AFC announces availability of its Annual Report

AFC GROUP HOLDINGS LIMITED
ANNUAL REPORT 2018
FOR THE YEAR ENDED 31 MARCH 2018

AFC GROUP HOLDINGS LIMITED
ANNUAL REPORT CONTENTS
FOR THE YEAR ENDED 31 MARCH 2018
Page
Directors' Profiles
2
Directors' Report
3 - 4
Corporate Governance Statement5 - 6
AFC Longview Limited7
AFC International Trading Group Limited 8
National Dairy Group Limited 9
AFC Biotechnology Manufacture Co Limited 10
AFC GoGlobal Ecommerce Limited 11
AFC Education Investment Limited 11
Financial Statements 12
Consolidated Statement of Comprehensive Income 13
Consolidated Statement of Changes in Equity 14
Consolidated Statement of Financial Position 15
Consolidated Statement of Cash Flows16
Notes to the Consolidated Financial Statements 17 - 52
Independent Auditor's Report53 - 56
Shareholder and Statutory Information57 - 59
Corporate Information60

AFC Group Holdings Limited Annual Report 2018
Page 1

AFC GROUP HOLDINGS LIMITED
HAO LONG QIANG LI
Mr. Qiang Li had more than 10 years’ experience
in the health industry before he came to New
Zealand in 2001 to study for his MBA
qualification. He joined GMP Dairy Limited in
2004. He gained experience in R&D, purchasing,
production department. He’s also promoted New
Zealand health products into the Chinese market
successfully while he was working with GMP. He
joined the GMP management group in 2010, and
during that time promoted the “KAWALA” brand
of milk products into the Chinese market.
Mr. Li joined AFC in 2016 and is an Independent
Director of AFC Group Holdings Limited.
Mr. Hao Long moved to New Zealand in 2002
and graduated from Massey University with a
double major in Accounting and Marketing. He is
a Chartered Accountant (CA), a member of
Chartered Accountants Australia and New
Zealand, and a Chartered Member of the
Institute of Director (CMInstD). He has over 12
yearsprofessionalaccountingexperience,
including working for a Big 4 accounting firm plus
governance and management experience in the
commercial sectors in China and New Zealand.
Mr. Long joined AFC in 2015 and is the
Executive Director and CFO of AFC Group
Holdings Ltd, and the CEO of AFC Longview
Limited.
DIRECTORS' PROFILES
Yang Xia is a Chinese National with more than
30 years of experience in commerce and
finance. Prior to starting his own business, he
held management and leadership roles in the
Chinese Government’s finance department and
in major nationally owned Chinese companies.
He is a former director general of the Anhui
Chaohu Foreign Trade and Economic Relations
Commission. He currently holds directorships in
various Chinese companies spanning a range of
industries.
In 2007 Mr Xia formed his own investment
company, Guangdong Yinrui Investment &
Management Company. While a majority of his
investments are in China, he has also invested in
a chemical company in Thailand. Mr Xia is
currently in the process of expanding his
investment activities into Australia and New
Zealand having founded NZ Silveray Group
Limited in February 2014.
YANG XIA BO XIAN CAO
Mr. Bo Xian Cao is a Chinese National and a
New Zealand Citizen. He moved to New Zealand
in 1994 and he has over 22 years business
experience in China and New Zealand. He has
held various executive positions in export related
sectors specifically primary industries (including
Hydroponics) and Skin Care industries. Mr. Cao
has developed skills in trading between New
Zealand and Asian countries specialising in
Hong Kong and China.
Mr. Cao joined AFC in 2016 and he is currently
the director of AFC Group Holdings Limited, and
a Chairman of the Audit and Risk committee.
AFC Group Holdings Limited Annual Report 2018
Page 2

AFC GROUP HOLDINGS LIMITED
DIRECTORS' REPORT
During the 2018 financial year, not only did AFC Group continue its normal business operations but also
achieved comprehensive and consistent development.
AFC Group Holdings Ltd has achieved remarkable results in all the operating segments of the Group. AFC
Group Holdings Ltd has combined the advantages of resource integration in the capital market inChina and
New Zealand. This has been achieved through the Group’s complementary insights of the business resources
and markets of the New Zealand and China business environment. After more than two year’s development,
the Group has laid the foundation of self-development in the food processing, wine industry, trade logistics,
biotechnology, cross-border e-commerce and other sectors. The Group has also played a role inpromoting
China-New Zealand economic and trade exchanges and non-governmental exchanges.
Under the leadership of managers at all levels within the group, all employees in China and New Zealand were
committed and motivated during the year. The Group made PAYE payments of NZ$160 thousand, which is an
increase of 45% from last year’s PAYE paid of NZ$110 thousand. The Group has offered and provided a total
of 40 employment positions in the market, which is an increase of 200% from last year.
For 2018, AFC Group has achieved sales revenue of NZ$6,600 thousand. The Group experienced a net loss of
NZ$473 thousand for the year, which is NZ$851 thousand less than the loss incurred in the 2017 year. AFC
Group further strengthened its financial team and management systems, and formulated policies and
procedures covering all aspects and levels of the organisation. AFC Biotechnology Manufacture Co Ltd has
successfully and smoothly continued production since the beginning of the year's trial operation. Theproduction
capacity has reached the ideal state during continuous debugging and learning. The popularity ofthe high-
quality DD Mask continues to increase under the brand promotion of China and New Zealand. AFC
International Trading Group Ltd wholeheartedly organised several large-scale events for its brand. DD Mask's
brand was effectively promoted and successfully expanded sales performance. The wine varieties of AFC
Longview Ltd include premium, medium and low wines. The Longview flagship of White diamond sweet white
wine statement is now broadcasted. It is not only supported by the signature of two former New Zealand Prime
Ministers and parliament members, but also by the admiration of the Rothschild family. In the pastyear,
National Dairy Group Ltd has obtained trademark registration rights for brands including Morning, DD Maskand
others. In general, there is a qualitative leap in the Group’s systems and management, brand building and
publicity, work production and financial processes, staffing, managerial level, and employee awareness.
Below are the operation summaries of each subsidiary for the 2018 year:
National Dairy Group Limited
In the food industry, starting from the OEM and trade of milk powder and honey, we have put the firstattention
across China and New Zealand’s market development which in the urban peoples ‘internet plus breakfast'
series products, as well as the “MORNING” Brand’s operation.
AFC Longview Limited
In the wine industry, we have built a series of projects for the world's top sweet white winebrands based on the
principles of quality, priority, value discovery, value enhancement and differentiated operation. At the same
time, AFC Longview Ltd also cooperated with New Zealand's famous vineyard and launched various fine wines.
AFC International Trading Group Limited
In the field of international trade, we have made AFC International Trading Group Ltd a bridge for trade between
Australia, New Zealand and China by integrating the resources of China and New Zealand ‘s markets, funds
and talents, and increasing the number of agency products.
AFC Group Holdings Limited Annual Report 2018
Page 3

AFC GROUP HOLDINGS LIMITED
Meetings
Attended
Meetings Held
Yang Xia
44
44
44
Qiang Li
44
AUDIT COMMITTEE
Yang Xia
Qiang Li
20182017
MaleMale
Directors44
CORPORATE GOVERNANCE STATEMENT
Profiles of the individual Directors can be found on
page 2.
A breakdown of the gender composition of directors
and officers as at the Company's balance date,
including comparative figures is shown below:
The Board met 4 times during the year and received
papers, including regular reports from management,
to read and consider before each meeting. The Board
is provided at all times with accurate timely
information on all aspects of AFC’s operations and is
kept informed of key risks to AFC on a continuing
basis.
In addition, the Board meets whenever necessary to
deal with specific matters needing attention between
scheduled meetings, including a number of meetings
to consider various opportunities. These meetings are
not included in the numbers below.
Board Members
Hao Long
Bo Xian Cao
The AFC Audit Committee has been established to
focus on audit and risk management and specifically
addressesresponsibilitiesrelativetofinancial
reporting and regulatory conformance.
Non-Executive (Chair)
Non-Executive
Executive
Non-Executive
Bo Xian Cao
Hao Long
The Audit Committee held and attended 3 meetings
during the year and comprised of the following
members:
The Board of Directors (“the Board”) of AFC Group
Holdings Limited (“AFC” or “the Company”)
recognisestheneedforstrongcorporate
governancepracticesandhasadopteda
comprehensive corporate governance code.
The Board believes that the corporate governance
structures and practices encourage the creation of
value for AFC shareholders whilst ensuring the
highest standards of ethical conduct and providing
accountability and control systems commensurate
with the risks involved.
ROLE AND COMPOSITION OF THE BOARD
The Board is responsible for the direction and
control of AFC and is accountable to shareholders
and others for AFC’s performance and its
compliance with applicable laws, regulations and
standards.
AFC offers shareholders an experienced Board
with skills across a number of industries and
disciplines.
The AFC Constitution requires a minimum of three
Directors. The Board elects a Chairman whose
primary responsibility is the efficient functioning of
the Board.
For 31 March 2018, the Board comprised of the
following directors:
The Audit Committee is accountable for ensuring the
performance and independence of the external
auditors and also makes recommendations to the
Board. The committee met twice during the year.
Bo Xian Cao
Qiang Li
ETHICAL CONDUCT
AFC has adopted a policy of business ethical conduct
that is designed to formalise its commitment to high
standards of ethical conduct and to provide all
Directors and representatives with clear guidance on
those standards. These are governed by its Code of
Ethics, Conflicts of Interest Policy and its Insider
Trading Policy.
AFC Group Holdings Limited Annual Report 2018
Page 5

AFC GROUP HOLDINGS LIMITED
OTHER COMMITTEES
SHAREHOLDER INFORMATION
AFC maintains a website for shareholders,
www.afcnz.com.Shareholderreports,market
announcements,copiesofAnnualReports,
presentations, press releases and news articles, as
well as performance data, are posted on the
website.
AFC’s Code of Ethics details the ethical and
professional behavioural standards required of the
Directors and other officers. The code also
provides the means for proactively addressing and
resolving potential ethical issues.
The Conflicts of Interest Policy details the process
to be adopted for identifying conflicts of interest and
the actions that should be taken.
The Code of Ethics and Conflicts of Interest Policy
are available for the shareholders upon request.
The Board recognises the importance of providing
comprehensiveandtimelyinformationto
shareholders.
Due to the importance of nomination and
remuneration matters the Board as a whole
addresses these and consequently there is no
separate Nomination or Remuneration Committee.
CORPORATE GOVERNANCE STATEMENT CONTINUED
AFC Group Holdings Limited Annual Report 2018
Page 6

AFC GROUP HOLDINGS LIMITED
AFC LONGVIEW LIMITED
Longview Estate was established by the Vuletich family in 1969. Longview Estate Wines pioneered wine-growing
in Whangarei. Longview is the oldest commercially operating vineyard in northern New Zealand with a total area
of 6.5 hectares of vines. The Winery produces a series of wines with annual output of 25 tonnes. Varieties
include Cabernet Sauvignon, Merlot, Cabernet Franc, Malbec, Syrah, Chardonnay, White Diamondand
Gewürztraminer. The major wines are Reserve Gewurztraminer, Chardonnay, White Diamond, Merlot Cabernet
Franc Malbec-Syrah and Gumdiggers Port. White Diamond is the unique product in New Zealand. White
Diamond grapes produce a sweet fragrant, fruity wine, with an intense grape flavour. “Once tasted never
forgotten”.
AFC Group Holdings Limited Annual Report 2018
Page 7

AFC GROUP HOLDINGS LIMITED
AFC INTERNATIONAL TRADING GROUP LIMITED
AFC International Trading Group Limited (AFCIT) was setup to purchase products in NewZealand and to
export these to China and Hong Kong. AFCIT is able to draw on the capital resources of AFC and hence it can
purchase products from suppliers and export these to the most lucrative markets. AFCIT has helped many
exporters to gain access to the Chinese and Hong Kong markets without having to spend valuable money on
expensive marketing trips and promotion.
AFC Group Holdings Limited Annual Report 2018
Page 8

AFC GROUP HOLDINGS LIMITED
NATIONAL DAIRY GROUP LIMITED
National Dairy Group Limited (NDG) is involved in research and development, manufacturing and
management. All NDG products pass the qualification of GMP (Good Manufacturing Practice) in New
Zealand. NDG is a wholly owned subsidiary of AFC Group Holdings Limited (AFC), NDG owns the “ Morning “
brand plus other brands. Its products are sold across New Zealand, Australia and China. NDG promotes
natural health and scientific nutrition so it is able to provide its customers with high quality health food.
AFC Group Holdings Limited Annual Report 2018
Page 9

AFC GROUP HOLDINGS LIMITED
AFC Biotechnology Manufacture Co Limited started production within six months after incorporation in July
2016. The designed annual capacity of the production line is 10 million sheets of face mask. With the most
advanced face mask production line in New Zealand, the company adopts GMP standard and operates ina
dust-free work shop. The Company sells both in New Zealand and exports primarily to China.
AFC BIOTECHNOLOGY MANUFACTURE CO. LIMITED
AFC Group Holdings Limited Annual Report 2018
Page 10

