The One Hundred and Ninetieth
Annual Report and Accounts of
THE VAN DIEMEN’S LAND COMPANY
ARBN 009 475 601
Established by Royal Charter 1825
2014
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Contents
Company Information
____________________________________________
Directors' Report
5
____________________________________________
Court of Directors
K G Sutton (Governor)
M L Hampton
M C Trousselot
T H Westacott
J F Bennett
Auditor’s Report
10
____________________________________________
Managing Director
T H Westacott
Directors' Declaration
12
____________________________________________
Company Secretary
T J Breward
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
13
____________________________________________
Auditor
Ernst & Young
Melbourne 3000, Victoria
Australia
Governor's Report
3
____________________________________________
Consolidated Statement of Financial Position 14
____________________________________________
Bankers
Rabobank Australia Limited
Launceston 7250, Tasmania
Australia
Consolidated Statement of Cash Flows
15
____________________________________________
Consolidated Statement of Changes in Equity 16
____________________________________________
ANZ Banking Group Limited
Melbourne 3000, Victoria
Australia
Solicitors
Hunt & Hunt
Hobart 7000, Tasmania
Australia
Notes to the Financial Statements
17
____________________________________________
Registrars/Share Registration Office
Computershare Registry Services Pty Ltd
Level 2, 159 Hurstmere Road
North Shore, Auckland
Private Bag 92119
Auckland 1020
Ph: +64 9 488 8777
Fax: +64 9 488 8787
Statement of Interest
44
____________________________________________
Auditor’s Independence Declaration
45
____________________________________________
Registered Office
139 Nelson Street
PO Box 418
Smithton, Tasmania
Australia 7330
Ph: +61 3 6452 2911
Fax: +61 3 6452 2519
Email: [email protected]
Financial Calendar
Annual Meeting
7 November 2014
Stanley Seaview Inn
58 Dovecote Road
Stanley 7331, Tasmania, Australia
Contact Details
139 Nelson Street
PO Box 418
Smithton, Tasmania
Australia 7330
Ph: +61 3 6452 2911
Fax: +61 3 6452 2519
Email: [email protected]
Proxies Close
5 November 2014
Results Announced
Annual:
October
2
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Governor's Report
Dear Shareholder
On behalf of the Court of Directors I am pleased to present the 2014 Annual Report to Shareholders for the Company’s 190th year.
The overall result for The Van Diemen’s Land Company and Controlled Entities (‘the Group’ or ‘VDL’) was a total comprehensive
income after tax of A$8.986 million and a net profit after tax of A$7.538 million.
The much improved trading result followed a record milk price, fair seasonal conditions, increased production volumes, a focus on cost
management and an increase in livestock carrying values.
The Group achieved record production for the year to 31 May 2014 of 6.72 million kg of milk solids, an increase of 7.5% on 2013. This
follows an increase of 8.5% in the year to 31 May 2013. The increase was achieved as our Newlands farm came on line, along with
further improvements in farm practice, herd quality and an on-going pasture renovation program.
The average milk price for the year for VDL was A$7.07 per kg of milk solids compared to A$5.09 paid in 2013, an increase of 38.9%.
Total costs rose by 3.5% with a lift in farm working expenses of 3.7%, an increase in administrative expenses of 5.2%, a lift in
depreciation expense of 17.7%, a lift in employee benefit expenses of 1.3% and a drop in finance costs of 0.3%. The lift in depreciation
and employee benefit expenses reflects the movement of more of the larger farms from a share-farming to a managed arrangement where
equipment and staff become a Group rather than a share farmer cost and the full year addition of Newlands, our latest dairy conversion.
That movement from share farmed to managed operations also resulted in the share of the milk cheque going to the share farmer group
dropping from 17.0% to 13.5% from the 2012/13 to 2013/14 financial years
The growth in milk production was achieved at a reasonable margin, with an operating EBIT (excluding livestock valuation) of around
A$1.38 per kg of milk solid, and EBITDA of around A$2.46 per kg of milk solid (including livestock valuation).
The Group has continued to implement management and policy changes aimed at providing sustainable improvements in environmental
practice, animal welfare, productivity and profitability. These initiatives, along with fixing the milk price for approximately 70% of the
2014/15 budgeted production early in the year and favourable seasonal conditions throughout 2014/15 thus far, have the Group
forecasting a 6.0% lift in production and a similar EBIT (excluding livestock valuation) outcome in 2014/15.
Valuation of Land and Buildings
The Group farms were valued by the Directors at 31 May 2014 in accordance with Accounting Standards. Based on independent
valuations received in conjunction with other advice, Directors have valued the Land and Buildings at A$179.2 million, up A$1.9 million
on the prior year, albeit after the expenditure of A$0.8 million during 2013/14.
Capital Initiatives
The Group continues to seek to raise additional funding on acceptable terms to enable a significant expansion of its dairy farming
activities at Woolnorth, and in preparation for that, is committed to simplifying the organisational structure, shareholding, and
jurisdiction framework to get the business “investment ready”.
Outlook
Continuing production growth and lowering of production costs per kilogram of milk solids, on-going strengthening in management and
information systems, and fixed milk prices, provide for a positive outlook for the Group. The Group continues to strengthen
management, focus on operational improvements, health and safety, animal health and productivity, and plan for the continuing
development of its properties.
3
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Governor's Report (continued)
Outlook (continued)
The new season from 1 June 2014 has started well and production as at 30 September 2014 is 10.8% above the previous corresponding
period. For the full year we are forecasting a 6.0% lift in milk production to 7.1 million kg of milk solids.
Forecast production and productivity gains are underpinned by investments in existing dairy farms and the build-up from new
conversions that occurred during the 2012/13 financial year. The new conversions, Newlands and Cape Barren, are currently milking
2,145 cows.
Externally the combination of forecast global population growth, continuing urbanisation and the rapid growth of the middle class in
developing regions and increased protein consumption are expected to continue to drive increased demand for dairy products.
At the same time climate change, urban spread and increased competition for agricultural land is reducing the availability of productive
land for dairying. The resulting long run supply-demand balance outlook continues to support long term firming of pricing for dairy
products and productive agricultural land, albeit with considerable volatility from time to time.
North West Tasmania remains ideally suited to dairy farming. Its temperate climate combines abundant and consistent rainfall with
moderate temperatures both in summer and winter.
Summary
The Group continues to move towards realising the full potential of its current farms and has delivered improved productivity and
profitability in 2014. The Group expects to deliver similar profitability in 2015 through a combination of continuing operational
improvements, fixed milk pricing and business growth.
The long term outlook for dairy farming remains positive although milk prices are expected to remain volatile in the near term.
I welcome new staff and share farmers who have joined The Van Diemen’s Land Company during the year, all of whom have, and will,
with their existing colleagues, continue to assist the Group improve its overall performance.
In early 2014, the Chief Executive Officer, Michael Guerin resigned. I thank Michael for his contributions to the Group over the past two
years. Trevor Westacott was appointed as Managing Director, providing valuable dairying experience to the Group and helping VDL
management achieve real progress in 2014 and setting the course for another good year in 2015. Trevor and I both wish to acknowledge
the significant support received from Directors and staff throughout the year.
K G Sutton
Governor
Dated: 30 September 2014
4
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Directors' Report
Your Directors present their report on the Company and its controlled entities for the financial year ended 31 May 2014. The names of
the Directors in office at any time during, or since the end of the year are:
K G Sutton
M L Hampton
M C Trousselot
T H Westacott
J F Bennett
E Gill
Governor
Non Executive Director
Non Executive Director
Managing Director
Non Executive Director - appointed 4 March 2014
Non Executive Director - resigned 21 November 2013
Directors have been in office since the start of the financial year to the date of this report, unless otherwise stated.
The disclosures in relation to Directors’ remuneration and shareholdings are detailed in Note 6 and on page 44.
Directors’ Profiles:
Keith Sutton (BCA) – Governor of The Van Diemen's Land Company and Chairperson of Tasman Farms Limited.
Keith Sutton of Wellington, New Zealand is a Director of Sutton McCarthy Limited, Chairperson of Taranaki Investment Management
Limited, a member of the Maori Trustee Advisory Board and a Director of Wellington International Airport Limited, Gough Group
Limited, Sealord Group Limited, Wools of New Zealand Limited and OSPRI New Zealand Limited.
Keith is also a Member of the Institute of Directors and has both farming and forestry interests in New Zealand.
Elaine Gill (ONZM LLB JP) – Director of The Van Diemen's Land Company and Tasman Farms Limited and Member of the
Audit and Risk Committee.
Elaine Gill, of New Plymouth, New Zealand, resigned as a Director effective 21 November 2013 and at that time was the Chairperson of
TSB Bank Ltd, a Director of Taranaki Investment Management Limited and a past Director of Radio Works.
Elaine was a New Plymouth District Councillor for nine years retiring in 2007, serving as a Chair of the Monitoring Committee and the
Policy Committee and as a member of the Council's Investment Subcommittee.
Elaine has extensive regional and national experience in the tourism industry.
