACCOUNTING
POLICIES
(a) New and amended Standards
adopted by the Group
The Group has considered the
implications of new or amended
Accounting Standards which have
become applicable for the current
financial reporting period as set out
below:
Initial application of AASB 16
The Group has adopted AASB 16:
Leases retrospectively with the
cumulative effect of initially applying
AASB 16 recognised at 1 July 2019.
In accordance with AASB 16, the
comparatives for the 30 June 2019
reporting period have not been
restated.
The Group has recognised a lease
liability and right-of-use asset for all
leases (with the exception of short-
term and low-value leases) recognised
as operating leases under AASB 117:
Leases where the Group is the lessee.
There has been no significant change
from prior period treatment for leases
where the Group is a lessor.
The lease liabilities are measured at
the present value of the remaining
lease payments. The Group’s
incremental borrowing rate as at 1 July
2019 was used to discount the lease
payments.
The right-of-use asset for wmotor
vehicles was measured at its carrying
amount as if AASB 16 had been
applied since the commencement
date, but discounted using the Group’s
incremental borrowing rate per lease
term as at 1 July 2019.
The right-of-use assets for the remaining leases were measured and recognised in the
statement of financial position as at 1 July 2019 by taking into consideration the lease
liability and prepaid and accrued lease payments previously recognised as at 1 July
2019 (that are related to the lease).
The following practical expedients have been used by the Group in applying AASB 16
for the first time:
for a portfolio of leases that have reasonably similar characteristics, a single
-
discount rate has been applied;
leases that have a remaining lease term of less than 12 months as at 1 July 2019
-
have been accounted for in the same way as short-term leases;
the use of hindsight to determine lease terms on contracts that have options to
-
extend or terminate;
- applying AASB 16 to leases previously identified as leases under AASB 117 and
Interpretation 4: Determining whether an arrangement contains a lease without
reassessing whether they are, or contain, a lease at the date of initial application;
and
- not applying AASB 16 to leases previously not identified as containing a lease
under AASB 117 and Interpretation 4.
Adjustments recognised in the balance sheet on 1 July 2019
The following summary indicates the adjustments and reclassifications of financial
statement line items in the balance sheet due to the implementation of AASB 16.
CARRYING AMOUNT
UNDER AASB 117
$
Property, plant and
equipment
Right of use assets
Borrowings
Lease liabilities
113,349
-
(91,776)
-
Retained earnings
(8,043,633)
ADJUSTMENTS
$
(62,914)
592,950
91,776
(634,827)
(15,623)
Measurement of lease liabilities
Operating lease commitments disclosed as at 30 June 2019
Add: finance lease liabilities recognised as at 30 June 2019
Add: Adjustments as a result of a different treatment of
extension and termination options
Lease liabilities recognised as at 1 July 2019
Represented by:
-
-
Current lease liabilities
Non-current lease liabilities
CARRYING AMOUNT
UNDER AASB 16
$
50,435
592,950
-
(634,827)
(8,059,256)
$
179,375
91,776
363,676
634,827
105,336
529,491
634,827
In the previous year, the Group only recognised lease assets and lease liabilities in
relation to leases that were classified as “finance leases” under AASB 117: Leases.
The assets were presented in property, plant and equipment and the liabilities as part
of the group’s borrowings. For adjustments recognised on adoption of AASB 16 on 1
July 2019, please refer to Note 3(a).
Measurement of right of use assets
The associated right of use assets for property leases were measured on a
retrospective basis as if the new rules had always been applied. Other right-of-use
assets were measured at the amount equal to the lease liability, adjusted by the
amount of any prepaid or accrued lease payments relating to that lease recognised in
the balance sheet as at 30 June 2019.
(b) New Accounting Standards for
application in future periods
The AASB has issued a number of new
and amended Accounting Standards
and Interpretations that have
mandatory application dates for future
reporting periods, some of which are
relevant to the Group. The Group has
decided not to early adopt any of the
new and amended pronouncements as
the Group assessed that the new and
amended pronouncements have no
material impact on the Group.
4. SUMMARY OF
ACCOUNTING POLICIES
The following significant accounting
policies have been adopted in the
preparation and presentation of the
financial report.
(a) General
Material accounting policies adopted in
the preparation of this financial report
are presented below and have been
consistently applied unless otherwise
stated.
Reporting basis and conventions
These financial statements have been
prepared on an accruals basis under the
historical cost convention, as modified
by the revaluation of available-for-sale
financial assets, financial assets and
liabilities at fair value.
Critical accounting estimates and
judgements
The preparation of a financial report in
conformity with Australian Accounting
Standards requires management to make
estimates, judgements and assumptions
based on historical knowledge and best
available current information. Estimates
assume a reasonable expectation of
future events and are based on current
trends and economic data obtained both
externally and within the Group.
Actual results may differ from the
estimates.
Fair value of financial assets
The Group records the fair value of
financial assets using the market value
of the investments at reporting date.
While this represents the best estimate
of the fair value as at the reporting date,
the current market uncertainty means
that, if the financial assets are sold in the
future, the price achieved may be higher
or lower than the most recent valuation,
and higher or lower than the fair value
recorded in the financial statements.
Impairment
In assessing impairment, management
estimates the recoverable amount of each
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asset or cash generating unit based on
expected future cash flows and, where
required, uses an interest rate to discount
them.
Estimation uncertainty relates to
assumptions about future operating
results and the determination of a
suitable discount rate.
Useful lives of depreciable assets
Management reviews its estimate of the
useful lives of depreciable assets at each
reporting date, based on the expected
useful life of the assets. Uncertainties
in these estimates relate to technical
obsolescence that may change the value
of certain software and IT equipment.
Inventories
Management estimates the net realisable
values of inventories, taking into account
the most reliable evidence available at
each reporting date. The future realisation
of these inventories may be affected by
future technology or other market-driven
changes that may reduce future selling
prices.
(b) Basis of Consolidation
The consolidated financial statements
incorporate all of the assets, liabilities
and results of Zoono Group Limited
and all subsidiaries as of 30 June 2020.
Subsidiaries are all entities over which the
Group has control. The Group controls an
entity when it is exposed to, or has rights
to, variable returns from its involvement
with the entity and has the ability to affect
those returns through its power to direct
the activities of the entity.
The assets, liabilities and results of
all subsidiaries are fully consolidated
into the financial statements of the
Group from the date on which control is
obtained by the Group. The consolidation
of a subsidiary is discontinued from the
date that control ceases.
Intercompany transactions, balances
and unrealised gains or losses on
transactions between group entities
are fully eliminated on consolidation.
Accounting policies of subsidiaries have
been changed and adjustments made
where necessary to ensure uniformity of
the accounting policies adopted by the
Group.
(c) Business combinations
The Group applies the acquisition method
in accounting for business combinations.
The consideration transferred by the
Group to obtain control of a subsidiary is
calculated as the sum of the acquisition-
date of fair values of assets transferred,
liabilities incurred and the equity interests
issued by the Group, which includes
the fair value of any asset or liability
arising from a contingent consideration
arrangement. Acquisition costs are
expensed as incurred.
The Group recognises identifiable
assets acquired and liabilities assumed
in a business combination regardless
of whether they have been previously
recognised in the acquiree’s financial
statements prior to the acquisition.
Assets acquired and liabilities assumed
are generally measured at their
acquisition-date fair values.
Goodwill is stated after separate
recognition of identifiable intangible
assets. It is calculated as the excess of
the sum of: (a) fair value of consideration
transferred, (b) the recognised amount
of any non-controlling interest in the
acquiree, and (c) acquisition-date fair
value of any existing equity interest in
the acquiree, over the acquisition-date
fair values of identifiable net assets. If
the fair values of identifiable net assets
exceed the sum calculated above, the
excess amount (i.e. gain on a bargain
purchase) is recognised in profit or loss
immediately.
(d) Foreign Currency Transactions
and Balances Functional and
presentation currency
The functional currency of each of
the Group entities is measured using
the currency of the primary economic
environment in which that entity operates.
The consolidated financial statements
are presented in New Zealand dollars,
which is the parent entity’s functional and
presentation currency.
Transactions and balances
Foreign currency transactions are
translated into functional currency using
the exchange rates prevailing at the
date of the transaction. Foreign currency
monetary items are translated at the year-
end exchange rate. Non-monetary items
measured at historical cost continue to
be carried at the exchange rate at the
date of the transaction. Non-monetary
items measured at fair value are reported
at the exchange rate at the date when fair
values were determined.
