Announcement PDF ASX Announcement Re-issued financial statements Pure Foods Tasmania Limited (ASX: PFT) 29 November 2024 Pure Foods Tasmania Ltd (ASX:PFT) (‘PFT’ or ‘the Company’) is pleased to release its re-issued financial statements as at 30 June 2024 (Re-Issued Financial Statements). The Re-issued Financial Statements indicate that the previously issued financial statements for the year ended 30 June 2024 (Original Financial Statements) have been revised and reissued. This is to reflect the effects of the information which became available subsequent to the issue of the Independent Auditor’s Report dated 30 September 2024, and therefore not previously incorporated at that time (see Note 25 of the Re-issued Financial Statements for further detail). The key further facts that have become known in regard to the re-financing of the Company resulted in $1.845m converting to a non-current liability and not due for maturity within the next 12 months. The new information that has become available has resulted in the Auditor no longer issuing a qualified audit opinion (see page 61 of the Re-issued Financial Statements). Although the Auditor indicates that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern, the Auditor’s Report is no longer modified in respect of this matter. The Company continues to work with its key stakeholders, including its financiers, Auditor, advisers and the ASX in relation to the re-quotation of its securities on ASX. ---ends--This announcement has been authorised and approved by the Chair of PFT on 29 November 2024 For further information, please contact: Corporate Malcolm McAully Executive Chair 0362294546 About Pure Foods Tasmania (PFT) Pure Foods Tasmania Pty Ltd was formed in 2015 with the aim to enhance and promote Tasmania’s premium food and beverage businesses. PFT’s strategy is to develop new premium products within our existing brands and in the plant-based food market, to acquire complementary brands and businesses and to increase our market penetration and distribution for our suite of brands and products globally. PFT’s suite of brands and businesses include Woodbridge Smokehouse, Tasmanian Pate, Daly Potato Co, Pure Tasmanian Seafood, The Cashew Creamery and New Pastures. purefoodstas.com Pure Foods Tasmania Ltd | ABN: 13 112 682 158 | ASX: PFT 100 -104 Mornington Rd, Mornington TAS 7018 | Phone: +61 3 6231 4233 | Email: office@purefoodstas.com www.purefoodstas.com Pure Foods Tasmania Limited Reissued Financial Statements 30 June 2024 Pure Foods Tasmania Limited – Reissued Financial Statements ABN 13 112 682 158 Table of Contents Who is Pure Foods Tasmania?................................................................................................................ 3 Directors’ Report ........................................................................................................................................ 4 Remuneration Report ............................................................................................................................. 10 Auditor’s Independence Declaration .................................................................................................. 16 Consolidated Statement of Profit or Loss and Other Comprehensive Income ........................ 17 Consolidated Statement of Financial Position .................................................................................. 19 Consolidated Statement of Changes in Equity ................................................................................. 20 Consolidated Statement of Cash Flows.............................................................................................. 21 Notes to and Forming Part of the Financial Statements ................................................................ 22 Consolidated Entity Disclosure Statement ........................................................................................ 59 Directors’ Declarations ........................................................................................................................... 60 Independent Auditor’s Report .............................................................................................................. 61 Shareholder Information ....................................................................................................................... 66 Company Directory ................................................................................................................................. 