Miles Hampton BEc(Hons), FCPA, FCIS, FAICD – Director of The Van Diemen's Land Company and Tasman Farms Limited
and Chairperson of the Audit and Risk Committee.
Miles Hampton, of Tasmania was, until 2006, the Managing Director of Roberts Limited, a position he held for 20 years.
A qualified accountant and company secretary, Miles is currently Chairman of Tasmanian Water Corporations, My State Limited and
Mather Foundation.
Miles has also served as a Director of a number of companies including Forestry Tasmania, and Australian Pharmaceutical Industries
Limited.
Michael Trousselot BCom – Director of The Van Diemen's Land Company and Tasman Farms Limited and Member of the Audit
and Risk Committee.
Michael Trousselot, of New Plymouth, New Zealand is Chief Executive of Taranaki Investment Management Limited, a NZ perpetual
investment fund.
Michael has held finance, general manager and CEO roles in a range of New Zealand companies and other organisations.
He is a current member of the Institute of Directors, and corporate member of the New Zealand Venture Capital Association.
5
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Directors' Report (continued)
Directors’ Profiles (continued):
Trevor Westacott – Director of The Van Diemen's Land Company and Tasman Farms Limited.
Trevor Westacott, of Victoria was also Director of Trameana Pty Ltd.
Trevor has extensive industry experience within the agribusiness sector, including developing large scale dairying operations, lecturing in
agribusiness management and participation in many dairying initiatives. He has also previously been the Managing Director of one of
Australia’s largest dairy cattle veterinary practices.
Trevor was appointed Managing Director on 24 March 2014.
Jane Bennett – Director of The Van Diemen's Land Company and Tasman Farms Limited and Member of the Audit and Risk
Committee.
Jane Bennett, of Tasmania, spent 18 years working with her family to build Ashgrove Cheese, a successful dairy processing business
established in a paddock on the family farm in Elizabeth Town in northern Tasmania. In February 2011 Jane stepped down from the helm
of the business to become a non-executive Director in a range of businesses including the Australian Broadcasting Corporation, CSIRO,
Australian Farm Institute, Tasmanian Ports Corporation and Nuffield Australia.
Jane is a Member and past Chair of the Tasmanian Food Industry Advisory Council and a Member of the Brand Tasmania Council. Jane
was named the 2010 Tasmanian Telstra Business Woman of the Year and 1997 Australian ABC Rural Women of the Year. In 2008 Jane
did a Nuffield Farming Scholarship studying the Role of Regionality in the Marketing and Branding of Food.
In addition to her work in the family business, Jane has a range of experience in industry advisory bodies for food, agriculture, education
and training and in rural and regional economic development.
Jane was appointed as a Director on 4 March 2014.
Principal Activities
The principal continuing activity of the Group is pasture based farming, which in the year under review was primarily dairying and
activities to support dairying, with only a nominal amount of beef and sheep activities.
Operating Results
The operating result of the Group for the financial year was total comprehensive income after tax of A$8.986 million and net profit after
tax of A$7.538 million.
Record production of 6.72 million kilograms of milk solids was 7.5% ahead of the preceding year. The Group remained the largest
supplier of milk in Australia.
Review of Operations
A review of the Group operations during the financial year and the results of those operations are as follows:
Dairy Operations
The Group milked 18,090 cows on 25 farms having a total effective area of 7,009 hectares for total production in the year ended 31 May
2014 of 6.72 million kilograms of milk solids (kgMS) (2013: milked 18,558 cows on 24 farms having a total effective area of 7,229
hectares for production of 6.22 million kgMS).
The Group average farm gate milk price for the year ended 31 May 2014 was A$7.07 per kgMS, an increase of 38.9% from A$5.09 per
kgMS for the year ended 31 May 2013.
6
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Directors' Report (continued)
Review of Operations (continued)
Dairy Outlook
As at the date of this report, milk production is approximately 10.8% above last year due to the good cow condition at calving, improved
productivity, and a larger proportion of our herd autumn calving.
The Group’s milk processor announced its opening price for the 2014/15 season at approximately A$5.80 per kgMS. However as the
Group has already fixed the bulk of its expected 2014/15 milk production, further volatility in the farm gate milk price will have a limited
impact on the Group’s 2015 operating revenues.
Dairy Support
The Group runs a dedicated dairy support unit, which provides supplementary feed and agistment services on land not presently used for
milking cows. This allows the dairy units to focus solely on milking cows whilst allowing the Group to be partially self-contained for
agistment and supplement.
This unit will continue to reduce the dependence of the Group on external sources of supplement production and agistment services.
Role of the Court
The Court of Directors is elected by the shareholders to supervise the management of The Van Diemen’s Land Company and its
controlled entities. The Court establishes the Group’s objectives, annual budgets and the overall policy framework within which the
business is conducted. The Court monitors Management’s performance relative to these goals and plans, and has delegated the day to
day management of the Group to the Managing Director.
The Court has the obligation to protect and enhance the value of the assets of the Group. It achieves this through the approval of
appropriate corporate strategies, approval of transactions relating to acquisitions and divestments and capital expenditures above
delegated authority limits, financial and dividend policy and the review of performance against strategic objectives.
The composition and terms of reference of the Court, the Governor, Sub Committees and the Managing Director are reviewed
periodically by the Court.
The Governor regularly assesses the effectiveness of the Court and its Committees. The Governor of the Court, with the assistance of the
Managing Director, establishes the agenda for each Court of Directors Meeting.
The Group currently has one formally constituted Audit and Risk Committee.
Court Operations and Membership
The Court currently comprises five Directors: a Non-Executive Governor, one Managing Director and three Non-Executive Directors.
The Royal Charter sets out policies and procedures on the operation of the Court, including the appointment and removal of Directors.
7
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Directors' Report (continued)
Audit and Risk Committee
At the date of the Annual Report, The Van Diemen’s Land Company had an Audit and Risk Committee consisting of the following
Directors:
M L Hampton (Chairperson)
M Trousselot
J Bennett
The Committee’s responsibilities are to:
•
•
•
•
oversee the existence and maintenance of internal controls and accounting systems;
oversee the financial reporting process;
nominate the external auditors; and
review the existing external audit arrangements.
Indemnity
No indemnities have been given or insurance premiums paid, during or since the end of the financial year, for any person who is or has
been an officer or auditor of the Group.
The Group has paid premiums to insure each Director of the Group, its parent entity (Tasman Farms Limited), and its subsidiary
companies 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 of the Group, other than conduct involving a wilful breach of duty in relation to the Group.
Dividends
The Directors have declared an unfranked dividend of 2.832 cents per share, payable to shareholders on 15 May 2015 (2012/13: nil).
Directors’ Benefits
Since 31 May 2014 no Director of the Group has received or become entitled to receive a benefit (other than a remuneration benefit
included in Note 6 to the financial statements) because of a contract made by the Group or a related body corporate with the Director or
with a firm of which he is a member, or with a company in which he has a substantial financial interest, other than that disclosed in Note
21.
After Balance Date Events
The Rabobank loan has been classified as a current liability as the Company debt facilities were subject to annual review within twelve
months of 31 May 2014 whereby the Company did not have an unconditional right to defer repayment of the facility for a period of more
than one year from balance date. Subsequent to 31 May 2014 the Company completed the annual review with Rabobank and the debt
facilities were confirmed in writing on 25 September 2014. The facility expires on 30 November 2016 and the next review date is 30
November 2015.
The Australian Government has confirmed its intention of lowering the company tax rate to 28.5% from 1 July 2015. However for
companies with a taxable income over $5m this will be offset by a proposed 1.5% Paid Parental Leave levy. In accordance with AASB
112 Income Taxes, this announcement will not impact the 2014 financial statements as the legislation to reduce the company tax rates
was not enacted by 31 May 2014. We note that the legislation has not been passed by both Houses of Parliament at the date these
financial statements have been authorised for issue.
Apart from the above, the Directors are not aware of any significant events since the end of the reporting period.
8
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Directors' Report (continued)
Options
No options over issued shares or interests in the Group or a controlled entity were granted during or since the end of the financial year
and there were no options outstanding at the date of this report.
Environmental Issues
The economic entity’s ongoing operations are not regulated by any significant environmental regulation under a law of the
Commonwealth or State or of a Territory other than may be required for industry accepted dairy and pastoral operations. Proposed land
development at Woolnorth will be subject to relevant Commonwealth, State and Local regulations.
Court Proceedings
No person has applied for leave to the 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 party to any such proceedings during the year.
Auditor
Ernst & Young continue as the auditor of the Group.
Auditor’s Independence Declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 45.
Annual General Meeting
The Annual General Meeting of shareholders of The Van Diemen’s Land Company will be held at the Stanley Seaview Inn, 58 Dovecote
Road, Stanley, Tasmania, Australia on Friday 7 November 2014 commencing at 1.00 pm
Signed by order of the Court on 30 September 2014.
K G Sutton
Governor
T H Westacott
Managing Director
9
)(
))
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Directors' Declaration
In accordance with a resolution of the Directors of The Van Diemen’s Land Company, the Directors of the Company declare that:
1.
2.
