ANNUAL REPORT AND CONSOLIDATED
FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
CONTENTS
Pages
Chairman’s Review
1-2
Board of Directors
3
Corporate Governance
Director’s Responsibility Statement
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
4-5
6
7-8
9
Consolidated Statement of Changes in Equity
10
Consolidated Statement of Financial Position
11
Consolidated Statement of Cash Flows
12
Reconciliation of Net Profit With Cash Flows from Operating Activities
13
Notes to the Consolidated Financial Statements
14 - 37
Statutory Information
38 - 43
Company Directory
44
OCEANIA NATURAL LIMITED
CHAIRMAN’S REVIEW
FOR THE YEAR ENDED 31 MARCH 2016
Dear Shareholders
Today we are releasing our Annual Report for the 12 months to 31 March 2016, and we are pleased that sales more than
doubled from the previous year, rising 121% from $1.512m to $3.351m.
The company’s year ended strongly. Sales were in line with our expectations.The majority of sales were incurred in the second
half of the financial year, with Christmas, Gregorian New Year, Chinese New Year and Valentine’s Day being popular holidays in
our key market of China. We believe this sales cycle will repeat in subsequent years.
The net profit after tax (NPAT) for the year ending 31 March 2016 is $182,584. The company had $461,365 in cash and cash
equivalents in the bank at the end of the financial year.
Key highlights for the year ended 31 March 2016
The NXT listing of Oceania Natural Limited on 31 March 2016 was the perfect way to close the financial year and the result of
the combined efforts of the Oceania team and our external advisors.
Sales channels
More than 80% of the company’s revenues were generated from our network of three regional distributors. The carefully
considered selection of our three distributors, with each having a physical presence and regional expertise within the three
Chinese provinces we currently operate in, has thus far proven to be an effective sales strategy. During the year, we have
opened seven retail stores and a number of retail stores and pharmacies sell our products in their shops using our “Rich
Garden” display stands.
We continue to look at ways of optimising our sales networks while also building new distribution channels that will take us
further into China. This includes expanding our direct sales, which grew to $655,000 during this reporting period. Direct sales
were mostly generated from our own web properties and the shops we’ve set up on popular Chinese trading platforms
WeChat, Taobao, and TMall.
Regions
China has remained our key market, with the majority of our sales generated from three regions boasting a combined
population of 140 million: Shandong and Guizhou provinces and Wuxi City. The market for health products in China is in excess
of $100 billion so there is plenty of untapped opportunity to expand in this country where the appetite for New Zealand made
food products and dietary supplements is strong.
Sales in New Zealand are predominantly transacted through our web properties and we have also started selling our products
in a local supermarket. While New Zealand is a small market relative to China, it is home to our business operations and is one
of the world’s fastest growing natural honey suppliers. We remain committed to growing our presence and increasing our
involvement in the local community. We have once again committed to supporting the New Zealand Skycity Breakers
basketball team, through a significant sponsorship for the forthcoming season.
Another key region for our business operations is the Cook Islands, and in particular the island of Atuataki where our key
supplier of Noni fruit is based. We imported 28,000kg of noni fruit from the Cook Islands last year, with our supplier being a
significant employer in this region, and with more than 100 families relying upon Oceania for long-term employment.
Supply
Supply remains our greatest challenge, as overseas demand for products with honey, Noni and other natural ingredients is
soaring. During the past year we have developed and strengthened our supplier relationships, sourcing honey from a number
of suppliers to spread our supply base. At the same time we have had success in entering into long-term strategic business
alliances with suppliers, guaranteeing both volume and price for their honey, and are looking to extend this to other suppliers.
We expect to negotiate further strategic alliances with honey production and processing suppliers in the coming year.
Meanwhile our Noni juice is sourced from the biggest supplier of Noni in the Cook Islands as we consider this supplier’s fruit to
be of a consistently higher quality than the others.
1
OCEANIA NATURAL LIMITED
CHAIRMAN’S REVIEW
FOR THE YEAR ENDED 31 MARCH 2016
Customers
Our business is built with our customers top of mind. Our CEO, and Sales and Marketing Manager each have in excess of 30
years living and doing business in China giving us a strong understanding of the people and business culture, regulations and
importantly, how, where and when Chinese consumers buy food and health supplements. Chinese consumers want quality
health supplements they can trust and we will continue to put systems in place to ensure our products are promoted and sold
in the most optimal way to consumers amid new online trading regulations in China.
Looking forward
We are a small listed company with big plans for growth. There is an insatiable demand for honey and other food products with
health attributes. This financial year we need to ensure we form new strategic supply alliances, and develop our human resource
and to meet this growing demand. This will include building our supply and sales channels, while continuing to develop a highly
trusted and quality product range that commands a premium price.
As mentioned earlier, the second half of the financial year is traditionally the busiest sales period, and a good portion of the first
six months of 2017 will be focussed on putting the systems and people in place that will allow us to meet our sales target of
$5,380,000.
Our marketing strategy for the next 12 months is focussed upon the Chinese market where strong growth opportunities exist
across a number of sales channels.
We began the 2017 financial year on a new journey as a listed company. We now have a strong governance structure, greater
visibility and a higher level of transparency which a large number of our investors and followers in China see as being very
important to success.
We are excited at the opportunities in the year ahead and beyond. And we thank you for your ongoing support for Oceania
Natural Ltd,
Yours sincerely
OCEANIA NATURAL LIMITED
Wei Zhong
Chairman
2
OCEANIA NATURAL LIMITED
BOARD OF DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2016
Wei (Walker) Zhong – PhD, MBA – Executive Chairman
Walker is the founder and director of Camsing Trading Limited and Oceania Natural Limited. Prior to moving to New Zealand
in 2013, Walker held a variety of senior management roles in China in a number of large multinational corporations, including
PepsiCo Inc. and Tetra Pak.
Walker has more than 20 years’ of experience in China national media and the fast-moving consumer foods (FMCG) industry,
with extensive experience in strategic planning, mergers and acquisitions and marketing. Walker holds a doctoral degree in law
and a MBA from China and Singapore respectively.
Zhongyang (Sean) Meng – MCA – Non-Executive Director
Sean Meng is the director of the accounting firm Meng & Associates Limited, and is a qualified Chartered Accountant with a
certificate of public practice. Meng & Associates were the former accountants of ONL and Camsing Trading Limited.
Sean has worked in the Chartered Accounting profession (including as a partner of Lowthers Chartered Accountants from May
2014 to July 2015) and the Government sector where he has held a variety of executive level positions, including Chief Financial
Officer of an Auckland City Council subsidiary and Corporate Service Manager with the Health and Disability Commissioner.
Sean has significant experience in the areas of strategic planning, statutory reporting, financial management and cash flow
forecasting.
Sean holds a Master’s Degree in accounting from Victoria University of Wellington
Zhi Jun Shi – MBA – Non-Executive Independent Director
Zhi Jun Shi, a Canadian Chinese, is the co-founder and the first Chairman of the board for Credit China Holdings Limited (Nov
2010 – Oct 2013), a Hong Kong listed company (listed in 2011, ticker code 8207.HK). Zhi Jun has particular experience in
mergers and acquisitions, business financing and strategic planning and development.
Prior to pursuing a career in the finance industry, he was a surgeon in Shanghai, China. Zhi Jun holds a MBA degree from
Nanyang Technological University in Singapore.
Ross Keeley – Non-Executive Independent Director
Ross was the CEO and Executive Director of SeaDragon Limited a listed company on the NZX and instrumental in building a
small private company to a size to enable it to list on the NZX in 2012.
SeaDragon has during the 11 years under Ross’s leadership championed the Omega-3 industry in New Zealand and through a
number of expansion projects diversified the business to such an extent that it the largest company in the Omega 3 market
sector in Australasia.
In 2014 SeaDragon won the prestigious Exporter of the Year award. Business growth was based upon Ross’s experience in
international trade dealing with products regulated under strict Ministry of Primary Industry regulations, thereby ensuring cross
border trade was able to be completed with minimal regulatory obstruction.
Ross has extensive operations, procurement and sales experience, having managed these functions while SeaDragon was
growing and only recently have these responsibilities been passed over to the new team at SeaDragon.
Ross has been an active participant in a number of domestic and international organisations associated with the natural
products and dietary supplements industry. He received an “Outstanding Contribution to the New Zealand Natural Products
Industry” award in 2011.
Ross has worked in many primary related industries including, being the head of a major division of Tegel Foods Ltd, a senior
executive of Ngai Tahu Fisheries, and commercialised scientific innovation with New Zealand’s largest CRI (AgResearch).
3
OCEANIA NATURAL LIMITED
CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 31 MARCH 2016
The Board of Oceania Natural Limited (Company) is committed to acting with integrity and expects high standards of behaviour
and accountability from all its officers and staff. The Board of the Company is committed to enhancing shareholder value by
building a sustainable business with consistent profitable growth. The Board has adopted a Corporate Governance Code, a
Code of Ethics, an Audit, Finance and Risk Committee Charter, a Remuneration, Nomination and Health & Safety Charter, and
a Financial Products Trading policy. These are available to view on the NXT Market Website at www.nxt.co.nz.
Role of the Board
The Board has ultimate responsibility for the direction, control and performance of the Group and for creating shareholder
value. The Board’s primary responsibilities include:
・setting the long term goals of the Group and strategic plans to achieve those goals;
・ensuring the Group is sufficiently capitalised to achieve its growth objectives;
・regularly review the Group’s financial performance, budget and performance against the Group’s Key Operating Milestones
and its approved strategic, business and financial plans;
・ensuring compliance by the Group with its legal obligations; and
・reviewing and approving material transactions not in the ordinary course of the Group’s business.
The Board consists of four directors of whom three are non-executive. Board members have an appropriate range of
proficiencies and experience to ensure that all governance responsibilities are fulfilled. Two directors (Ross Keeley and Zhi Jun
Shi) are considered by the Board to be independent under the NXT Market Rules.
The Board has delegated responsibility for the day-to-day leadership and management of the Group to the Chief Executive
Officer. Currently, the Board permits the roles of Chairperson and CEO to be held concurrently by Wei (Walker) Zhong due to
his level of expertise and knowledge of the business and industry.