AFC GROUP HOLDINGS LIMITED
AFC EDUCATION INVESTMENT LIMITED
AFC Education Investment Limited (AFCEI) was established to acquire and reconstructfor educational
institutes. It will integrate the educational resources and models of studying abroad between China and New
Zealand.
AFC GOGLOBAL ECOMMERCE LIMITED
GoGlobal is designed to be a platform which specialises in the sale of quality New Zealand and Australian
products to China. This easy to use international platform allows producers and retailersto access the vast
Chinese market with ease. The sellers can control their own prices, inventory, and all otheraspects of the
marketing and sales process from New Zealand.
AFC Group Holdings Limited Annual Report 2018
Page 11

AFC GROUP HOLDINGS LIMITED
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018

AFC GROUP HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2018
20182017
Notes
NZ$ NZ$
Operating Revenue2 6,506,888 12,740,658
Cost of Sales(5,146,361)(11,263,720)
Gross profit1,360,527 1,476,938
Other Income
2 347,473 43,997
Expenses
Selling and Distribution Expenses3 (510,382)(290,816)
Administration Expenses
3 (1,657,882)(2,479,848)
(460,264)(1,249,729)
Finance Income
2 1,431
2,780
Finance Expense
3 (13,989)
(76,835)
(12,558)(74,055)
Profit / (Loss) before income tax(472,822)(1,323,784)
Income tax benefit
4 - -
Profit / (loss) for the year(472,822)(1,323,784)
Other comprehensive income
- -
Total comprehensive income / (loss) for the year(472,822)(1,323,784)
Profit/(loss) and Total Comprehensive Income Attributable to:
Equity holders of the parent(412,406)(896,704)
Non-controlling interest
7
(60,416)(427,080)
(472,822)(1,323,784)
Profit / (loss) per share:
Basic earnings per share (cents per share)
5 (0.00013)(0.00040)
Diluted earnings per share (cents per share)
5 (0.00013)(0.00025)
Operating profit / (loss)
The financial statements are to be read in conjunction with the notes to the financial statements set out on pages 17 to 52.
AFC Group Holdings Limited Annual Report 2018
Page 13

AFC GROUP HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2018
Notes
Issued
Share
Capital
Accumulated
Losses
Equity
Holders of
the Parent
Non-
Controlling
Interests
Total
NZ$ NZ$ NZ$ NZ$ NZ$
Balance as at 1 April 201625,540,835 (23,810,181) 1,730,654 1,151,151 2,881,805
Net loss for the financial year-(896,704) (896,704) (427,080) (1,323,784)
Other comprehensive income-----
Total comprehensive income/(loss)-(896,704) (896,704) (427,080) (1,323,784)
Transactions with owners
Ordinary shares issued ---290,000 290,000
Exercise of Warrants
6
3,160,396 -3,160,396 -3,160,396
Share Issue Costs
6
(21,728) -(21,728) -(21,728)
Total transactions with owners3,138,668 -3,138,668 290,000 3,428,668
Balance as at 31 March 201728,679,503(24,706,885) 3,972,6181,014,0714,986,689
Net loss for the financial year-(412,406) (412,406) (60,416) (472,822)
Other comprehensive income-----
Total comprehensive income/(loss)-(412,406) (412,406) (60,416) (472,822)
Transactions with owners
Ordinary shares issued
6,7
---200,000 200,000
Exercise of Warrants
6
-----
Share Issue Costs
6
-----
Total transactions with owners---200,000 200,000
Balance as at 31 March 201828,679,503(25,119,291) 3,560,2121,153,6554,713,867
The financial statements are to be read in conjunction with the notes to the financial statements set out on pages 17 to 52.
AFC Group Holdings Limited Annual Report 2018
Page 14

AFC GROUP HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2018
20182017
Notes
NZ$ NZ$
Cash flows from operating activities
Cash was received from:
Receipts from customers 6,628,350 12,512,405
Receipts from related parties718,364 -
Interest received1,431 2,780
Other receipts56,930 50,211
Cash was applied to:
Payments to suppliers and employees(7,553,745) (12,137,791)
Payments to related parties- (1,053,088)
Interest paid(13,989)(76,835)
Income tax paid
- (590)
Net cash outflow from operating activities
17
(162,659)(702,908)
Cash flows from investing activities
Cash was applied to:
Purchase of property, plant and equipment
12
(41,755)(524,750)
14
(1,500)(1,100)
Net cash outflow from investing activities(43,255)(525,850)
Cash flows from financing activities
Cash was received from:
Proceeds from exercise of warrants- 3,160,396
Proceeds from issue of equity to non-controlling interests
7
200,000 290,000
Receipts from related parties- 40,000
Cash was applied to:
Payments to related parties(119,701)(2,109,670)
Payment of share issue costs
- (21,728)
Net cash inflow from financing activities80,299 1,358,998
(125,615)130,240
Foreign currency translation adjustment
13,553 (41,387)
Cash and cash equivalents at the beginning of the year
777,841 688,988
Cash and cash equivalents at the end of the year
665,779 777,841
Purchase of intangible assets
Net increase/(decrease) in cash and cash equivalents
The financial statements are to be read in conjunction with the notes to the financial statements set out on pages 17 to 52.
AFC Group Holdings Limited Annual Report 2018
Page 16

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
1.ACCOUNTING POLICIES
REPORTING ENTITY
1.1Statement of compliance
1.2 Basis of preparation
1.3 New accounting standards adopted
1.4New accounting standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations have been approved but arenot yet
effective and have not been adopted by the Group for the year ended 31 March 2018. These will be applied when they
become mandatory.
AFC Group Holdings Limited (the “Company”) is a company incorporated and domiciled in New Zealand and
registered under the Companies Act 1993. The Company is listed on the Alternative Market of the New Zealand Stock
Exchange (“NZAX”) and the addresses of its registered office and principal place of businessare disclosed in the
Corporate Information section of this report. The Company is an FMC Reporting Entity under the Financial Markets
Conduct Act 2013 and its financial statements comply with the Companies Act 1993 and the Financial Markets
Conduct Act 2013.
The consolidated financial statements of AFC Group Holdings Limited for the year ended 31 March2018 comprise
the Company and its subsidiaries (together referred to as the "Group"). For the purposes of complying with generally
accepted accounting practice in New Zealand ("NZ GAAP"), the Group is a for-profit entity. As a listed company, the
Group is considered a Tier One entity. The principal activity of the Company and the Group is to produce,
manufacture and purchase food, health, and cosmetic products for distribution in the New Zealand, China and Hong
Kong markets. The Group also operates in the winery and vineyard industry.
These financial statements have been prepared in accordance with NZ GAAP. They comply withNew Zealand
equivalents to International Financial Reporting Standards and other applicable Financial Reporting Standards("NZ
IFRS"), as applicable to the Group as a profit oriented entity. These financial statements also comply with International
Financial Reporting Standards ("IFRS").
The consolidated financial statements were approved and authorised for issue by the directors on _______________.
The directors are not able to amend the financial statements after issue.
The consolidated financial statements are prepared on a cost basis except for biological produce which has been
measured at fair value and financial assets which are carried at amortised cost. The preparationof financial
statements in conformity with NZ IFRS and IFRS requires the use of certain critical accounting estimatesand
assumptions. 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 whereassumptions and estimates
are significant to the consolidated financial statements are disclosed in note 1.24.
The consolidated financial statements for the Group are presented in New Zealand dollars ($), which is the functional
currency of all entities within the Group. All financial information has been rounded to the nearest dollar unless
otherwise stated.
No new standards, amendments to standards and interpretations to existing standards which are mandatory for the
first time for year ended 31 March 2018 have been adopted by the Group.
AFC Group Holdings Limited Annual Report 2018
Page 17

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
1.ACCOUNTING POLICIES (continued)
1.4New accounting standards and interpretations not yet adopted (continued)
NZ IFRS 15: Revenue from Contracts with Customers – applicable to the Group from 1 April 2018
NZ IFRS 9 (2014): Financial Instruments – applicable to the Group from 1 April 2018
The International Accounting Standards Board (IASB) issued the completed version of IFRS 9: Financial Instruments
(to replace NZ IAS 39: Financial Instruments: Recognition and Measurement), bringing together theclassification and
measurement, impairment and hedge accounting phases of the IASB’s project to replace IAS 39: Financial
Instruments: Recognition and Measurement and all previous versions of IFRS 9.
Impact: Financial assets and liabilities of the Group are measured at amortised cost with the exception of any foreign
currency forward exchange contracts and options or interest rate swaps which are held atfair value. The classification
and measurement of these will remain the same under NZ IFRS 9. However, for those financialliabilities held at fair
value, the Group will be required to separate the fair value movement that relates to changes in the Group’scredit risk
and record this through Other Comprehensive Income rather than through profit or loss where the remaining change
in value will be recorded. The impairment model in the standard also moves from the previous“incurred loss” model
to an “expected loss” model. Management has assessed the impact of NZIFRS 9 and the main areaof potential
impact is impairment provisioning on trade receivables due to the requirement to use a "expected loss" model. It is
considered that the adoption of NZ IFRS 9 may result in an increase in the Group's provision for doubtful debts
depending on other external factors that will be considered for the forward-looking approach.

NZ IFRS 15 establishes principles for reporting useful information to users of financial statements about the nature,
amount, timing and uncertainty of revenue and cash flows arising from an entity’s contractswith customers. NZ IFRS
15 supersedes NZ IAS 18 Revenue. The core principle of NZ IFRS 15 is that an entity recognises revenue to depict
the transfer of promised goods or services to customers in an amount that reflects theconsideration to which the
entity expects to be entitled to in exchange for those goods or services. An entity will recognise revenue in accordance
with that core principle by applying the following steps: Step 1: Identify the contract(s) with a customer; Step 2: Identify
the performance obligations in the contract; Step 3: Determine the transaction price;Step 4: Allocate the transaction
price to the performance obligations within the contract; Step 5: Recognise revenue when (or as) the entity satisfies a
performance obligation.
There has been an amendment to NZ IFRS 15 which clarifies how to: (a) Identify a performance obligation in a
contract; (b) Determine whether an entity is a principal or an agent, and; (c) Determine whetherrevenue from granting
a licence should be recognised at a point in time or over time. The amendment also provides additional relief to
reduce cost and complexity for an entity when it first applies NZ IFRS 15.
Impact: Management have reviewed the new standard and related guidance and considered the core principle and
steps required to recognise revenue. The Group has performed an assessment of the impact of the changes in NZ
IFRS 15 and does not expect the recognition and measurement of revenue to materially change under the new
standard. The Group's contracts with customers is for the supply of products and revenue is recognised ata point in
time when the sale is completed. The Group does not have any additional performance obligations under these
contracts that would need to be spread over a longer term. For 2018, the Group has assessed that no adjustments
would be required on adopting the standard or recognising revenue in the future.
NZ IFRS 16: Leases – applicable to the Group from 1 April 2019
IFRS 16 requires lessees to account for all leases under a single on-balance sheet model (subject to certain
exemptions) in a similar way to finance leases under IAS 17: Leases. Lessees will be required to recognise a liability
to pay rentals with a corresponding asset, and recognise interest expense and depreciation separately.
Reassessment of certain key considerations (e.g. lease term, variable rents based on an index or rate, discount rate)
by the lessee is required upon certain events. Lessor accounting is substantially the same as lessor accounting under
IAS 17’s dual classification approach.
AFC Group Holdings Limited Annual Report 2018
Page 18