The financial statements and notes set out on the following pages are in accordance with the Corporations Act 2001 and:
a.
comply with Accounting Standards which, as stated in accounting policy Note 1 to the financial statements, constitutes
compliance with International Financial Reporting Standards (IFRS); and
b.
give a true and fair view of the financial position as at 31 May 2014 and of the performance for the year ended on that date
of the Consolidated Group.
In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
Signed by order of the Court on 30 September 2014.
K G Sutton
Governor
T H Westacott
Managing Director
12
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 May 2014
Notes
3
Consolidated Group
2014
2013
A$
A$
52,017,966
39,168,080
5,522,883
(5,663,541)
(2,996,248)
(3,946,481)
54,544,601
29,558,058
3
244,972
763,537
4
4
4
(30,383,546)
(1,557,990)
(1,713,186)
(6,335,966)
(3,997,922)
(29,298,754)
(1,480,336)
(1,455,490)
(6,251,446)
(4,009,646)
10,800,963
(12,174,077)
(3,262,466)
4,017,851
7,538,497
(8,156,226)
2,067,866
(620,360)
-
Total other comprehensive income for the year
1,447,506
-
Total comprehensive income/(loss) for the year
8,986,003
(8,156,226)
Profit/(loss) for the year attributed to:
Members of the parent entity
7,538,497
(8,156,226)
Total comprehensive income/(loss) for the year attributed to:
Members of the parent entity
8,986,003
(8,156,226)
Sales revenue
Net increase/(decrease) in value of livestock
Dairy livestock purchases at cost
4
Gross profit
Other revenue from continuing operations
Farm working expenses
Administration expenses
Depreciation expense
Employee benefit expenses
Finance costs
Profit/(loss) before income tax
Tax (expense)/income
5
Profit/(loss) for the year
Other Comprehensive Income
Increase/(decrease) in asset revaluation reserve
Tax effect of other comprehensive income
18
18
The accompanying notes form part of these financial statements.
13
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Consolidated Statement of Financial Position
as at 31 May 2014
Notes
CURRENT ASSETS
Cash
Trade and other receivables
Livestock and inventories
Other
7
8
9
10
Consolidated Group
2014
2013
A$
A$
134,307
8,330,829
8,360,489
36,759
8,923
4,437,074
6,668,905
996,987
16,862,384
12,111,889
19,352
183,517,144
29,610,723
1,438,126
319,200
181,754,634
24,662,747
1,438,126
Total non current assets
214,585,345
208,174,707
TOTAL ASSETS
231,447,729
220,286,596
9,262,037
63,899,764
388,828
8,371,649
1,592,585
282,790
73,550,628
10,247,024
509,416
35,948,342
65,520,716
32,065,516
36,457,758
97,586,232
TOTAL LIABILITIES
110,008,386
107,833,256
NET ASSETS
121,439,343
112,453,340
41,768,941
78,534,651
1,135,751
41,768,941
77,087,145
(6,402,746)
121,439,343
112,453,340
Total current assets
NON CURRENT ASSETS
Financial assets
Property, plant and equipment
Livestock and inventories
Memorabilia
11
12
9
10
CURRENT LIABILITIES
Trade and other payables
Borrowings
Provisions
13
14
15
Total current liabilities
NON CURRENT LIABILITIES
Borrowings
Deferred tax liability
14
17
Total non current liabilities
EQUITY
Issued capital
Reserves
Retained profits/(losses)
16
18
19
TOTAL EQUITY
The accompanying notes form part of these financial statements.
14
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Consolidated Statement of Cash Flows
for the year ended 31 May 2014
Notes
Consolidated Group
2014
2013
A$
A$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Dividends received
Finance costs
45,591,350
(38,395,156)
1,860
185
(4,303,125)
34,918,928
(38,134,386)
2,302
62,160
(3,789,851)
2,895,114
(6,940,847)
26,349
(1,412,963)
4,317,253
(2,996,248)
2,051,490
2,353,710
(10,965,954)
3,842,192
(3,946,481)
(65,609)
(6,665,043)
Advance from/(to) Tasman Farms Limited
Equipment financing
Repayment of equipment financing
Drawdown/(repayment) of Rabobank facility
Advance from/(to) Fonterra Australia (Bonlac Supply Company) Limited
(1,602,557)
470,664
(705,844)
(866,384)
-
1,472,296
792,839
(510,665)
9,693,161
1,723,399
Net cashflows from/(to) financing
(2,704,121)
13,171,030
Net increase/(decrease) in cash held
Cash at the beginning of the year
125,384
8,923
(434,860)
443,783
134,307
8,923
7
Net cashflows from/(to) operating
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
Proceeds from sale of investments
Purchase of property, plant and equipment
Dairy stock sale proceeds
Dairy stock purchase costs
Net cashflows from/(to) investing
CASH FLOWS FROM FINANCING ACTIVITIES
Cash at the end of the financial year
7
The accompanying notes form part of these financial statements.
15
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Consolidated Statement of Changes in Equity
for the year ended 31 May 2014
Issued
Capital
Asset
Revaluation
Reserve
A$
A$
Other
Reserves
Retained
Earnings
Total
A$
A$
A$
CONSOLIDATED GROUP
Balance as at 1 June 2012
41,768,941
76,255,744
1,313,332
1,271,549
120,609,566
-
(481,931)
-
(8,156,226)
481,931
(8,156,226)
-
41,768,941
75,773,813
1,313,332
(6,402,746)
112,453,340
-
1,447,506
-
7,538,497
-
7,538,497
1,447,506
41,768,941
77,221,319
1,313,332
1,135,751
121,439,343
Profit/(loss) for the year
Other comprehensive income/(loss)
Balance as at 31 May 2013
Profit/(loss) for the year
Other comprehensive income/(loss)
Balance as at 31 May 2014
The accompanying notes form part of these financial statements.
16
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements
for the year ended 31 May 2014
The consolidated financial statements and notes represent those of The Van Diemen’s Land Company and its controlled entity, Tasman
Farmdale Pty Limited as a group (the “Consolidated Group”).
To simplify administration, during the year the assets and liabilities of subsidiaries: The Van Diemen’s Land Company – Dairies Pty
Limited and Tasman Farms Pty Limited were transferred to the parent and these subsidiaries were deregistered.
The Van Diemen’s Land Company is a company limited by shares, incorporated by Royal Charter in the United Kingdom and domiciled
in Australia. Tasman Farms Limited is the parent company of The Van Diemen’s Land Company holding 98.42% of the ordinary shares.
It is incorporated in New Zealand.
1. Statement of Significant Accounting Policies
Basis of Preparation
These general purpose financial statements have been prepared in accordance with the Corporations Act 2001, Australian Accounting
Standards and interpretations of the Accounting Standards Board. The Consolidated Group is a for-profit entity for financial reporting
purposes under Australian Accounting Standards. Compliance with Australian Accounting Standards as issued by the Australian
Accounting Standards Board ensures that the financial statements and notes also comply with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board.
These financial statements are prepared on a going concern basis the validity of which is dependent on the future budgets being met and
funding being available. The Directors are satisfied the business is a going concern and sufficient funding facilities are available for the
forthcoming financial year. The financial statements, except for cash flow information, have been prepared on an accruals basis using
historical costs, modified where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial
liabilities.
The following change in Accounting Policy took place during the year:
AASB 13 (IFRS 13): Fair Value Measurement – This standard applied from 1 June 2013. It establishes a single source of guidance for
determining the fair value of assets and liabilities. AASB 13 does not change when an entity is required to use fair value, but rather,
provides guidance on how to determine fair value and when fair value is required or permitted. It also expands the disclosure
requirements for all assets and liabilities carried at fair value.
The following Accounting Standards issued or amended which are applicable to the Consolidated Group but not yet effective, have not
been adopted for the annual reporting period ended 31 May 2014:
AASB
Amendment
Affected Standard(s)
Nature of change to
accounting policy
AASB 1053
Application of Tiers of Australian Accounting
Standards
The impact of this change is not
anticipated to have a material
effect on the financial statements.
01-Jul-13
01-Jun-14
AASB 2013-3
Amendments to AASB 136 - Recoverable Amount
Disclosures for Non-Financial Assets
The impact of this change has not
yet been determined.
01-Jan-14
01-Jun-14
AASB 1031
Materiality
The impact of this change has not
yet been determined.
01-Jan-14
01-Jun-14
AASB 2009-11
AASB 9: Financial Instruments
The impact of this change has not
yet been determined.
01-Jan-15
01-Jun-15
AASB 9
Financial Instruments
The impact of this change has not
yet been determined.
01-Jan-18
01-Jun-18
17
Application
date of
standard
Application
date for
the Company
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
1. Statement of Significant Accounting Policies (continued)
The material accounting policies adopted by the Consolidated Group in the preparation of the financial statements are presented below
and have been consistently applied unless stated otherwise.
(a) Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by The Van Diemen's Land
Company at the end of the reporting period. A controlled entity is any entity over which The Van Diemen's Land Company has the
power to govern the financial and operating policies so as to obtain benefits from its activities.