At least one third of the directors of the Board retire by rotation at each Annual Meeting. The directors to retire are those who
have been longest in office since the last election. Directors retiring by rotation may, if eligible, stand for re-election at the
Annual Meeting.
Board Meetings
The Board normally meets regularly for scheduled meetings. Additional meetings are held where specific matters require
attention between scheduled meetings. Board meetings are used to monitor, challenge, develop and fully understand
business and operational issues.
Criteria for Board Membership
When a vacancy arises, the Board will identify candidates with a mix of capabilities and perspectives considered necessary for
the Board to carry out its responsibilities effectively. A Director appointed by the Board must stand for election at the next
Annual Meeting. At each Annual Meeting one-third of Directors (excluding the Managing Director) must retire by rotation.
Retiring Directors are eligible for re-election.
Board Committees
The Board has established an Audit & Risk Committee and a Remuneration, Nomination and Health & Safety Committee.
The Audit & Risk Committee operates under a Charter approved by the Board and is accountable to the Board for: the business
relationship with, and the independence of, external auditors; the reliability and appropriateness of the disclosure of the
financial statements and external financial communication; and the maintenance of an effective business risk management
framework including compliance and internal controls. The Audit & Risk Committee is comprised of Independent and
Executive Directors. The Chairman of the Committee is Sean Meng. Ross Keeley and Walker Zhong are also members of the
Audit & Risk Committee.
The Remuneration, Nomination and Health & Safety Committee operates under a Charter approved by the Board and is
accountable to the Board for: obtaining assurance that the Group’s human resources policies and practices support
achievement of the Group’s goals; overseeing appointments of the Group Chief Executive Officer, roles reporting to the Group
Chief Executive Officer, and key professional advisors.
4
OCEANIA NATURAL LIMITED
CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 31 MARCH 2016
The Remuneration, Nomination and Health & Safety Committee recommends to the Board the level of the Group Chief
Executive Officer’s remuneration package.
The Remuneration, Nomination and Health & Safety Committee is comprised of Independent, Non-executive and Executive
Directors. The Chairman of the Committee is Ross Keeley. Sean Meng and Walker Zhong are also members of the
Remuneration, Nomination and Health & Safety Committee.
Trading in Shares
Oceania Natural Limited has a detailed Insider Trading Policy applying to all Directors and employees. A procedure must be
followed to obtain consent to trade in the Group’s shares at all times. Generally trading is permitted from the release of interim
results until 28 February and from the release of the final results until 31 August. Directors and employees are not able to trade
in Group shares, if they are in possession of unpublished price sensitive information.
The Group reinforces these measures by requiring that anyone designated as having the opportunity to access price sensitive
information can transact in the Group’s securities only with the prior approval of the Group Secretary and Chairman.
Make Timely and Balanced Disclosure
The Group has in place procedures designed to ensure compliance with the NXT Listing Rules such that:
・All investors have equal and timely access to material information concerning the Group, including its financial situation,
performance, ownership and governance.
・Group announcements are factual and presented in a clear and balanced way.
Accountability for compliance with disclosure obligations is with the Group Secretary, Malcolm Lindeque. Significant market
announcements, including the preliminary announcement of the half year and full year results, and the financial statements for
those periods, require review by the Audit & Risk Committee and the Board.
Corporate Governance Best Practice Code
The Group does not consider that the corporate governance principles adopted or followed by the Group materially differ from
the Corporate Governance Best Practice Code.
Diversity Policy
The Group does not have a formal diversity policy. However, it recognises the wide-ranging benefits that diversity brings to an
organisation and its workplaces. Oceania Natural Limited endeavours to ensure diversity at all levels of the organisation to
ensure a balance of skills and perspectives are available in the service of our shareholders and customers.
As at 31 March 2016, the gender balance of the Group’s directors, officers and all employees was as follows:
Female
Male
Total
Directors
0
0%
4
100%
4
100%
Officers
0
0%
1
100%
1
100%
Employees
3
100%
0
0%
3
100%
5
OCEANIA NATURAL LIMITED
DIRECTORS’ RESPONSIBILITY STATEMENT
FOR THE YEAR ENDED 31 MARCH 2016
The Directors of Oceania Natural Limited present to shareholders the audited consolidated financial statements for the Group
for the year ended 31 March 2016.
The Directors are responsible for presenting financial statements in accordance with New Zealand law and generally accepted
accounting practice, which fairly presents the financial position of the Group as at 31 March 2016 and the results of its
operations and cash flows for the year ended on that date.
The Directors consider that the financial statements of the Group have been prepared using accounting policies which have
been supported by reasonable judgments and estimates and that all relevant financial reporting and accounting standards
have been followed.
The Directors believe that proper accounting records have been kept which enable with reasonable accuracy, the
determination of the financial position of the Group and facilitate compliance of the financial statements with the requirements
of the Financial Markets Conduct Act 2013.
The Directors consider that they have taken adequate steps to safeguard the assets of the Group, and to prevent and detect
fraud and other irregularities. Internal control procedures are also considered to be sufficient to provide a reasonable assurance
as to the integrity and reliability of the financial statements.
The Financial Statements are signed on behalf of the Board on 31 May 2016 by:
Wei Zhong
Director
Ross Keeley
Director
6
7
8
OCEANIA NATURAL LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2016
2016
2015
Note
3
$
3,351,400
$
1,511,772
4
(2,012,486)
(1,010,254)
1,338,914
501,518
18,616
8,610
(47,973)
(4,002)
(1,033,280)
(486,563)
276,277
19,563
158
626
Interest and finance charges
(22,727)
(17,582)
Profit before income tax
253,708
2,607
(71,124)
(1,453)
182,584
1,154
-
-
182,584
1,154
0.89
4.15
Revenue
Cost of sales
Gross profit
Other income
Distribution costs
Administrative expenses
5
Profit before finance costs and income tax
Interest income
Income tax credit /(expense)
7
Profit after tax attributable to the
shareholders of the parent
Other comprehensive income
Items that may be reclassified to profit or loss
Total comprehensive income for the year
Earnings per share
Basic and Diluted (cents)
9
The attached notes form part of and are to be read in conjunction with the Financial Statements.
9
OCEANIA NATURAL LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2016
Share
Capital
Retained earnings
/(Accumulated
losses)
Total Equity
$
$
$
100
(66,608)
(66,508)
Profit for the year
-
1,154
1,154
Other comprehensive income:
-
-
-
Total other comprehensive income
-
-
-
Total comprehensive income for the year
-
1,154
1,154
100
(65,454)
(65,354)
Profit for the year
-
182,584
182,584
Other comprehensive income:
-
-
-
Total other comprehensive income
-
-
-
Total comprehensive income for the year
-
182,584
182,584
1,756,487
-
1,756,487
1,756,487
-
1,756,487
1,756,587
117,130
1,873,717
Note
Balance as at 1 April 2014
Total comprehensive income for the year
Balance at 31 March 2015
Total comprehensive income for the year
Transactions with owners, recorded directly in equity
Issue of ordinary shares
Total transactions with owners
Balance at 31 March 2016
20
The attached notes form part of and are to be read in conjunction with the Financial Statements.
10
OCEANIA NATURAL LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2016
Note
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Bartercard assets
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Loans and borrowings
Taxation payable
Other current liabilities
Total current liabilities
Non-current liabilities
Loans and borrowings
Total non-current liabilities
Total liabilities
11
12
13
14
16
17
7
18
19
18
Net assets/(liabilities)
Equity
Share capital
Retained earnings/(accumulated losses)
Total equity/(deficit)
20
2016
$
2015
$
461,365
1,635,414
871,043
93,394
3,061,216
4,278
22,552
6,611
33,441
66,204
413,205
133,094
14,597
627,100
3,688,316
22,011
140,076
24,176
186,263
219,704
344,835
737,317
76,546
196,226
1,354,924
170,033
115,025
285,058
459,675
459,675
1,814,599
285,058
1,873,717
(65,354)
1,756,587
117,130
1,873,717
100
(65,454)
(65,354)
For and on behalf of the Board of Directors who approved these financial statements for issue on 31 May 2016.
________________________________
Wei Zhong
Executive Chairman/Chief Executive Officer
________________________________
Ross Keeley
Independent Director
The attached notes form part of and are to be read in conjunction with the Financial Statements.
11
OCEANIA NATURAL LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2016
Note
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers
Interest received
Interest and other finance costs paid
Taxation paid
Net cash (out flow)/inflow from operating activities
Cash flows from investing activities
Cash acquired on acquisition of subsidiary
Purchase of property, plant and equipment
Net cash inflow from investing activities
Cash flows from financing activities
Proceeds from borrowings
Loan from shareholder
Repayment of bank borrowings
Repayment of loan from shareholder
Shares issued
Net cash inflow/(out flow) from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of year
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at the end of year
14
2016
$
2015
$
1,774,103
(3,760,668)
158
(22,727)
(19,999)
(2,029,133)
1,415,065
(1,234,471)
626
(17,582)
163,638
1,314
(2,424)
(1,110)
-
737,317
1,756,487
2,493,804
79,826
(67,850)
(171,963)
(159,987)
463,561
4,278
(6,474)
461,365
3,651
627
4,278
The attached notes form part of and are to be read in conjunction with the Financial Statements.
12
OCEANIA NATURAL LIMITED
RECONCILIATION OF NET PROFIT WITH CASH FLOWS FROM OPERATING ACTIVITIES
FOR THE YEAR ENDED 31 MARCH 2016
Note
Cash Flows from operating activities
Profit for the year
Add/(Less) non-cash items:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Movement of Bartercard trade dollars
Write down of inventory
Impairment in investment
Unrealised loss from foreign currency translation of
cash and cash equivalents
Add/(less) movements in working capital
Trade and other receivables
Inventories
Other assets
Trade and other payables
Taxation payable
Other current liabilities
Net cash (out flows)/inflows from operating
activities
14
16
2016
$
2015
$
182,584
2,607
14,191
14,998
6,982
6,474
25,110
(105,317)
20,384
14,940
-
(1,595,913)
(824,697)
(86,783)
128,558
51,125
73,348
(25,436)
46,732
184,618
-
(2,029,133)
163,638
The attached notes form part of and are to be read in conjunction with the Financial Statements.