68 2 Pure Foods Tasmania Limited ABN 13 112 682 158 Who is Pure Foods Tasmania? Pure Foods Tasmania Pty Ltd (PFT) was formed in 2015 with the aim to enhance and promote Tasmania’s food and beverage businesses. PFT’s strategy is to develop new products within its existing brands and in the plant-based food market, to acquire complementary brands and businesses and to increase its market penetration and distribution for its suite of brands and products globally. PFT’s stable of brands and businesses include Woodbridge Smokehouse, Tasmanian Pate, Daly Potato Co., and The Cashew Creamery. Strategy PFT’s growth strategy encompasses several key themes: 1. organically grow its existing brands; 2. improve margins and capacity via automation of its production as products and brands reach scale; 3. secure key assets; and 4. grow via the acquisition of complementary/scalable products/brands/businesses to exploit product expansion opportunities. PFT brands are targeted at the “conscious consumer”, offering convenience and indulgent home entertaining products with a uniquely Tasmanian focus. Organic growth will be achieved through increased penetration of existing markets, entry into new markets and new product development. 3 Pure Foods Tasmania Limited - Reissued Financial Statements ABN 13 112 682 158 Directors’ Report Pure Foods Tasmania Limited and its Controlled Entities Your Directors present their report on the consolidated entity (referred to herein as the Group) consisting of Pure Foods Tasmania Limited and its controlled entities for the financial year ended 30 June 2024. The information in the preceding operating and financial review forms part of this Directors’ report for the financial year ended 30 June 2024 and is to be read in conjunction with the following information: General Information Directors The following persons were Directors of the Group during or since the end of the financial year up to the date of this report: Malcolm McAully Non-executive Chairman 1 Michael Cooper 2 Managing Director Ken Fleming Non-executive Director Dividends Paid or Recommended No dividends were paid or declared during the financial year. Indemnifying Officers or Auditor During the financial year, the Group paid a premium in respect of a contract insuring the Directors of the Group, the Group Secretary and all Executive Officers of the entity and any related body corporate against a liability incurred as a Director, Secretary or Executive Officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Group has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the Group or of any related corporate against a liability incurred as an officer or auditor. Proceedings on Behalf of the Group No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings. The Group was not a party to any such proceedings during the year. 1 2 Executive Chairman from 30 August 2024. Resigned 30 August 2024. 4 Pure Foods Tasmania Limited - Reissued Financial Statements ABN 13 112 682 158 Directors’ Report Non-Audit Services The Board of Directors is 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. The following fees were paid or payable to WLF Accounting & Advisory for non-audit services provided during the year ended 30 June 2024: Details $ Advisory taxation services 23,500 Accounting assistance 4,600 28,100 Auditor’s Independence Declaration The lead auditor’s independence declaration for the year ended 30 June 2024 has been received and can be found on page 16 of the financial report. Information Relating to Directors and Group Secretary Details and Experience Malcolm McAully Malcolm McAully is an experienced Company Director having held roles over a diverse range of industry backgrounds including financial services, energy generation, waste management, agribusiness, technology manufacturing, human resource management, property development and food manufacturing. Malcolm was the Chairman of ASX Listed Pinnacle VRB (ASX: PCE) from 2004 to 2005 and remained Chairman when the company (following an acquisition) changed its name to Cougar Energy Limited (ASX: CXY) until 2013 when he resigned. Malcolm is also Chairman of Chaucer Energy Limited and several privately owned companies. Malcolm has held various executive management positions including National Manager of MLC Life when owned by the Lend Lease Group. He holds an MBA and qualifications in accounting, business management, mediation, turn around management and GAICD. 