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
1.ACCOUNTING POLICIES (continued)
1.4New accounting standards and interpretations not yet adopted (continued)
1.5Basis of consolidation
1.6Intangible assets and goodwill
Intangible assets comprise goodwill and acquired brands, trademarks and distribution right asset. Goodwill and
brands are indefinite life intangibles subject to annual impairment testing. Brands are not amortised but are tested for
impairment annually and are carried at cost less any accumulated impairment losses.
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share ofthe identifiable
net assets of the acquired subsidiary at the date of acquisition. Goodwill is not amortised but itis tested for impairment
annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carriedat
cost less accumulated impairment losses. Gains and losses on the disposal of an entity include thecarrying amount
of goodwill relating to the entity sold.
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 31
March 2018. Subsidiaries are those entities over which the Group has control. Control is achieved when the Group is
exposed, or has rights, to variable returns from its involvement with the investee and has the abilityto affect those
returns through its power over the investee.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant
facts and circumstances in assessing whether it has power over an investee, including:
- The contractual arrangement with the other vote holders of the investee;
- Rights arising from other contractual arrangements; and
- The Group’s voting rights and potential voting rights.
Profit or loss and each component of other comprehensive income ("OCI") are attributed to the equity holders
of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling
interests having a deficit balance. The financial statements of subsidiaries are prepared for the same reporting period
as the Company, using consistent accounting policies. All intra-group assets and liabilities,equity, income, expenses
and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Consolidation of an investee begins when the Group obtains
control over the investee and ceases when the Group loses control of the investee. Assets, liabilities, income and
expenses of an investee acquired or disposed of during the year are included in the statement of comprehensive
income from the date the Group gains control until the date the Group ceases to control the investee.
Impact: The Group currently has the operating lease commitments as disclosed under note 19,which will fall under
NZ IFRS 16. The Group has assessed the impact of the changes in NZ IFRS 16 on its accounting policyfor the
recognition of leases. The Group will be required to recognise a ‘Right-of-use Asset’ and acorresponding ‘Finance
Liability’ in the statement of financial position for all of the leases. The change will also affect the profile of expenses
(interest and depreciation) and the timing of these expenses relative to the lease payments whichare currently
recognised. Based on the operating lease commitments as at 31 March 2018, the Group will have a 'Right of use
Asset' of $1,217,346 and a corresponding 'Finance Liability' of $1,217,346 to recognise as at 1 April 2019.
The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For
purchases from non-controlling interests, the difference between any consideration paid and the relevant share
acquired of the carrying value of net assets of the investee is recorded in equity. Gains or losses on disposals to non-
controlling interests are also recorded in equity.
AFC Group Holdings Limited Annual Report 2018
Page 19

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
1.ACCOUNTING POLICIES (continued)
1.6Intangible assets and goodwill (continued)
1.7Going concern
1.8Revenue
Sale of goods
Interest income
- Bearing in mind past losses, the Group has restructured its business operations and forecasts for profits to June
2019.
Interest income is accrued on a time apportioned basis, by reference to the principal outstanding and at theeffective
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.
Trademarks are also tested for impairment annually and are carried at cost less any accumulatedamortisation and
impairment losses. Trademarks have a finite useful life of 10 years and the Group amortises these using the straight-
line method over 10 years. Trademarks are recognised in the statement of financial position at cost less accumulated
amortisation.
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.
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 mustalso be met before revenue is
recognised:
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 passedto 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.
- The Directors have forecasts that indicate the Group can manage its working capital requirements and trade
levels for at least 12 months from the date of these financial statements.
- All amounts receivable from trade receivables will be received as per customer agreements and repayment terms.
As at 31 March 2018, the Group is in a positive working capital position of $2,799,495 (2017: $2,826,288) and net
equity of $4,713,867 (2017: $4,986,689). The Group did not raise any equity funding during the year(2017:
$3,138,668) from share placements. The Directors consider that using the going concern basis is appropriate having
reviewed cash flow projections of the Group to June 2019 based on a number of key assumptions and Director’s
intentions including:
- The Group has no external debt and is therefore not subject to any externally imposed capital requirements.
The consolidated financial statements have been prepared on a going concern basis. Management has reasonable
expectation that the Group had adequate resources to continue in operational existence for the foreseeable future.
Distribution right asset is amortised on the straight line basis over the life of the agreement and is also tested for
impairment annually. The distribution right asset is recognised in the statement of financial position at cost less
accumulated amortisation and any impairment losses.
AFC Group Holdings Limited Annual Report 2018
Page 20

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
1.ACCOUNTING POLICIES (continued)
1.8Revenue (continued)
1.9Foreign currency
1.10Inventories
1.11Leases – Operating leases
The Group as lessee
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.
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 inthe ordinary
course of business, less the estimated costs of completion and selling expenses.
Rental Income
Rental Income is recognised as income on a straight-line basis over the term of the lease.
Included within the cost of inventory is the fair value of the grapes (agricultural produce) at the time the grapes are
harvested. At the point of harvest, the harvest of grapes qualify as agricultural produce under NZ IAS 41: Agriculture
and are recorded at fair value at that date. The fair value at balance date becomes thebasis of cost when accounting
for inventories.
Growing Costs : Harvesting of the grape crop is ordinarily performed in late March. Costs incurred in growing the
grapes including any applicable harvest costs, are initially allocated into the cost of inventory as part of the total cost to
acquire and grow the agricultural produce. At the point of harvest, a fair value adjustment is made so that the cost per
tonne is adjusted to fair value in accordance with NZIAS 41: Agriculture and NZIFRS 13 : Fair Value Measurement.
Any difference between cost and fair value is included within the statement of comprehensive income as cost of sales.
Transactions in foreign currencies are translated to the functional currency of the Groupat exchange rates at the
dates of the transactions.
Leases in which significant portion of the risks and rewards of ownership are retained by the lessor areclassified as
operating leases.
Payments made under operating leases are charged to the income statement 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.
The Directors’ assessment of the value is determined after reviewing and comparing the marketprice 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 of the provision written off to profit or loss at 31 March 2018 was $124,885 (31 March 2017:
$241,374).
AFC Group Holdings Limited Annual Report 2018
Page 21

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
1.ACCOUNTING POLICIES (continued)
1.11Leases – Operating leases (continued)
The Group as a lessor
1.12Cash and cash equivalents
1.13Employee benefits
1.14Financial assets
Loans and other receivables
1.15Financial Liabilities
Financial liabilities at amortised cost
Interest and dividends
Related party payables
1.16Equity

Trade and other receivables, and related party receivables have fixed or determinable payments that are notquoted in
an active market and are classified as ‘loans and receivables’.
Loans and receivables are measured at amortised cost using the effective interest methodless impairment. Interest is
not charged on overdue amounts.
Transaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of the
proceeds of the equity instruments to which the costs relate. Transactions costs are the costs that are incurred directly
in connection with the issue of those equity instruments and which would not have been incurred had those
instruments not been issued.
Share capital is classified as equity when the amount represents a residual interest. Incremental costs directly
attributable to the issue of new shares or warrants are shown in equity as a deduction, net of tax, from the proceeds.
Cash and cash equivalents comprise cash on hand and cash in bank.
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs and are
subsequently measured at amortised cost using the effective interest method.
Interest and dividends are classified as expenses or as distributions of profit consistentwith the statement of financial
position classification of the related debt or equity instruments or component parts of compound instruments.
Trade and other payables are initially measured at fair value less transaction costs and subsequently carried at
amortised cost and due to their short term nature they are not discounted. They represent liabilities for goods and
services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group
becomes obliged to make future payments in respect of the purchase of these goods and services.
Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave
when it is probable that settlement will be required and they are capable of being measured reliably. Provisions made
in respect of employee benefits are measured at their nominal values using the remuneration rate expected to apply
at the time of settlement.
Rental Income from operating leases is recognised as income on a straight-line basis over the period of the lease.
AFC Group Holdings Limited Annual Report 2018
Page 22

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
1.ACCOUNTING POLICIES (continued)
1.16Equity (continued)
1.17Goods and services tax (“GST”)
1.18Income tax
1.19Property, plant and equipment
Recognition and measurement
Subsequent costs
Taxation expense comprises both current and deferred tax.
Current tax is the expected tax payable on the taxable income for the financial year, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Income tax is recognised in the Income Statement except when it relates to items that are recognised directly under
other comprehensive income, in which case the income tax is recognised in other comprehensive income.
Deferred tax is accounted for using the balance sheet method, providing for temporary differences between the
carrying values of assets and liabilities in the financial statements and the corresponding tax base of these items.
Deferred tax is determined using tax rates and regulations enacted at the balance sheet date in New Zealand, which
is the jurisdiction the Group operates and generates taxable income in.
Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available
against which deductible temporary differences or unused tax losses and tax offsets can be utilised.
Items of property, plant and equipment are measured at cost less accumulated depreciation and anyimpairment
losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. In the event thatsettlement of all
or part of the purchase consideration is deferred, cost is determined by discountingthe amounts payable in the future
to their present value as at the date of acquisition.
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 equipmentare recognised in the profit
and loss component of the consolidated statement of comprehensive income as incurred.
When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly
attributable costs is recognised as a deduction from equity. Repurchased shares are classified as treasury shares.
When treasury shares are sold or reissued subsequently, the amount received is recognisedas an increase in equity
and the resulting surplus or deficit on the transaction is presented within share premium.
Revenue, expenses, assets and liabilities are recognised net of the amount of goods and services tax(GST), except
for receivables and payables, which are recognised inclusive of GST.
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.
AFC Group Holdings Limited Annual Report 2018
Page 23

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
1.ACCOUNTING POLICIES (continued)
1.19Property, plant and equipment
Depreciation
0% - 6% Diminishing Value
40% - 50% Diminishing value
20% Diminishing value
10% - 40% Diminishing Value
20% - 30% Diminishing Value
8% - 67% Diminishing Value
7.5% Diminishing Value
1.20 Biological Assets
1.21Impairment of assets
Financial assets
Biological assets consist of grape fruit bunches. The Group grows and purchases grapesto use in the production of
wine, as part of normal operations. Grapes are normally harvested between March and May eachyear. The grapes
harvested and purchased are adjusted to fair value at the point of harvest after taking into consideration of various
market factors, as well as reviewing the district average pricing report for grapes of similar quality and variety. Any
adjustment to bring the cost of sales to fair value is recognised in inventory and cost of sales.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s
carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the
exception of loan and trade receivables where the carrying amount is reduced through the use of an allowance
account.
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. The useful lives and residual values are reviewed annually.
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:
Computer Equipment
Leasehold Improvements
Plant & Equipment
Land & Land Improvements
Buildings
Grape Vines / Bearer Plants
not depreciated
Financial assets are impaired where there is objective evidence, that as a result of one or more events that occurred
after the initial recognition of the financial assets, the estimated future cash flows of the investment have been
impacted.
Motor Vehicles
Fixture and Fittings and Office Equipment
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.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognised, the previously recognised impairmentloss is reversed
through profit or loss to the extent the carrying amount of the investment at the date theimpairment is reversed does
not exceed what the amortised cost would have been had the impairment not been recognised.
When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of
amounts previously written off are credited against the allowance account. Changes in the carrying amount of the
allowance account are recognised in profit or loss.
AFC Group Holdings Limited Annual Report 2018
Page 24

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
1.ACCOUNTING POLICIES (continued)
1.21Impairment of assets (continued)
Non-financial assets
1.22Earnings per share
1.23Cash Flows
The following are the definitions used in the consolidated statement of cash flows:
1.24 Critical accounting judgments and key sources of estimation uncertainty
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.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholdersand the weighted
average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which
comprises of warrants.
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.
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 Company by the weighted average number of
ordinary shares outstanding during the period.
Financing activities are activities that result in changes in the size and composition of the contributed equity and
borrowings of the Group.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre tax discount rate thatreflects current
market assessments of the time value of money and the risks specific to the asset for which the estimates of future
cash flows have not been adjusted. If the recoverable amount of an asset is estimated tobe less than its carrying
amount, the carrying value is reduced to the recoverable amount. An impairment loss is recognised in profit or loss
immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as
a revaluation decrease.
Investing activities are the acquisition and disposal of long-term assets not included in cash and cash equivalents.
At each reporting date the Group reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such impairment exists, the
recoverable amount of the asset is estimated to establish the impairment loss, (if any). Goodwill is tested for
impairment annually and whenever there is an indication that the asset may be impaired an adjustment is made andis
not subsequently reversed.
All impairment losses are immediately recognised through profit and loss.
AFC Group Holdings Limited Annual Report 2018
Page 25

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
1.24 Critical accounting judgments and key sources of estimation uncertainty (continued)
Recognition of provision for deferred tax assets
Provision for Doubtful Debts
Provision for Inventory
Impairment of Intangible Assets
2.REVENUE
20182017
Operating revenue
NZ$NZ$
Sale of goods
6,606,888 12,540,658
Rendering of services - distribution fees
(100,000)200,000
Total operating revenue
6,506,888 12,740,658
Other Income
57,482 33,097
Rental Income
13,000 10,900
Gain on forgiveness of debt
276,991 -
347,473 43,997
Total Income
6,854,361 12,784,655
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.
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.
The Group's assessment of provisions for inventory obsolescence and net realisable value involves making estimates
and judgements in relation to future selling prices. The Group considers a wide range offactors including historical
data, current trends, recent sales data and product information from buyers as part of the process to determine the
appropriate value of these provisions.
For the provision for doubtful debts, trade receivables are assessed to determine whether there is anyobjective
evidence that an impairment has been incurred but not yet identified. This assessment involves making estimates and
judgements regarding the collectability of trade receivables and includes considering evidence such as significant
financial difficulties of the debtor, probability that the debtor will enter bankruptcy and the default or delay in payments
being made to the Group.
The Group has not recognised a deferred tax asset (2017: had not recognised a deferred tax asset) onits statement
of financial position as at reporting date. Significant judgement is required in determining ifthe utilisation of deferred
assets is probable. The recognition of deferred tax assets is based upon whether it is more likely than not that
sufficient and suitable taxable profits will be available in the future against which the reversal of temporary differences
can be deducted. To determine the future taxable profits, reference is made to the latest forecasts of future earnings
of the Group. Where the temporary differences are related to losses, relevant tax law isconsidered to determine the
availability of the losses to offset against the future taxable profits (refer note 4).
The carrying value of intangible assets is assessed at least annually to ensure that it is not impaired. Performing this
assessment generally requires management to estimate future cash flows to be generated by the relevant investment
or cash-generating unit, which entails making judgements, including the expected rate of growth of revenues, margins
expected to be achieved and the appropriate discount rate to apply when valuing future cash flows (refer note 14).
AFC Group Holdings Limited Annual Report 2018
Page 26