Exchange differences arising on the
translation of monetary items are
recognised in profit or loss, except where
deferred in equity as a qualifying cash
flow or net investment hedge.
Exchange differences arising on the
translation of non-monetary items
are recognised directly in other
comprehensive income to the extent that
the underlying gain or loss is recognised
in other comprehensive income;
otherwise the exchange difference is
recognised in profit or loss.
Group companies
The financial results and position of
foreign operations whose functional
currency is different from the Group’s
presentation currency is translated as
follows:
• Assets and liabilities are translated at
year end exchange rates prevailing at
that reporting date.
Income and expenses are translated at
•
average exchange rates for the year.
• Retained earnings/Accumulated
losses are translated at the exchange
rates prevailing at the date of the
transaction.
Exchange differences arising on
translation of foreign operations with
functional currencies other than the
Australian dollar are recognised in other
comprehensive income and included in
the foreign currency translation reserve
in the statement of financial position. The
cumulative amount of these differences is
reclassified into profit or loss in the period
in which the operation is disposed of.
(e) Cash and cash equivalents
Cash and cash equivalents includes
cash on hand, deposits held at call with
banks and other short- term highly liquid
investments with original maturities 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.
(f) Income tax
The charge for current income tax
expense is calculated by reference to
the amount of income taxes payable
or recoverable in respect of the taxable
profit or loss for the period. It is
calculated using the tax rates that have
been enacted or are substantially enacted
by the reporting date.
Deferred tax is accounted for using the
liability method in respect of temporary
differences arising between the tax bases
of assets and liabilities and their carrying
amounts in the financial statements. No
deferred income tax will be recognised
from the initial recognition of an asset
or liability, excluding a business
combination, where there is no effect on
accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates
that are expected to apply to the period
when the asset is realised or liability is
settled. Deferred tax is charged to the
statement of profit or loss and other
comprehensive income except where
it relates to items that may be credited
directly to equity, in which case the
deferred tax is adjusted directly against
equity.
Deferred income tax assets are
recognised to the extent that it is
probable that future tax profits will be
available against which deductible
temporary differences can be utilised.
Current tax assets and liabilities are
offset where a legally enforceable right of
set-off exists and it is intended that net
settlement or simultaneous realisation
and settlement of the respective asset
and liability will occur. Deferred tax assets
and liabilities are offset where a legally
enforceable right of set-off exists, the
deferred tax assets and liabilities relate
to income taxes levied by the same
taxation authority on either the same
taxable entity or different taxable entities
where it is intended that net settlement or
simultaneous realisation and settlement
of the respective asset and liability
will occur in future periods in which
significant amounts of deferred tax assets
or liabilities are expected to be recovered
or settled.
The amount of benefits brought to
account or which may be realised in the
future is based on the assumption that
no adverse change will occur in income
taxation legislation and the anticipation
that the consolidated entity will derive
sufficient future assessable income
to enable the benefit to be realised
and comply with the conditions of
deductibility imposed by the law.
(g) Inventories
Inventories are measured at the lower
of cost and net realisable value. The
cost of manufactured products includes
direct materials, direct labour and
an appropriate proportion of variable
and fixed overheads. Overheads are
applied on the basis of normal operating
capacity. Costs are assigned on a first-in,
first-out basis. Net realisable value is the
estimated selling price in the ordinary
course of business less any applicable
selling expenses.
(h) Property, plant and equipment -
Plant and equipment
Plant and equipment are measured
on the cost basis less accumulated
depreciation and impairment losses.
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 the profit or loss during
the financial period in which they are
incurred. All fixed assets are depreciated
over their estimated useful lives to the
Group.
The depreciation rates used for each
class of depreciable assets are:
CLASS OF
FIXED ASSET
DEPRECIATION
RATE
Plant and equipment
10 – 33%
Motor vehicles
30%
Furniture and equipment
13 – 33%
Computer equipment
48 – 67 %
Depreciation
The assets’ residual values and useful
lives are reviewed, and adjusted if
appropriate, at each reporting date. An
asset’s carrying amount is written down
immediately to its recoverable amount
if the asset’s carrying amount is greater
than its estimated recoverable amount.
Gains and losses on disposals are
determined by comparing proceeds with
the carrying amount. These gains and
losses are included in the profit or loss
within other income or expenses.
(i) Intangible Assets
Patents, trademarks and website
development
Patents, trademarks and website
development are recognised at cost
of acquisition. They have a finite
life and are carried at cost less any
accumulated amortisation and any
impairment losses. Patents, trademarks
and website development are amortised
over their useful lives of up to 10
years. Amortisation has been included
within depreciation, amortisation and
impairment of non-financial assets.
(j) Impairment of Assets
At the end of each reporting period, the
Group assesses whether there is any
indication that an asset may be impaired.
The assessment will include considering
external sources of information and
internal sources of information including
dividends received from subsidiaries,
associates or joint ventures deemed to
be out of pre-acquisition profits. If such
an indication exists, an impairment test is
carried out on the asset by comparing the
recoverable amount of the asset, being
the higher of the asset’s fair value less
costs of disposal and value in use, to the
asset’s carrying amount. Any excess of
the asset’s carrying amount over its
recoverable amount is recognised
immediately in profit or loss, unless the
asset is carried at a re-valued amount.
Any impairment loss of a re-valued asset
is treated as a revaluation decrease.
Where it is not possible to estimate
the recoverable amount of an
individual asset, the Group estimates
the recoverable amount of the cash-
generating unit to which the asset
belongs. Impairment testing is performed
annually for goodwill and intangible
assets with indefinite lives.
(k) Fair Value of Assets and Liabilities
The Group measures some of its assets
and liabilities at fair value on either
a recurring or non- recurring basis,
depending on the requirements of the
applicable Accounting Standard.
Fair value is the price the Group would
receive to sell an asset or would have
to pay to transfer a liability in an orderly
(i.e. unforced) transaction between
independent, knowledgeable and willing
market participants at the measurement
date.
As fair value is a market-based measure,
the closest equivalent observable market
pricing information is used to determine
fair value. Adjustments to market values
may be made having regard to the
characteristics of the specific asset or
liability. The fair values of assets and
liabilities that are not traded in an active
market are determined using one or more
valuation techniques. These valuation
techniques maximise, to the extent
possible, the use of observable market
data.
To the extent possible, market
information is extracted from either
the principal market for the asset or
liability (i.e. the market with the greatest
volume and level of activity for the asset
or liability) or, in the absence of such a
market, the most advantageous market
available to the entity at the end of the
reporting period (i.e. the market that
maximises the receipts from the sale of
the asset or minimises the payments
made to transfer the liability, after taking
into account transaction costs and
transport costs).
For non-financial assets, the fair value
measurement also takes into account
a market participant’s ability to use the
asset in its highest and best use or to
sell it to another market participant that
would use the asset in its highest and
best use.
The fair value of liabilities and the entity’s
own equity instruments (excluding
those related to share- based payment
arrangements) may be valued, where
there is no observable market price
in relation to the transfer of such
financial instruments, by reference to
observable market information where
such instruments are held as assets.
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Where this information is not available,
other valuation techniques are adopted
and, where significant, are detailed
in the respective note to the financial
statements.
(l) Accounts payable
Trade payables and other accounts
payable are recognised when the
Group becomes obliged to make future
payments resulting from the purchase
of goods and services. Due to their
short-term nature they are measured
at amortised cost and not discounted.
These amounts are unsecured and are
usually paid within 30 days of recognition.
(m) Provisions, contingent liabilities
and contingent assets
Provisions for product warranties, legal
disputes, onerous contracts or other
claims are recognised when the Group
has a present legal or constructive
obligation as a result of a past event, it
is probable that an outflow of economic
resources will be required from the Group
and amounts can be estimated reliably.
Timing or amount of the outflow may still
be uncertain.
Restructuring provisions are recognised
only if a detailed formal plan for the
restructuring has been developed and
implemented, or management has at
least announced the plan’s main features
to those affected by it. Provisions are not
recognised for future operating losses.
Provisions are measured at the estimated
expenditure required to settle the present
obligation, based on the most reliable
evidence available at the reporting date,
including the risks and uncertainties
associated with the present obligation.
Where there are a number of similar
obligations, the likelihood that an
outflow will be required in settlement is
determined by considering the class of
obligations as a whole. Provisions are
discounted to their present values, where
the time value of money is material.