13
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
1、SIGNIFICANT ACCOUNTING POLICIES
(a)General Information
Oceania Natural Limited (the “Group”) and its subsidiaries (together, the “Group”) are predominantly engaged in the
wholesale business of providing Honey products, Noni juice, dietary supplements and promotion services in New Zealand and
China.
Oceania Natural Limited, including the fully owned subsidiaries, Camsing Trading Limited and Rich Garden Limited, is the
reporting entity for the year ended 31 March 2016. The comparatives presented in the financial statements are for Camsing
Trading Limited, the Group existing prior to the capital reorganisation, and is the reporting entity for the year ended 31 March
2015. Further details on the capital reorganisation is set out in note 15 (a) and note 20.
Camsing Trading Limited is a profit oriented Group incorporated on 28 November 2012 and domiciled in New Zealand under
the Companies Act 1993. During the year, Camsing Trading Limited undertook a capital reorganisation in order to achieve a
better capital structure. On 27 May 2015, a new Group, Oceania Natural Limited was incorporated and became the sole
shareholder of Camsing Trading Limited. On 30 September 2015, Oceania Natural Limited further acquired 100% of the issued
shares of Rich Garden Limited, from a related party of the majority shareholder.
The reporting entity is Oceania Natural Limited (the “Group” or “ONL”). It is profit oriented and incorporated and domiciled
in New Zealand, registered under the Companies Act 1993 and is a Financial Markets Conduct reporting entity under Part 7 of
the Financial Markets Conduct Act 2013. The financial statements of the Group have been prepared in accordance with the
requirements of Part 7 of the Financial Markets Conduct Act 2013 and the NXT Board Listing Rules. In accordance with the
Financial Markets Conduct Act 2013 separate financial statements for Oceania Natural Limited (the Parent) are no longer
required to be prepared and presented.
The Group’s registered office is at Unit G2, 59 Apollo Drive, Albany, Auckland 0632, New Zealand.
These financial statements were authorised for issue by the Board of Directors dated 31 May 2016.
(b)Basis of Preparation
The consolidated financial statements of the Group have been prepared in accordance with New Zealand Generally Accepted
Accounting Practice and New Zealand Equivalents to International Financial Reporting Standards (IFRS). The financial
statements also comply with IFRS. The consolidated financial statements have been prepared under the historical cost
convention. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the group’s accounting policies.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to
the consolidated financial statements are disclosed in note 2.
The consolidated financial statements for the Group are presented in New Zealand dollars ($), which is the functional currency
of all entities within the Group.
(c)Statement of Compliance
For the purposes of complying with generally accepted accounting practice in New Zealand (NZ GAAP), the Group is a
for-profit entity. These financial statements comply with NZ GAAP, New Zealand equivalents to International Financial
Reporting Standards (NZ IFRS) and International Financial Reporting Standards (IFRS).
(d)Changes in Accounting Policies and Disclosures
There have been no changes in accounting policies. Given changes to the business since 31 March 2015, additional accounting
policies have been disclosed below. Policies have been applied on a consistent basis with those of the previous reporting
period, unless otherwise stated.
(e)Going concern
The Directors have prepared the financial statements on the going concern basis. In doing so significant judgement has been
applied. For further details of these assumptions and other associated material uncertainties refer to note 2.
14
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
1、SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f)New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations have been approved but are not yet effective and
have not been adopted by the Group for the year ended 31 March 2016. The adoption of these standards and interpretations
is not expected to have a material recognition or measurement impact on the Group’s financial statements. These will be
applied when they become mandatory. The significant standards are:
NZ IFRS 9: Financial Instruments
NZ IFRS 9: ‘Financial Instruments’ was issued in September 2014 as a complete version of the standard. NZ IFRS 9 replaces the
parts of NZ IAS 39 that relate to the classification and measurement of financial instruments, hedge accounting and impairment.
NZ IFRS 9 requires financial assets to be classified into two measurement categories; those measured as at fair value and those
measured at amortised cost. The determination is made at initial recognition. The classification depends on the entity’s
business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For
financial liabilities, the standard retains most of the NZ IAS 39 requirements. The main change is that, in cases where the fair
value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other
comprehensive income rather than the income statement, unless this creates an accounting mismatch. The new hedge
accounting model more closely aligns hedge accounting with risk management activities undertaken by companies when
hedging their financial and non-financial risks. NZ IFRS 9 introduces a new expected credit loss model for calculating the
impairment of financial assets. The standard is effective for reporting periods beginning on or after 1 January 2018. The Group
has no intention for an early adoption of the new standard. The Group has not yet assessed NZ IFRS 9's full impact.
NZ IFRS 15: Revenue from Contracts with Customers
NZ IFRS 15 addresses recognition of revenue from contracts with customers. It replaces the current revenue recognition
guidance in NZ IAS 18: Revenue and NZ IAS 11: Construction Contracts and is applicable to all entities with revenue. It sets out
a five step model for revenue recognition to depict the transfer of promised goods or services to customers in an amount that
reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. This standard is
effective for periods beginning on or after 1 January 2018.The Group has no intention for an early adoption of the new
standard. The Group has not yet assessed NZ IFRS 15's full impact.
NZ IFRS 16: Leases
NZ IFRS 16 replaces the current guidance in NZ IAS 17. Under NZ IFRS 16, a contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Under NZ IAS 17,
a lessee was required to make a distinction between a finance lease (on balance sheet) and an operating lease (off balance
sheet). NZ IFRS 16 now requires a lessee to recognise a lease liability reflecting future lease payments and a ‘right-of-use asset’
for virtually all lease contracts. Included is an optional exemption for certain short-term leases and leases of low-value assets;
however, this exemption can only be applied by lessees. The standard is effective for accounting periods beginning on or after
1 January 2019. Early adoption is permitted but only in conjunction with NZ IFRS 15, ‘Revenue from Contracts with Customers'.
The Group intends to adopt NZ IFRS 16 on its effective date and has yet to assess its full impact.
(g)Basis of Consolidation
The Group financial statements consolidate the financial statements of the Group, Oceania Natural Limited, and its subsidiary
undertakings in accordance with NZ IFRS 10. Subsidiaries are all entities (including structured entities) over which the Group has
control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree
and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability
resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any
non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling
interest's proportionate share of the recognised amounts of acquiree's identifiable net assets.
15
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
1、SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Acquisition-related costs are expensed as incurred.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date
fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as
goodwill. If the total of consideration transferred, non-controlling interest recognised and previously held interest measured is
less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised
directly in the income statement.
Inter-Group transactions, balances, and unrealised gains on transactions between Group companies are eliminated. Unrealised
losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Group’s
accounting policies.
Common Control Transactions
The Group has applied the acquisition method to account for common control transactions. Under this method, the assets
transferred and the liabilities acquired have been recognised at fair value, and goodwill has been recognised in accordance
with the Group’s goodwill policy.
(h)Segment Reporting
For management purposes, the Group’s operating segments have primarily been determined with reference to the markets
where goods are sold and reflect the structure and internal reporting used by the Directors, as the chief operating decision
maker, and to assist strategic decision-making and allocation of resources.
The below operating segments have been identified:
・Domestic market – Provision of Honey, Noni juice, and dietary supplement products to New Zealand customers.
・Overseas market – Provision of Honey, Noni juice, and dietary supplement products to China customers.
The Group evaluates segmental performance on the basis of profit and loss before income tax from operations calculated in
accordance with NZ IFRS.
Cost of goods sold are based on actual cost incurred in each market. Employee costs and other expenses are allocated based
on the labour hours spent on each segment which is estimated by management. This allocation method has been applied
consistently during each period.
Assets and liabilities are not allocated to segments as they are not reported to the chief operating decision maker at a segment
level.
(i)Inventories
The valuation of inventory is determined under the principle of lower of cost or net realisable value. The cost of inventories is
based on the first in first out principle, and includes expenditure incurred in acquiring the inventories and bringing them to their
existing location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and selling expenses. The Directors’ assessment of the value is determined after reviewing and
comparing the market price with the cost and as a result of this, the carrying value of some inventories have been written down
to estimated net realisable value. The total amount written off to profit or loss at 31 March 2016 was $nil (31 March 2015:
$20,384).
(j)Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies of the Group at exchange rates at the
dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are
retranslated to the functional currency at the exchange rate at the date. The foreign currency gains or loss on monetary items
is the difference between amortised cost in the functional currency at the beginning of the year, adjusted for effective interest
and payments during the year, and the amortised cost in foreign currency translated at the exchange rate at the end of year.
16
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
1、SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(k)Revenue
Recognition of income
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can
be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have been passed to the buyer and
the revenue can be measured reliably. Risks and rewards are considered passed to the buyer at the time of delivery of the goods
to the customer or at the free on board port/delivery point or as otherwise contractually determined.
Other income
Other income comprises rent and other sundry income. Rent income is recorded in the profit and loss component of the
consolidated statement of comprehensive income on an accruals basis.
Interest income
Interest income is accrued on a time apportioned basis, by reference to the principal outstanding and at the effective interest
rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial
asset to that asset's net carrying amount.
(l)Financial Instruments
Financial instruments are classified in one of the following categories at initial recognition: Financial assets measured at
amortised cost and financial liabilities measured at amortised cost.
Financial Assets measured at Amortised Cost – loans and receivables
These assets are recorded upon initial recognition at fair value plus transaction costs and are subsequently measured at
amortised cost using the effective interest rate method, less impairment. This category of Financial Asset includes:
Trade and other receivables
These include accounts receivable and amounts due from Group undertakings and from customers for merchandise sold in the
ordinary course of business, less impairment. If collection is expected in one year or less, they are classified as current assets. If
not, they are presented as non-current assets.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk or changes in value.