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
2.REVENUE (continued)
20182017
Finance Income:NZ$NZ$
Interest received on bank account
247
1,559
Interest received from related parties
18189
-
Other Interest received
995
1,221
1,4312,780
Gain on forgiveness of debt
Distribution Fees
3.EXPENSES
20182017
NoteNZ$NZ$
Selling and Distribution Expenses
Advertising
136,31847,837
Business Events
74,64929,914
Freight and Courier
24,32412,262
Rent
38,44832,496
Salaries and Sales Commission
225,692163,795
Administration Expenses
Accounting and Consulting
152,575173,272
Amortisation of Intangible Assets
14
75,992151,608
Depreciation
12
120,87674,410
Directors Fees
18
114,667107,333
Entertainment
48,14223,227
Impairment of Intangible Assets
14
92,416548,154
Insurance
23,26521,877
Kiwisaver Contributions
15,3705,415
Legal Fees
35,8935,508
Management Fees
18
14,667242,334
Rent
134,973130,417
Salaries
554,253278,798
NZX costs
12,05052,445
Travel
68,90184,258
Profit / (Loss) before income tax has been determined after charging:
The Group had a loan from NZ Silveray Limited for the deferred consideration of theNDG Distribution Right
Asset (Note 14) with a balance of $276,991 as at 30 September 2017. NZ Silveray Limited agreed to write-off
and forgive the amount outstanding in September 2017 and this resulted in income for the gainon forgiveness
of debt of $276,991 for the year ended 31 March 2018 (2017: $nil).
Due to a change in circumstances and the distribution agreement ceasing, the Group issueda credit note to
Guangdong Farmside International Trading Co. Limited (formerly known as Guangdong Farmside Dairy
Development Limited) in September 2017. The total for the credit note issued was $200,000 and this related to
the monthly distribution fees revenue recognised in both the 2017 and 2018 year (from October 2016 to 30
September 2017).
AFC Group Holdings Limited Annual Report 2018
Page 27

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
3.EXPENSES (continued)
20182017
NoteNZ$NZ$
Auditors' remuneration
Audit of financial statements
Audit of 2016 financial statements- 58,853
Audit of 2017 financial statements45,000 167,200
Audit of 2018 financial statements187,662 -
Other services
Tax compliance fees
370 -
Wine Standards Management Plan audit
1,610 -
Total fees paid to auditors
234,642 226,053
The auditors for 2018 were William Buck Audit (NZ) Limited (2017: Staples Rodway)
Finance costs:
Interest paid on borrowings from related parties
18
(10,315)(61,643)
18
(3,010)(14,713)
Other Interest paid(664)(479)
(13,989)(76,835)
4. INCOME TAX EXPENSE
4.1.Components of Income tax expense
20182017
NZ$NZ$
- -
- -
Income tax expense
- -
Reconciliation of effective tax rate
Profit / (loss) before income tax
(472,822) (1,323,784)
(132,390)(370,660)
Expected income expense / (benefit)
(132,390)(370,660)
Adjustments
Non deductible expenses
23,259 142,111
Losses Carried Forward
100,272 88,932
Income tax expense
- -
Current year income tax charge
Deferred tax movements
Income tax expense/(benefit) calculated at 28%
Deferred tax movements relating to origination and reversal of
temporary differences
8,859
139,617
The tax rate used for the reconciliation above is the corporate tax rate of 28% (2017: 28%) payable by New
Zealand corporate entities on taxable profits under New Zealand tax law.
Finance charge on deferred consideration for Distribution Right Asset
AFC Group Holdings Limited Annual Report 2018
Page 28

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
4. INCOME TAX EXPENSE (continued)
4.2 Deferred tax assets and liabilities
20182017
NZ$NZ$
Deferred tax assets/(liabilities) arising from the following:
Unused tax losses
271,634
171,362
Provisions and Accruals
95,180 133,407
Distribution rights asset
- (47,086)
Tax benefits not recognised
(366,814)(257,683)
Deferred tax assets as at 31 March 2018
- -
Unused
tax
lossesAccruals
Distribution
rights asset
Deferred tax
not
recognised
Total
NZ$NZ$
Balance as at 1 April 2016
82,43042,149(95,444)(29,135)-
Movements
88,932
91,258
48,358
(228,548)
-
Balance as at 31 March 2017
171,362133,407
(47,086)(257,683)
-
-
Current year movements
100,272
(38,227)47,086(109,131)
-
Balance at 31 March 2018
271,63495,180
- (366,814)-
5.
EARNINGS PER SHARE
20182017
NZ$NZ$
Basic earnings per share
Profit / (Loss) after taxation(472,822)(1,323,784)
3,664,253,194 3,310,091,845
Basic earnings per share(0.00013)(0.00040)
The above amounts are tax effected balances. Obtaining the benefits of the deferred tax assets is dependent
upon deriving sufficient assessable income and the Group have assessed that there will be sufficient taxable
income with which to utilise the asset based on the forecasts provided.
Losses can be carried forward indefinitely under New Zealand tax law (assuming shareholder continuity
requirements are met and approval of the Inland Revenue Department is obtained). Losses incurred prior to
the change in shareholder control in 2016 were forfeited at the time the shareholding changed and are
therefore not available for future use.
The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per
share are as follows:
The Group has not recognised the deferred tax asset of $366,814 on its Statement of Financial Position as at
reporting date. In deciding whether to recognise the deferred tax assets, the Group has determined if the
utilisation of deferred assets is probable and whether it is likely that sufficient and suitable taxable profits will
be available in the future against which the reversal of temporary differences can be deducted.
Weighted average number ordinary shares on issue
AFC Group Holdings Limited Annual Report 2018
Page 29

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
4. EARNINGS PER SHARE (continued)
Diluted earnings per share
Profit / (Loss) after taxation(472,822)(1,323,784)
3,664,253,194 3,310,091,845
Weighted average number warrants not exercised- 1,902,871,361
Diluted earnings per share(0.00013)(0.00025)
6.AUTHORISED AND ISSUED SHARE CAPITAL
Shares
IssuedGroup
No.NZ$
6.1Ordinary shares
Balance at 1 April 2016
2,084,080,173 25,540,909
Movement for 2017 financial year
Ordinary shares authorised and issued:
Shares issued at 0.2 cents per share
1,580,173,021 3,160,396
Share issue expenses
- (21,728)
Ordinary shares on issue at 31 March 2017
3,664,253,194 28,679,577
Treasury shares
(37,082)(74)
3,664,216,112 28,679,503
Movement for 2018 financial year
Ordinary shares authorised and issued
- -
Ordinary shares on issue at 31 March 2018
3,664,253,194 28,679,577
Treasury shares
(37,082)(74)
3,664,216,112 28,679,503
All ordinary shares issued are fully paid. All ordinary shares rank equally with one vote attached to each fully
paid ordinary share and have equal dividend rights and no par value.
Treasury shares are those shares acquired by the company from shareholders who exercised theirminority
buy back rights at the time shares were issued to NZ Silveray Group Limited. These shares are held by the
company until the directors resolve to reissue the shares or to cancel the shares. At balance date, the
company held 37,082 treasury shares which were acquired during 2016.
Weighted average number ordinary shares on issue
Ordinary shares on issue at 31 March 2017 excluding
treasury shares
Ordinary shares on issue at 31 March 2018 excluding
treasury shares
There have been no other transactions involving ordinary shares or potential ordinary shares between the
reporting date and the date of authorisation of these financial statements.
AFC Group Holdings Limited Annual Report 2018
Page 30

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
6.AUTHORISED AND ISSUED SHARE CAPITAL (continued)
6.2Warrants
Shares
IssuedGroup
No.NZ$
Movement for 2017 financial year
Balance as at 1 April 2016
1,784,080,173
-
Warrants exercised during the year
(1,182,849)(2,366)
Balance as at 31 March 2017 (April 2015 warrants)
1,782,897,324 (2,366)
May 2016 Warrants
Warrants issued at no cost
2,085,263,022 -
Warrants exercised
(1,578,990,172)(3,157,980)
Warrants forfeited - expired
(506,272,850)-
Balance as at 31 March 2017 (May 2016 warrants)
- (3,157,980)
Balance as at 31 March 2017
1,782,897,324 -
Movement for 2018 financial year
Balance as at 1 April 2017
1,782,897,324
-
Warrants forfeited/expired during the year
(1,782,897,324)-
Balance as at 31 March 2018
- -
7
NON-CONTROLLING INTEREST
AFC Longview Limited
April 2015 Warrants
On 26 February 2016 AFC Longview Limited was recapitalised by the issue of 2,399,999 shares of $1 each
for cash. 1,223,999 shares were subscribed by AFC Group Holdings Limited and a non-controlling interest
subscribed to the remaining 1,176,000 shares (49% of the equity).
No dividends have been declared or paid for the year ended 31 March 2018 (2017: $nil)
There are non-controlling interests in AFC Longview Limited and AFC Biotechnology Manufacture Co Limited.
The balance of 1,782,897,324 warrants as at 1 April 2017 related to the April 2015 warrants issued by the
company at $nil per warrant to all existing shareholders on the basis of one (1) warrant for each share held at
that date. Each warrant being a warrant to subscribe for one (1) ordinary share in the Company at an exercise
price of NZ 0.2 cents each payable in cash on exercise, and to be exercisable at any time up to 31 December
2017. This balance was forfeited on 31 December 2017 as under the terms of the warrant issue,warrants not
exercised by 31 December 2017 lapsed and all rights in regards to them expired. No other warrants were
issued during the year.
AFC Group Holdings Limited Annual Report 2018
Page 31

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
AFC Biotechnology Manufacture Co Limited
Both entities are incorporated and domiciled in New Zealand.
20182017
20182017
NZ$NZ$NZ$NZ$
Summarised statement of financial position
Current assets1,895,927 271,485
665,860 1,060,635
Current liabilities1,218,481 310,621
833,607 813,686
Current net assets/(liabilities)677,446 (39,136)
(167,747)246,949
Non-current assets305,408 343,187
1,493,413 1,520,816
Non-current net assets305,408 343,187
1,493,413 1,520,816
Net assets982,854 304,051
1,325,666 1,767,765
501,256 156,185 676,090 901,560
481,598 147,866 649,576 866,205
Summarised statement of comprehensive income
Revenue2,034,501 -
389,836 1,247,806
Profit/(Loss) for the year318,803 (335,949)
(442,099)(581,524)
Other comprehensive income- -
- -
Total comprehensive income/(loss)
318,803 (335,949)(442,099)(581,524)
162,590 (193,816)
(225,470)(296,577)
156,213 (142,133)
(216,629)(284,947)
Summarised cash flows
Cash flows from operating activities(1,091,217)(311,970)
235,112
(238,763)
Cash flows from investing activities(19,588)(355,035)
(9,504)
(82,016)
Cash flows from financing activities1,121,656 683,590
(65,266)
312,667
10,851 16,585 160,342 (8,112)
AFC Biotechnology Manufacture Co Limited was incorporated in July 2016 with 100 ordinary shares issued at
$10,000 for each share. For the 2018 year, AFC Group Holdings Limited held 51% of the sharesand non
controlling interest having 49% shareholding.
The non-controlling interest in AFC Longview Limited and AFC Biotechnology Manufacture Co Limitedare set
out below. The amounts stated are before any inter-company eliminations.
Profit/(Loss) allocated to the
equity holders of the parent
Profit/(Loss) allocated to Non-
Controlling Interest
Net increase/(decrease) in cash
and cash equivalents
AFC Longview Limited
AFC Biotechnology
Manufacture Co Limited
Net Assets attributed to the equity holders
of the parent
Net Assets attributed to non-controlling
interest
AFC Group Holdings Limited Annual Report 2018
Page 32