Any reimbursement that the Group can
be virtually certain to collect from a
third party with respect to the obligation
is recognised as a separate asset.
However, this asset may not exceed the
amount of the related provision. In those
cases where the possible outflow of
economic resources as a result of present
obligations is considered improbable or
remote, no liability is recognised.
(n) Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities
are recognised when the entity becomes
a party to the contractual provisions of
the instrument. For financial assets, this
is equivalent to the date that the Group
commits itself to either purchase or sell
the asset (i.e. trade date accounting is
adopted).
Financial instruments are initially
measured at fair value plus transaction
costs, except where the instrument is
classified “at fair value through profit or
loss”, in which case transaction costs are
recognised as expenses in profit or loss
immediately.
Classification and subsequent
measurement
Financial instruments are subsequently
measured at fair value, amortised cost
using the effective interest method, or
cost. Where available, quoted prices in an
active market are used to determine fair
value. In other circumstances, valuation
techniques are adopted.
Amortised cost is calculated as the
amount at which the financial asset or
financial liability is measured at initial
recognition less principal repayments
and any reduction for impairment and
adjusted for any cumulative amortisation
of the difference between that initial
amount and the maturity amount
calculated using the effective interest
method.
The effective interest method is used
to allocate interest income or interest
expense over the relevant period and
is equivalent to the rate that exactly
discounts estimated future cash
payments or receipts (including fees,
transaction costs and other premiums or
discounts) through the expected life (or
when this cannot be reliably predicted,
the contractual term) of the financial
instrument to the net carrying amount
of the financial asset or financial liability.
Revisions to expected future net cash
flows will necessitate an adjustment to
the carrying amount with a consequential
recognition of an income or expense item
in profit or loss.
(i) Loans and receivables
Loans and receivables are non-derivative
financial assets with fixed or determinable
payments that are not quoted in an active
market and are subsequently measured
at amortised cost. Gains or losses are
recognised in profit or loss through the
amortisation process and when the
financial asset is derecognised.
(ii) Financial liabilities
Non-derivative financial liabilities other
than financial guarantees are subsequently
measured at amortised cost. Gains or
losses are recognised in profit or loss
through the amortisation process and
when the financial liability is derecognised.
Impairment
At the end of each reporting period,
the Group assesses whether there is
objective evidence that a financial asset
has been impaired. A financial asset (or a
group of financial assets) is deemed to be
impaired if, and only if, there is objective
evidence of impairment as a result of
one or more events (a “loss event”)
having occurred, which has an impact
on the estimated future cash flows of the
financial asset(s).
In the case of financial assets carried at
amortised cost, loss events may include:
indications that the debtors (or a group
of debtors) are experiencing significant
financial difficulty, default or delinquency
in interest or principal payments;
indications that they will enter bankruptcy
or other financial reorganisation;
and changes in arrears or economic
conditions that correlate with defaults.
For financial assets carried at amortised
cost (including loans and receivables), a
separate allowance account is used to
reduce the carrying amount of financial
assets impaired by credit losses. After
having taken all possible measures of
recovery, if management establishes that
the carrying amount cannot be recovered
by any means, at that point the written-
off amounts are charged to the allowance
account, or the carrying amount of
impaired financial assets is reduced
directly if no impairment amount was
previously recognised in the allowance
account.
When the terms of financial assets that
would otherwise have been past due
or impaired have been renegotiated,
the Group recognises the impairment
for such financial assets by taking into
account the original terms as if the terms
have not been renegotiated so that the
loss events that have occurred are duly
considered.
De-recognition
Financial assets are derecognised when
the contractual rights to receipt of cash
flows expire or the asset is transferred
to another party whereby the entity no
longer has any significant continuing
involvement in the risks and benefits
associated with the asset. Financial
liabilities are derecognised when the
related obligations are discharged,
cancelled or have expired. The difference
between the carrying amount of
the financial liability extinguished or
transferred to another party and the fair
value of consideration paid, including the
transfer of non-cash assets or liabilities
assumed, is recognised in profit or loss.
(o) Receivables
Trade receivable are initially recognised
at fair value and subsequently measured
at amortised cost using the affective
interest method, less any allowance for
impairment.
(p) Employee Benefits
Short-term employee benefits
Provision is made for the Group’s
obligation for short-term employee
benefits. Short-term employee benefits
are benefits (other than termination
benefits) that are expected to be settled
wholly before 12 months after the end of
the annual reporting period in which the
employees render the related service,
including wages, salaries and sick
leave. Short-term employee benefits are
measured at the (undiscounted) amounts
expected to be paid when the obligation
is settled.
The Group’s obligations for short-term
employee benefits such as wages,
salaries and sick leave are recognised as
part of current trade and other payables
in the statement of financial position.
(q) Share-based payments
The cost to the Company of share
options granted to directors and
executive officers is included at fair value
as part of the directors’ and executive
officers’ aggregate remuneration in the
financial year the options are granted.
The fair value of the share option are
calculated using the Black Scholes option
pricing model, which takes into account
the exercise price, the term of the option,
the vesting and performance criteria,
the impact of dilution, the non-tradable
nature of the option, the current price and
expected price volatility of the underlying
share, the expected dividend yield and
the risk- free interest rate for the term of
the option.
The fair value determined at the grant
date of the equity settled share-based
payment is expensed on a straight-line
basis over the vesting period.
(r) Revenue
Revenue is measured at the fair value of
the consideration received or receivable
after taking into account any trade
discounts and volume rebates allowed.
Any consideration deferred is treated as
the provision of finance and is discounted
at a rate of interest that is generally
accepted in the market for similar
arrangements. The difference between
the amount initially recognised and the
amount ultimately received is interest
revenue.
Revenue from the sale of goods is
recognised at the point of delivery as this
corresponds to the transfer of significant
risks and rewards of ownership of
the goods and the cessation of all
involvement by the Group in those goods.
All revenue is stated net of the amount of
goods and services tax.
Other income
Interest revenue is recognised using
the effective interest method, which for
floating rate financial assets is the rate
inherent in the instrument.
Dividend revenue is recognised when
the right to receive a dividend has been
established.
Realised gains and losses on sale are
recognised as income or expense
respectively in the statement of profit or
loss and other comprehensive income and
are calculated as the difference between
consideration on sale and the original
cost.
(s) Goods and services tax (GST)
The Statement of Profit or Loss and
Other Comprehensive Income has been
prepared so that all components are
stated exclusive of GST, except where the
amount of GST incurred is not recoverable
from the tax office. All items in the
Statement of Financial Position are stated
exclusive of GST, with the exception of
receivables and payables, which include
GST.
(t) Earnings per share
i) Basic earnings per share:
Basic earnings per share is determined
by dividing the operating profit/(loss) after
income tax excluding any cost of servicing
equity other than ordinary shares by the
weighted average number of ordinary
shares outstanding during the financial
year.
ii) Diluted earnings per share:
Diluted earnings per share adjusts the
figures used in determining earnings per
share by taking into account amounts
unpaid on ordinary shares and any
reduction in earnings per share that will
probably arise from the exercise of options
outstanding during the financial year.
(u) Segment reporting
Segment revenues and expenses
are those directly attributable to the
segments and include any joint revenue
and expenses where a reasonable basis
of allocation exists. Segment assets
include all assets used by a segment and
consist principally of cash, receivables,
inventories, intangibles and property,
plant and equipment, net of allowances
and accumulated depreciation and
amortisation. Segment liabilities consist
principally of payables, employee
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benefits, accrued expenses, provisions and borrowings. The Group do not allocate
revenues, assets or liabilities to individual segments.
(v) Leases
At inception of a contract, the Group assesses if the contract contains or is a lease.
If there is a lease present, a right-of-use asset and a corresponding lease liability is
recognised by the Group where the Group is a lessee. However, all contracts that are
classified as short-term leases (ie a lease with a remaining lease term of 12 months
or less) and leases of low-value assets are recognised as an operating expense on a
straight-line basis over the term of the lease.
Initially, the lease liability is measured at the present value of the lease payments still
to be paid at commencement date. The lease payments are discounted at the interest
rate implicit in the lease. If this rate cannot be readily determined, the Group uses the
incremental borrowing rate.