Financial Liabilities measured at Amortised Cost
Liabilities in this category are measured at amortised cost using the effective interest rate method and include:
Trade and other payables
Trade and other payables, loans and borrowings and other current liabilities are initially measured at fair value, and
subsequently measured at amortised cost, using the effective interest method.
Loans and borrowings
All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs
associated with the borrowing. After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost using the effective interest rate method which allocates the cost through the expected life of the loan or
borrowing. Amortised cost is calculated taking into account any issue costs, and any discount or premium on drawdown.
Bank loans are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for
at least 12 months after the balance date.
17
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
1、SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Other current liabilities
These are recorded at amortised cost. They represent liabilities for goods and services provided to the Group prior to the end
of the financial period that are unpaid and arise when the Group becomes obliged to make future payments. These amounts
are unsecured.
Liabilities for wages and salaries are recognised in respect of the employees’ services up to the balance date and are measured
at the amounts expected to be paid when the liabilities are settled.
Fair value estimation
The carrying amount of all financial instruments approximates their fair value.
(m)Bartercard Assets
The Bartercard trade dollars are recorded at cost less accumulated impairment losses. The trade dollars are acquired as earned
and consumed as utilised and are tested at least annually for impairment or when indicators of impairment exist. Significant
reduction in the ability to trade with other bartercard holders and the probability that the Group would not be able to utilise all
the trade dollars it holds are considered indicators that the bartercard asset is impaired. Bartercard assets are impaired and
impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred
after the initial recognition of the asset. An impairment loss is recognised whenever the carrying amount of a bartercard
exceeds its recoverable amount. The estimated recoverable amount of bartercard assets are the greater of their fair value less
costs to sell and value in use.
Trade debits arising from sales to customers and trade credits from purchases of services are recognised in the consolidated
statement of comprehensive income in the period in which the transaction occurs. Where trade credits are used to purchase
an asset, the asset is capitalised and recognised in the consolidated statement of financial position.
Value of Bartercard Trade Dollars
Bartercard uses an electronic currency called a trade dollar. The Group earns trade dollars for the goods it sells to customers
(trade debits) and uses these trade dollars to make purchases (trade credits) from other Bartercard holders. One trade dollar is
equivalent to one New Zealand Dollar for accounting and tax purposes. Impairment testing of the Bartercard trade dollar is
performed on an annual basis. The Directors have determined there has been no impairment to the Bartercard trade dollar at
31 March 2016 (31 March 2015: $nil), taking into consideration the usage subsequent to year end and the expected
accumulation of new trade dollars’ usage over the next 2-3 years.
(n)Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares
outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.
(o)Share Capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as
a deduction from equity.
18
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
1、SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(p)Property, Plant and Equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. In the event that settlement of all or part
of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present
value as at the date of acquisition.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items
(major components) of property, plant and equipment.
Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured
reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the profit and loss component
of the consolidated statement of comprehensive income as incurred.
Depreciation
Depreciation is recognised in the consolidated statement of comprehensive income to write off the cost of an item of property,
plant and equipment over its expected useful life, at the following rates:
Computers and Software
Leasehold Improvements
Plant & Equipment
Motor Vehicles
Office Furniture and Equipment
40% - 50% Straight Line
30% - 80% Straight Line
10% - 40% Diminishing Value
30% Diminishing Value
40% Diminishing Value
The useful lives are reviewed annually and the depreciation recognised in the profit and loss component of the consolidated
statement of comprehensive income calculated on a straight line basis would not be materially different from the depreciation
recognised using the above rates as allowed by the Income Tax Act 2007.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than
its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are
included in the profit and loss component of the consolidated statement of comprehensive income.
(q)Intangible assets and goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the identifiable net assets
of the acquired subsidiary at the date of acquisition. Goodwill is not amortised but it is tested for impairment annually, or more
frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated
impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity
sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which
the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal
management purposes, being the operating segments.
The Group amortises intangible assets with a limited useful life using the straight-line method over the following periods:
・Software
2 years
・Brands
5 years
19
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
1、SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(r)Leases – Operating leases
The Group leases office and warehouse space under an operating lease. Lease in which a significant portion of the risks and
rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are
charged to profit or loss on a straight-line basis over the period of the lease. Lease incentives received are recognised in profit
or loss in a straight-line basis over the lease term as an integral part of the total lease expense.
(s)Impairment
Impairment of Trade and Other Receivables
The recoverable amount of the Group’s trade and other receivables carried at amortised cost is calculated on an undiscounted
basis due to their short term nature. At each reporting date, the Group reviews individually significant trade and other
receivables for evidence of impairment. For trade and other receivables which are not significant on an individual basis,
collective impairment is assessed on a portfolio basis based on numbers of days overdue, and taking into account the historical
loss experience in portfolios with a similar amount of days overdue.
Impairment of Non-Financial Assets
The carrying amounts of the Group's non-financial assets other than inventories are reviewed at each reporting date to
determine whether there is any objective evidence of impairment. If any such indication existed, the asset's recoverable amount
is estimated.
An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses
directly reduce the carrying amount of assets and are recognised in profit and loss.
The estimated recoverable amount of non-financial assets is the greater of their fair value less costs to sell and value in use.
Value in use is determined by estimating future cash flows from the use and ultimate disposal of the asset and discounting these
to their present value using a pre-tax discount rate that reflects current market rates and the risks specific to the asset.
(t)Expense Recognition
All expenses are recognised in the consolidated statement of comprehensive income on an accruals basis.
(u)Income Tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the profit and loss component
of the consolidated statement of comprehensive income except to the extent that it relates to items recognised directly in
equity, in which case it is recognised in other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at
the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purpose.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax
rates enacted or substantively enacted at the reporting date.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it
is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
20
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
1、SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(v)Cash Flows
The following are the definitions used in the consolidated statement of cash flows:
Cash and cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
Operating activities are the principal revenue-producing activities of the Group and other activities that are not investing or
financing activities.
Investing activities are the acquisition and disposal of long-term assets not included in cash and cash equivalents.
Financing activities are activities that result in changes in the size and composition of the contributed equity and borrowings of
the Group.
2、CRITICAL ESTIMATES AND JUDGEMENTS USED IN APPLYING ACCOUNTING POLICIES
The Group prepares its consolidated financial statements in accordance with NZ IFRS, the application of which often requires
judgements to be made by management when formulating the Group’s financial position and results. Under NZ IFRS, the
Directors are required to adopt those accounting policies most appropriate to the Group’s circumstances for the purpose of
presenting a true and fair view of the Group’s financial position, financial performance and cash flows.
In determining and applying accounting policies, judgement is often required in respect of items where the choice of specific
policy, accounting estimate or assumption to be followed could materially affect the reported results or net asset position of
the Group should it later be determined that a different choice would be more appropriate.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised and in any future periods affected. In particular, information about significant areas
of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the
amount recognised in the financial statements are described in more detail below.
Value of Bartercard Trade Dollars
Bartercard uses an electronic currency called a trade dollar. The Group earns trade dollars for the goods it sells to customers
(trade debits) and uses these trade dollars to make purchases (trade credits) from other Bartercard holders. One trade dollar is
equivalent to one New Zealand Dollar for accounting and tax purposes. Impairment testing of the Bartercard trade dollar is
performed on an annual basis. Management has determined there has been no impairment to the Bartercard trade dollar,
taking into consideration the usage subsequent to year end and the expected accumulation of new trade dollars’ usage over
the next 2-3 years. See note 17.
Estimated useful life of brands
The Group amortises intangible assets with a limited useful life using the straight-line method. The useful life of brands has
been estimated to be 5 years.
Fair value determination for business combinations
Management have made estimations of the fair value of the net assets acquired as detailed in note 15. The brand value is
attributable to the purchased product range and the profitability of the acquired business. Any goodwill will not be deductible
for tax purposes.
Fair value of options
The fair value of options that are not traded in an active market are determined by using valuation techniques. The Group uses
its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at the
end of each reporting period. The Group has used discounted cash flow analysis to value options that are not traded in active
markets, adjusted for the likelihood of conditions being achieved.
21
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
Going concern
As at 31 March 2016, the Group is in a positive working capital position of $1,706,292 (2015: negative working capital of
$251,617) and net equity of $1,873,717 (2015: negative net equity of $65,354). During the year, the Group raised equity funding
of $1.75 million from shareholders. The Directors consider that using the going concern assumption is appropriate having
reviewed cash flow projections of the Group for a period of 12 months from the date these financial statements were approved
based on a number of key assumptions and Director’s intentions including:
・All amounts receivable from trade receivables will be received as per customer agreements and repayment terms, and
・Loan agreements entered into by Camsing Trading Limited to assist in funding bulk honey purchases are renegotiated in the
ordinary course of business and may be renegotiated or extended.
There have been no other changes to the estimates and judgements. The estimates and judgements have been applied on a
consistent basis with those of the previous period.
3、REVENUE
Note
Domestic sales
Overseas sales
10
10
2016
$
2015
$
555,036
2,796,364
3,351,400
287,206
1,224,566
1,511,772
2016
$
2015
$
22,552
2,854,719
(864,785)
2,012,486
17,500
1,015,306
(22,552)
1,010,254
2016
$
2015
$
29,189
84,675
5,513
3,333
61,390
109,835
50,149
443,278
68,527
177,391
1,033,280
25,110
36,750
18,077
7,539
14,940
35,270
254,315
26,404
68,158
486,563
4、COST OF SALES
Note
Opening inventory
Purchases
Closing inventory
12
5、ADMINISTRATION EXPENSES AND STAFF COSTS
Note
Amortisation and depreciation
Auditors' remuneration
Barter card trade fee
Directors' fees
Foreign currency gains and losses
Impairment on investment in shares
Marketing and promotions
Other expenses
Professional and consulting fees
Rental and lease payments
Salaries and benefits
14,16
6
22
There were no post-employment benefits, other long-term benefits, termination benefits or share based payments made to key
management personnel during the year ended 31 March 2016 (31 March 2015: $nil).
During the year ended 31 March 2016, Oceania Natural Limited engaged with external advisors, lawyers, and accountants for
the public listing preparation and incurred significant professional and consulting fees.