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
7
NON-CONTROLLING INTEREST (continued)
AFC Longview Limited (442,099)
(216,629)(225,470)
AFC Biotechnology Manufacture Co Limited 318,803
156,213 162,590
Total for 31 March 2018(123,296)(60,416)(62,880)
AFC Longview Limited (581,524)
(284,947)(296,577)
AFC Biotechnology Manufacture Co Limited (335,949)
(142,133)(193,816)
(917,473)(427,080)(490,393)
20182017
NZ$NZ$
AFC Longview Limited
Opening Balance 1 April 2017
866,205 1,151,152
Payment received for equity issued to non-controlling interest
- -
Profit and total comprehensive income attributed to non-controlling interest
(216,629)
(284,947)
649,576
866,205
AFC Biotechnology Manufacture Co Limited
Opening Balance 1 April 2017
147,866 -
Payment received for equity issued to non-controlling interest
200,000
290,000
Profit and total comprehensive income attributed to non-controlling interest
156,213
(142,134)
504,079 147,866
Total effect of non-controlling interest
1,153,655 1,014,071
8.CASH AND CASH EQUIVALENTS
20182017
NZ$NZ$
Cash at bank and on hand665,779 777,841
Total cash and cash equivalents
665,779 777,841
31 March 2018
31 March 2017
During the year, $200,000 was received from non-controlling interest in AFC Biotechnology Manuafcture Co
Limited for share capital that was unpaid as at 31 March 2017.
The effect on the profit and loss attributable to non-controlling interest and to the equity holders of the parent
of AFC Longview Limited and AFC Biotechnology Manufacture Co Limited is summarised as follows:
The effect on the equity attributable to the owners of AFC Longview Limited and AFC Biotechnology
Manufacture Co Limited is summarised as follows:
Profit/(Loss)
allocated to
Non-Controlling
Interest
Profit/(loss)
allocated to the
equity holders of
the parent
Total
Comprehensiv
e income/(loss)
for the year
AFC Group Holdings Limited Annual Report 2018
Page 33

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
8.CASH AND CASH EQUIVALENTS (continued)
9.TRADE AND RELATED PARTY RECEIVABLES
20182017
Note
NZ$NZ$
Trade receivables490,615 764,530
Allowance for impairment losses(35,085)(20,411)
Total trade receivables
455,530 744,119
Related party receivables18
843,231 1,017,353
Total trade and related party receivables
1,298,761 1,761,472
Analysis of trade and related party receivables
Current
648,320
728,083
Past due 0-30
230,430
92,010
Past due 31-90
132,437
766,938
Past due more than 90
287,574
174,441
1,298,761 1,761,472
20182017
NZ$NZ$
Movement in the allowance for impairment losses
Opening Balance 1 April 2017
20,411 20,411
14,674 -
35,085 20,411
The carrying amount of cash and cash equivalents approximates their fair value. Cash at bank earns interest
at floating rates on daily deposit balances.
Increase in provision
Trade debtors are non-interest bearing and receipt is normally on 30 days terms. Related party receivables
are non-interest bearing and repayable on demand as disclosed in note 18.
The directors consider that there is no material difference between the carrying value and fair value of trade
debtors and related party receivables. The Group's management considers that all financial assetsthat are
not impaired or past due for each of the reporting dates under review are of good credit quality. Thedirectors
also consider that the receivables that are past due and not impaired are fully recoverable.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect
of trade and related party receivables. The main component of this allowance is a specific loss component
that relates to individually significant exposures, and a collective loss component established for groups of
similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance
is determined based on historical data of payment statistics for similar financial assets.
Closing Balance 31 March 2018
AFC Group Holdings Limited Annual Report 2018
Page 34

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
10.PREPAYMENTS AND OTHER CURRENT ASSETS
20182017
NZ$NZ$
Advances to suppliers
131,049
22,408
Prepayment of expenses
32,273 115,642
Taxation receivable
40,987 41,504
GST receivable
109,484 395,311
313,793 574,865
11.INVENTORIES
20182017
NZ$NZ$
Work in progress
54,545 237,071
Finished goods
1,066,956 1,433,775
Inventory in Transit
312,016 -
Provision for inventory
(124,885)(241,374)
Total Inventories
1,308,632 1,429,472
Provision for closing stock
(241,374)-
241,374 -
(124,885)(241,374)
(124,885)(241,374)
The fair value of agricultural produce as at the point of harvest was $27,219 (2017: $35,316).A fair value
loss of $194,213 (2017: $126,375) was recorded during the year within cost of sales.
Reversal of opening provision for inventory
Inventory of $124,885 has been expensed and written down to net realisable value/lower of cost (31 March
2017: $241,374). There were reversals of $241,374 for the provision for stock during the year (2017:$nil). For
2017, a provision of $105,368 was inlcuded for DD masks that were expected to be given away as samples.
These mask were sold during 2018 and a provision for these stock items is no longer required.
Assessing write downs for inventory obsolescence and net realisable value involves making estimates and
judgements in relation to future selling prices between the most recent store stock counts and reporting date.
Charged to profit and loss
Closing provision for closing stock
Opening provision for inventory
Prepayment of inventory is required to secure the production of specific inventory items produced to the
company's specification.
AFC Group Holdings Limited Annual Report 2018
Page 35

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
12.
PROPERTY, PLANT AND EQUIPMENT
Land Buildings
Land
Improvements
Plant &
Equipment
Motor
Vehicles
Computer
Equipment
Fixture &
Fittings,
Office
Equipment
Bearer
Plants -
Grape Vines
Total
NZ$NZ$NZ$NZ$NZ$NZ$NZ$NZ$NZ$
Year ended 31 March 2017
Cost
Cost as at 1 April 2016320,000 855,000 50,000 146,169 72,181 1,027 21,299 80,000
1,545,676
Additions - 46,166 - 280,627 22,609 12,676 162,672 - 524,750
Cost as at 31 March 2017320,000 901,166 50,000 426,796 94,790 13,703 183,971 80,000 2,070,426
Accumulated Depreciation
- - - (1,485)(3,037)(43)(207)- (4,772)
- (231)- (26,662) (18,908)(4,525)(18,084)(6,000)(74,410)
- (231)- (28,147) (21,945)(4,568)(18,291)(6,000)(79,182)
Carrying Amount
Cost 320,000 901,166 50,000 426,796 94,790 13,703 183,971 80,000
2,070,426
- (231)- (28,147) (21,945)(4,568)(18,291)(6,000)(79,182)
320,000 900,935 50,000 398,649 72,845 9,135 165,680 74,000 1,991,244
Year ended 31 March 2018
Cost
Cost as at 1 April 2017320,000 901,166 50,000 426,796 94,790 13,703 183,971 80,000
2,070,426
Additions - - - 12,790 3,954 4,569 20,442 - 41,755
Cost as at 31 March 2018320,000 901,166 50,000 439,586 98,744 18,272 204,413 80,000 2,112,181
Accumulated Depreciation
- (231)- (28,147) (21,945)(4,568)(18,291)(6,000)(79,182)
- (2,756)- (62,695) (18,068)(5,947)(25,860)(5,550)(120,876)
- (2,987)- (90,842) (40,013)(10,515)(44,151)(11,550)(200,058)
Carrying Amount
Cost 320,000 901,166 50,000 439,586 98,744 18,272 204,413 80,000
2,112,181
- (2,987)- (90,842) (40,013)(10,515)(44,151)(11,550)(200,058)
320,000 898,179 50,000 348,744 58,731 7,757 160,262 68,450 1,912,123
Accumulated Depreciation
at 1 April 2016
Accumulated
Depreciation at 31 March
2017
Accumulated Depreciation
Carrying Amount 31
March 2017
Depreciation charge for the
year
Bearer plants consist of grape vines on our vineyards here in New Zealand. As at 31 March 2018, the Group had grape vines planted on
4.75 productive hectares of land (2017: 4.75 hectares). The Group also leases vineyard land which is just under 5 hectares (2017: 5
hectares).
Accumulated Depreciation
Carrying Amount 31
March 2018
Accumulated Depreciation
at 1 April 2017
Depreciation charge for the
year
Accumulated
Depreciation at 31 March
2018
AFC Group Holdings Limited Annual Report 2018
Page 36

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
13. BIOLOGICAL ASSETS

Biological assets comprise the grape fruit bunches growing on the grape vines.
20182017
Carrying value of biological assets
NZ$NZ$
- -
Movements in Period
Additions at fair value
27,219 35,316
Transfer of harvested fresh fruit bunches to inventory
(27,219)(35,316)
- -
14.INTANGIBLE ASSETS
GoodwillBrandsTrademarks
Distribution
Right Asset Total
NZ$NZ$NZ$NZ$NZ$
Year ended 31 March 2017
Cost
Cost as at 1 April 2016
495,785 31,161 - 454,467
981,413
Additions- - 1,100 - 1,100
Cost as at 31 March 2017495,785 31,161 1,100 454,467 982,513
-
Accumulated Amortisation -
- - - (113,594)(113,594)
- - (109)(151,499)(151,608)
- - (109)(265,093)(265,202)
The Company grows grapes to use in the production of wine, as part of normal operations. Vineyards are
located in Whangarei, New Zealand. Grapes are harvested between March and May each year.
During the year ended 31 March 2018, the Group harvested grapes equal to 13,050 litres of wine (2017:
13,345 litres). Of this amount the Company purchased 4,700 litres from independent third party growers.The
grapes harvested are adjusted to fair value at the point of harvest and any adjustment to bring thecost of
sales to fair value is recognised in inventory and cost of sales.
The Group is exposed to financial risks in respect of agricultural activity. The agricultural activity of the
Company consists of the management of vineyards to produce grapes for use in the productionof wine. The
primary financial risk associated with this activity occurs due to the length of time between expending cash
on the purchase or planting and maintenance of grape vines and on harvesting grapes, and ultimately
receiving cash from the sale of wine to third parties. The Company's strategy to manage thisfinancial risk is
to actively review and manage its working capital requirements. The quality and quantity of the grape harvest
is dependent on seasonal climatic factors such as rainfall, sunshine and temperature, including frosts.
Opening Balance
Accumulated amortisation
as at 31 March 2017
Accumulated amortisation at 1
April 2016
Amortisation for the year
Balance as at 31 March 2018
Refer to the segment reporting disclosure in Note 22 for details on the vineyard and winery.
AFC Group Holdings Limited Annual Report 2018
Page 37

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
14.INTANGIBLE ASSETS (continued)
GoodwillBrandsTrademarks
Distribution
Right Asset Total
NZ$NZ$NZ$NZ$NZ$
Accumulated Impairment-
- - - - -
(495,785)(31,161)- (21,208)(548,154)
(495,785)(31,161)- (21,208)(548,154)
Carrying Amount
Cost
495,785 31,161 1,100 454,467
982,513
- - (109)(265,093)(265,202)
(495,785)(31,161)- (21,208)(548,154)
- - 991 168,166 169,157
Year ended 31 March 2018
Cost
Cost as at 1 April 2017
495,785 31,161 1,100 454,467
982,513
Additions- - 1,500 - 1,500
Cost as at 31 March 2018495,785 31,161 2,600 454,467 984,013
-
Accumulated Amortisation -
- - (109)(265,093)(265,202)
- - (242)(75,750)(75,992)
- - (351)(340,843)(341,194)
Accumulated Impairment-
(495,785)(31,161)- (21,208)(548,154)
- - - (92,416)(92,416)
(495,785)(31,161)- (113,624)(640,570)
Carrying Amount
Cost
495,785 31,161 2,600 454,467
984,013
- - (351)(340,843)(341,194)
(495,785)(31,161)- (113,624)(640,570)
- - 2,249 - 2,249
The distribution right asset was allocated to National Dairy Group Limited.
The goodwill and brands were allocated to the Longview Estate winery and vineyard and have a$nil carrying
balance as at 31 March 2018 (2017: $nil).
Accumulated amortisation at 1
April 2017
Amortisation for the year
Accumulated amortisation
as at 31 March 2018
Accumulated Impairment at 1
April 2017
Impairment for the year
Accumulated impairment
Accumulated amortisation
Carrying Amount 31 March
2018
Accumulated impairment as
at 31 March 2018
Carrying Amount 31 March
2017
Accumulated amortisation
Accumulated impairment
Accumulated Impairment at 1
April 2016
Impairment for the year
Accumulated impairment as
at 31 March 2017
AFC Group Holdings Limited Annual Report 2018
Page 38