The right-of-use assets comprise the initial measurement of the corresponding
lease liability as mentioned above, any lease payments made at or before
the commencement date, as well as any initial direct costs. The subsequent
measurement of the right-of-use assets is at cost less accumulated depreciation and
impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying
asset, whichever is the shortest. Where a lease transfers ownership of the underlying
asset, or the cost of the right-of-use asset reflects that the Group anticipates to
exercise a purchase option, the specific asset is depreciated over the useful life of the
underlying asset.
(w) Comparative information
Comparative figures are, where appropriate, reclassified to be comparable with the
figures presented for the financial year.
5. REVENUE AND OTHER INCOME
32
Revenue from operating activities
Operating activities
- Revenue from sale of goods/contracts
with customers
Total revenue from operating activities
Other income
- Dividends received
- New Zealand Trade & Enterprise
- Interest received
- Expenses recovery
Total other income
CONSOLIDATED
2020
NZ$
2019
NZ$
38,329,369
38,329,369
1,777,156
1,777,156
375
16,801
50,036
103,566
170,778
380
-
122,024
13,738
136,142
Revenue from Contracts
Revenue is recognised at a point in time when the service has been fulfilled and the
group has the right to invoice.
6. PROFIT/(LOSS) FOR THE YEAR
Profit/(loss) before income tax has been
determined after:
Depreciation
Amortisation
Expected credit loss allowance
Salary costs (including directors’ fees and
management fees)
Interest on borrowings
Net foreign exchange (gain) and losses
CONSOLIDATED
2020
NZ$
165,059
32,378
16,747
2019
NZ$
39,656
50,356
1,242
2,738,965
1,720,724
52,559
188,548
10,140
44,876
7. INCOME TAX
The prima facie tax payable on profit/(loss) is reconciled to the income tax expense as
follows:
Prime facie tax payable on profit/(loss)
before income tax at 28% (2019: 28%)
Add: tax effect of:
5,883,094
(677,316)
- Other assessable and non-allowable items
(60,307)
(146,309)
- Deferred tax losses not recognised in accounts
-
823,625
- Utilisation of carry-forward losses
- Effect of foreign exchange rates
Income tax expense/(benefit)
(1,449,723)
(620,457)
3,752,607
-
-
-
Subject to the provisions of the Income Tax Assessment Act, if the Group derives
assessable income it will be able to utilise carry-forward losses. The Group has losses
available to be carried forward of NZ$1,428,365 to 30 June 2020.
The net deferred tax asset will only be obtained if:
(a)
(b)
(c)
the Company derives future assessable income of a nature and of an amount
sufficient to enable the benefit from the deductions for the loss to be
realised;
the Company continues to comply with the conditions for deductibility
imposed by law; and
no changes in tax legislation adversely affect the Company in realising the
benefit from the deduction of the loss.
Consequently, there is a balance of deferred tax asset that has not been recognised.
8. ACCUMULATED PROFIT/(LOSSES)
CONSOLIDATED
2020
NZ$
2019
NZ$
33
Accumulated losses at beginning of year
(8,043,633)
(5,624,649)
Cumulative adjustment upon adoption of new
accounting Standard – AASB 16
(15,623)
-
Accumulated losses at beginning of year - restated
Profit/(Loss) for the year
(8,059,256)
16,659,442
(5,624,649)
(2,418,984)
Accumulated profit/(losses)
8,600,186
(8,043,633)
9. TRADE AND OTHER RECEIVABLES
Trade receivables
Provision for expected credit loss
Net GST/VAT receivable
Other receivables
8,874,855
(17,989)
8,856,866
276,461
96,092
9,229,419
585,896
(1,242)
584,654
82,818
152,827
820,299
The Group applies the AASB 9 simplified approach to measuring expected credit
losses, which permits the use of the lifetime expected loss provision for all trade
receivables.
The following table details the loss allowance as at 30 June 2020 and 30 June 2019.
As the Group’s historical credit loss experience does not show significantly different
loss patterns for different customer segments, the provision for loss allowance
based on past due status is not further distinguished between the Group’s different
customer bases.
ZOONO GROUP LIMITED ANNUAL REPORT 2020
PAST DUE BUT NOT IMPAIRED (DAYS OVERDUE)
< 30
NZ$
31–60
NZ$
61–90
NZ$
> 90
NZ$
2020
Expected Loss Rate
0.1%
0.2%
0.3%
Trade and term receivables
3,498,186
2,919,806
2,194,557
(3,495)
(5,828)
(6,564)
3,494,691
2,913,978
2,187,993
0.77%
262,307
(2,103)
260,204
0.1%
216,392
(216)
216,176
0.1%
237,122
(237)
236,885
0.1%
29,673
(30)
0.75%
102,709
(765)
29,643
101,944
0
2
0
2
T
R
O
P
E
R
L
A
U
N
N
A
D
E
T
M
L
P
U
O
R
G
O
N
O
O
Z
I
I
Provision
Total
2019
Expected Loss Rate
Trade and term receivables
Provision
Total
10. INVENTORIES
TOTAL
NZ$
8,874,855
(17,989)
8,856,866
585,896
(1,247)
584,654
Finished goods at cost
11. PLANT AND EQUIPMENT
Plant and equipment:
Plant and equipment at cost
34
Accumulated depreciation
Motor vehicles:
Motor vehicles at cost
Accumulated depreciation
Furniture and equipment:
Furniture and equipment at cost
Accumulated depreciation
Computer equipment:
Computer equipment at cost
Accumulated depreciation
Total Property, Plant and Equipment
CONSOLIDATED
2020
NZ$
13,202,029
13,202,029
189,781
(19,495)
170,286
*
*
-
70,666
(24,086)
46,580
36,056
(23,567)
12,489
229,355
2019
NZ$
503,125
503,125
28,832
(13,468)
15,364
119,155
(56,241)
62,914
47,631
(15,311)
32,320
21,939
(19,208)
2,741
113,349
* see Note 3(a) for adjustments recognised on adoption of AASB 16 on 1 July 2019.
a. Movements in carrying amounts
Movement in the carrying amounts for each class of plant and equipment between the
beginning and the end of the current financial year:
PLANT AND
EQUIPMENT
MOTOR
VEHICLES
FURNITURE AND
EQUIPMENT
COMPUTER
EQUIPMENT
TOTAL
NZ$
NZ$
NZ$
NZ$
NZ$
7,934
31,243
-
(6,857)
32,320
-
-
1,618
2,921
-
(1,788)
2,751
-
-
23,035
14,097
-
-
-
-
(8,775)
46,580
118,406
34,599
-
(39,656)
113,349
-
(62,914)
198,081
-
-
(4,359)
12,489
(19,161)
229,355
35
Balance at 1 July 2018
Additions
Disposals – written down value
Depreciation expense
Carrying amount at 30 June 2019
Reclassified to Right of Use assets
on initial application of AASB 16
Additions
Disposals – written-down value
Gain on sale
Depreciation expense
Carrying amount at 30 June 2020
12. INTANGIBLE ASSETS
Trademarks and patents:
Trademarks and patents at cost
Accumulated amortization
Website Development:
Website development at cost
Accumulated amortization
18,975
89,879
435
-
(4,046)
15,364
-
-
160,949
-
-
(6,027)
170,286
-
-
(26,965)
62,914
-
(62,914)
-
-
-
-
-
2020
NZ$
2019
NZ$
147,820
(128,572)
19,248
78,450
(60,472)
17,978
147,820
(114,172)
33,648
78,450
(42,494)
35,956
a. Movements in carrying amounts
Movement in the carrying amounts for each class of intangible assets between the
beginning and the end of the current financial year:
Opening Balance
Additions
Amortisation expense
Closing Balance
13. LEASES
a. Right of use assets
Buildings
Equipment and motor vehicles
b. Lease liabilities
Current
Non-current
69,604
-
(32,378)
37,226
119,961
-
(50,357)
69,604
CONSOLIDATED
2020
NZ$
2019
NZ$
1,456,213
44,042
1,500,255
201,156
1,359,022
1,560,178
527,272
65,678
592,950
105,336
529,491
634,827
ZOONO GROUP LIMITED ANNUAL REPORT 2020
0
2
0
2
T
R
O
P
E
R
L
A
U
N
N
A
D
E
T
M
L
P
U
O
R
G
O
N
O
O
Z
I
I
c. Movements in carrying amounts
Movement in the carrying amounts for each class of right of use assets between the
beginning and the end of the current financial period:
BUILDINGS
$
EQUIPMENT AND
MOTOR VEHICLES
$
TOTAL
$
Consolidated Group
Balance at 1 July 2019
Additions
Disposals – written-down value
Depreciation expense
527,272
1,055,805
-
(126,864)
Carrying amount at 30 June 2020
1,456,213
65,678
592,950
-
-
1,055,805
-
(21,636)
(148,500)
44,042
1,500,255
AASB 16 related amounts recognised in the statement of profit or loss
Depreciation charge related to right of use assets
Interest expense on lease liabilities
Short-term and low-value asset leases expense
Variable lease payment expense
14. OTHER ASSETS
Prepayments
36
15. TRADE AND OTHER PAYABLES
Trade creditors
Sundry creditors and accruals
Other payables
Income in advance
16. BORROWINGS
CURRENT
Lease liability
NON-CURRENT
Lease liability
CONSOLIDATED
NZ$
148,500
10,673
-
21,079
CONSOLIDATED
2020
NZ$
176,027
176,027
5,430,248
819,741
850,183
1,319,723
8,419,895
-
-
2019
NZ$
64,250
64,250
299,137
71,751
51,043
323,661
751,592
22,853
68,923
17. ISSUED CAPITAL
(a) Issued shares:
Beginning of the year
Issued during the year:
2020
NO. SHARES
2019
NO. SHARES
2020
NZ$
2019
NZ$
163,312,707
163,011,827
11,821,140
11,781,716
Recognition of shares in Zoono Holdings Limited
-
880
-
Shares issued as share-based payment (refer Note 18)
300,000
300,000
640,660
Share issue cost
-
-
-
190
41,118
(1,884)
163,612,707
163,312,707
12,461,800
11,821,140
Holders of ordinary shares are entitled to participate in dividends when declared
and are entitled to one vote per share, either in person or by proxy, at shareholder
meetings. In the event of winding up of the Company, ordinary shareholders are
ranked after all other creditors and are entitled to any proceeds of liquidation in
proportion to the number of and amounts paid on the shares held.