Where controlled entities have entered or left the Consolidated Group during the year, the financial performance of those entities is
included only for the period of the year that they were controlled. A list of controlled entities is contained in Note 22 to the financial
statements.
All inter-company balances and transactions between entities in the Consolidated Group have been eliminated on consolidation.
(b) Income Tax
The income tax (expense)/income for the year comprises current income tax (expense)/income and deferred tax (expense)/income.
Current income tax (expense)/income charged to profit or loss is the tax payable on taxable income. Current tax assets and liabilities for
the current and prior periods are measured at the amount expected to be paid to or recovered from the taxation authority. The tax rates
and tax laws used to compute the amounts are those that are enacted or substantively enacted by the balance sheet date.
Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
•
except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
•
in respect of taxable temporary differences associated with investments in subsidiaries, except where the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax
losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary difference, and the
carry-forward of unused tax assets and unused tax losses can be utilised:
•
except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss; and
•
in respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are only recognised to
the extent that it is probable that the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised
deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that
future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax
rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have
been enacted or substantively enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the profit or loss. Deferred tax assets and
deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the
deferred tax assets and liabilities relate to the same taxable entity and taxation authority.
18
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
1. Statement of Significant Accounting Policies (continued)
(c) Fair Value of Assets and Liabilities
The Consolidated 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 Consolidated Group would receive to sell an asset or would have to pay to transfer a liability in an orderly (ie
unforced) transaction between independent, knowledgeable and willing 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 specific characteristics of the specific asset or liability. The fair value 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 (ie 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 Consolidated Group at the end of the reporting period (ie 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 Consolidated Group’s own equity instrument (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 instrument, by
reference to observable market information where such instruments are held as assets. Where this information is not available, other
valuation techniques are adopted and, where significant, are detailed in the respective note to the financial statements.
(d) Livestock and Inventories
The policies for livestock and inventories are summarised as follows:
(i) Dairy, beef and sheep livestock – in accordance with the AASB 141: Agriculture, the dairy, beef and sheep livestock have been valued
at market value as at 31 May 2014 less estimated costs of sale. Under IFRS 13 the Consolidated Group has split the livestock valuation
by potential market. Calves and yearling heifers are 35% export quality and have been valued as such. Any movement in valuation due
to biological changes or market price is recorded in profit or loss. Dairy, beef and sheep livestock will next be valued at 31 May 2015.
(ii) Fodder – is stated at market value less estimated costs of sale. An independent farm consultant provided market valuations on the
range of fodder conserved by the Consolidated Group. The volume of all fodder is measured at least every six months and is revalued at
least annually.
(iii) Consumable stores - are stated at the lower of cost and net realisable value.
(iv) Wool - Where wool is sold shortly after balance date and the selling price is known, the wool stocks are recorded at market value less
estimated costs of sale, otherwise it is recorded at cost.
(e) Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated
depreciation and impairment losses.
Property
Properties included in the financial statements are carried at their fair value as a combination of assets (being the amount for which the
combination of assets could be exchanged between knowledgeable willing parties in an arm’s-length transaction), based on periodic, but
at least triennial, valuations by external independent valuers, less accumulated depreciation for buildings.
19
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
1. Statement of Significant Accounting Policies (continued)
Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation reserve included in equity.
Decreases that offset previous increases in the same asset are charged against asset revaluation reserve directly in equity; all other
decreases are recognised in profit or loss.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is
restated to the revalued amount of the asset.
Plant and Equipment
Plant and equipment is measured on the cost basis and therefore carried at cost less accumulated depreciation and any accumulated
impairment losses. In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the
carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognised; either in profit
or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is
made when impairment indicators are present (refer Note 1(i) for details of impairment of assets).
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 Consolidated Group and the cost of the item can be measured
reliably. All other repairs and maintenance are recognised as expense in profit or loss in the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets, including buildings but excluding freehold land, is depreciated on a straight-line basis over
the asset’s useful life to the Consolidated Group commencing from the time the asset is held ready for use. The depreciation rates used
for buildings ranges between 2.5% and 5% and for plant and equipment between 6.67% and 25%. Depreciation rates have not changed
significantly from the previous year.
The assets’ residual values are reviewed and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying value is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount.
Gains or losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are recognised in
profit or loss when the item is derecognised. When revalued assets are sold, amounts included in the revaluation surplus relating to that
asset are transferred to retained earnings.
Development Expenditure
Development expenditure on items resulting in a future benefit to the Consolidated Group is capitalised.
(f) Memorabilia
Memorabilia included in the financial statements were valued by the Directors at 31 May 2014 in accordance with the Accounting
Standards based on an independent valuation by Mr R L Broughton ALIA ASA, a registered valuer of archivist material. It is not
depreciated, as it is a naturally appreciating asset. Revaluation of the memorabilia will be conducted on a cyclical basis with sufficient
frequency to ensure the accounting value does not materially differ from the carrying amount.
(g) Leases
Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset – but not the legal ownership
– are transferred to entities in the Consolidated Group, are classified as finance leases.
Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal to the fair value of the leased
property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated
between the reduction of the lease liability and the lease interest expense for the period.
Operating lease payments are recognised as an expense in profit or loss on a straight line basis over the lease term.
20
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
1. Statement of Significant Accounting Policies (continued)
(h) 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 company commits itself to either purchase or sell the asset (ie 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.
The group does not designate any interest in subsidiaries, associates or joint venture entities as being subject to the requirements of
Accounting Standards specifically applicable to financial instruments. Accordingly, such interests are accounted for on a cost basis.
i.
Financial assets at fair value through profit or loss
Financial assets are classified at “fair value through profit or loss” when they are held for the purpose of short-term profit taking,
derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable
performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in
accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with
changes in carrying amount being included in profit or loss.
ii.
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 measure at amortised cost. Gains and losses are recognised in profit or loss through the amortisation
process and when the financial asset is derecognised.
iii.
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and
it is the Consolidated Group’s intention to hold these investments to maturity. They are subsequently measured at amortised cost.
Gains and losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised.
iv.
Available-for-sale investments
Available-for-sale investments are non-derivative financial assets that are either not capable of being classified into other categories
of financial assets due to their nature or they are designated as such by management. They comprise investments in the equity of
other entities where there is neither a fixed maturity nor fixed determinable payments.
They are subsequently measured at fair value with any re-measurements other than impairment losses and foreign exchange gains
and losses recognised in other comprehensive income. When the financial asset is derecognised, the cumulative gain or loss
pertaining to that asset previously recognised in other comprehensive income is reclassified into profit or loss.
21
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
1. Statement of Significant Accounting Policies (continued)
Available-for-sale financial assets are classified as non-current assets then they are not expected to be sold within 12 months after
the end of the reporting period. All other available-for-sale financial assets are classified as current assets.
v.
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 Consolidated 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 the 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 available-for-sale financial assets, a significant or prolonged decline in the market value of the instrument is considered to
constitute a loss event. Impairment losses are recognised in profit or loss immediately. Also, any cumulative decline in fair value
previously recognised in other comprehensive income is reclassified into profit or loss at this point.
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; indicators 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 loss. 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 Consolidated 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.
Financial Guarantees
Where material, financial guarantees issued that require the issuer to make specified payments to reimburse the holder for a loss it incurs
because a specified debtor fails to make payment when due are recognised as financial liabilities at fair value on initial recognition.
The fair value of financial guarantee contracts has been assessed using the probability-weighted discount cash flow approach. The
probability has been based on:
•
•
•
the likelihood of the guarantee party defaulting in the next reporting period;
the proportion of the exposure that is not expected to be recovered due to the guarantee party defaulting; and
the maximum loss exposure if the guarantee party were to default.
Financial guarantees are subsequently measured at the higher of the best estimate of the obligation in accordance with AASB 137:
Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less, when appropriate, cumulative
amortisation in accordance with the AASB 118: Revenue. Where the entity gives guarantee in exchange for a fee, revenue is recognised
under AASB 118.
Derecognition
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.
22
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
1. Statement of Significant Accounting Policies (continued)
(i) Impairment of Assets
At the end of each reporting period, the Consolidated 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, associated or jointly controlled entities deemed to be out of pre-acquisition profits. If such an indication exists, an
impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of asset’s fair value less
costs to sell and value in use to the asset’s carrying amount. Any excess of the asset’s carrying amount over its recoverable amount is
recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard (eg in
accordance with the revaluation model in AASB 116: Property, Plant and Equipment). Any impairment loss of a revalued asset is treated
as a revaluation decrease in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Consolidated 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.
(j) Foreign Currency Transactions and Balances
The Consolidated Group’s functional and presentation currency is Australian dollars (A$). Foreign currency transactions during the
period are converted to Australian currency at the rates of exchange applicable at the dates of the transactions. Amounts receivable and
payable in foreign currencies at balance date are converted at the rates of exchange on that date. The gains and losses from conversion of
short-term assets and liabilities, whether realised or unrealised, are included in operating profit before income tax as they arise. The
issued capital in Sterling has been translated into Australian Dollars at the 30 June 1993 rate of A$2.06 to £1 Sterling. In prior years, the
movement in the exchange rate was transferred to the foreign currency translation reserve. The current policy is for the issued capital to
remain at this historical figure.