5 Pure Foods Tasmania Limited - Reissued Financial Statements ABN 13 112 682 158 Directors’ Report Details and Experience Michael Cooper Michael Cooper is the Managing Director of PFT. Michael has over 29 years’ experience in senior executive roles in the food and beverage industry. He was the CEO and later Managing Director of Juicy Isle Pty Ltd (JI) and sold his family interest to Myer Family Investments. JI was the largest supplier of organic juice in Australia to Woolworths, Coles, and Costco. He was also a director (2012 – 2017) of Ausfec Ltd, a $550m revenue business. Ausfec was the major route to market distribution channel for global brands such as Cadbury, Nestle, Mars, Wrigley, Smith and SBA Snack Foods, Red Bull, and V Energy drinks. Michael joined the PFT Board in February 2017 and was appointed Managing Director on a part time basis in October 2018 and full time from April 2019. Ken Fleming Ken Fleming has extensive experience in capital markets and has held senior roles at Deutsche Bank (including Director; Global Co-ordinator – Telecommunications Technology), James Capel Australia and Tricom (Head of Research). He has also worked in the Australian public service (Canberra) and at KPMG (Melbourne). He is a Director of Castray Capital Pty Ltd and holds an Honours Degree in Economics and post graduate qualifications in economics and finance and is also a Fellow of the Financial Services Institute of Australia (FFIN). Justin Hill Justin is a Principal at Page Seager Lawyers – the largest law firm in Tasmania. Justin advises clients in a number of key industry sectors, including agribusiness, financial services, energy, and the not-for-profit sector. He specialises in mergers and acquisitions, governance and corporate structures and restructures. Justin also has significant experience in finance (including derivative transactions) and advising on raising capital for companies by way of equity and debt. He also assists with preparing contracts of employment and provides employment advice on transfer of businesses. Justin has a first-class honours degree in Commerce, a Master’s in Law from the University of Melbourne and a Graduate Diploma in Applied Finance and Investment. Before joining Page Seager as a Partner/Principal, Justin worked as in-house counsel for the investment banking division of Deutsche Bank in Sydney. Prior to working with Deutsche Bank, Justin was principal counsel in the institutional markets and investment division of National Australia Bank. Justin also practised for a number of years in the mergers and acquisitions team of Mallesons Stephen Jaques (now King & Wood Mallesons). 6 Pure Foods Tasmania Limited - Reissued Financial Statements ABN 13 112 682 158 Directors’ Report Meetings of Directors During the financial year, 11 meetings of Directors (including committees of Directors) were held. Attendance by each Director during the year was as follows: Directors’ Meetings Eligible Meetings Meetings Attended Malcolm McAully 11 11 Michael Cooper 11 11 Ken Fleming 11 11 Remuneration of Directors and Senior Management Information about the remuneration of Directors and senior management is set out in the Remuneration Report. Review of Operations and Principal Activities The Group's principal activities at the commence of the financial year are outlined in the Chairman's report and listed in the Events Subsequent to Balance Date. Operating Results The loss after tax of the Group for the financial year attributable to the members of Pure Foods Tasmania Limited was ($3.9m) (2023: ($1.8m)). State of Affairs and Likely Developments In the opinion of the Directors there were no significant changes in the state of affairs of the Group and its controlled entities that occurred during the financial year under review not otherwise disclosed in this report or the accompanying financial report. Reference should be made to the subsequent events note for changes in the state of affairs after balance date. Events Subsequent to Balance Date The Board, other than what is stated in the below section “Facts which have become known to the Auditor after the Financial Report has been issued”, is not aware of any matter or circumstance not otherwise dealt within these financial statements that has significantly or may significantly affect the operation of the Group, the results of those operations, or the state of affairs of the Group in subsequent financial years. 7 Pure Foods Tasmania Limited - Reissued Financial Statements ABN 13 112 682 158 Directors’ Report Facts which have become known to the Auditor after the Financial Report has been Issued Since the signing and issue of the financial statements and audit opinion on 30 September 2024, further facts have become known in regard to the re-financing of the Group. As at 30 September 2024, the Group had the following facilities with the Commonwealth Bank of Australia (CBA) and National Australia Bank (NAB): • • • • $1.5m market rate loan secured against a $1.5m deposit facility with CBA with both maturing in November 2024; $0.5m short-term secured loan with Amal Security Services and maturing in September 2024; $1.4m asset finance liabilities with CBA which are secured over specific assets ranging