22
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
6、AUDITORS’ REMUNERATION
The Auditor of the Group is PricewaterhouseCoopers (“PwC”).
Fees to PwC for:
Audit related services
Other services
Total auditors' remuneration
2016
$
2015
$
78,675
6,000
84,675
36,750
36,750
Other services include fees in relation to agreed upon procedures for revenue testing.
7、INCOME TAX EXPENSE & DEFERRED TAX ASSETS
Income tax expense
The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense in the
consolidated financial statements as follows:
Profit before tax
Expected tax charge based on the standard rate of
New Zealand company tax at 28%
Tax effects of:
Non-deductible expenditure
Income not subject to tax
Tax charge/(credit)
Comprising
Current tax (in respect of current year)
Deferred tax (in respect of current year)
2016
$
2015
$
253,708
2,607
71,038
730
383
(297)
71,124
723
1,453
96,545
(25,421)
71,124
1,453
1,453
No movements in deferred tax have been recognised directly in equity.
23
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
Net deferred tax assets
The analysis of net deferred tax assets is as follows:
Deferred tax assets
- Deferred tax assets to be recovered after more
than 12 months
- Deferred tax assets to be recovered within 12
months
Deferred tax assets
2016
$
2015
$
-
25,629
46,097
46,097
(1,453)
24,176
Deferred tax liabilities
- Deferred tax liabilities to be recovered after more
than 12 months
(24,500)
- Deferred tax liabilities to be recovered within 12
months
Deferred tax liabilities
(7,000)
(31,500)
-
14,597
24,176
Net deferred tax assets
-
The gross movement on the deferred income tax account is as follows:
At 1 April
Income tax benefit /(charge)
Deferred tax liability recognised on acquisition
At 31 March
2016
$
2015
$
24,176
25,421
(35,000)
14,597
25,629
(1,453)
24,176
24
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
The net movement in net deferred income tax assets during the year is as follows:
Deferred tax assets
Provisions Prepayments Tax losses
$
$
$
At 1 April 2014
Charged/(credited) to the
income statement
At 31 March 2015
Charged/(credited) to
income tax expense
At 31 March 2016
Deferred tax liabilities
At 1 April 2014
Charged/(credited) to the
income statement
At 31 March 2015
On acquisition of brands
Charged/(credited) to the
income statement
At 31 March 2016
Net deferred tax assets
Brands
$
Other
$
Total
$
-
-
25,629
-
-
25,629
-
-
(1,453)
24,176
-
-
(1,453)
24,176
37,667
37,667
(7,700)
(7,700)
(24,176)
-
-
12,630
12,630
21,921
46,097
-
-
-
-
-
-
-
-
- (35,000)
- (35,000)
-
-
3,500
- (31,500)
3,500
- (31,500)
37,667
(7,700)
- (31,500)
12,630
14,597
8、DIVIDENDS DECLARED AND PAID
No dividends were declared or paid relating to the Group results for the year ended 31 March 2016
(31 March 2015: $nil).
9、EARNINGS PER SHARE
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares.
Basic EPS is calculated by dividing the Group profit or loss attributable to ordinary shareholders of the Group by the weighted
average number of ordinary shares on issue during the period.
The calculation of basic and diluted earnings per share at 31 March 2016 was based on the profit attributable to owners of
$182,584 (31 March 2015: $1,154) and a weighted average number of ordinary shares issued of 20,606,485 (31 March 2015:
13,919 shares, 100 shares on issue for Camsing Trading Limited, adjusted for the share exchange, see note 21 for share
exchange details) calculated as follows:
25
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
Basic earnings per share
Basic earnings per share (cents per share)
Earnings used in the calculation of total basic
earnings per share
Weighted average number of ordinary shares for
the purposes of basic earnings per share
Diluted earnings per share
Diluted earnings per share (cents per share)
Earnings used in the calculation of total Diluted
earnings per share
Weighted average number of ordinary shares for
the purposes of diluted earnings per share
2016
2015
0.89
4.15
182,584
1,154
20,606,485
27,838
0.89
4.15
182,584
1,154
20,606,485
27,838
At 31 March 2016, there were no financial instruments that carried any shareholder dilution rights or characteristics (31 March
2015: $nil). Accordingly, basic and diluted earnings per share are identical in both accounting periods being reported on.
10、SEGMENT INFORMATION
Basis of segmentation
The Group’s operating segments have primarily been determined with reference to the markets where goods are sold and
reflect the structure and internal reporting used by the Directors, as the chief operating decision maker, and to assist strategic
decision-making and allocation of resources.
The below operating segments have been identified:
Domestic market – Provision of Honey, Noni juice, and wellbeing products to New Zealand customers.
Overseas market – Provision of Honey, Noni juice, and wellbeing products to China customers.
The Group evaluates segmental performance on the basis of profit and loss from operations calculated in accordance with NZ
IFRS but excluding non-recurring losses.
Cost of goods sold are based on actual cost incurred in each market. Employee costs and other expenses are allocated based
on the labour hours spent on each segment which was estimated by management. This allocation method has been applied
consistently each period.
Revenue from external customers
Other income
Interest income
Interest and finance charges
Depreciation & amortisation
Cost of goods sold
Employee costs
Other expenses
Segment result
Domestic market
$
31 March 2016
Overseas market
$
Total
$
555,036
18,616
158
(22,727)
(25,042)
(333,294)
(152,740)
(490,305)
(450,298)
2,796,364
(4,147)
(1,679,192)
(24,650)
(384,369)
704,006
3,351,400
18,616
158
(22,727)
(29,189)
(2,012,486)
(177,390)
(874,674)
253,708
26
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
31 March 2015
Domestic market Overseas market
$
$
Revenue from external customers
Other income
Interest income
Interest and finance charges
Depreciation & amortisation
Cost of goods sold
Employee costs
Other expenses
Segment result
287,206
1,722
125
(3,516)
(5,022)
(191,928)
(13,632)
(72,395)
2,560
1,224,566
6,888
501
(14,066)
(20,088)
(818,326)
(54,526)
(289,578)
35,371
Total
$
1,511,772
8,610
626
(17,582)
(25,110)
(1,010,254)
(68,158)
(361,973)
37,931
The 31 March 2015 segment result excludes non-recurring losses, such as the impairment of investment ($14,940) and
writedown of inventory ($20,384).
Segment assets and liabilities
Assets and liabilities are not allocated to segments as they are not reported to the chief operating decision maker at a segment
level.
11、TRADE AND OTHER RECEIVABLES
Note
Trade receivables
Less: impairment provision
Closing balance
2016
$
2015
$
1,635,414
1,635,414
-
At 31 March 2016 the Group has no trade receivables that have not been settled by the contractual due date and are not
considered to be impaired because of the nature of contracts.
12、INVENTORIES
Note
Raw materials
Work in progress
Finished goods
2016
$
2015
$
605,531
6,258
259,254
871,043
22,552
22,552
2016
$
2015
$
27,500
65,804
90
93,394
6,188
423
6,611
13、OTHER CURRENT ASSETS
Note
Prepayments
GST receivable
Other receivables
Closing balance
27
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
14、PROPERTY, PLANT AND EQUIPMENT
Leasehold
Improvements
Motor
Vehicle
Plant &
Equipment
Office
Equipment
Computer
Equipment
Total
$
$
$
$
$
$
15
21,470
(2,147)
19,323
37,436
(10,180)
27,256
-
625
(83)
542
-
59,531
(12,410)
47,121
15
19,323
(17,176)
2,147
27,256
(7,717)
19,539
-
542
(217)
325
-
47,121
(25,110)
22,011
15
15
21,470
(19,323)
2,147
37,436
(17,897)
19,539
-
625
(300)
325
-
59,531
(37,520)
22,011
15
2,147
19,539
- (17,287)
(2,147)
(2,252)
-
72,789
(9,170)
63,619
325
458
(181)
602
22,011
73,247
2,424
2,424
- (17,287)
(441) (14,191)
1,983
66,204
72,789
(9,170)
63,619
1,083
(481)
602
2,424
76,296
(441) (10,092)
1,983
66,204
Note
At 1 April 2014
Cost
Accumulated depreciation
Net carrying amount
Year ended 31 March 2015
Opening net carrying amount
Depreciation
Closing net carrying amount
At 1 April 2015
Cost
Accumulated depreciation
Net carrying amount
Year ended 31 March 2016
Opening net carrying amount
Additions through acquisitions
Other additions
Disposals
Depreciation
Closing net carrying amount
At 31 March 2016
Cost
Accumulated depreciation
Net carrying amount
-
-
28
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
15、INVESTMENT IN SUBSIDIARY UNDERTAKINGS
During the year ended 31 March 2016, Oceania Natural Limited acquired its two subsidiaries:
(a)Acquisition of Camsing Trading Limited
Oceania Natural Limited acquired 67,355 shares of Camsing Trading Limited at $1 per share on 3 June 2015. This was a capital
reorganisation. As a result of this, Camsing Trading Limited is 100% owned by Oceania Natural Limited.
Recognised amounts of identifiable assets acquired and liabilities assumed at book values:
Cash and cash equivalents
Trade and other receivables
Barter Card
Property, plant and equipment
Loan
Trade and other payables
Other current liabilities
Total identifiable net assets at 3 June 2015
$
51,764
140,447
154,585
20,428
(201,018)
(16,815)
(9,166)
140,225
(b)Acquisition of Rich Garden Limited
Oceania Natural Limited acquired 100% of the issued shares of Rich Garden Limited for a consideration of $450,509 on 30
September 2015. The Group acquired 100% of the share capital of Rich Garden Limited, a Group registered in New Zealand.
Rich Garden Limited sells Noni juice, Honey, and other natural health products. The director and sole shareholder of Rich
Garden Limited is a related party who is the wife of the Group’s majority shareholder and accordingly the transaction is
considered to be a common control transaction. The acquisition has been accounted for using the acquisition accounting
method as set out in NZ IFRS 3 Business Combinations. The total consideration is $450,509, which is based on an independent
valuation report.