(k) Employee Benefits
Provision is made for the Consolidated Group's liability for employee entitlements arising from services rendered by employees to
balance date. Employee entitlements expected to be settled within one year have been measured at their nominal amount based on
remuneration rates which are expected to be paid when the liability is settled. Other employee entitlements payable later than one year
have been measured at cost unless the amount is material and then these are measured at the present value of the estimated future cash
outflows to be made for those entitlements. Contributions are made by the Consolidated Group to employee superannuation funds in
accordance with Superannuation Guarantee Legislation and are charged as expenses when incurred.
(l) Cash
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short term deposits with an original maturity of
three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in
value. For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined
above.
(m) Revenue Recognition
Revenue is recognised to the extent it is probable that the economic benefits will flow to the entity and the revenue can be easily
measured. The following specific recognition criteria must also be met before revenue is recognised:
(i) Sale of Goods – Control of the goods has passed to the buyer.
(ii) Interest – Control of the right to receive the interest payment.
(iii) Dividends – Control of the right to receive the dividend payment.
23
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
1. Statement of Significant Accounting Policies (continued)
(n) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable
from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part
of an item of expense. Receivables and payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities, which are
recoverable from or payable to the Australian Taxation Office, are presented as operating cash flows included in receipts from customers
or payments to suppliers.
(o) Trade and Other Receivables
Trade receivables are recognised and carried at original invoice amount less a provision for impairment. An estimate for impairment is
made when collection of the full amount is no longer probable. Bad debts are written off as incurred.
Receivables from related parties are recognised and carried at the nominal amount due.
(p) Interest Bearing Liabilities and Borrowing
All loans and borrowings are initially recognised at fair value of the consideration received less directly attributable transaction costs.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest
method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement.
Gains or losses are recognised in profit or loss when liabilities are derecognised as well as through the amortisation process.
(q) Trade and Other Payables
Trade payables and other payables represent the liabilities for goods and services received by the Consolidated Group that remain unpaid
at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 45 days of the
recognition of the liability.
(r) Contributed Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity
as a deduction, net of tax, from the proceeds.
(s) Borrowing Costs
Borrowing costs are amortised over the lower of the life of the loan or five years.
(t) Derivative Financial Instruments
On occasions the Consolidated Group may use derivative financial instruments (including interest rate swaps) to hedge its risk associated
with interest rate fluctuations. Through the use of specific separate arrangements within its banking facility, the Consolidated Group has
the option of fixing a component of its obligations with Rabobank Australia Limited over various fixed term periods. Given that the
characteristics of this arrangement mirror that of an interest rate swap, the Consolidated Group has chosen to account for this as an
embedded derivative separate from the underlying banking arrangement.
Such derivative financial instruments are initially recognised at fair value on the date on which the derivative contract is entered into and
subsequently measured to fair value. Derivatives are carried as assets when their fair value is positive and as liabilities when their fair
value is negative. Any gains or losses arising from the changes to the fair of the derivatives are taken directly to profit or loss for the
year.
The fair value of such derivatives is determined by reference to market values for similar instruments.
(u) Comparative Figures
Where required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current
financial year.
24
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
1. Statement of Significant Accounting Policies (continued)
(v) Critical Accounting Estimates and Judgements
The Directors evaluate estimates and judgements incorporated in the financial statements based upon historical knowledge and best
available current information. Estimates assume a reasonable expectation of future events; are based upon current trends and economic
data; and opinions obtained both externally and internally.
Management has identified the following critical accounting policies for which significant judgements, estimates and assumptions are
made:
Land, buildings and improvements
Land, buildings and improvements are revalued at least once every three years.
The Directors have determined the valuation after consideration of a range of factors, including external valuations, status of land
clearance approvals and relevant market transactions. The Directors’ valuation is $179,160,000 as at 31 May 2014. The prior year
valuation was based on a valuation of each individual farm.
The external valuation considered a portfolio valuation compared to a farm by farm valuation methodology.
More information concerning the valuation is contained in Note 12 to the financial statements.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences and tax losses to the extent that management considers that it is
probable that future taxable profits will be available to utilise those temporary differences and tax losses. More information concerning
this issue can be obtained from Notes 5 and 17 to the financial statements.
Livestock valuations
All livestock is valued annually at balance date. The Directors have based their valuation on an appraisal undertaken by Roberts Limited.
More information concerning this issue is contained in Note 9 to the financial statements.
25
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
2014
A$
2013
A$
2. 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
16,862,317
211,511,697
12,707,539
220,449,648
Total assets
228,374,014
233,157,187
LIABILITIES
Current liabilities
Non current liabilities
120,613,086
20,449,827
57,286,811
86,390,563
Total liabilities
141,062,913
143,677,374
EQUITIES
Contributed equity
Reserves
Retained profits/(losses)
41,768,941
59,494,428
(13,952,268)
41,768,941
59,082,133
(11,371,261)
87,311,101
89,479,813
Total profit/(loss)
(2,581,008)
(8,649,317)
Total comprehensive income/(loss)
(2,168,714)
(8,649,317)
Total equity
Statement of Profit or Loss and Other Comprehensive Income
Guarantees
The Van Diemen’s Land Company has not entered into any guarantees, in the current or previous financial years, in relation to the debts
of its subsidiaries.
Contingent liabilities
There were no contingent liabilities as at 31 May 2014.
Capital commitments
There were no capital commitments as at 31 May 2014.
26
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
Notes
Consolidated Group
2014
2013
A$
A$
3. Revenue
Sales Revenue
- sale of goods and services
52,017,966
39,168,080
1,860
185
2,046
2,302
62,160
64,462
219,113
2,597
21,215
244,972
90,566
639,068
(11,780)
(18,779)
763,537
52,262,938
39,931,617
Dairy livestock purchases at cost
2,996,248
3,946,481
Depreciation:
- buildings
- plant and equipment
Total depreciation
693,328
1,019,858
1,713,186
527,429
928,061
1,455,490
Employee benefit expense
6,335,966
6,251,446
Finance costs:
- foreign exchange loss
- interest rate break cost
- external parties finance costs
Total finance costs
302,604
3,695,318
3,997,922
9,774
210,021
3,789,851
4,009,646
60,741
60,741
41,448
41,448
Other Revenue
- Finance Revenue
- interest from other corporations
- dividends from other corporations
- Sundry farm income
- Foreign exchange gain
- Gain on the disposal of shares
- Gain/(loss) on the disposal of land and buildings
- Gain/(loss) on the disposal of plant and equipment
Sub total - other revenue
Total revenue
4. Expenses
Remuneration of auditor:
- audit or review
- other services
Total payment to auditor
27
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
Notes
Consolidated Group
2014
2013
A$
A$
5. Tax (expense)/income
Current income tax (expense)/income
Deferred tax (expense)/income
(3,262,466)
1,463,883
2,553,968
Tax (expense)/income
(3,262,466)
4,017,851
10,800,963
(12,174,077)
Prima facie tax payable at income tax rate of 30% (2013: 30%)
Add/(less) tax effect of:
Non deductible items
Movement in temporary differences
3,240,289
(3,652,223)
20,590
1,587
16,932
(382,560)
Total income tax expense/(income)
3,262,466
(4,017,851)
The prima facie tax on profit/(loss) from ordinary activities before income tax is
reconciled to the income tax as follows:
Accounting profit/(loss) before income tax
Current income tax benefit/(expense) is based on the estimated taxable loss/(income) of the Consolidated Group for the current year.
Tax effects relating to each component of other comprehensive income is shown as follows:
2014
Before tax
amount
A$
Tax
(expense)/
benefit A$
2013
Net of Tax
Amount
A$
Before tax
amount
A$
Tax
(expense)/
benefit A$
Net of Tax
Amount
A$
Consolidated Group:
Increase/(decrease) in land and buildings
2,067,866
(620,360)
1,447,506
Notes
-
-
-
Consolidated Group
2014
2013
A$
A$
6. Key Management Personnel Compensation
The totals of remuneration paid to key management personnel (KMP) of the
Consolidated Group during the year are as follows:
Short term employee benefits
Post employment benefits
Other long term benefits
918,629
-
934,310
-
918,629
934,310
All remuneration was paid by the parent entity to key management personnel. For details of other transactions refer to Note 21: Related
Party Transactions.