with maturity dates from December 2024 to November 2028; and $0.002m asset finance facility with NAB and maturing in September 2024. As of 15 November 2024, the CBA has approved the: • • • Extension of the $1.5m cash backed Market Rate loan until 30 June 2026; Extending the temporary facility to $1.6m and convert to a Better Business Loan expiring 30 June 2026; and Restructure of the existing equipment finance balloons of $0.645m due in FY25. These facilities will be renegotiated over a further term on current repayments to repay them to nil. This will push the terms for each of these equipment finance contracts to 30 June 2026 or beyond. The above approval of re-financing from CBA as at 15 November 2024 results in $1.845m converting to a non-current liability and not due for maturity within the next 12 months. The remaining $0.4m refinanced is to be repaid to the CBA in February 2025. The $0.5m short-term secured loan with Amal Security Services and was scheduled to mature in September 2024 has been paid down to $0.110m with the remaining balance to be settled in November 2024. In addition: • • The Board has also entered into negotiations for equipment sales for equipment totalling $0.175m; and $0.400m was raised in additional capital in October 2024. As a result of the above information, the Director’s resolved to amend and re-issue the financial statements to update the events occurring subsequent to balance date disclosures in Note 25. This enabled the auditors to issue an amended audit report expressing an opinion on the amended and reissued financial statements. Withdrawal of previously issued 2024 Financial Statements The Board has overseen the process in obtaining the additional information subsequent to the issuing of the financial statements on 30 September 2024. The obtaining of the additional 8 Pure Foods Tasmania Limited - Reissued Financial Statements ABN 13 112 682 158 Directors’ Report information as detailed above and in Note 25 of the financial statements has resulted in the reissuing of the financial statements to reflect this information. There were no other matters or circumstances arising since the end of the reporting period that have significantly affected or may significantly affect the operations of the Group and the results of those operations or the state of the affairs of the Group in the financial period subsequent to 30 June 2024. On behalf of the Directors Malcolm McAully Director Date: 28 November 2024 9 Pure Foods Tasmania Limited – Reissued Financial Statements ABN 13 112 682 158 Remuneration Report Remuneration Policy The remuneration policy of the Group has been designed to align key management personnel (KMP) objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the Group’s financial results. The Board of the Group believes the remuneration policy to be appropriate and effective in its ability to attract and retain highquality KMP to run and manage the Group, as well as create goal congruence between Directors, executives, and shareholders. The Board’s policy for determining the nature and amount of remuneration for KMP of the Group is based on the following: • • • • • The remuneration policy is to be developed by the Board after professional advice is sought from independent external consultants. All KMP receive a base salary (which is based on factors such as length of service and experience), superannuation, fringe benefits, options, and performance incentives. Performance incentives are generally only paid once predetermined key performance indicators (KPIs) have been met. Incentives paid in the form of options or rights are intended to align the interests of the Directors and Group with those of the shareholders. In this regard, KMP are prohibited from limiting risk attached to those instruments by use of derivatives or other means. The Board reviews KMP packages annually by reference to the Group’s performance, executive performance, and comparable information from industry sectors. The performance of KMP is measured against criteria agreed biannually with each executive and is based predominantly on the forecast growth of the Group’s profits and shareholders’ value. All bonuses and incentives must be linked to predetermined performance criteria. The Board may, however, exercise its discretion in relation to approving incentives, bonuses, and options. Any change must be justified by reference to measurable performance criteria. The policy is designed to attract the highest calibre of executives and reward them for performance results leading to long-term growth in shareholder wealth. KMP receive, at a minimum, a superannuation guarantee contribution required by the government, which, during the 2024 financial year was 11.0% of the individual’s average weekly ordinary time earnings (AWOTE). Some individuals, however, have chosen to sacrifice part of their salary to increase payments towards superannuation. All remuneration paid to KMP is valued at the cost to the Group and expensed. 