Before the acquisition, Camsing Trading Limited purchased all its Noni Juice from Rich Garden Limited for resale. As a result of
the acquisition, the Group owns the Noni juice business and secures the goods supply. There were no acquisition related costs.
The fair values of the identifiable assets and liabilities acquired from Rich Garden Limited as at date of acquisition were:
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant and equipment
Software
Brands
Trade and other payables
Other current liabilities
Deferred tax liabilities
Total identifiable net assets at 30 September 2015
Goodwill
Total consideration
$
1,314
108,864
23,794
73,247
7,915
125,000
(142,060)
(7,853)
(35,000)
155,221
295,288
450,509
Within the trade and other receivables of $108,864, there was $103,641 owed by Camsing Trading Limited. There were no
amounts that were not expected to be collected. Rich Garden Limited achieved a net profit of $48 for the six-month period
ended 30 September 2015. This amount is not included in the Group profit figure as Rich Garden Limited was acquired on 30
September 2015. As at 30 September 2015, Camsing Trading Limited had a closing inventory of $16,558, which was purchased
from Rich Garden Limited.
The goodwill of $295,288 is the excess of the consideration over the net identifiable assets acquired and it will not be
deductible for tax purposes. The consideration of $450,509 has not been paid and a term loan has been entered into with the
previous owner, the expected repayment date will be on or before 31 December 2017, see note 19.
All subsidiary undertakings, controlled entities and joint operations have reporting dates of 31 March and were incorporated in
New Zealand.
29
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
16、INTANGIBLE ASSETS
Note
Cost
Balance at 1 April 2015
Additions through acquisitions
Balance at 31 March 2016
Brands
$
Software
$
Goodwill
$
Total
$
125,000
125,000
7,915
7,915
295,288
295,288
428,203
428,203
Amortisation and impairment losses
Balance at 1 April 2015
Amortisation for the year
Balance at 31 March 2016
(12,500)
(12,500)
(2,498)
(2,498)
-
(14,998)
(14,998)
Carrying amount
As at 31 March 2015
As at 31 March 2016
112,500
5,417
295,288
413,205
15
17、BARTERCARD ASSETS
Opening balance
Trade dollars earned
Trade dollars spent
Closing balance
2016
$
2015
$
140,076
26,857
(33,839)
133,094
34,759
171,509
(66,192)
140,076
2016
$
2015
$
129,928
317,389
290,000
459,675
1,196,992
-
737,317
459,675
-
18、LOANS AND BORROWINGS
BNZ term loan (a)
BNZ trade finance facility (b)
Interest bearing loans (c)
Related party loan (d)
Total loans
Current loans
Non current loans
30
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
(a)BNZ term loan
Camsing Trading Limited had a NZD$129,928 term loan with Bank of New Zealand as at 31 March 2016. The interest rate is
8.01% and repayable in monthly instalments of $15,153. The loan facility is secured against, Wei Zhong, a director’s personal
bank deposit of NZD$85,000 and a security interest in the property of Camsing Trading Limited. The loan maturity date is 1
December 2016.
(b)BNZ trade finance facility
Camsing Trading Limited has a NZD$350,000 revolving trade finance facility on fixed term periods for up to 180 days. The
interest rate payable was 5.50% to 5.85%. The loan facility is secured against, Wei Zhong, a director’s personal bank deposit of
NZD$85,000 and a security interest in the property of Camsing Trading Limited.
(c)Interest bearing loans
Camsing Trading Limited has entered into loan agreements to assist in funding bulk honey purchases. All loans are repayable
by January 2017 and the minimum interest rate payable is 8.50%. No value has been recognised in respect of an option
associated with this loan whereby the holder would share in the profits should an uplift in NPA+ occur at specified levels.
(d)Related party loan
The related party loan of $459,675 is for the outstanding purchase price for Rich Garden Limited and cash loans made to
Oceania Natural Limited, see note 15 (b). The loan is interest free, unsecured and due to be repaid on or before 31 December
2017, the repayment is only required where, immediately following making a repayment (in full or in part), Oceania Natural
Limited will meet the solvency test under section 4 of the Companies Act 1993.
19、OTHER CURRENT LIABILITIES
Shareholder current accounts
Sundry accruals
Other payables
Closing balance
2016
$
2015
$
147,678
48,548
196,226
73,835
41,190
115,025
2016
$
2015
$
100
1,756,487
1,756,587
100
100
20、SHARE CAPITAL
Issued and paid up capital:
Balances at the start of the year
Ordinary shares issued during the year
Balance at the end of the year
31
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
All Ordinary Shares are issued and fully paid, have no par value and have an equal right to vote, to dividends and to any surplus
on winding up. The Group does not have a total number of authorised shares. The Board may issue Shares or other Equity
Securities to any person in any number it thinks fit provided that while the Group is Listed, the issue is made in accordance with
the NXT Listing Rules.
Camsing Trading Limited
At 31 March 2015, Camsing Trading Limited had 100 fully paid ordinary shares on issue at $1 per share. Prior to the capital
reorganisation, but also on 3 June 2015, Camsing Trading Limited issued to Wei Zhong 67,255 fully paid ordinary shares at $1
per share in order to capitalise the $67,255 loan owed to Wei Zhong by Camsing Trading Limited. At the date of the capital
reorganisation, Camsing Trading Limited had 67,355 fully paid ordinary shares on issue to its sole shareholder, Wei Zhong.
Oceania Natural Limited
Oceania Natural Limited was incorporated on 27 May 2015 by issuing 1 ordinary share to Wei Zhong.
On 3 June 2015, a capital reorganisation occurred between Oceania Natural Limited and Camsing Trading Limited. This was
effected by Oceania Natural Limited issuing 9,374,999 ordinary shares to Wei Zhong in exchange for the 67,355 of shares of
Camsing Trading Limited held by Wei Zhong. This resulted in Wei Zhong being the sole shareholder of Oceania Natural Limited
holding 9,375,000 fully paid ordinary shares, and Camsing Trading Limited became a 100% owned subsidiary of Oceania
Natural Limited. As set out in note 16(a), the net assets of Camsing Trading Limited at the date of the capital reorganisation was
$140,255. Due to this being a capital reorganisation, opening share capital and opening retained losses presented as at 1 April
2015 for the Group represents the opening share capital and opening retained losses of Camsing Trading Limited and this
annual financial statements include capital raised by Camsing Trading Limited prior to the capital reorganisation and twelve
months trading of Camsing Trading Limited.
Oceania Natural Limited share capital movement schedule:
Company
Balance 1 April 2015
Movements during the year
1 share issued at $nil each on 27/5/2015
9,374,999 shares issued at $0.71845 each on 3/6/2015
2,962,275 shares issued at $0.32 each on 27/7/2015
Share split - 12,337,275 shares issued at $nil each on
2/9/2015
1,008,288 shares issued at $0.64 each on 11/9/2015
150,000 shares issued at $0.64 each on 30/3/2016
Balance 31 March 2016
Number of Issue price
(cents)
shares
Note
-
$
100
1
9,374,999
2,962,275
0.0
0.71845
32.0
67,255
947,928
12,337,275
1,008,288
150,000
25,832,838
0.0
64.0
64.0
645,304
96,000
1,756,587
32
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
21、FINANCIAL INSTRUMENTS
Significant accounting policies
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.
As at 31 March the Group had the following classes of financial instruments:
Note
Loans and receivables
Cash and cash equivalents
Trade receivables
Other current assets
11
13
Financial liabilities measured at amortised cost
Trade and other payables
Other current liabilities
Shareholder current account
Loans and borrowings
19
18
2016
$
2015
$
461,365
1,635,414
90
2,096,869
4,278
423
4,701
(344,835)
(196,226)
(1,196,992)
(1,738,053)
(170,033)
(41,190)
(73,835)
(285,058)
Risk Management policies
The Group is exposed to three main types of risks in relation to financial instruments, which are market (foreign
currency risk and interest rate risk), credit and liquidity. The Group’s exposure to risk arises directly from its operating activities.
These activities involve the acceptance of credit, market (currency and interest rate), financing, and operational risks. The
management of risk is an essential element of the Group's strategy with emphasis placed on pro-active management to
enhance shareholder value and minimise earnings volatility in individual financial years and multi-year periods. The Board of
Directors is responsible for policy setting and execution of the policies.
Market Risk
(i)Foreign exchange risk
The Group operates internationally and has exposure to foreign currency risk as a result of transactions denominated in foreign
currencies from normal trading activities. The foreign currency in which the Group primarily deals with is the USD. At year end,
the Group had foreign exchange exposures as illustrated below:
USD cash and cash equivalents
USD accounts receivable
Group
2016
$
183,820
947,497
Group
2015
$
-
Exchange rate sensitivity
The following sensitivity is based on the foreign currency risk exposures in existence at the reporting date. The impact of a plus
or minus 10% foreign exchange movement on all trading currencies against New Zealand dollars, with all other variables held
constant, is illustrated below:
Pre tax profit / (loss)
Equity
NZD +10%
2016
2015
$
$
181,507
130,685
-
NZD -10%
2016
2015
$
$
(148,506)
(106,924)
-
33
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
(ii)Interest risk
Interest rate risk is defined as the risk of the Group’s cost of funds changing as a result of changes in the interest rates paid on
outstanding debt. The Group’s main interest rate risk arises from term borrowings with variable rates, which expose the group
to cash flow interest rate risk.
The main objective of management of interest rate risk is to minimise the volatility in the cost of debt. The Group does not enter
into forward rate agreements or any interest rate hedges. The Group’s interest rate positions are limited to New Zealand yield
curves.
The Group’s objective in relation to interest rate risk management is to minimise the cost of net borrowings and to minimise the
impact of interest rate movements on the Group’s interest expense and net earnings.
The table below highlights the weighted average interest rate and the currency profile of interest bearing loans and
borrowings as at 31 March 2016, as at 31 March 2015, the Group did not have any interest-bearing loans.
Weighted average
interest rate
New Zealand Dollars
Total
7.27%
Loans and
borrowings
$
737,317
737,317
Credit risk
Credit risk is the risk that a counterparty fails to discharge an obligation to the Group. The Group is exposed to
this risk for various financial instruments, for example trade and sundry receivables and deposits with financial
institutions. The Group’s maximum exposure to credit risk is limited to the carrying amount of financial assets
recognised at 31 March 2016, as summarised below.