28
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
Notes
Consolidated Group
2014
2013
A$
A$
7. Cash Flow Information
(a) Cash at the end of the financial year as shown in the statement of cash flows is
reconciled to the related items in the statement of financial position as follows:
Cash at bank and on hand
134,307
8,923
7,538,497
(8,156,226)
1,713,186
(21,215)
(2,597)
302,604
1,455,490
30,560
(639,068)
9,774
210,021
(3,893,755)
957,472
(7,142,153)
(818,411)
892,985
3,262,463
106,038
143,415
(640,942)
2,555,902
3,199,385
(1,180,398)
(4,017,851)
89,091
2,895,114
(6,940,847)
65,550,000
65,550,000
63,024,267
63,890,651
2,525,733
1,659,349
(b) Reconciliation of cash flow from operations with profit/(loss) from
ordinary activities after income tax:
Operating profit/(loss) after taxation
Non cash flows in operating profit/(loss) from ordinary activities:
Depreciation
(Profit)/loss on sale of property, plant and equipment
(Profit)/loss on sale of investments
Foreign exchange (gain)/loss
Interest rate derivative change/break benefit
Changes in assets and liabilities:
(Increase)/decrease in receivables
(Increase)/decrease in other assets
(Increase)/decrease in dairy livestock
(Increase)/decrease in inventories
Increase/(decrease) in payables
Increase/(decrease) in tax liabilities
Increase/(decrease) in provisions
Cash flows from operations
(c) Credit stand-by arrangements and loan facilities:
Unrestricted access was available to the following lines of credit:
Total facilities:
Revolving credit facility
Used at balance date:
Revolving credit facility
14
Unused at balance date:
Revolving credit facility
29
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
Consolidated Group
2014
2013
A$
A$
Notes
8. Trade and other receivables
CURRENT
Trade receivables
Milk accrual and other receivables
less provision for impairment
1,365,656
6,995,786
(30,613)
519,514
3,947,284
(29,724)
8,330,829
4,437,074
(a) The movement in the provision for impairment of receivables is as follows:
Opening
Balance
Charge for
the Year
Amounts
written off
Closing
Balance
$
$
$
$
2013
Trade and term receivables
29,724
-
2014
Trade and term receivables
29,724
4,416
-
(3,527)
29,724
30,613
(b) The Consolidated Group has a significant concentration of credit risk with its major customer, Fonterra Australia (Bonlac Supply
Company) Limited.
The following table details the Consolidated Group’s trade and other receivables, with ageing and impairment provision. Current trade
receivables are non-interest bearing and generally on 30 day terms. A provision for impairment is recognised where there is objective
evidence that an individual trade or other receivable is impaired.
Gross
Amount
A$
Past due and
Impaired
A$
Past due but Not Impaired (days overdue)
<30
31-60
61-90
A$
A$
A$
>90
A$
Within
Trade terms
A$
2013
Trade and term receivables
Milk accruals and other
519,514
3,947,284
29,724
-
428,732
3,947,284
-
31,523
-
29,535
-
428,732
3,947,284
Total
4,466,798
29,724
4,376,016
-
31,523
29,535
4,376,016
2014
Trade and term receivables
Milk accruals and other
1,365,656
6,995,786
30,613
-
1,295,817
6,995,786
-
13,068
-
30,574
-
1,295,817
6,995,786
Total
8,361,442
30,613
8,291,603
-
13,068
30,574
8,291,603
30
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
Notes
Consolidated Group
2014
2013
A$
A$
9. Livestock and Inventories
CURRENT
At net market value:
Dairy livestock - domestic market (4,392 head - 2013: 4,354 head)
Sheep livestock (87 head - 2013: 1,038 head)
Beef livestock (65 head - 2013: 431 head)
Fodder on hand
Total at net market value
(a)
(b)
(c)
At cost:
Stores
Total at cost
NON CURRENT
At net market value:
Dairy livestock - domestic market (21,367 head - 2013: 24,673 head)
Dairy livestock - export market (3,520 head - 2013: nil)
(a)
Total at net market value
5,225,422
5,708
41,604
3,041,906
8,314,640
4,352,249
80,004
265,573
1,925,969
6,623,795
45,849
45,849
45,110
45,110
8,360,489
6,668,905
26,557,764
3,052,959
24,662,747
-
29,610,723
24,662,747
Livestock held for the export market has been valued using a different market in the current year, refer Note 1(d).
Reconciliation of carrying amount:
(a) Dairy Livestock
Carrying value at beginning of period
Sales at carrying value
Purchases at carrying value
Gains/(losses) arising from changes in fair value less estimated
point of sale costs attributed to physical changes
Gains/(losses) arising from changes in fair value less estimated
point of sale costs attributed to price changes
Carrying value at end of period
Attributed to:
Current asset
Non current asset
(d)
31
29,014,997
(7,272,318)
2,478,641
31,466,610
(7,786,428)
3,795,835
5,016,060
5,034,311
5,598,767
(3,495,331)
34,836,145
29,014,997
5,225,422
29,610,723
4,352,249
24,662,747
34,836,145
29,014,997
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
Notes
Consolidated Group
2014
2013
A$
A$
9. Livestock and Inventories (continued)
Reconciliation of carrying amount:
(b) Sheep Livestock
Carrying value at beginning of period
Sales at carrying value
Purchases at carrying value
Gains/(losses) arising from changes in fair value less estimated
point of sale costs attributed to physical changes
Gains/(losses) arising from changes in fair value less estimated
point of sale costs attributed to price changes
80,004
(69,826)
-
270,124
(212,809)
-
(1,106)
89,132
(3,364)
(66,443)
5,708
80,004
265,573
(280,797)
-
3,287,381
(4,011,790)
619,353
43,347
496,116
13,480
(125,487)
41,603
265,573
Carrying value at end of period
(c) Beef Livestock
Carrying value at beginning of period
Sales at carrying value
Purchases at carrying value
Gains/(losses) arising from changes in fair value less estimated
point of sale costs attributed to physical changes
Gains/(losses) arising from changes in fair value less estimated
point of sale costs attributed to price changes
Carrying value at end of period
Physical quantities of livestock:
#
#
(a) Dairy Livestock
Mixed age cows
Rising 2 year heifers
Rising 1 year heifers
Calves
Dairy bulls
Total dairy livestock
17,245
1,822
5,735
4,299
178
29,279
17,757
1,617
4,578
4,408
667
29,027
Attributed to:
Current asset
Non current asset
Total dairy livestock
4,392
24,887
29,279
4,354
24,673
29,027
32
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
Notes
Consolidated Group
2014
2013
9. Livestock and Inventories (continued)
#
#
(b) Sheep Livestock
Breeding ewes
Sale lambs
Rams
Total sheep livestock
45
16
26
87
952
58
28
1,038
(c) Beef Livestock
Breeding cows
Rising 1 year heifers
Bulls, steers and trading cattle
Total beef livestock
13
52
65
227
34
170
431
(d) In accordance with industry practice the Directors have classified 15% of the dairy livestock as current, ie A$5,225,422 (2013:
A$4,352,249); representing a reasonable estimate of the portion of the dairy herd that will be sold during the next twelve months.
(e) Fodder expensed during the year amounted to A$1,925,969 (2013: $1,906,281).
Nature of Assets
Beef cattle and sheep are run on the non dairying land on the Woolnorth property. The total number of beef cattle carried at 31 May
2014 has declined; this decline in numbers continues to reflect the changed focus of the dairy support operations. Large volumes of feed
are conserved and utilised by the dairy operations. The dairy support operations also provide grazing for dairy cows both when wintered
off the milking platforms and when it is appropriate to retain the dairy animal and place it back into an autumn calving pattern once in a
suitable condition. Dairy cows are run on the Consolidated Group’s 25 dairy units. Replacement dairy heifers are run on the Heifer
Block at Woolnorth and are managed as part of the Consolidated Group’s dairy support operations. The financial risk management
strategy for livestock incorporates the above and the overall financial risk management strategy as outlined in Note 23.
Valuation of Livestock and Fodder
All livestock are valued annually at balance date. The Directors have based their valuation on an appraisal undertaken by Peter
Townsend, Livestock Agent for Roberts Limited. All feed stocks are valued annually at balance date. The Directors have based their
valuation on an appraisal undertaken by independent farm consultant Penny Williams. The Sharefarmers allocation of fodder on hand
has been capitalised, in accordance with an agreement with each Sharefarmer.
Livestock Numbers and Feed Reserves
A stock audit process is used to tally:
•
•
All livestock numbers are physically counted for all classes of stock; and
All feed reserves, including testing for quality and adjustment of figures where wastage has occurred.
33
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
Notes
Consolidated Group
2014
2013
A$
A$
10. Other
CURRENT
Equity and finance raising costs
Prepayments
NON CURRENT
Memorabilia
(a)
36,759
936,928
60,059
36,759
996,987
1,438,126
1,438,126
(a) A valuation was conducted of the memorabilia by Robert Broughton, an independent valuer as at 31 May 2014, with the change
recorded against the asset revaluation reserve, net of deferred tax.
11. Financial Assets
NON CURRENT
Interest rate break benefit
Borrowing costs
24(a)
Available for sale financial assets
- shares in listed dairy processor at cost
- shares in unlisted other corporations at cost
Sub total - shares
24(a)
10,169
302,601
7,169
8,836
347
9,183
8,836
594
9,430
19,352
319,200
179,160,000
4,357,144
177,339,252
4,415,382
183,517,144
181,754,634
179,160,000
-
177,866,681
(527,429)
179,160,000
177,339,252
12. Property, Plant and Equipment
Land, buildings & improvements (Directors' valuation)
Plant & equipment (cost less accumulated depreciation)
(a)
(b)
(a) Land, buildings & improvements at Directors' valuation
less accumulated depreciation
The Directors have determined the valuation after consideration of a range of factors, including external valuations, status of land
clearance approvals and relevant market transactions. The Directors’ valuation is $179,160,000 as at 31 May 2014. The prior year
valuation was based on a valuation of each individual farm.