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
14.INTANGIBLE ASSETS (continued)
Goodwill and brands
Distribution right asset
15.TRADE AND OTHER PAYABLES AND ACCRUALS
20182017
NoteNZ$NZ$
Trade creditors
155,762 694,208
Accruals
203,045 217,037
Related party payables18
391,034 577,737
Other payables
37,629 228,380
787,470 1,717,362
The amortisation charge of $75,992 and impairment charge of $92,416 are recognised under administration
expenses in the Statement of Comprehensive Income.
The normal trade credit terms granted to the Group range from 30 to 90 days. The trade creditorsare
unsecured and non-interest bearing. The carrying amount disclosed above is a reasonable approximation of
fair value.
The value of the acquired brand that was acquired as part of the Longview Estate was determined by Grant
Thornton, Chartered Accountants under the relief of royalty method at the time of acquisition 1 March 2016.
A royalty base was determined by reference to the amount for which the asset would be acquired inan arm's
length transaction securing the same rights, net of any cost to maintain the asset. The fair value was the net
present value of theoretical royalties that was calculated by applying a royalty rate to the royalty base.
Goodwill on acquisition was calculated after comparing the net assets acquired at fair value to the
consideration paid for the Longview Estate. The value of goodwill acquired was determined afterthe
Longview state assets were valued by Logan Stone, registered valuers and the brands were valued by Grant
Thornton and compared to the purchase price paid.
Goodwill and brands were fully impaired last year and have a $nil carrying balance as at 31 March 2018.
Management recognised an impairment charge of $494,845 at 31 March 2017 against goodwill, with a final
carrying value of $nil and an impairment charge of $31,161 against brands with a final carrying value of $nil
as at 31 March 2017. The impairment charge was recorded within administration expenses in the Statement
of Comprehensive Income.
On 8 December 2015, AFC acquired a Distribution Right Asset owned by National Dairy Group Limited from
the Company's major shareholder, NZ Silveray Group Limited for $480,000. At the date of acquisition NDG
had not traded, however was in the process of registering trademarks for the "morning" brand. The
distribution agreement with Guangdong entitle the Group to exclusive distribution rights of this brand for a
consideration of $200,000 a year commencing 1 July 2015 for a 3 year period.
During the year, the Group initially recognised an amortisation charge of $75,750 (2017: $151,499) against
the Distribution Right Asset under the amortisation policy. The distribution right asset had suffered
impairment as a result of the distribution right agreement with Guangdong ceasing trading during the year. A
impairment adjustment of $92,416 resulted in the total amortisation and impairment charge of $168,166 to be
recorded within administration expenses in the Statement of Comprehensive Income. The carrying value of
the Distribution Right Asset was $nil as at 31 March 2018 (2017: $168,166)
AFC Group Holdings Limited Annual Report 2018
Page 39

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
15.TRADE AND OTHER PAYABLES AND ACCRUALS (continued)
16.BORROWINGS
17.
NET CASH OUTFLOW FROM OPERATING ACTIVITIES
The reconciliation of net profit / (loss) with cash outflow from operations is as follows:
20182017
NZ$NZ$
Profit/(loss) before taxation(472,822)(1,323,784)
Adjustment for non cash items
Depreciation of property, plant and equipment120,876 74,410
Amortisation and impairment of intangible assets168,408 699,762
Fair value adjustment on agricultural produce194,213 126,375
(276,991)-
(13,553)41,387
Adjustment for movements in working capital items
Trade and other receivables121,463 (228,253)
Inventories(73,373)(658,923)
Prepayments and other current assets261,072 639,701
Related party receivable341,250 (803,433)
Trade and other payables(910,316)973,882
Related party payables377,114 (249,655)
Taxation receivable- 5,623
Net cash outflow from operating activities(162,659)(702,908)
18.RELATED PARTIES
Related Parties:
Almond Draw Limited
Australasian International Group Limited
Bo Xian CaoDirector of company and subsidiary
Company associated with Garth Ward, CFO of
Investment Research Group Limited and associated
with management of AFC.
Company associated to company's major shareholder
Related party transactions have arisen where a person(s) has control or significant influence overthe
reporting entity or where two entities are controlled or jointly controlled by a person(s)that has control or
significant influence over the reporting entity.
Related party payables are unsecured and repayable on demand. The related party payables except for NZ
Silveray Limited are non-interest bearing. For NZ Silveray Limited, interest is charged at 7.04% for amounts
advanced up to $600,000 and at 8.32% for amounts advanced over $600,000.
Foreign exchange differences
The Group has no other long-term borrowings (2017: $nil)
Reconciliation of net profit / (loss) with cash outflow from
operations
Forgiveness of debt
AFC Group Holdings Limited Annual Report 2018
Page 40

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
18.RELATED PARTIES (continued)
Related Parties:
E Way Holdings Group LimitedCompany associated with director, Mr Bo Xian Cao
E Way Trading LimitedCompany associated with director, Mr Bo Xian Cao
Hao Long
Company associated with director Mr Hao Long
Investment Research Group Limited
Lin FangShareholder of subsidiary
May Sun Trading Limited
Company associated with director, Mr Bo Xian Cao
NZ Silveray Group LimitedCompany's major shareholder
Qiang LiDirector of subsidiary and shareholder
Super Life NZ Ltd
Yang XiaDirector of company and subsidiary
Ying Ying Trading LimitedCompany associated to Lin Fang, a shareholder
Yinrui Shen Director of subsidiary and shareholder
Related party balances
The following balances were held with related parties at year end.
31 March31 March
20182017
$$
Related Party Receivables
Australasian International Group LimitedSale of products121,608 536,501
648,800 456,434
NZ Silveray Group LimitedSale of products- 24,055
Other related partiesAdvances- 363
Super Life NZ Limited Sale of products72,823 -
843,231 1,017,353
Guangdong Sanjiang Industry Development LimitedCompany associated to company's major shareholder
Guangdong Farmside International Trading Co.
Limited (Previously Guangdong Farmside Dairy
Development Limited)
Company associated to company's major shareholder
Company associated to company's major shareholder
Guangdong Silver Fern Network Technology Co.
Limited
Company associated to company's major shareholder
Guangdong Yinrui Investment & Management
Company
Company associated to company's major shareholder
Director of company and subsidiary, senior employee of AFC,
director of NZ Silveray Group Limited
Howard & Co Chartered Accountants Limited
Company associated with previous director Mr Brent King
Company associated with Lin Fang, director of subsidiary
New Zealand Asia-Pacific Cultural
Exchange Centre Limited
Guangdong Farmside International Trading Co.
Limited
Sale of products and refund
of Distribution Fees
Federation of New Zealand Shenzhen Societies Inc.Company associated to company's major shareholder
NZ Guangdong Business Development
Corporation Limited
Company associated to company's major shareholder
Nature of Transactions
AFC Group Holdings Limited Annual Report 2018
Page 41

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
18.RELATED PARTIES (continued)
Year ended Year ended
31 March
2018
31 March
2017
Related party transactions
$$
Related Party Payables
Almond Draw LimitedServices- 8,937
Australasian International Group Limited
380,718 -
3,833 -
- 167,126
1,500 -
NZ Silveray Group Limited4,983 127,693
NZ Silveray Group Limited- 273,981
391,034 577,737
Sales of products or services provided to the following:
Australasian International Group Limited
184,320 744,773
E Way Holdings Group Limited
2,162 2,956
E Way Trading Limited
30,146 -
Federation of New Zealand Shenzhen Societies Inc.
438 -
Guangdong Farmside International Trading Co., Ltd
892,115 468,652
Howard & Co Chartered Accountants
1,176 -
May Sun Trading Limited
- 1,467
Mr Bo Xian Cao
1,176 -
New Zealand Asia-Pacific Cultural Exchange Centre Limited
324 -
New Zealand Guangdong General Association of Commerce Inc.
491 -
NZ Silveray Group Limited
69 24,203
Super Life NZ Limited
392,352 -
1,504,769 1,242,051
Expenses repaid/recharged on behalf of the Group:
Guangdong Farmside International Trading Co. Limited
33,729 -
Guangdong Silver Fern Network Technology Co. Limited
1,056 -
Guangdong Yinrui Investment & Management Company Limited
18,647 -
Other related parties
29,806 163,050
83,238 163,050
Guangdong Sanjiang Industry Development Limited Purchase of goods
The related parties receivables and payables except for NZ Silveray Group Limited are unsecured,non-interest
bearing and repayable on demand. There is no collateral or guarantees for related parties payables.
Sales made to related parties in China are made on extended terms with payment due 3 monthsfrom the date the
goods are received by the related party.
The amount payable to NZ Silvery Group Limited is also unsecured and repayable on demand. Interest is charged
at 7.04% per annum for amounts below $600,000 and 8.32% per annum for amounts above $600,000.
Purchases of goods
E Way Holdings Group Limited Directors fees
New Zealand Asia-Pacific Cultural Exchange Centre
Limited
Purchase of goods and
services
Advance, interest and
management fees
Deferred consideration for
Distribution Right Asset
AFC Group Holdings Limited Annual Report 2018
Page 42

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
18.RELATED PARTIES (continued)
Year ended Year ended
31 March
2018
31 March
2017
Related party transactions
$$
Almond Draw Limited - 76,953
Australasian International Group Limited 664,447 -
E Way Holdings Group Limited
41,000 -
Guangdong Farmside International Trading Co. Limited702,782 -
Guangdong Sanjiang Industry Development Limited18,398 -
Guangdong Yinrui Investment & Management Company12,243 -
Howard & Co Chartered Accountants Limited20,000 -
Investment Research Group Limited
- 72,890
May Sun Trading Limited 12,000 197,872
New Zealand Asia-Pacific Cultural Exchange Centre Limited12,342 -
NZ Guangdong Business Development Corporation Limited1,696 -
NZ Silveray Group Limited 56,333 -
1,541,241 347,715
Interest received or debited on related party balances:
Guangdong Farmside International Trading Co. Limited
189 -
189 -
Interest paid or credited on related party balances:
NZ Silveray Group Limited - on advances
10,315 61,643
3,010 14,713
13,325 76,356
Other transactions:
276,991
-
276,991 -
Share Placements during the year:
- 1,717,273
- 200,000
- 240,000
- 180,000
- 40,000
- 2,377,273
The have been no share placement during the year ended 31 March 2018 (2017: $2,377,273).
NZ Silveray Group Limited - on deferred consideration payable for Distribution Right
Asset
Mr Hao Long subscribed for 20,000,000 shares in AFC Group Holdings Limited at 0.2
cents per share
Purchases from the following for services or products provided:
NZ Silveray Group Limited - deferred consideration payable for Distribution Right
Asset extinguished due to Distribution Rights agreement ceasing.
NZ Silveray Group Limited subscribed to 858,636,792 shares in AFC at 0.2 cents per
share credited to the related party balance
Ms Lin Fang subscribed for 100,000,000 shares in AFC at 0.2 cents per share paid in
cash
NZ Silveray Group Limited subscribed to 24 shares in AFC Biotechnology
Manufacture Co Limited at $10,000 per share.
Ms Yinrui Shen subscribed for 90,000,000 shares in AFC at 0.2 cents per share paid
in cash
AFC Group Holdings Limited Annual Report 2018
Page 43

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
18.RELATED PARTIES (continued)
Key Management Personnel
MarchMarch
20182017
$$
Short-term employee benefits
11,324 1,800
Directors' fees
114,667 178,333
Other remuneration
180,608 61,800
306,599 241,933
19.COMMITMENTS
Operating lease commitments - Group as lessee
Non-cancellable operating lease rentals are payable as follows:
20182017
NZ$NZ$
As at 31 March:
Less than one year193,383 177,113
Between one and five years183,200 387,345
More than five years- -
Total operating lease commitments
376,583 564,458
20182017
NZ$NZ$
Lease of offices and warehouse - 245 Ti Rakau Drive 172,339 141,711
Lease of printer and eftpos equipment540 998
Vineyard Rental12,000 11,000
The Group has no capital commitments at 31 March 2018 (2017: $nil)
The group leases offices and warehouse in Auckland under a non-cancellable operating lease expiring in
three years.
The Group also leases additional vineyard land in Whangarei which is just under five hectares in area. The
lease is for a term of three years less one day and commenced on 1 March 2016.
The group has also entered into operating leases for eftpos and printing equipment with lease terms expiring
in three years.
Commitments for minimum lease payments in relation to non-cancellable
operating leases are payable as follows:
Paymentsmadeunderoperatingleases(netofanyincentivesreceivedfromthelessor)arechargedtothe
income statement on a straight-line basis for the 2018 financial year as follows:
Key management personnel are defined as those persons having authority and responsibility for planning, directing
and controlling the activities of the Group, directly or indirectly, and include the directors and the ChiefExecutive.
Remuneration paid to key management personnel is as follows:
AFC Group Holdings Limited Annual Report 2018
Page 44

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
20.FINANCIAL INSTRUMENTS
Loans and
receivables
Financial
liabilities at
amortised
cost
Total
NZ$NZ$NZ$
Financial Assets:
Cash and cash equivalents665,779 - 665,779
Trade debtors and other receivables455,530 - 455,530
Related party receivables843,231 - 843,231
Total financial assets1,964,540 - 1,964,540
Financial liabilities:
Trade creditors and other payables- 396,436 396,436
Related party payables and loans391,034 - 391,034
Total financial liabilities391,034 396,436 787,470
Financial Assets:
Cash and cash equivalents777,841 - 777,841
Trade debtors and other receivables744,119 - 744,119
Related party receivables1,017,353 - 1,017,353
Total financial assets2,539,313 - 2,539,313
Financial liabilities:
Trade creditors and other payables- 1,139,625 1,139,625
Related party payables and loans577,737 - 577,737
Total financial liabilities577,737 1,139,625 1,717,362
Capital management
31 March 2017
Categories of financial assets and liabilities
The specific financial risks that the Group is exposed to are discussed below.
31 March 2018
The carrying amounts presented in the statement of financial position relate to the following categories of
assets and liabilities:
The fair value of the financial instruments of the Group approximates their carrying value.
The use of financial instruments exposes the Group to credit, interest rate and liquidityrisks. The Group's
overall risk management programme seeks to minimise potential adverse effects on the Group's financial
performance.
The capital structure of the Group consists of debt and equity attributable to equity holders of theparent,
comprising of issued capital and retained earnings. The Group's capital includes shares and retained
earnings with total shareholders' funds equal to $4,713,867 (2017: $4,986,689). Related party payables of
$391,034 (2017: $410,611) included in the Group's capital structure are disclosed in note 18. As there is no
collateral over the related party payables, the maximum exposure is represented by the carrying amount of
the payables as at the end of the reporting period.
The Group is not subject to any externally imposed capital requirements.
AFC Group Holdings Limited Annual Report 2018
Page 45