The Group continuously monitors defaults of customers and other counterparties, identified either individually or
by the Group, and incorporates this information into its credit risk controls. The Group’s policy is to deal only with
creditworthy counterparties.
At 31 March 2016 the Group has no trade receivables that have not been settled by the contractual due date and are not
considered to be impaired because of the nature of contracts.
In respect of trade and other receivables, the Group is exposed to significant credit risk exposure to a
single counterparty or a group of counterparties having similar characteristics. Trade receivables consist of a
small number of distribution customers in various geographical areas, predominantly in China. Management considers the
credit quality of trade receivables that are not past due or impaired to be good.
The credit risk for cash and short term deposits is considered negligible, since the counterparties are reputable
banks with high quality external credit ratings.
34
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
The following table represents the maximum exposure to credit risk.
Note
Credit risk relating to recognised assets
Cash and cash equivalents
Trade receivables
Other current assets
Total gross financial assets
Allowance for impairment losses
Total net financial assets
11
13
2016
$
2015
$
461,365
1,635,414
90
2,096,869
2,096,869
4,278
423
4,701
4,701
Management expects minimal exposure of credit risk resulting from its financial assets.
Liquidity risk
Liquidity risk arises from the Group is management of working capital. It is the risk that the Group will encounter difficulty in
meeting its financial obligations as they fall due.
The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due.
The Group’s financial assets and liabilities analysed by contractual maturity groupings based on the remaining period at the
reporting date to the contractual maturity date is presented below.
Carrying
amount
$
Less than
six months
$
Between six
months and
one year
$
Trade receivables
1,635,414
Trade and other payables (344,835)
Loans and borrowings
(1,196,992)
1,635,414
(344,835)
(408,309)
(358,660)
Between one
Over two
and two years years
$
$
(459,675)
-
Capital Risk Management
The main objective of capital risk management is to ensure the Group operates as a going concern, meeting debts as they fall
due, maintaining the best possible capital structure and reducing the cost of capital. Group capital consists of share capital and
retained earnings. To maintain or alter the capital structure the Group has the ability to review the size of dividends paid to
shareholders, return capital or issue new shares, reduce or increase debt, or sell assets. The Group’s policies in respect of capital
management and allocation are reviewed regular by the Board of Directors.
22、RELATED PARTY TRANSACTIONS
Identity of related parties
The Group has a related party relationship with Wuxi Rich Garden Co. Limited, a Group registered in The People’s Republic of
China. The Company is under the common control of the majority shareholder. The director, Wei Zhong’s wife, who is the
director and was the sole shareholder of Rich Garden Limited, until 30 September 2015, and is also the director of Wuxi Rich
Garden Co. Limited. Wei Zhong and his wife are the two shareholders of Wuxi Rich Garden Co. Limited. Wuxi Rich Garden Co.
Limited acts as an agent of the Group to expand the Chinese market and assist the importation process of goods from New
Zealand to China.
As part of the agreement to purchase the shares in Rich Garden Limited, a subsidiary of the Group, the Group has
a $459,675 loan payable to the former owner, Regina Ding, the wife of Director Wei Zhong, see note 15(b).
The Group has a related party relationship Meng and Associates, a company controlled by Director, Sean Meng. Meng and
Associates provided accounting services to the Group during the year ended 31 March 2016 and 2015.
The Group has a related party relationship with Merinova Limited, a company controlled by Director, Ross Keeley.
35
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
Transactions with related parties
Related party
Wuxi Rich Garden Co. Limited
Rich Garden Limited brand authorisation fee
Marketing expenses incurred on behalf of the Group
Purchases of goods and services
Meng & Associates
Accounting services
Other income - office rental
Total value
2016
2015
$
$
Asset / (liability)
2016
2015
$
$
100,000
133,420
5,000
216,438
155,000
-
(155,000)
57,045
17,556
3,083
-
2,088
-
Transactions with Directors and Key Management Personnel
Key management personnel are defined as those persons having authority and responsibility for planning, directing and
controlling the activities of the entity, either directly or indirectly. The key management personnel are the directors of the
Group.
Total value
2016
2015
$
$
Asset / (liability)
2016
2015
$
$
Director's Fees
Wei Zhong (Executive Director)
Sean Meng
Ross Keeley
Zhi Jun Shi
3,333
-
-
(3,333)
-
-
Remuneration
Wei Zhong (Executive Director)
96,619
47,000
(10,000)
-
Other services
Sean Meng (Fees paid to Meng & Associates)
Other income - office rental
57,045
17,556
3,083
-
2,088
-
All of the above balances are unsecured and repayable on demand.
No amounts owed by related parties were written off or forgiven during the year ended 31 March 2016 (31 March 2015: nil).
36
OCEANIA NATURAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
23、OPERATING LEASE COMMITMENTS
At 31 March 2016, the Group had operating lease commitments in respect of its office premises used by the Group. At each
reporting date the total future minimum payments under non-cancellable operating leases were payable as follows:
Note
Non-cancellable operating lease payments
No longer than 1 year
Longer than 1 year and not longer than 5 years
2016
$
2015
$
64,055
80,069
144,124
6,500
6,500
24、CAPITAL COMMITMENTS
There were no capital commitments at 31 March 2016 (31 March 2015: $nil).
25、CONTINGENT ASSETS AND LIABILITIES
There were no contingent liabilities at 31 March 2016.
26、LITIGATION AND CLAIMS
The Group is not currently involved in any ongoing litigation.
27、SUBSEQUENT EVENTS
On 12 May 2016, the Group released subscription agreements to qualified investors in New Zealand and China to raise new
equity at an issue price of $2.295 per share. $827,825 was raised through the private placement and 360,708 new ordinary shares
were allotted on 24 May 2016.
There have been no other significant events after the reporting period.
37
OCEANIA NATURAL LIMITED
STATUTORY INFORMATION
FOR THE YEAR ENDED 31 MARCH 2016
1、DIRECTORS
The names of the Directors of the Group in office at the date of this Report are:
Wei Zhong (“Walker”)
Executive Chairman and Group Chief Executive Officer
Ross Keeley
Independent Director
Zhi Jun Shi
Independent Director
Zhongyang Meng (“Sean”)
Non-executive Director
2、REMUNERATION OF DIRECTORS
During the year the following remuneration was paid or payable to Directors:
Wei Zhong (included in salaries cost)
Ross Keeley
Group
2016
$
96,619
3,333
99,952
Group
2015
$
47,000
47,000
3、EMPLOYEES
The number of employees within the Group and Group receiving remuneration and benefits above $100,000, as is required to
be disclosed in accordance with Section 211(g) of the Companies Act 1993, is indicated in the following table:
2016
Number
2015
Number
1
-
Oceania Natural Limited
$110,000 - $120,000
4、DIRECTORS’ SHAREHOLDINGS FOR THE YEAR ENDED 31 MARCH 2016
Director
Holder
Wei Zhong & Lei Ding
Zhongyang Meng
Zhi Jun Shi
Zhong Wei & Lei Ding
& Zhong Family
Trustee Limited
Zhongyang Meng
Zhi Jun Shi
Number of shares
15,937,500
2,072,264
625,000
38
OCEANIA NATURAL LIMITED
STATUTORY INFORMATION
FOR THE YEAR ENDED 31 MARCH 2016
5、INTERESTED TRANSACTIONS
The Directors have disclosed the following transactions with the Group:
Identity of related parties
The Group has a related party relationship with Wuxi Rich Garden Co. Limited, a company registered in The People’s Republic
of China. The company is under the common control of the majority shareholder. The director, Lei Ding （Wei Zhong’s wife）
is the director of Rich Garden Limited and was the sole shareholder of Rich Garden Limited prior to its acquisition by Oceania
Natural Limited on 30 September 2015. Wei Zhong and his wife are the two shareholders of Wuxi Rich Garden Co. Limited.
Wuxi Rich Garden Co. Limited acts as an agent of the Group to expand the Chinese market and assist the importation process
of goods from New Zealand to China.
As part of the agreement to purchase the shares in Rich Garden Limited, a subsidiary of the Group, the Group has
a $459,675 loan payable to the former owner, Regina Ding the wife of Director Wei Zhong, see note 15(b).
The Group has a related party relationship Meng and Associates, a Group controlled by Director, Sean Meng. Meng and
Associates provided accounting services to the Group during the year ended 31 March 2016 and 2015.
The Group has a related party relationship Merinova Limited, a Group controlled by Director, Ross Keeley.
Transactions with related parties
Total value
2016
2015
$
$
Asset / (liability)
2016
2015
$
$
Director's Fees
Wei Zhong (Executive Director)
Sean Meng
Ross Keeley
Zhi Jun Shi
3,333
-
-
(3,333)
-
-
Remuneration
Wei Zhong (Executive Director)
96,619
47,000
(10,000)
-
Other services
Sean Meng (Fees paid to Meng & Associates)
Other income - office rental
57,045
17,556
3,083
-
2,088
-
Transactions with Directors and Key Management Personnel
Key management personnel are defined as those persons having authority and responsibility for planning, directing and
controlling the activities of the entity, either directly or indirectly. The key management personnel are the directors of the
Group.
Total value
2016
2015
$
$
Asset / (liability)
2016
2015
$
$
Director's Fees
Wei Zhong (Executive Director)
Sean Meng
Ross Keeley
Zhi Jun Shi
3,333
-
-
(3,333)
-
-
Remuneration
Wei Zhong (Executive Director)
96,619
47,000
(10,000)
-
Other services
Sean Meng (Fees paid to Meng & Associates)
Other income - office rental
57,045
17,556
3,083
-
2,088
-
39
OCEANIA NATURAL LIMITED
STATUTORY INFORMATION
FOR THE YEAR ENDED 31 MARCH 2016
All of the above balances are unsecured and repayable on demand.
Directors’ Remuneration
Remuneration details of Directors are provided above.