The external valuations were prepared by Opteon on a farm by farm basis and CBRE Australia both farm by farm and portfolio valuation,
of the total land, buildings and improvements, and farm by farm valuation methodologies. The portfolio valuation resulted in a higher
valuation than the farm by farm valuation methodology.
34
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
Consolidated Group
2014
2013
A$
A$
Notes
12. Property, Plant and Equipment (continued)
(b) Plant & equipment at cost
less accumulated depreciation
11,031,974
(6,674,830)
10,396,884
(5,981,502)
4,357,144
4,415,382
(c) Reconciliations – Reconciliations of the carrying amounts of property, plant and equipment at the beginning and at the end of the
current financial year:
Consolidated Group
Land,
buildings &
impovements
A$
Plant and
equipment
Total
A$
A$
Year ended 31 May 2013
Balance as at 1 June 2012
Additions
Disposals
Gain/(loss) on disposal
Depreciation charge for the year
168,228,718
9,649,743
(11,780)
(527,429)
4,142,563
1,316,211
(96,552)
(18,779)
(928,061)
172,371,281
10,965,954
(96,552)
(30,559)
(1,455,490)
Carrying amount at 31 May 2013
177,339,252
4,415,382
181,754,634
Balance as at 1 June 2013
Additions
Disposals
Gain/(loss) on disposal
Revaluation increment/(decrement)
Depreciation charge for the year
177,339,252
772,740
2,067,866
(1,019,858)
4,415,382
640,224
(13,409)
8,275
(693,328)
181,754,634
1,412,964
(13,409)
8,275
2,067,866
(1,713,186)
Carrying amount at 31 May 2014
179,160,000
4,357,144
183,517,144
Year ended 31 May 2014
(d) Cost model –The carrying value of land, buildings and improvements under the cost model as at 31 May 2014 would be $59,587,608
(2013: A$59,834,726) for the Consolidated Group.
35
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
Notes
Consolidated Group
2014
2013
A$
A$
13. Trade and other payables
CURRENT
Secured liabilities:
Advance from Fonterra Australia (Bonlac Supply Company) Limited
Unsecured liabilities:
Trade creditors
GST clearing
Other creditors and accruals
(a)
1,723,399
1,723,399
6,269,193
516,529
752,916
5,556,285
466,596
625,369
9,262,037
8,371,649
(a) Fonterra offered a short term interest free advance to all suppliers, secured against future milk payments. The advance is due to be
repaid on 15 April 2015.
14. Borrowings
CURRENT
Secured liabilities:
Revolving credit facility - Rabobank Australia Ltd
Equipment finance loans
Unsecured liabilities:
Parent - Tasman Farms Limited
NON CURRENT
Secured liabilities:
Revolving credit facility - Rabobank Australia Ltd
Parent - Tasman Farms Limited
Equipment finance loans
(a)
63,024,267
542,575
1,000,000
592,585
21
332,922
-
63,899,764
1,592,585
509,416
62,890,651
1,935,479
694,586
509,416
65,520,716
(a)
21
(a) The above liabilities to Rabobank Australia Limited are secured by a registered charge over the farming properties and a registered
equitable mortgage over the assets of the Consolidated Group.
The Rabobank loan has been classified as a current liability as the Company debt facilities were subject to annual review within twelve
months of 31 May 2014 whereby the Company did not have an unconditional right to defer repayment of the facility for a period of more
than one year from balance date. Subsequent to 31 May 2014 the Company completed the annual review with Rabobank and the debt
facilities were confirmed in writing on 25 September 2014. The facility expires on 30 November 2016 and the next review date is 30
November 2015.
36
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
Notes
Consolidated Group
2014
2013
A$
A$
15. Provisions
CURRENT
Employee benefits:
Provision for employee entitlements
Other:
Provision for audit fee
328,087
257,731
60,741
25,059
388,828
282,790
95
77
41,768,941
41,768,941
41,768,941
41,768,941
(a) Movement in paid up capital
Beginning of the financial year
Movement
41,768,941
-
41,768,941
-
End of the financial year
41,768,941
41,768,941
Number of employees at reporting date
16. Issued Capital
Paid up capital:
Ordinary shares fully paid
No. of shares
No. of shares
(b) Movement in shares
Beginning of the financial year
Movement
88,274,688
-
88,274,688
-
End of the financial year
88,274,688
88,274,688
(c) Terms and Conditions of Contributed Equity
Ordinary shares have the right to receive dividends as declared and, in the event of winding up The Van Diemen’s Land Company, to
participate in the proceeds from the sale of all surplus assets in proportion to the number and amounts paid up on shares held. Ordinary
shares entitle their holder to one vote, either in person or by proxy, at a meeting of The Van Diemen’s Land Company.
(d) Capital Management
When managing capital, the Consolidated Group’s objective is to ensure the Consolidated Group continues as a going concern as well as
maintaining an optimal return to shareholders and benefits for other stakeholders. The debt leverage (Interest Bearing Debt/Equity
excluding the Deferred Tax Liability) as at the 31 May 2014 is 40.9% (2013: 46.4%).
37
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
Opening
Balance
A$
Charged to
Income
A$
Charged to
Equity
A$
Closing
Balance
A$
17. Deferred Tax
Year ended 31 May 2013
Deferred tax liability on:
Livestock, fodder and other
Trade and other receivables
Other financial assets
Land, buildings, improvements and memorabilia
Deferred tax asset offset
4,450,961
169,178
234,706
34,619,796
(3,391,274)
(3,873,171)
(79,463)
(143,342)
1,601,635
(1,523,510)
-
577,790
89,715
91,364
36,221,431
(4,914,784)
Net deferred tax liability
36,083,367
(4,017,851)
-
32,065,516
Deferred tax asset on:
Trade and other payables
Provisions
Losses available
Deferred tax asset offset
61,052
58,110
3,272,112
(3,391,274)
(40,101)
26,727
1,536,884
(1,523,510)
-
20,951
84,837
4,808,996
(4,914,784)
-
-
-
-
Deferred tax liability on:
Livestock, fodder and other
Trade and other receivables
Other financial assets
Land, buildings, improvements and memorabilia
Deferred tax asset offset
577,790
89,715
91,364
36,221,431
(4,914,784)
334,782
(89,715)
10,657
136,392
2,870,350
620,360
-
912,572
102,021
36,978,183
(2,044,434)
Net deferred tax liability
32,065,516
3,262,466
620,360
35,948,342
Deferred tax asset on:
Trade and other receivables
Trade and other payables
Provisions
Losses available
Deferred tax asset offset
20,951
84,837
4,808,996
(4,914,784)
9,184
6,133
31,811
(2,917,478)
2,870,350
-
9,184
27,084
116,648
1,891,518
(2,044,434)
-
-
-
-
Total deferred tax assets
Year ended 31 May 2014
Total deferred tax assets
38
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
Consolidated Group
Other
Reserves
Total
A$
A$
76,255,744
1,313,332
77,569,076
(688,473)
206,542
-
(688,473)
206,542
75,773,813
1,313,332
77,087,145
Revaluation increment/(decrement)
Tax effect of the above
2,067,866
(620,360)
-
2,067,866
(620,360)
Sub total
1,447,506
-
1,447,506
77,221,319
1,313,332
78,534,651
Asset
Revaluation
Reserve
A$
18. Reserves
As at 1 June 2012
Revaluation surplus on assets sold transferred to retained earnings
Tax effect of the above
As at 31 May 2013
As at 31 May 2014
Asset revaluation reserve
The asset revaluation reserve is used to record increments and decrements in the value of non-current assets; it can only be used for
distributions in limited circumstances.
Other reserves
(i) Surplus on landed estates - This reserve is used to record realised capital profits on landed estates.
(ii) Capital reserve - This reserve records realised capital profits other than on landed estates.
(iii) General reserve - This reserve contains amounts of realised profits, set aside by Directors for special projects.
Notes
Consolidated Group
2014
2013
A$
A$
19. Retained Profits/(Accumulated Losses)
Retained profits/(accumulated losses) at the beginning of the financial year
(6,402,746)
1,271,549
-
481,931
Net profit/(loss) attributable to the members of the Company
7,538,497
(8,156,226)
Retained profits/(accumulated losses) at the end of the financial year
1,135,751
(6,402,746)
Net gain on disposal of previously revalued assets (net of tax)
18
20. Segment Information
The Consolidated Group operates in one geographical area, Tasmania, and operates as pastoralists and dairy farmers.
39
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
21. Related Party Transactions
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other
parties unless otherwise stated.
Consolidated Group
Notes
2014
2013
A$
A$
Advance from Tasman Farms Limited
Trade receivable from Taranaki Investment Management Limited
(a)
332,922
936,928
1,935,479
-
(a) Tasman Farms Limited has provided the above loan with no fixed repayment date. No interest is charged on the outstanding balance;
refer Note 23(a).