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
20.FINANCIAL INSTRUMENTS (continued)
Credit risk
Credit risk concentration profile
Exposure to credit risk
The exposure of credit risk for trade and other receivables by geographical region is as follows:
20182017
NZ$NZ$
Australia
- 621,697
China
770,407 461,579
528,354 678,196
Total trade and related party receivables1,298,761 1,761,472
Ageing analysis
The ageing analysis of the Group’s trade and related party receivables as at reporting date is as follows:
20182017
NZ$NZ$
Not past due
648,320 728,083
Past due 0-30
230,430 92,010
Past due 31-90
132,437 766,938
Past due more than 90
287,574 174,441
Total trade and related party receivables
1,298,761 1,761,472
As the Group does not hold any collateral, the maximum exposure to credit risk is represented by thecarrying
amount of the financial assets as at the end of the reporting period.
New Zealand
The Board reviews the Group's capital structure regularly. The capital of the Group is monitored to ensure
equity holder objectives are met, the primary of which is to ensure the Group's continued ability to provide a
consistent return to its equity shareholders through a combinations of capital growth and distributions. The
Group manages its capital to ensure the entities in the Group will be able to continue as going concerns.
Financial instruments which potentially are subject to credit risk principally relate to bank accounts, loans
receivable, trade receivables and other receivables. The Group's exposure to credit risk arises from potential
default of the counterparty. The bank accounts are placed with high credit quality financial institutions. The
Company performs credit evaluations on all customers requiring advances. The Company generally requires
collateral or other security to support loans advanced. The board and management on a regular basis assess
all receivables.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect
of the trade and other receivables as appropriate. The main components of this allowance are a specific loss
component that relates to individually significant exposures, and a collective loss componentestablished for
groups of similar assets in respect of losses that have been incurred but not yet identified. Impairment is
estimated by management based on prior experience and the current economic environment.
The Group's major concentrations of credit risk relate to the amounts owing by three (3)related party
customers which constituted approximately 65% of its total trade receivables as at the end of the reporting
period. (2017: 57% of the total trade receivables and related party receivables related to twoof the Groups'
related party customers).
The values in the statement of financial position are also the maximum credit risk exposure.
AFC Group Holdings Limited Annual Report 2018
Page 46

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
20.FINANCIAL INSTRUMENTS (continued)
Interest rate risk
Liquidity risk
0 to 6
months
7 to 12
months
1 to 2
years
Over 2
years
Total
NZ $NZ $NZ $NZ $NZ $
382,502 225 - 13,709
396,436
Related party payables
391,034 - - -
391,034
773,536 225 - 13,709 787,470
1,355,688 - - -
1,355,688
Related party payables
224,683 136,991 - -
361,674
1,580,371 136,991 - - 1,717,362
The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period
based on contractual undiscounted cash flows (including interest payment computed using contractual rates
or, if floating, based on the rate at the end of the reporting period):
The Group has included a provision for impairment losses $35,085 for the year ended 31 March2018. The
Group believes that no further impairment allowance is necessary in respect of the trade and related party
receivables. They are substantial companies with good track record. 65% (2017: 84.9%)of the receivables
that are past the due date relate to amounts owing by three (3) related parties. A significant portionof trade
receivables that are neither past due nor impaired are regular customers that have been transacting with the
Group. The Group uses ageing analysis and setting credit terms for different customers to monitor the credit
quality of the trade receivables.
Interest rate risk is where the risk of loss to the Group from adverse changes in interest rates. TheGroup
exposure to interest rate changes that can affect the performance of the operation relates primarily to
changes in fixed rates at the time term loans are renegotiated.
The Group is not exposed to interest rate risk as the interest
-bearing financial instruments carry fixed interest
rates and are measured at amortised cost. As such, sensitivity analysis is not disclosed.
Liquidity risk arises mainly from general funding and business activities. The Group practicesprudent risk
management by maintaining sufficient cash balances and the availability of funding throughcertain committed
credit facilities.
2018
Trade creditors and other
payables
Financial Liabilities
Financial Liabilities
Trade creditors and other
payables
2017
The Group considers expected cash flows from financial assets in assessing and managing liquidity risk, in
particular its cash resources, trade receivables and the provision of funding from related parties and bank
loan facilities.
AFC Group Holdings Limited Annual Report 2018
Page 47

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
20.FINANCIAL INSTRUMENTS (continued)
Interest rate risk profile
At the reporting date the interest rate profile of interest-bearing financial instruments was:
20182017
NZ$NZ$
Fixed interest instruments
Financial assets
1,964,540 2,539,313
Financial Liabilities
(787,470)(1,717,362)
Total
1,177,070 821,951
Fair value of financial assets and liabilities
21. INVESTMENT IN SUBSIDIARIES
Name of subsidiaryPrincipal activity
20182017
Vineyard and winery51%51%
Commodity trading100%100%
National Dairy Group Limited100%100%
51%51%
100%100%
100%100%
All the subsidiaries are incorporated in New Zealand and have 31 March balance dates.
22. SEGMENT REPORTING
Source and distribute
goods to China
AFC Longview Limited
Ownership interest and
voting rights
The Financial assets and liabilities are fixed for various terms.
The fair value of financial assets and financial liabilities are determined using standard terms andconditions
of the relevant instruments. The method used in determining the fair values of financial instrumentsare
discussed in note 1.14 and 1.15.
Non-Trading
Non-Trading
AFC GoGobal Ecommerce Limited
AFC Education Investment Limited
The Group's operating segments are reported in a manner consistent with the internal reporting provided to
the chief operating decision-maker. The chief operating decision-maker is the person or group that allocates
resources to and assesses the performance of the operating segments on an entity. The Group has
determined the Group's Board of Directors as its chief operating decision-maker as the board is responsible
for allocating resources and assessing the performance of the operating segments and making strategic and
operating decisions. Income and expenses directly associated with each segment are included in determining
each segment's performance.
Refer to note 7 for further details of non-controlling interests in AFC Longview Limited and AFCBiotechnology
Manufacture Co Limited.
Manufacturing
AFC International Trading Group Limited
AFC Biotechnology Manufacture Co Limited
AFC Group Holdings Limited Annual Report 2018
Page 48

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
22. SEGMENT REPORTING (continued)
International marketing and distribution
Vineyard and winery
Manufacturing
AFC Biotechnology Manufacture Co Limited which manufactures disposable face masks.
Corporate
International
Marketing
Vineyard
and winery
Corporate Manufacturing
Eliminations
and
adjustments
Year ended 31
March 2018
NZ$NZ$NZ$NZ$NZ$NZ$
Year ended 31 March 2018
Operating Income
Operating Revenue
5,018,234 389,836 -2,034,501 (935,683)6,506,888
Other Revenue101,932
13,609 383,845 18,417
(170,330)347,473
Interest Income3,371 42
144,876 535
(147,393)1,431
Total Revenue5,123,537 403,487 528,721 2,053,453 (1,253,406)6,855,792
Sales between the segments of the Group are on an arm’s length basis in a similar manner to transactions
with third parties.
AFC Longview Limited, a vineyard and winery based in Whangarei which produces and sells a number of
varietals and blends of wine.
National Dairy Group Limited, which sources food products for distribution for China. During 2018, National
Dairy group became non-active.
The operations of this segment include providing accounting, management and administration services to
other segments of the Group. AFC GoGlobal ECommerce Limited and AFC Education Investment Limited did
not trade during the 2018 financial year and have been included under this segment.
AFC International Trading Group Limited, which sources packaged food products, cosmetics and health
products.
The Group operates in a number of business segments in New Zealand. The Group has determined its
operating segments into three segments, namely international marketing and distribution, vineyard and winery
and manufacturing. These segments reflect the different type of industry sectors within which the Group
operates. The Company is considered to be in the corporate operating segment. Information regarding the
operations of each reportable operating segment is included below.
No operating segments have been aggregated to form the above reportable operating segments.
The Group's taxation has not been allocated to segments and is included centrally. Financinghas been
allocated to segments.
AFC Group Holdings Limited Annual Report 2018
Page 49

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
22. SEGMENT REPORTING (continued)
International
Marketing
Vineyard
and winery
Corporate

Manufacturing
Eliminations
and
adjustments
Year ended 31
March 2018
NZ$NZ$NZ$NZ$NZ$NZ$
Year ended 31 March 2018
Operating Expenses
Interest67,570 40,684
9,543 43,585
(147,393)13,989
242 - 168,166 - - 168,408
6,75536,908 19,846 57,367 - 120,876
(271,045)(442,099)(27,204)318,803 (51,277)(472,822)
Assets
Segment assets872,765 2,159,273 4,884,550 2,201,335 (4,616,586)5,501,337
Capital Expenditure11,543 9,504 1,119 19,589 - 41,755
Segment Liabilities395,935 833,607 170,755 1,218,481 (1,831,308)787,470
Year ended 31 March 2017
Operating Income
Operating Revenue
11,537,7231,247,806--(44,871)12,740,658
Other Revenue28,958
11,039 4,000 -
- 43,997
Interest Income511 1
2,018 250
- 2,780
Total Revenue11,567,192 1,258,846 6,018 250 (44,871)12,787,435
Operating Expenses
Interest- 479
76,356 -
- 76,835
- 527,055 172,707 - - 699,762
8,84538,561 15,156 11,848 - 74,410
(191,617)(581,524)(214,694)(335,949)- (1,323,784)
Assets
Segment assets2,693,781 2,581,451 5,421,602 614,672 (4,607,454)6,704,052
Capital Expenditure32,598 82,016 55,101 355,035 - 524,750
Segment Liabilities1,945,906 813,686 680,603 310,621 (2,033,454)1,717,362
Amortisation and
Impairment losses
Depreciation
Segment profit (loss)
before tax
Amortisation and
Impairment losses
Depreciation
Segment profit (loss)
before tax
AFC Group Holdings Limited Annual Report 2018
Page 50

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
22. SEGMENT REPORTING (continued)
20182017
NZ$NZ$
(472,822)(1,323,784)
- -
(472,822)(1,323,784)
5,501,337 6,704,051
- -
5,501,337 6,704,051
787,470 1,717,362
- -
787,470 1,717,362
Geographical segments
International
Marketing
Vineyard
and winery
Corporate

Manufacturing
Eliminations
and
adjustments
Total
NZ$NZ$NZ$NZ$NZ$NZ$
Australia
- - - - - -
Hong Kong
553,314 40,320 - 144,000 - 737,634
China
(41,583)276,829- 589,628 - 824,874
New Zealand
4,489,42762,121- 392,832 - 4,944,380
Operating Revenue
5,001,158379,270- 1,126,460- 6,506,888
Australia
422,758- - - - 422,758
Hong Kong
- - - - - -
China
883,1111,102,646- - - 1,985,757
New Zealand
10,223,590108,553- - - 10,332,143
Operating Revenue
11,529,4591,211,199 - - - 12,740,658
All operations, assets, and liabilities were domiciled within New Zealand.
Total assets for operating segments
Add: deferred tax asset
Total assets per Statement of Financial Position
The eliminations and adjustments of segment profit, assets and liabilities relate to intercompanytransactions and
balances which are eliminated on consolidation.
Profit / (loss) before tax for operating segments
Taxation benefit for the year
Profit / (loss) after taxation
Total liabilities for operating segments
Adjustments
Total liabilities per Statement of Financial Position
For 31 March 2017, a subvention payment of $424,917 was made from AFC Longview Limited to AFC
International Trading Group Limited to utilise the 31 March 2017 losses incurred by AFC international Trading
Group Limited.
31 March 2018
31 March 2017
Revenue from external customers is attributed to geographical segments on the basis of the countrythe customer
is trading in. Revenues from eleven related party customers of the Group's international marketing, vineyard and
manufacturing segments represented 24% of the Group's total operating revenue.
AFC Group Holdings Limited Annual Report 2018
Page 51

AFC GROUP HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
23. NET TANGIBLE ASSETS PER SHARE
20182017
NZ$NZ$
Total Assets5,501,337 6,704,051
Less Intangible assets2,249 169,157
Tangible assets5,499,088 6,534,894
Less total liabilities787,470 1,717,362
Net tangible assets4,711,618 4,817,532
Number of ordinary shares on issue3,664,253,194 3,664,253,194
Net tangible assets / liabilities per share in cents0.0013 0.0013
24.CONTINGENT LIABILITIES
The Group has no contingent liabilities at 31 March 2018 (2017: Nil)
25.EVENTS AFTER THE REPORTING PERIOD
There are no significant events after balance date.
The net tangible assets and number of shares used in the calculation are as follows:
AFC Group Holdings Limited Annual Report 2018
Page 52

AFC Group Holdings Limited
Independent auditor’s report to the Shareholders
Report on the Audit of the Consolidated Financial
Statements
Qualified Opinion

We have audited the consolidated financial statements of AFC Group Holdings Limited
and its subsidiaries (the Group), which comprise the consolidated statement of financial
position as at 31 March 2018, and the consolidated statement of comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for
the year then ended, and notes to the consolidated financial statements, including a
summary of significant accounting policies.