Indemnification and Insurance of Officers and Directors
The Group indemnifies Directors and Executive Officers of the Group against all liabilities which arise out of the performance
of their normal duties as Directors or Executive Officers, unless the liability relates to conduct involving lack of good faith. To
manage this risk, the Group has indemnity insurance. The total cost of this insurance to the Group is $16,200.
Share Transactions
Camsing Trading Limited
At 31 March 2015, Camsing Trading Limited had 100 fully paid ordinary shares on issue at $1 per share. Prior to the capital
reorganisation, but also on 3 June 2015, Camsing Trading Limited issued to Wei Zhong 67,255 fully paid ordinary shares at $1
per share in order to capitalise the $67,255 loan owed to Wei Zhong by Camsing Trading Limited. At the date of the capital
reorganisation, Camsing Trading Limited had 67,355 fully paid ordinary shares on issue to its sole shareholder, Wei Zhong.
Camsing Trading Limited
Oceania Natural Limited was incorporated on 27 May 2015 with 1 ordinary share on issue held by Wei Zhong.
On 27 May 2015, a capital reorganisation occurred with Oceania Natural Limited acquiring 100% of the shares on issue in
Camsing Trading Limited from Wei Zhong. At the time of the acquisition, Wei Zhong was sole shareholder of Oceania Natural
limited and Camsing Trading Limited. The consideration for the acquisition was nominally set at $89,408 which was satisfied by
Oceania Natural Limited issuing 9,374,999 ordinary shares to Wei Zhong. This results in Wei Zhong being the sole shareholder
of Oceania Natural Limited holding 9,375,000 fully paid ordinary shares, and Camsing Trading Limited became a 100% owned
subsidiary of Oceania Natural Limited. Due to this being a capital reorganisation, opening share capital and opening retained
losses presented as at 1 April 2015 for the Group represents the opening share capital and opening retained losses of Camsing
Trading Limited and the condensed interim financial statements includes capital raised by Camsing Trading Limited prior to the
capital reorganisation and 6 months trading of Camsing Trading Limited.
Wei Zhong
Interested Party
Zhong Wei & Lei Ding &
Zhong Family Trustee
Limited
Acquisition Date
27 May 2015
03 June 2015
* 02 September 2015
Total Ordinary
Shares Held
1
9,375,000
15,937,500
Zhongyang Meng
Zhongyang Meng
27 July 2015
* 02 September 2015
1,036,132
2,072,264
Zhi Jun Shi
27 July 2015
* 02 September 2015
312,500
625,000
Director
Zhi Jun Shi
* On 02 September 2015, the Company had a share split where 1 Ordinary Share was issued for every Ordinary Share held
on 1 September 2015.
There were no other acquisitions nor disposals of any Ordinary Shares in the Group by Directors during the year.
Directors’ Loans
There were no loans made by the Group to Directors.
Use of Group Information
The Board received no notices during the year from Directors requesting to use Group information received in their
capacity as Directors which would not otherwise have been available to them.
40
OCEANIA NATURAL LIMITED
STATUTORY INFORMATION
FOR THE YEAR ENDED 31 MARCH 2016
6、AUDITORS
Fees paid and due to PricewaterhouseCoopers are $84,675 (2015: $36,750) for audit related services. In accordance with
Section 200 of the Companies Act 1993, the auditors, PricewaterhouseCoopers, continue in office.
7、DONATIONS
There were no donations paid during the year (2015: $nil).
8、SHAREHOLDERS
As at 4 May 2016 there were 96 shareholders.
9、SHARE ISSUES
During the year ended 31 March 2016 the following share issues took place:
Movement in Ordinary Shares
Company
Balance 1 April 2015
Note
Movements during the year
1 share issued at $nil each on 27/5/2015
9,374,999 shares issued at $0.71845 each on 3/6/2015
2,962,275 shares issued at $0.32 each on 27/7/2015
Share split - 12,337,275 shares issued at $nil each on
2/9/2015
1,008,288 shares issued at $0.64 each on 11/9/2015
150,000 shares issued at $0.64 each on 30/3/2016
Balance 31 March 2016
Number of Issue price
(cents)
shares
-
1
9,374,999
2,962,275
0.0
0.7184
5
32.0
12,337,275
1,008,288
150,000
25,832,838
$
100
67,255
947,928
0.0
645,304
64.0
96,000
64.0 1,756,587
10、SHAREHOLDER DETAILS
The ordinary shares of Oceania Natural Limited are listed on the NXT Market operated by NZX Limited.
11、SUBSTANTIAL SECURITY HOLDERS
Pursuant to Section 276, Financial Markets Conduct Act 2013, details of substantial security holders and their total relevant
interests as at 4 May 2016:
Name
Zhong Wei & Lei Ding & Zhong Family Trustee
Limited
Zhongyang Meng
Oceania Natural Limited
Number of
shares
15,937,500
2,072,264
18,009,764
Record date
31 March
2016
31 March
2016
31 March
2016
Date of notice
31 March
2016
31 March
2016
31 March
2016
The total number of shares on issue at 31 March 2016 was 25,832,828 (2015: nil).
12、TRADING HALTS
There have been no trading halts in the Group’s shares during the financial year.
41
OCEANIA NATURAL LIMITED
STATUTORY INFORMATION
FOR THE YEAR ENDED 31 MARCH 2016
13. EARNINGS AND NET ASSETS PER SHARE
Basic earnings per share is calculated by dividing the Group profit or loss attributable to ordinary shareholders of the Group by
the weighted average number of ordinary shares on issue during the period (Also see note 9 of the consolidated financial
statements for the year ended 31 March 2016).
Net assets per share is calculated by dividing the Group net assets or liabilities by the weighted average number of ordinary
shares on issue during the period (Also see note 9 of the consolidated financial statements for the year ended 31 March 2016).
2016
2015
0.89
4.15
9.09
(234.77)
Basic earnings per share
Basic earnings per share (cents per share)
Net tangible assets per share
Net tangible assets per share (cents per share)
14、SHAREHOLDER ENQUIRIES
Shareholders should send changes of address to Link Market Services Limited at the address noted in the Group Directory.
Notification must be in writing. Questions relating to shareholdings should also be addressed to Link Market Services Limited.
For information about the Group please contact the Group at the Registered Office by sending an e-mail to
[email protected] or visit the website www.onlgroup.co.nz.
15、ANNOUNCEMENT AND REPORTING TO SHAREHOLDERS
The Group has established an e-mail list of Shareholders that want to receive announcements and reports made by Oceania
Natural Limited to the NZX. Announcements and reports are e-mailed to Shareholders who wish to receive them shortly after
they are released. This will include the Annual Meeting addresses, Annual Reports and Interim Reports. If you want to be
added to this listing, please e-mail [email protected] and advise us of your preferred e-mail address. Your e-mail details will
be kept confidential.
16、DISTRIBUTION OF EQUITY SECURITIES
The information in the disclosures below has been taken from the Company's register as at 4 May 2016:
Size of holding
1-1,000
1,001-5,000
5,001-10,000
10,001-50,000
50,001-100,000
Greater than 100,000
Security holders
Number
%
6
6.25
20
20.83
5
5.21
36
37.5
10
10.42
19
19.79
96
100.00
Securities
Number
%
3,561
0.01
55,211
0.21
45,500
0.18
767,466
2.97
640,625
2.48
24,320,475
94.15
25,832,838 100.00
42
OCEANIA NATURAL LIMITED
STATUTORY INFORMATION
FOR THE YEAR ENDED 31 MARCH 2016
17、20 LARGEST SHAREHOLDERS
The information in the disclosures below has been taken from the Company's register as at 4 May 2016:
Rank
1
2
3
4
5
6
7
8
=
10
11
=
=
=
15
16
17
=
19
20
Investor Name
Zhong Wei & Lei Ding & Zhong
Family Trustee Limited
Zhongyang Meng
Jinfeng Qi
Jiashun Qian
Zhijun Shi
Wenbin Zhu
Weizheng Guo
Debbao Qiao
Meiqi Huang
Hongjun Cao
Yu Rong
Jufang Shi
Lei Sun
Wei Jiang
Xiangming Yin
Jianliang Sun
Huai Chuang Chang
Dan Li
Xiangdong Zhang
Jia Zhu
Total Units
% Issued Capital
15,937,500
2,072,264
1,250,000
740,236
625,000
562,500
385,000
375,000
375,000
300,000
250,000
250,000
250,000
250,000
200,000
154,600
117,000
117,000
109,375
78,125
24,398,600
61.69
8.02
4.84
2.87
2.42
2.18
1.49
1.45
1.45
1.16
0.97
0.97
0.97
0.97
0.77
0.60
0.45
0.45
0.42
0.30
94.44
43
OCEANIA NATURAL LIMITED
COMPANY DIRECTORY
AS AT 31 MARCH 2016
Independent Directors
Murray Ross Keeley
238 Mount Heslington Road, RD1,
Brightwater, 7091, New Zealand
Zhijun Shi
Room 501, No1 lane 388 Furongjiang Road,
China
Company Number
5709167
NZ Business Number
9429041774144
Non-executive Director
Zhongyang Meng
12a Blakeborough Drive, Forrest Hill,
Auckland, New Zealand
Incorporated
27 May 2015
Executive Director
Wei Zhong
8 Maidstone Place, Oteha, Auckland,
New Zealand
Shares Issued
25,832,838 Ordinary
Company Secretary
Malcolm Lindeque
17 Kingfisher Road, Millwater, Auckland
Solicitors
Duncan Cotterill
Level 1, CPO building, 12 Queen Street, Auckland
Registered Office
Unit G2, 59 Apollo Drive, Rosedale, Auckland
Tel: +64 9 972 2656
Bankers
ASB Bank Limited
ANZ Bank Limited
BNZ Bank Limited
Auditor
PricewaterhouseCoopers
PwC Tower, 188 Quay Street, Auckland
NXT Advisor
CM Partners Limited
Suite 107, The Geyser Building, 100 Parnell Road,
Auckland
Share Registrar
Link Market Services Limited
Deloitte Centre, 80 Queen Street, Auckland
Tel:+64 9 375 5998
44
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