There has been no impairment or write off of related party balances.
22. Controlled Entities
Subsidiaries:
The Van Diemen's Land Company - Dairies Pty Limited
Tasman Farmdale Pty Limited
Tasman Farms Pty Limited
Notes
Country of
Incorporation
(a)
Australia
Australia
Australia
(a)
Percentage Owned (%)
2014
2013
100
-
100
100
100
(a) To simplify administration, during the year the assets and liabilities of subsidiaries (The Van Diemen’s Land Company – Dairies Pty
Limited and Tasman Farms Pty Limited) were transferred to the parent and these subsidiaries were deregistered.
23. Financial Risk Management Objectives
The Consolidated Group’s principal financial instruments comprise bank loans, equipment finance loans, advances from
suppliers/customers and cash.
The main purpose of these financial instruments is to raise finance for the Consolidated Group’s operations. The Consolidated Group
has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations.
The main risks arising from the Consolidated Group’s financial instruments are interest rate risk, liquidity risk, commodity price risk and
credit risk. The Court of Directors reviews and agrees policies for managing each of these risks as summarised below.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and
the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity
instrument are disclosed in Note 1 to the financial statements.
(a) Interest rate risk
The Consolidated Group’s exposure to the risk of changes in market interest rates relates primarily to the Consolidated Group’s debt
facility where the interest rate has not been fixed. As at 31 May 2014 the Consolidated Group had exposure to A$63,024,267 (2013:
A$63,890,651) in borrowings with Rabobank Australia Limited. The weighted average interest rate on the total debt with Rabobank
Australia Limited is 5.25% (2013: 5.76%).
A loan from Tasman Farms Limited exists as at 31 May 2014. No interest is payable by the Consolidated Group on this loan.
It is the policy of the Consolidated Group to enter into derivative transactions, including interest rate swap contracts, in appropriate
circumstances to manage interest rate risk. The Consolidated Group has no derivative transactions in place. It is, and has been
throughout the period under review, the Consolidated Group’s policy that no trading in financial instruments be undertaken.
40
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
23. Financial Risk Management Objectives (continued)
(b) Commodity price risk
The Consolidated Group’s exposure to commodity price risk is primarily related to international milk commodity prices, with secondary
exposure to grain and fertiliser prices.
(c) Credit risk
The exposure at balance date to credit risk is limited to the carrying value of trade debtors and other receivables. Credit risk exposure is
concentrated with the large milk supplied by the Consolidated Group’s Tasmanian farms; in particular Fonterra Australia (Bonlac Supply
Company) Limited. This risk is minimised as receivable balances are received within 14 days of the month that the milk is supplied.
(d) Liquidity risk
The Consolidated Group’s objective is to maintain liquidity of funding through the use of bank loans and normal credit terms for its dairy
activities.
24. Financial Instruments
(a) Net Fair Value
The Consolidated Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:
- Level 1: the fair value is calculated using quoted prices in active markets.
- Level 2: the fair value is estimated using inputs other than quote markets included in Level 1 that are observable for the asset or
liability, either directly (as prices) or indirectly (derived from prices).
- Level 3: the fair value is estimated using inputs for the asset or liability that are not based on observable market data.
The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised below:
Consolidated Group
Valuation Technique:
2013
Non Financial Assets
Land and buildings
Livestock
Financial Assets
Listed shares
Interest Rate Break Benefit
2014
Non Financial Assets
Land and buildings
Livestock
Financial Assets
Listed shares
Quoted prices in active Significant observable
markets
inputs
(Level 1)
(Level 2)
A$
A$
Significant
unobservable inputs
(Level 3)
A$
Total
A$
-
177,339,252
29,360,573
206,699,825
-
177,339,252
29,360,573
206,699,825
8,836
8,836
594
302,601
303,195
-
9,430
302,601
312,031
-
179,160,000
34,883,457
214,043,457
-
179,160,000
34,883,457
214,043,457
8,836
8,836
347
347
-
9,183
9,183
For financial instruments not quoted in active markets, the Consolidated Group uses valuation techniques such as present value
techniques, comparison to similar instruments for which market observable prices exist and other relevant models used by market
participants. These valuation techniques are both observable and unobservable market inputs. Financial instruments that use valuation
techniques with only observable market inputs or unobservable inputs that are not significant to the overall valuation include interest rate
swaps and interest rate break benefits. There were no transfers between Level 1 and Level 2 during the year.
41
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
24. Financial Instruments (continued)
(b) Interest Rate Risk
The following table sets out the carrying value by maturity, of the financial instruments exposed to interest rate risk:
Interest*
rate %
CONSOLIDATED - Year ended 31 May 2013
Financial Assets
Cash assets
1.16%
Financial Liabilities
Equipment finance loans
7.34%
Bank loans
5.76%
Parent - Tasman Farms Ltd
0.00%
CONSOLIDATED - Year ended 31 May 2014
Financial Assets
Cash assets
0.00%
Financial Liabilities
Equipment finance loans
6.90%
Bank loans
5.25%
Parent - Tasman Farms Ltd
0.00%
A$
<1 year
A$
1 - 5 years
A$
5 - 10 years
A$
>10 years
A$
Total
8,923
-
-
-
8,923
592,585
1,000,000
1,935,479
694,586
62,890,651
-
-
-
1,287,171
63,890,651
1,935,479
134,307
-
-
-
134,307
542,575
63,024,267
332,922
509,416
-
-
-
1,051,991
63,024,267
332,922
* weighted average interest rate
The other financial instruments of the Consolidated Group not included in the above tables are non-interest bearing and therefore not
subject to interest rate risk.
(c) Sensitivity Analysis
The Consolidated Group has performed a sensitivity analysis relating to its exposure to interest rate risk at balance date. This sensitivity
analysis demonstrates the effect on the current year results and equity which could result from a change in interest rates.
As at 31 May 2014, assuming all other variables remain constant, the effect on profit/(loss) and equity as a result of changes in interest
rate would be as follows:
Consolidated Group
Notes
2014
2013
A$
A$
Change in Profit/(Loss)
Increase interest rate by 1%
(630,242)
(88,907)
Decrease interest rate by 1%
630,242
88,907
Change in Equity
Increase interest rate by 1%
Decrease interest rate by 1%
(630,242)
630,242
(88,907)
88,907
The above interest rate sensitivity analysis has been performed based upon the assumption that all other variables remain unchanged and
has only been applied to the total Consolidated Group debt.
42
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Notes to the Financial Statements (continued)
for the year ended 31 May 2014
Notes
Consolidated Group
2014
2013
A$
A$
25. Capital and Leasing Commitments
Lease commitments under non cancellable operating leases:
Not later than one year
Later than one year and not later than two years
Later than two years and not later than five years
Greater than five years
56,057
56,057
144,481
120,401
56,122
55,622
151,072
167,038
Total operating lease commitments
376,996
429,854
595,896
546,896
(90,801)
666,926
744,194
(123,949)
1,051,991
1,287,171
Lease commitments under non cancellable finance leases:
Not later than one year
Later than one year and not later than five years
Less future finance charges
Total finance lease commitments
26. Capital Commitments and Contingencies
At balance date the Consolidated Group had no capital commitments (2013: A$nil).
At balance date no contingencies existed (2013: A$nil).
27. Economic Dependency
The majority of the Consolidated Group’s revenue is derived from Fonterra Australia (Bonlac Supply Company) Limited.
28. Subsequent Events
The Rabobank loan has been classified as a current liability as the Company debt facilities were subject to annual review within twelve
months of 31 May 2014 whereby the Company did not have an unconditional right to defer repayment of the facility for a period of more
than one year from balance date. Subsequent to 31 May 2014 the Company completed the annual review with Rabobank and the debt
facilities were confirmed in writing on 25 September 2014. The facility expires on 30 November 2016 and the next review date is 30
November 2015.
The Australian Government has confirmed its intention of lowering the company tax rate to 28.5% from 1 July 2015. However for
companies with a taxable income over $5m this will be offset by a proposed 1.5% Paid Parental Leave levy. In accordance with AASB
112 Income Taxes, this announcement will not impact the 2014 financial statements as the legislation to reduce the company tax rates
was not enacted by 31 May 2014. We note that the legislation has not been passed by both Houses of Parliament at the date these
financial statements have been authorised for issue.
Apart from the above, the Directors are not aware of any significant events since the end of the reporting period.
43
THE VAN DIEMEN'S LAND COMPANY AND CONTROLLED ENTITIES (ARBN: 009 475 601)
Statement of Interest
Statement of Directors and Officers and their direct interest in The Van Diemen’s Land Company
Shareholding as at
31 May 2014 31 May 2013
K G Sutton (Governor)
M L Hampton
M C Trousselot
T H Westacott
J F Bennett
E Gill
Appointed Director 6 January 2011
Appointed 4 March 2008
Appointed 6 January 2011
Appointed 25 September 2009
Appointed 4 March 2014
Appointed 6 January 2011
resigned 21 November 2013
The above shareholdings satisfy the requirements to be a Director under the Royal Charter.
44
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