10 Pure Foods Tasmania Limited – Reissued Financial Statements ABN 13 112 682 158 Remuneration Report Performance-based Remuneration KPIs are set annually, with a certain level of consultation with KMP. The measures are specifically tailored to the area each individual is involved in and has a level of control over. The KPIs target areas the Board believes hold greater potential for Group expansion and profit, covering financial and non-financial as well as short and long-term goals. The level set for each KPI is based on budgeted figures for the Group and respective industry standards. Performance Conditions Linked to Remuneration The Group seeks to emphasise reward incentives for results and continued commitment to the Group through the provision of various cash bonus reward schemes, specifically the incorporation of incentive payments based on the achievement of revenue targets, return on equity ratios and continued employment with the Group. Employment Details of Members of Key Management Personnel The term Key Management Personnel refers to those persons having the authority and responsibility for planning, directing, and controlling activities of the Group, directly or indirectly, and includes any Director of the Group (whether executive or otherwise). The KMP of the Group for the year ended 30 June 2024 were: 3 4 Key Management Personnel Role Appointment Date Malcolm McAully Non-executive Chairman 1 September 2017 Michael Cooper 3 Managing Director 1 February 2017 Ken Fleming Non-executive Director 29 July 2015 Phillip Excell 4 Chief Financial Officer 20 March 2023 Resigned 30 August 2024. Resigned 17 September 2024. 11 Pure Foods Tasmania Limited – Reissued Financial Statements ABN 13 112 682 158 Remuneration Report Remuneration Expense Details for the Year Ended 30 June 2024 Short-term benefits Post-employment benefits Long-term benefits Equity-settled share-based payments Salary, fees, and leave Profit share and bonuses Nonmonetary Pension and superannuation Other Incentive plans LSL Shares/units Options/rights $ $ $ $ $ $ $ $ $ Cash-settled share-based payments Termination benefits Total $ $ $ KMP Malcolm McAully Michael Cooper 5 Ken Fleming 5 2024 50,000 - - 5,500 - - - - - - - 55,500 2023 50,000 - - 5,250 - - - - - - - 55,250 2024 302,732 - - 33,000 - - - - - - - 335,732 2023 300,771 - - 31,499 - - - - - - - 332,270 2024 36,000 - - 3,960 - - - - - - - 39,960 2023 36,000 - - 3,780 - - - - - - - 39,780 Resigned 30 August 2024. 12 Pure Foods Tasmania Limited – Reissued Financial Statements ABN 13 112 682 158 Remuneration Report Short-term benefits Charles Hughes 6 Phillip Excell 7 Total KMP Post-employment benefits Long-term benefits Equity-settled share-based payments Salary, fees, and leave Profit share and bonuses Nonmonetary Pension and superannuation Other Incentive plans LSL Shares/units Options/rights $ $ $ $ $ $ $ $ $ Cash-settled share-based payments Termination benefits Total $ $ $ 2024 - - - - - - - - - - - - 2023 174,270 - - 17,779 - - - - - - - 192,049 2024 200,600 - - 22,000 - - - - - - - 222,600 2023 57,842 - - 6,057 - - - - - - - 63,899 2024 589,332 - - 64,460 - - - - - - - 653,792 2023 618,883 - - 64,365 - - - - - - - 683,248 6 Resigned 21 April 2023. 7 Resigned 17 September 2024. 13 Pure Foods Tasmania Limited – Reissued Financial Statements ABN 13 112 682 158 Remuneration Report Securities Received that are not Performance-Related No members of KMP are entitled to receive securities that are not performance-based as part of their remuneration package. KMP Shareholdings The number of ordinary shares held by each KMP of the Group during the financial year is as follows: Balance at Beginning of the Year 8 Granted as Remuneration During the Year Issued on Exercise of Options During the Year Purchases During the Year Balance at End of Year Malcolm McAully 8 2,599,518 - 280,886 - 2,880,404 Michael Cooper8 4,404,682 - 1,382,230 - 5,786,912 Ken Fleming8 2,668,975 - 625,500 - 3,294,475 Phillip Excell8 - 255,102 - - 255,102 Includes indirect shareholdings. 