Ordinary shares have no par value and the Company does not have a limited amount
of authorised capital.
(b) Movement in issued share options during the year:
On 16 December 2019, Zoono granted senior management and staff 2,000,000
options, vesting on 16 December 2020, exercisable at A$0.25 and expiring on 16
December 2023.
(c) Uncalled capital:
No calls are outstanding at year end. All issued shares are fully paid.
(d) Capital management:
Management controls the capital of the Group in order to maintain a reasonable debt
to equity ratio, provide the shareholders with adequate returns and ensure that the
Group can fund its operations and continue as a going concern.
The Group currently has no debt funding available or external capital requirement.
The Group’s capital includes ordinary share capital share options and reserves. The
financial liabilities are supported by financial assets.
Management effectively manages the Group capital by assessing the Group’s
financial risks and adjusting its capital structure in response to changes in these risks
and in the market. These responses include the management of share issues. The
Group strategy remains unchanged from prior year.
18. RESERVES
Foreign currency translation reserve
Balance at beginning of year
Exchange differences on translation of
foreign operations
Balance at end of year
CONSOLIDATED
2020
NZ$
2019
NZ$
75,080
103,816
(538,346)
(463,166)
(28,736)
75,080
Exchange differences arising on translation of the foreign controlled entity are
recognised in other comprehensive income and accumulated as a separate reserve
within equity. The cumulative amount is reclassified to profit or loss when the net
investment is disposed of.
37
ZOONO GROUP LIMITED ANNUAL REPORT 2020
0
2
0
2
(a) Share-based payment:
T
R
O
P
E
R
L
A
U
N
N
A
D
E
T
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P
U
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O
N
O
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I
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The Consolidated Group issued 200,000 fully paid ordinary shares in the Company
at a deemed price of A$1.77 per share for a total consideration of NZ$378,628 to
the UK/EU Regional Manager as part of his remuneration package and also issued
100,000 fully paid ordinary shares in the Company at a deemed price of A$2.45 per
share for a total consideration of NZ$262,032 to the UAE Regional Manager as part of
his remuneration package.
In the prior year the Consolidated Group issued 300,000 fully paid ordinary shares
in the Company at a deemed price of 12 cents per share for a total consideration of
NZ$41,118 to the UK/EU Regional Manager as part of his remuneration package.
(b) Equity settled share-based payment:
Employee share option scheme
Zoono’s Employee Securities Plan was adopted by the Company on 7 November
2019 as a long-term incentive scheme to recognise talent, retain and motivate
employees to strive for Group performance. All employees are entitled to participate
in the Share Securities Plan. In 2019, employees and consultants who have been with
the Group for more than one year were invited to receive options which vest in 1 year,
provided the recipient is still employed by the Company. The options were issued
for no consideration with an exercise price of A$0.25. They carry no entitlements
to voting rights or dividends of the Group. The number available to be granted is
determined by the Board, based on retention, performance measures including
growth in shareholder return, return on equity, cash earnings and Group earnings per
share growth.
Option granted to employees of the Company:
On 16 December 2019, Zoono granted senior management and staff 2,000,000
options, vesting on 16 December 2020, exercisable at A$0.25 and expiring 16
December 2023.
The Consolidated Group has 2,000,000 share options on issue during the year
(2019: Nil).
19. REMUNERATION OF AUDITORS
38
Amounts received or due and receivable by the
auditors for:
- the review and the audit of the financial reports
for the consolidated group
CONSOLIDATED
2020
NZ$
2019
NZ$
55,000
55,000
55,000
55,000
20. ECONOMIC DEPENDENCY
Zoono and its products are subject to various laws and regulations including but
not limited to accounting standards, tax laws, environmental laws, product content
requirement, labelling/packaging, regulations and customs regulations. Changes in
these laws and regulations (including interpretation and enforcement) could adversely
affect the Group’s financial performance. Laws and regulations are specific to each
geographic location. In this regard, there is a risk that a certain product may not be
able to be supplied in another jurisdiction because it fails to meet that jurisdictions
regulatory requirements (e.g. product registration requirements). Failure of the Group
to remain up to date with these various regulatory requirements, could adversely
affect the Group financial performance.
21. CONTINGENT LIABILITIES
The directors are aware of a claim against the Company as at the date to which these
financial statements are made up as follows;
Qingdao Zoono Biotech Company Limited instigated legal proceedings against Zoono
on 20 May 2019 citing breach of contract under a distribution agreement entered into
on 29 May 2013. Zoono lodged a counter claim which stated; Qingdao breached
the distribution agreement by not meeting the minimum annual volumes under the
agreement and making disparaging comments about Zoono and its products. The
Group’s insurers have accepted the claim against Paul Hyslop but will only meet 50%
of the claim against the Company, less any insurance excess payable.
The Company took the plaintiff to Court and were awarded costs and the plaintiff was
ordered to pay costs and has failed to do so.
The Directors do not believe the outcome of the proceedings will have a material
effect on the financial statements as Zoono’s counter claim exceeds Qingdao’s claim.
22. RELATED PARTY TRANSACTIONS
Transactions between related parties are on normal commercial terms and conditions
unless otherwise stated. Complete details of the remuneration of directors and key
management personnel are set out in the Remuneration Report which forms part of
the accompanying Directors’ Report.
The totals of remuneration paid to key management personnel of the Company during
the year are as follows:
Short–term employee benefits
Other Benefits
Share based payments
CONSOLIDATED
2020
NZ$
893,615
6,102
155,560
2019
NZ$
1,023,996
6,102
-
1,055,277
1,030,098
Details of shares and options held by key management personnel are included in the
Remuneration Report set out in the accompanying directors’ report.
Key management personnel related entity transactions
Mr Paul Hyslop is the Managing Director/CEO of Zoono Group and provides
consulting services to the Group. Charges for services provided during the year
amounted to NZ$427,938 (2019: NZ$377,938).
Ms Elissa Hansen, a director of Market Capital Group Pty Ltd trading as CoSec
Services, provided company secretarial and consulting services to the Group.
Charges for services provided during the year amounted to NZ$ Nil (2019:
NZ$44,788). This is in addition to director’s fees earned by Ms. Hansen.
Morgan Recruitment Limited provided recruitment services to the Company and was
paid NZ$52,970 (2019: NZ$6,000) for their services. The wife of Mr Paul Hyslop owns
Morgan Recruitment Limited.
The Adams Agency Limited as an agent to the Company provided sales income to
the Company and was paid NZ$38,452 (2019: NZ$ Nil) for their services. The partner
of Mr Paul Ravlich owns The Adams Agency Limited.