In our opinion, except for the matter expressed in the Basis for Qualfiied Opinion section of
our report, the accompanying consolidated financial statements give a true and fair view of
the consolidated financial position of the Group as at 31 March 2018, and of its
consolidated financial performance and its consolidated cash flows for the year then
ended in accordance with New Zealand equivalents to International Financial Reporting
Standards (NZ IFRS).
Basis for Qualfiied Opinion

The prior year financial statements were audited by another auditor who expressed a
disclaimer of opinion on those consolidated financial statements. We have been unable to
obtain sufficient appropriate audit evidence that inventory was correctly recorded at
31 March 2017. As a result of this matter, we were unable to determine whether any
adjustments might have been necessary in respect of inventories at 31 March 2017, and
the resultant impact Cost of Sales for the year ended 31 March 2018.

We conducted our audit in accordance with International Standards on Auditing (New
Zealand) (ISAs (NZ)). Our responsibilities under those standards are further described in
the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
section of our report. We are independent of the Group in accordance with Professional
and Ethical Standard 1 (Revised) Code of Ethics for Assurance Practitioners issued by the
New Zealand Auditing and Assurance Standards Board and the International Ethics
Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the IESBA Code. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.

Other than in our capacity as auditor we have no relationship with, or interests in, AFC
Group Holdings Limited or any of its subsidiaries.

Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.

OPENING BALANCES
Area of focus How our audit addressed it
The prior year financial statements were audited
by another auditor who expressed a disclaimer
of opinion on those consolidated financial
statements.
Our audit procedures included:
—
Completing detailed audit procedures over
the balances recorded at 31 March 2017;
which included the a significant level of
testing of events subsequent to 31 March
2017 to validate if the opening balances
were correctly recorded
— Review of the working papers of the
previous auditor

REVENUE RECOGNITION
Area of focus How our audit addressed it
The Group earns revenue from multiple
business activities. These need to be correctly
regonised in accordance with NZ IAS 18
Revenue.

Our audit procedures included:
—
Understanding the system of processing
transactions for the different business
activities
— Complete detailed substantive testing of key
transactions, and transactions around the
reporting date
— Review of transactions after the reporting
date

RELATED PARTY TRANSACTIONS
Area of focus How our audit addressed it
The Group has had a significant volume of
related party transactions.

Our audit procedures included:
—
Identify all related parties of the Group
— Substantively test key related party
transactions by examination of supporting
documentation and obtained confirmations
—
Review and test related party transactions
to determine if in line with the terms agreed;
and consider where relevant market prices
—
Ensure appropriate disclosure has been
included in the financial statements

Other Matter

The consolidated financial statements of AFC Group Holdings Limited for the year ended 31 March 2017
were audited by another auditor who expressed a disclaimer of opinion on those consolidated financial
statements on 31 July 2017.

Information Other than the Consolidated Financial Statements and Auditor’s Report
Thereon

The directors are responsible for the other information in the Annual Report. The other information
comprises the Directors Profiles, Directors Report, Corporate Governance Statement, Summary Discription
of Key Business Activites, Shareholder and Statutroy Information included in the Annual report, but does
not include the consolidated financial statements and our auditor’s report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of audit opinion or assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this
regard.

Directors’ Responsibilities
The directors are responsible on behalf of the entity for the preparation of consolidated financial statements
that give a true and fair view in accordance with New Zealand equivalents to International Financial
Reporting Standards, and for such internal control as the directors determine is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to
fraud or error.

In preparing the consolidated financial statements, the directors are responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (NZ) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.

A further description of our responsibilities for the audit of these financial statements is located at the
External Reporting Board (XRB) website at:

https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1/

This description forms part of our independent auditor’s report.

The engagement director on the audit resulting in this independent auditor’s report is Darren Wright.

Restriction on Distribution and Use

This report is made solely to the Company’s shareholders, as a body. Our audit work has been undertaken
so that we might state to the Company’s shareholders those matters which we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and the Company’s shareholders, as a body, for
our audit work, for this report or for the opinions we have formed.



William Buck Audit (NZ) Limited

Auckland
17 July 2018

AFC GROUP HOLDINGS LIMITED
SHAREHOLDER AND STATUTORY INFORMATION
RankHolding%
11,508,808,51741.18
2451,043,37612.31
3198,750,0005.42
4Lin Fang 198,750,0005.42
5180,000,0004.91
6180,000,0004.91
7
Yong Zhu
122,578,3093.35
8100,000,0002.73
9100,000,0002.73
10Fei Yao 80,000,0002.18
1180,000,0002.18
1255,308,3701.51
1347,505,0001.30
1430,000,0000.82
15
Prakash Pandey
28,513,3330.78
16
Anthony Edwin Falkenstein & Ian Donald Malcolm
22,347,2220.61
17
Hao Long
20,000,0000.55
18
Shanshan Lu
20,000,0000.55
19
Huai Ji Zhou
20,000,0000.55
20
WeiHua Li
19,334,7900.53
Numberof
shareholders
%
Numberof
Shares
%
436.55%56,3760.00%
9714.76%333,5420.01%
10515.98%771,2270.02%
24036.53%5,692,6230.15%
406.09%2,790,8200.08%
548.22%10,497,7060.29%
7811.87% 3,644,110,90099.45%
657100.00% 3,664,253,194100.00%
64397.87% 3,661,046,50199.91%
Other142.13%3,206,6930.09%
657100.00% 3,664,253,194100.00%
5,000 - 9,999
The company is listed on the Alternative Market of the New Zealand Exchange (NZAX).
Largest Shareholders (As at 23 May 2018)
NZ Silveray Group Limited
E Way Holdings Group Limited
Zhongsheng Yao
Lei Chen
Shareholder
Wei Fang
Yinrui Shen
2,000 - 4,999
1 - 1,999
Size of Holding
Shuopeng Wang
Mingbao Zhang
Snowdon Peak Investments Limited
Zhan Qin Xu
Spread of Shareholders (as at 23 May 2018)
Tingsong Zhang
10,000 - 49,999
New Zealand
Geographic Spread
500,000 – plus
100,000 – 499,999
50,000 - 99,999
AFC Group Holdings Limited Annual Report 2018
Page 57

AFC GROUP HOLDINGS LIMITED
SHAREHOLDER AND STATUTORY INFORMATION
Ordinary
Shares
Beneficially
Held
Ordinary
Shares
Beneficially
Held
% Held% Held
2018201720182017
1,508,808,517 1,508,808,51741.1841.18
451,043,376451,043,37612.3112.31
198,750,000198,750,0005.425.42
198,750,000198,750,0005.425.42
2,357,351,893 2,357,351,89364.3364.33
AppointedResigned
6-Jun-16
-
13-Apr-15
-
17-Oct-16
-
9-Mar-17
28-Feb-18
The total number of voting securities of the company on issue at 14 May 2018 was 3,664,253,194
paid
ordinary shares.
Directors
Bo Xian Cao
Wei Fang
Lin Fang
This information reflects the company’s records and disclosures made under section 280(1)(b) of the Financial
Markets Conduct Act 2013.
E Way Holdings Group Limited
Substantial Product Holders (as at 23 May 2018)
NZ Silveray Group Limited
During the year the board of directors comprised:
Non-executive directors
-
-
20,000,000
Shares
Hao Long
Statement of Directors’ Security Holdings (as at 31 March 2018)
Bo Xian Cao
Yang Xia
Hao Long
Qiang Li
Yang Xia (Chairman)
Shares beneficially owned held by associated persons for Mr Bo Xian Cao comprise his interest asthe owner
of all the shares in E Way Holdings Group Limited, which company is the holder of 198,750,000 shares.
Mr Xia’s shares beneficially owned held by associated persons comprise his interest as an ultimate
shareholder in NZ Silveray Group Limited, which company is the holder of 1,508,808,517 shares.
Mr Qiang Li resigned as executive director on 28 February 2018 and was appointed an independent director
on 1 April 2018.
Beneficially Owned
Held Solely
Executive directors
Beneficially Owned
Held by Associated
Persons
198,750,000
1,508,808,517
Shares
-
AFC Group Holdings Limited Annual Report 2018
Page 58

AFC GROUP HOLDINGS LIMITED
SHAREHOLDER AND STATUTORY INFORMATION (continued)
The following are directorships held by the AFC Group Holdings Limited Directors as at 31 March 2018:
Director's feesOther Remuneration
$56,333Nil
$38,334Nil
$20,000$64,931
Statement of Directors’ Security Holdings (as at 31 March 2018)
Hao Long also received a salary of $64,931 during the year. The Directors of AFC Group HoldingsLimited did
not receive any other benefits from AFC Group Holdings Limited in the 12 months to 31 March 2018.
Bo Xian Cao
There were no other securities transactions disclosed to the Board and entered into the InterestsRegister for
the year to 31 March 2018.
Hao Long
AFC International Trading Group Limited
AFC Biotechnology Manufacture Co Limited
AFC Group Holdings Limited
E Way Holdings Group Limited
NZ Guangdong Business Development Corporation Limited
AFC Group Holdings Limited
AFC Goglobal Ecommerce Limited
AFC Education Investment Limited
AFC Longview Limited
National Dairy Group Limited
Howard & Co Chartered Accountants Limited
Long Family Trust Limited
NZ Silveray Group Limited
Anhui Sanhe Concrete Company
AFC Group Holdings Limited
Guangdong Farmside International Trading Co Limited
Guangzhou Ruifeng Fertilizer Company
Guangdong Sanjiang Industrial Development Company
Guangdong SYYR Investment & Management Company
Guangdong Yinrui Investment & Management Company
National Dairy Group Ltd
NZ Silveray Group Ltd
Sanhe Building Materials Technology Company Ltd
Yang Xia
The following is the remuneration paid to the Directors of AFC Group Holdings Limited for the twelve months to
31 March 2018:
There were no employees who received remuneration in excess of $100,000 during the year.
Directors’ Remuneration and Other Benefits
Yang Xia (Chairman)
Bo Xian Cao
Hao Long
Employees Remuneration (Excluding Directors)
Directors' Indemnity and Insurance
TheCompanyhasarrangedpoliciesofDirectors'Liabilityinsurancetoensurethatgenerally,directorswill
incur no monetary loss as a result of action taken against them as directors.
AFC Group Holdings Limited Annual Report 2018
Page 59

AFC GROUP HOLDINGS LIMITED
CORPORATE INFORMATION
SOLICITORSAFC GROUP HOLDINGS LIMITED
DLA Piper New ZealandSecurity code: AFC
P O Box 160Listed on NZAX Market
Auckland 1140NZ Company number: 1799581
SHARE REGISTRAR HEAD OFFICE / REGISTERED OFFICE
Computershare Investor Services Limited AFC Group Holdings Limited
Level 2, 159 Hurstmere Road245 Ti Rakau Drive
Private Bag 92-119Burswood
Auckland 1142Auckland 2013
ACCOUNTANTS
RSM New Zealand (Auckland)TELEPHONE
PO Box 20427664-9-930-0245
Ford Building, 86 Highbrook Drive, Highbrook
Auckland 2013WEBSITE
www.afcnz.com
AUDITORS
William Buck Audit (NZ) Limited
P O Box 106 090
Level 4, 21 Queen Street
Auckland 1010
BANKERS
ANZ Bank New Zealand Limited
AFC Group Holdings Limited Annual Report 2018
Page 60

---

AFC GROUP HOLDINGS LIMITED
(Listed on the NZAX: AFC)
1/245 Ti Rakau Drive
Burswood
Auckland
Ph: +64 (09) 930-0245


AFC announces availability of its Annual Report

AFC Group Holdings Limited releases its Annual Report for the year ended 31 March
2018.

On behalf of the Board of Directors



Hao Long
Director
19 July 2018

For Further Information
Please contact Mr Howard Long
howard.long@afcnz.com
+64- 21- 244-8000