14 Pure Foods Tasmania Limited – Reissued Financial Statements ABN 13 112 682 158 Remuneration Report Other Equity-Related KMP Transactions There have been no other transactions involving equity instruments apart from those described in the tables above relating to options, rights, and shareholdings. Other Transactions with KMP and/or their Related Parties There were no other transactions conducted between the Group and KMP or their related parties, apart from those disclosed above relating to equity, compensation, and loans, that were conducted other than in accordance with normal employee, customer, or supplier relationships on terms no more favourable than those reasonably expected under arm’s length dealings with unrelated persons. This Directors’ Report, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of Directors: Malcolm McAully Director Date: 28 November 2024 15 Pure Foods Tasmania Limited – Reissued Financial Statement ABN 13 112 682 158 Auditor’s Independence Declaration Auditor’s Independence Declaration In accordance with section 307C of the Corporations Act 2001, we are pleased to provide the following declaration of independence to the Directors of Pure Foods Tasmania Limited. As the lead audit partner for the audit of the financial report of Pure Foods Tasmania Limited for the year ended 30 June 2024, we declare that, to the best of our knowledge and belief, there have been no contraventions of: i. ii. the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and any applicable code of professional conduct in relation to the audit. This declaration is in respect of Pure Foods Tasmania Limited and the entities it controlled during the period. Wise Lord & Ferguson Nick Carter Partner Wise Lord & Ferguson Date: 28 November 2024 16 Pure Foods Tasmania Limited – Reissued Financial Statements ABN 13 112 682 158 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 30 June 2024 Notes 2024 $ 2023 $ Revenue Revenue from continuing operations 6 7,442,902 8,748,338 Other income 6 51,816 979,190 7,494,718 9,727,528 7,346,394 7,701,421 1,685,313 1,670,135 238,066 187,896 798 16,983 Depreciation and amortisation 920,028 752,918 ASX listing fees and expenses 32,312 45,425 Finance costs 388,922 317,173 Impairment of assets 956,090 - Insurance 194,891 165,731 Legal and professional fees 191,986 245,804 Marketing expenses 55,301 85,916 Motor vehicle expenses 35,999 44,323 Repairs and maintenance 283,780 209,271 Other expenses 405,110 521,982 Total Expenses 12,734,990 11,964,978 Net Loss Before Income Tax (5,240,272) (2,237,450) 1,358,877 410,117 (3,881,395) (1,827,333) (62,943) - (3,944,338) (1,827,333) - - (3,944,338) (1,827,333) Total Revenue Expenses Cost of goods sold 7 Employment expenses Occupancy, electricity, and telephone costs Bad debts Income tax benefit Net Loss After Tax for the Year from Continuing Operations 8 Discontinued Operations Loss from discontinued operations after tax Net Loss After Tax for the Year Other Comprehensive Income Other comprehensive loss net of tax Total Comprehensive Income The above statement should be read in conjunctions with the accompanying notes. 17 Pure Foods Tasmania Limited – Reissued Financial Statements ABN 13 112 682 158 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 30 June 2024 Notes 2024 $ 2023 $ Net Profit for the Period Attributable to: Non-controlling interest Owners of Pure Foods Tasmania Limited Total Comprehensive Income for the Year is Attributable to: Non-controlling interest Owners of Pure Foods Tasmania Limited - - (3,944,338) (1,827,333) (3,944,338) (1,827,333) - - (3,944,338) (1,827,333) (3,944,338) (1,827,333) Earnings per Share From Continuing and Discontinued Operations: Basic loss per share (cents per share) 4 (0.033) (0.018) Diluted loss per share (cents per share) 4 (0.033) (0.018) Basic loss per share (cents per share) 4 (0.033) (0.018) Diluted loss per share (cents per share) 4 (0.033) (0.018) From Continuing Operations: The above statement should be read in conjunctions with the accompanying notes. 18 Pure Foods Tasmania Limited – Reissued Financial Statements ABN 13 112 682 158 Consolidated Statement of Financial Position As at 30 June 2024 Notes 2024 $ 2023 $ Current Assets Cash and cash equivalents 18 1,078,661 3,468,766 Trade and other receivables 9 867,967 1,854,127 Inventories 10 1,132,025 1,535,255 72,932 154,922 3,151,585 7,013,070 Other assets Total Current Assets Non-Current Assets Property, plant and equipment 11 6,358,925 6,697,785 Right of use assets 12 357,227 486,251 Intangible assets 13 1,603,276 2,515,207 Deferred tax assets 8 4,215,010 3,019,811 Total Non-Current Assets 12,534,438 12,719,054 Total Assets 15,686,023 19,732,124 Current liabilities Trade and other payables 14 1,222,396 1,715,853 Lease liabilities 12 366,196 270,234 Provisions 15 172,015 219,817 Borrowings 16 2,937,644 2,913,779 4,698,251 5,119,683 Total Current Liabilities Non-Current Liabilities Lease liabilities 12 7,920 229,199 Provisions 15 5,597 - Borrowings 16 1,449,151 1,019,779 Deferred tax liabilities 8 992,603 1,220,004 Total Non-Current Liabilities 2,455,271 2,468,982 Total Liabilities 7,153,522 7,588,665 Net Assets