23. STATEMENT OF CASH FLOWS
(a) Reconciliation of cash:
Cash at bank
Cash on short term deposit
CONSOLIDATED
2020
NZ$
3,788,242
6,534,974
10,323,216
2019
NZ$
128,942
2,996,386
3,125,328
The effective interest rate on short-term bank deposits was 0.8% per annum (2019:
2.7% per annum) and these deposits have an average maturity of 120 days.
39
ZOONO GROUP LIMITED ANNUAL REPORT 2020
0
2
0
2
T
R
O
P
E
R
L
A
U
N
N
A
D
E
T
M
L
P
U
O
R
G
O
N
O
O
Z
I
I
(b) Reconciliation statement:
A reconciliation of “net cash used in operating activities” to “operating cash flows” is
as follows:
CONSOLIDATED
2020
NZ$
2019
NZ$
Profit/(Loss) after income tax
16,659,442
(2,418,984)
Add/(less)
Amortisation
Depreciation
Share based payments
Provision for expected loss on trade receivables
Foreign exchange differences
Changes in assets and liabilities:
32,378
169,892
1,006,699
17,989
3,687
50,357
39,656
-
1,242
(1,161)
(Increase)/decrease in trade and other receivables
(8,409,120)
(583,734)
(Increase)/decrease in inventories
(12,698,904)
(Increase)/decrease in prepayments
(Increase) in current tax liabilities
Increase/(decrease) in trade and other payables
Net cash used in operating activities
(111,777)
3,752,607
7,668,303
8,091,196
168,375
20,143
-
(198,749)
(2,881,547)
The Company does not have any formal loan facilities in place at the date of these
financial statements.
24. EARNINGS PER SHARE
The following reflects the income and share data used in the calculations of basic and
diluted earnings per share (EPS):
40
Basic profit/(loss) per share
Diluted profit/(loss) per share
10.20 cents
(1.48) cents
10.13 cents
(1.48) cents
Weighted average number of ordinary shares
outstanding during the year used to calculated
basic EPS
163,344,947
163,099,772
Weighted average number of ordinary shares
outstanding during the year used to calculated
diluted EPS
164,421,450
163,099,772
Profit/(loss) from continuing operations used to
calculated basic EPS and diluted EPS
16,659,442
(2,418,984)
There have been no transactions involving ordinary shares or potential ordinary shares
that would significantly change the number of ordinary shares or potential ordinary
shares outstanding between the reporting date and the date of completion of these
financial statements.
25. SEGMENT INFORMATION
Operating segments are not identified on the basis of internal reports about the
components of the Group that are regularly reviewed by the Chief Operating Decision
Makers in order to allocate resources to the segment and to assess its performance.
In presenting information on the basis of geographical segments, segment revenue is
based on the geographical location of distributors/customers. Segment assets and
liabilities are located in New Zealand and are allocated to individual geographical
segments by locations of distributors/customers on a reasonable basis. The Group’s
segment revenue is assigned to geographical locations as follows;
Global revenues:
Product
Hand sanitiser, textile applicator,
mould remediation, surface sanitiser
Geographical information
The Group’s revenue from external distributors/customers by geographical location
Geographical Revenue
Global revenues
Total Group Revenue
2020
NZ$
2019
NZ$
38,329,369
38,329,369
1,777,156
1,777,156
i) Revenue by geographical region
Revenue, including revenue from discontinued operations, attributable to external
customers is disclosed below, based on the location of the external customer.
Australasia, Asia, US, India
UK and Europe
Total Revenue
ii) Assets by geographical region
NZ$000
26,963
11,366
38,329
The location of segment assets by geographical location of the assets is disclosed below.
Australasia, Asia, US, India
UK and Europe
26. FRANKING CREDITS
24,000
10,698
The amount of the franking credits available for
subsequent reporting periods are:
88,384
88,384
27. CONTROLLED ENTITIES
Country of
Percentage Percentage
Incorporation Owned 2019 Owned 2020
Subsidiaries of Zoono Group Limited
Zoono Group Limited (NZ)
Zoono Limited
New Zealand
New Zealand
Zoono Holdings Limited (UK)
United Kingdom
100%
100%
100%
100%
100%
100%
28. FINANCIAL RISK MANAGEMENT
Financial risk management policies
The Group’s financial instruments consist mainly of current accounts with banks,
accounts receivable and payable.
i. Treasury risk management
Management considers on a regular basis the financial risk exposure and evaluates
treasury management strategies in the context of the most recent economic
conditions and forecasts.
The overall risk management strategy seeks to meet the Group’s financial targets,
whilst minimising potential adverse effects on financial performance.
Management operates under policies approved by the board of directors which
approves and reviews risk management policies on a regular basis. These include
future cash flow requirements.
ii. Financial risk exposures and management
The main risks the Group is exposed to through its financial instruments are interest
rate risk, foreign currency risk, liquidity risk, credit risk and price risk.
(a)
Foreign currency risk exposure
Most of the Group’s transactions are carried out in US Dollars ($USD), New Zealand
Dollars ($NZD), Australian Dollars ($AUD) and British Pound (GBP). Exposures to
currency exchange rates arise from the Group’s overseas sales and purchases, which
are primarily denominated in US Dollars ($USD), Australian Dollars ($AUD) and British
Pound (GBP). The Group also holds a bank account in $USD, $AUD and GBP.
(b)
Interest rate risk exposure
The Group is exposed to interest rate risk through cash and deposits held. The
Group continually monitors interest rates and financial markets for the Group’s cash
on deposit and regularly reviews future cash flow requirements. The following table
summarises the interest rate risk for the Group, together with the effective weighted
average interest rate for each class of financial assets and liabilities.
41
ZOONO GROUP LIMITED ANNUAL REPORT 2020
0
2
0
2
T
R
O
P
E
R
L
A
U
N
N
A
D
E
T
M
L
P
U
O
R
G
O
N
O
O
Z
I
I
2020
Financial assets
Cash
Financial liabilities
Lease liabilities
Net exposure to cash-flow interest rate risk
Weighted average interest rate
2019
Financial assets
Cash
Financial liabilities
Borrowings
Net exposure to cash-flow interest rate risk
Weighted average interest rate
(c) Credit risk exposure
INTEREST
RATE
FIXED INTEREST MATURING IN NON-INTEREST BEARING
OVER 5
YEARS $
OVER 1 TO
5 YEARS $
OVER 1 TO
5 YEARS $
OVER 5
YEARS $
1 YEAR OR
LESS $
TOTAL
$
0.8%
6,534,974
-
-
3,788,242
-
10,323,216
4.5%
3.7%
1.29%
201,157
898,855
460,167
-
6,333,817
(898,855)
(460,167)
3,788,242
-
-
-
-
-
-
-
1,560,179
8,763,037
1.29%
FIXED INTEREST
MATURING IN
OVER 1 TO
5 YEARS $
1 YEAR OR
LESS $
NON-INTEREST
BEARING
OVER 1 TO
5 YEARS $
1 YEAR OR
LESS $
INTEREST
RATE
TOTAL
$
3.0%
2,996,386
-
128,942
9.9%
6.9%
6.5%
(22,853)
2,973,533
-
(68,923)
(68,923)
-
-
128,942
-
-
-
-
-
3,125,328
(91,776)
3,033,552
6.5%
The maximum exposure to credit risk, excluding the value of any collateral or other
security, at reporting date to recognised financial assets is the carrying amount, net
of any provision for impaired receivables, as disclosed in the statement of financial
position and notes to the financial statements.
42
The Group does not have any material credit risk exposure to any single debtor or
group of debtors under financial instruments entered into by the Group.
Receivables due from major debtors are not normally secured by collateral, however
the credit worthiness of debtors is monitored.
(d) Liquidity risk
The Group manages liquidity risk by monitoring forecast cash flows to ensure that
adequate funding is maintained. The Group’s financial liabilities consist of trade and
other payables in the normal course of business and as such are normally due for
payment within 30 days of receipt of a valid tax invoice. The Group does not have any
liquidity risk associated with any borrowing.
(e) Interest rate risk
Interest rate risk on cash and short-term deposits is not considered to be a material
risk due to the short- term nature of these financial instruments.
29. CAPITAL AND LEASING COMMITMENTS
a. Finance Lease Commitments
Payable – minimum lease payments:
- not later than 12 months
- between 12 months and 5 years
- greater than 5 years
Minimum lease payments
Less future finance charges
Present value of minimum lease payments
2020
NZ$
2019
NZ$
-
-
-
-
-
-
22,853
68,923
-
91,776
(12,226)
79,550
b. Operating Lease Commitments
Payable – minimum lease payments:
- not later than 12 months
- between 12 months and 5 years
- greater than 5 years
2020
NZ$
2019
NZ$
-
-
-
-
52,500
126,875
-
179,375
The property lease is a non-cancellable lease with a six-year term entered into in
November 2016 with rent payable in advance. An option exists to renew the lease at
the end of the six-year term for an additional two terms of three years each under the
same terms.
30. PARENT INFORMATION
The following information has been extracted from the books and records of the
parent and has been prepared in accordance with Australian Accounting Standards.
Statement of Financial Position
ASSETS
Current assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Statement of Profit or Loss and
Other Comprehensive Income
Total Profit/(loss)
Total comprehensive Profit/(loss)
PARENT ENTITY
2020
NZ$
2019
NZ$
220,442
61,390
29,316,565
28,428,319
29,537,007
28,489,709
137,345
137,345
65,422
65,422
68,874,321
68,233,649
61,917
503,728
(39,536,576)
(40,313,090)
29,399,662
28,424,287
776,511
776,511
(575,424)
(575,424)
31. EVENTS SUBSEQUENT TO REPORTING DATE
The Board has approved a final dividend of NZ$3.2 cents per share. The final
dividend will be paid on 21st September 2020 with a record date of entitlement of
7th September 2020.
No other matters or circumstances have arisen since the end of the financial
year which significantly affected or may significantly affect the operations of the
consolidated group, the results of those operations, or the state of affairs of the
consolidated group in future financial years.
32. COMPANY DETAILS
The registered office of the
parent Company is:
Level 12, 225 George Street
Sydney NSW 2000 Australia.
The principal place of business
of the Group is:
Unit 3 24 Bishop Dunn Place
Flatbush,
Auckland 2013
New Zealand.
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DIRECTORS’
DECLARATION
The directors of Zoono Group Limited declare that:
The consolidated financial statements and associated notes for the financial year ended 30 June 2020 are in accordance with the
Corporations Act 2001 and:
(a) comply with Accounting Standards and the Corporations Regulations 2001 and International Financial
Reporting Standards issued by the International Accounting Standards Board (IASB) as disclosed in Note 2; and
(b) give a true and fair view of the financial position of the Company as at 30 June 2020 and the performance of the
Group for the financial year then ended.
The directors have received the declarations required by section 295A of the Corporations Act 2001 from the chief
executive officer and chief financial officer.
In the opinion of the directors there are reasonable grounds to believe that the Group will be able to pay its debts as and
when they become due and payable.
2.
3.
44
This declaration is made in accordance with a resolution of the directors.
MR. PAUL HYSLOP
MANAGING DIRECTOR/CEO
20 August 2020
AUDITOR’S INDEPENDENT
REPORT
ZOONO GROUP LIMITED ABN 73 006 645 754
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE OWNERS OF
ZOONO GROUP LIMITED
Report on the Financial Report
Opinion
ZOONO GROUP LIMITED ABN 73 006 645 754
AND CONTROLLED ENTITIES
We have audited the financial report of Zoono Group Limited and Controlled Entities (the
Group), which comprises the consolidated statement of financial position as at 30 June 2020,
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 consolidated financial statements, including a summary of significant
account policies and other explanatory information, and the directors’ declaration.
INDEPENDENT AUDITOR’S REPORT TO THE OWNERS OF
ZOONO GROUP LIMITED
Report on the Financial Report
Opinion
In our opinion the accompanying financial report of Zoono Group Limited and Controlled
Entities is in accordance with the Corporations Act 2001, including:
financial performance for the year then ended; and
a. giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
We have audited the financial report of Zoono Group Limited and Controlled Entities (the
Group), which comprises the consolidated statement of financial position as at 30 June 2020,
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 consolidated financial statements, including a summary of significant
account policies and other explanatory information, and the directors’ declaration.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b.
Basis for Opinion
b.
Basis for Opinion
financial performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
a. giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
In our opinion the accompanying financial report of Zoono Group Limited and Controlled
Entities is in accordance with the Corporations Act 2001, including:
We conducted our audit in accordance with Australian Auditing Standards. Those Standards
require that we comply with relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance about whether the financial report
is free from material misstatement. Our responsibilities under those Standards are further
described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
report. We are independent of the Group in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting
Professional and Ethical Standards Board’s APES 110: Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We
have also fulfilled our other ethical responsibilities in accordance with the Code.
We 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 conducted our audit in accordance with Australian Auditing Standards. Those Standards
require that we comply with relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance about whether the financial report
is free from material misstatement. Our responsibilities under those Standards are further
described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
report. We are independent of the Group in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting
Professional and Ethical Standards Board’s APES 110: Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We
have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Key Audit Matters
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.
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial report for the year ended 30 June 2020. These matters
were addressed in the context of our audit of the financial report as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial report for the year ended 30 June 2020. 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.
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AUDITOR’S INDEPENDENT
REPORT
ZOONO GROUP LIMITED ABN 73 006 645 754
ZOONO GROUP LIMITED ABN 73 006 645 754
AND CONTROLLED ENTITIES
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE OWNERS OF
INDEPENDENT AUDITOR’S REPORT TO THE OWNERS OF
ZOONO GROUP LIMITED
ZOONO GROUP LIMITED
Key Audit Matter
Key Audit Matter
Revenue Recognition
Revenue Recognition
Refer to Note 4(r) “Revenue”
Refer to Note 4(r) “Revenue”
the
the
group’s
group’s
business model
Under
consideration is sometimes received before
business model
Under
the sale of goods occurs and is recognised as
consideration is sometimes received before
the sale of goods occurs and is recognised as
deferred income. Revenue is subsequently
recognised when the goods are delivered.
deferred income. Revenue is subsequently
recognised when the goods are delivered.
We focused on this matter as a key audit
matter as there is a risk that revenue may be
We focused on this matter as a key audit
recognised prior to the sale of goods.
matter as there is a risk that revenue may be
recognised prior to the sale of goods.
46
How Our Audit Addressed the Key Audit
Matter
How Our Audit Addressed the Key Audit
Matter
in
in
Our procedures included, amongst others:
Our procedures included, amongst others:
• Obtaining an understanding of the key
• Obtaining an understanding of the key
the revenue recognition
controls
the revenue recognition
controls
cycle.
cycle.
• Obtaining a sample of contracts and
• Obtaining a sample of contracts and
tracing the terms and conditions to
ensure that revenue was recognised in
tracing the terms and conditions to
accordance with AASB 15 Revenue
ensure that revenue was recognised in
from Contracts with Customers.
accordance with AASB 15 Revenue
from Contracts with Customers.
• Verifying a sample of income in advance
• Verifying a sample of income in advance
supporting
to
transactions
documentation to ensure the revenue
supporting
to
transactions
was earned and recognised in the
documentation to ensure the revenue
correct accounting period.
was earned and recognised in the
correct accounting period.
• Verifying a sample of transactions on
• Verifying a sample of transactions on
either side of the accounting period end
to ensure they were recorded in the
either side of the accounting period end
to ensure they were recorded in the
correct period.
correct period.
Information Other than the Financial Report and Auditor’s Report Thereon
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2020 but does
The directors are responsible for the other information. The other information comprises the
not include the financial report and our auditor’s report thereon. Our opinion on the financial
information included in the Group’s annual report for the year ended 30 June 2020 but does
report does not cover the other information and accordingly we do not express any form of
not include the financial report and our auditor’s report thereon. Our opinion on the financial
assurance conclusion thereon in connection with our audit of the financial report. Our
report does not cover the other information and accordingly we do not express any form of
responsibility is to read the other information and, in doing so, consider whether the other
assurance conclusion thereon in connection with our audit of the financial report. Our
information is materially inconsistent with the financial report or our knowledge obtained in the
responsibility is to read the other information and, in doing so, consider whether the other
audit or otherwise appears to be materially misstated. If, based on the work we have
information is materially inconsistent with the financial report or our knowledge obtained in the
performed, we conclude that there is a material misstatement of this other information, we are
audit or otherwise appears to be materially misstated. If, based on the work we have
required to report that fact. We have nothing to report in this regard.
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
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the
The directors of the Company are responsible for the preparation of the financial report that
Corporations Act 2001 and for such internal control as the directors determine is necessary to
gives a true and fair view in accordance with Australian Accounting Standards and the
enable the preparation of the financial report that gives a true and fair view and is free from
Corporations Act 2001 and for such internal control as the directors determine is necessary to
material misstatement, whether due to fraud or error.
enable the preparation of the financial report that gives a true and fair view and is free from
material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the
Group to continue as a going concern, disclosing, as applicable, matters related to going
In preparing the financial report, the directors are responsible for assessing the ability of the
concern and using the going concern basis of accounting unless the directors either intend to
Group to continue as a going concern, disclosing, as applicable, matters related to going
liquidate the Group or to cease operations, or have no realistic alternative but to do so.
concern and using the going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative but to do so.
AUDITOR’S INDEPENDENT
REPORT
ZOONO GROUP LIMITED ABN 73 006 645 754
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE OWNERS OF
ZOONO GROUP LIMITED
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a
whole is free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
–
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
– Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group’s internal control.
– Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
– Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
– Evaluate the overall presentation, structure and content of the financial report, including
the disclosures, and whether the financial report represents the underlying transactions
and events in a manner that achieves fair presentation.
– Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the financial
report. We are responsible for the direction, supervision and performance of the Group
audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
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AUDITOR’S INDEPENDENT
REPORT
ZOONO GROUP LIMITED ABN 73 006 645 754
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE OWNERS OF
ZOONO GROUP LIMITED
From the matters communicated with the directors, we determine those matters that were of
most significance in the audit of the financial report of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
We have audited the remuneration report included in pages 16 to 19 of the directors’ report
for the year ended 30 June 2020.
48
In our opinion, the remuneration report of Zoono Group Limited for the year ended 30 June
2020 complies with s 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 s 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.
HALL CHADWICK (NSW)
Level 40, 2 Park Street
Sydney NSW 2000
DREW TOWNSEND
Partner
Dated: 20 August 2020
STRATEGIC KEY ALLIANCE
ZOONO ANIMAL
HEALTH LIMITED
49
Appointed distributors:
APIAM Animal Health, ASX listed
company and APIAM Solutions Inc, US
registered company.
APIAM Animal Health have various global
territories under their sub - distribution
agreement including Australia, United
States, Canada and Vietnam. APIAM
Animal Health also own APIAM Solutions
Inc in the US which commands no less
than 60% of The State of IOWA swine
production market providing veterinary
services across the state. IOWA provides
no less than 60% of the total US swine
market.
The APIAM partnership is providing
access to over 2,500 veterinary doctors
and their clients as well as a sales team
through procurement of over 3,000
mobile sales representatives.
Our distributors in Portugal and Hungary
are collectively establishing a customer
base in Iberia and Eastern Europe. We are
encouraged by the interest particularly
for the poultry sector in Portugal, Spain,
Hungary, Romania and Czech Republic.
It is without question the Covid pandemic
has slowed progress, without the ability
to travel and with the impact on livestock
production globally we have lost ground.
Fortunately, we spent 2019 establishing
key distributors in Europe, US and
Australia in particular, we also carried out
suffient credible field studies to provide
the confidence for these distributors
to make inroads albeit slower than
anticipated into the target markets.
Zoono Animal Health has exceeded its
first volume performance milestone after
18 months and expect growth to increase
significantly as registrations and particular
viral studies become available.
Please visit our website
www.zoonoanimalhealth.com
for more information.
Being appointed as the exclusive animal
health distributor for Zoono products in
February 2019 provided the opportunity
to invest and develop intellectual property
in various animal markets by way of
specific biological data against various
strains of microbes that significantly
impact in particular the livestock
production markets. It also provided the
opportunity to engage creditable sub –
distributors in various global markets
to develop the intellectual property and
grow the distribution of the technology.
Registration of the products in each
country is a process in its own right
has presented challenges and delays,
together with the basic product
registration we have commissioned a
range of microbial studies in each country
to allow claims to be made on product
labelling and marketing.
We anticipate the registrations in priority
regions to be completed over the
next 6 months with viral studies being
completed by December 2020, this will
significantly expand our sales market
particularly in the US and Europe.
As a result, the following has been
achieved in the past 18 months.
Completed field studies on poultry and
swine farms in New Zealand, Australia,
US, Portugal and Hungary providing solid
data proving the effectiveness of Zoono’s
Z-71 in livestock production facilities.
These studies have proven without
doubt the Zoono technology lowers the
microbial levels within the animal growing
facilities for sustained periods of time
which in turn provides healthier animals
that eat less food and gain more weight
and reduces mortality.
POULTRY TRIALS
AND STUDIES IN
PORTUGAL AND
HUNGARY
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ADDITIONAL INFORMATION FOR
LISTED PUBLIC COMPANIES
The following information is current as at 6 August 2020.
DISTRIBUTION OF SHAREHOLDERS
FULLY PAID ORDINARY SHARES
HOLDINGS RANGES
NUMBER
HOLDERS
NUMBERS
%
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001- AND OVER
TOTALS
2,943
2,344
668
699
1,521,251
6,190,645
5,233,592
20,562,204
94
130,105,015
0.930
3.780
3.200
12.570
79.520
6,748
163,612,707
100.000
20 LARGEST SHAREHOLDERS
50
No.
Name
Number of Ordinary Shares Held % of Issued Capital
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
PAUL RUSSELL HYSLOP & MARGARET JANE MORGAN
& NPT MEG TRUSTEES LIMITED
CITIBANK NOMINEES PTY LIMITED
MR EELCO WIERSMA & MRS BARBARA DIANE WIERSMA
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES
CS FOURTH NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
MR MALCOLM MILNE SMITH
LEWIS ANDREW CRAIG MACKINNON
MR JIEXIONG WEN
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
VELKOV FUNDS MANAGEMENT PTY LTD
MR EELCO WIERSMA
MS CHRISTINE MARY HOSKINS
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
MR VICTOR VELKOV
MR DAVID MAHER & MRS CLAUDIA MAHER
BRISPOT NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
66,558,000
16,210,662
7,660,466
3,344,282
2,191,376
2,067,144
1,695,204
1,318,230
1,008,000
1,000,000
1,000,000
914,706
820,000
767,718
735,749
730,030
635,000
627,605
617,846
615,480
40.680%
9.908%
4.682%
2.044%
1.339%
1.263%
1.036%
0.806%
0.616%
0.611%
0.611%
0.559%
0.501%
0.469%
0.450%
0.446%
0.388%
0.384%
0.378%
0.376%
110,517,498
67.548%
Substantial Holders
The following shareholders are substantial holders:
Holder Name
Number of shares
Voting Power
Paul Russell Hyslop & Margaret Jane Morgan & NPT Meg Trustees Limited
Regal Funds Management Pty Ltd
Bank of America
Mr. Eelco Wiersma
66,558,000
16,651,110
12,192,054
8,892,696
40.68%
10.18%
8.06%
5.44%
Voting Rights
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has
one vote on a show of hands. There are no other classes of equity securities.
Unmarketable Holders
There are 409 shareholders holding less than a marketable parcel of shares based on the closing price of AUD 2.44 on 6 August
2020 representing a total of 49,130 shares.
51
Restricted Securities
The Company has the 100,000 fully paid ordinary restricted securities which are voluntarily escrowed for 6 months to 4 December
2020 together with 300,000 fully paid ordinary restricted securities which are voluntarily escrowed for 24 months to 15 March
2021.
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CORPORATE
DIRECTORY
Directors
Auditors
Paul Hyslop, Managing Director
Hall Chadwick Pty Limited Level 40,
Don Clarke, Non-Executive Director
2 Park Street
Elissa Hansen, Non-Executive Director
Sydney, NSW, 2000
Company Secretary
Elissa Hansen
ASX Code
ZNO
Management
Share Registry
Paul Ravlich, Chief Financial Officer
Boardroom Pty Limited Level 12
Lew MacKinnon, Chief Operating Officer
225 George Street
Sydney, NSW, 2000
Telephone +61 2 9290 9600
Registered Office
Level 12
225 George Street
Sydney, NSW, 2000
Ph: +61 2 8042 8481
Principal Place of Business
Unit 3 24 Bishop Dunn Place
Flatbush
52
Auckland 2013
New Zealand
Ph: +64 21 659 977
E: info@zoono.com
53
ZOONO GROUP LIMITED ANNUAL REPORT 2020