FWL Full Year 2020 Results and Annual Report Published
Results announcement
Results for announcement to the market
Name of issuer Foley Wines Limited
Reporting Period 12 months to 30 June 2020
Previous Reporting Period 12 months to 30 June 2019
Currency NZD
Amount (000s) Percentage change
Revenue from continuing operations $55,165 +15.6%
Total Revenue $55,856 +16.5%
Net profit/(loss) from continuing operations $4,904 +27.7%
Total net profit/(loss) $6,921 +96.7%
Interim/Final Dividend
Amount per Quoted Equity Security $ 0.03000000
Imputed amount per Quoted Equity Security $ 0.01166667
Record Date 9 October 2020
Dividend Payment Date 23 October 2020
Current period Prior comparable period
Net tangible assets per Quoted Equity
Security
$1.37 $1.33
A brief explanation of any of the figures
above necessary to enable the figures to be
understood
Note: the net profit/loss includes a deferred tax
adjustment of $1,519 due to the re-introduction of
depreciation on commercial buildings from the 2020/2021
tax year – excluding this one-off adjustment the net profit
was $5,402 – up 53.6% on the prior year.
Other Key Metrics:
Operating Profit before revaluations and income tax
(“Operating Earnings”) $7,750 +53.2%
Operating Profit before interest, impairment, revaluations,
income tax, depreciation and amortisation (“Operating
EBITDA”) $15,163 +53.2%
This announcement should be read in conjunction with
the attached audited Annual Report 2020. A copy of the
Annual Report 2020 can also be found on the FWL web
site www.foleywines.co.nz.
Authority for this announcement
Name of person
authorised to make this
announcement
Jane Trought - CFO
Contact person for this announcement Mark Turnbull - CEO
Contact phone number +64 21 714 885
Contact email address mark@foleywines.co.nz
Date of release through MAP
27 August 2020
Audited financial statements accompany this announcement.
---
Distribution Notice
Section 1: Issuer information
Name of issuer Foley Wines Limited
Financial product name/description Ordinary Shares
NZX ticker code FWL
ISIN NZGRME0001S1
Type of distribution
Full Year X Quarterly
Half
Year
Special
DRP
applies
Record date 9 October 2020
Ex-Date 8 October 2020
Payment date 23 October 2020
Total monies associated with the
distribution
$1,972,084.44
Source of distribution Retained earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution $0.04166667
Total cash distribution $0.03000000
Excluded amount $N/A
Supplementary distribution amount $0.00529412
Section 3: Imputation credits and Resident Withholding Tax
Is the distribution imputed Fully imputed
If fully or partially imputed, please state
imputation rate as % applied
28%
Imputation tax credits per financial
product
$0.01166667
Resident Withholding Tax per financial
product
$0.00208333
Section 4: Distribution re-investment plan (not applicable)
Section 5: Authority for this announcement
Name of person
authorised to make this
announcement
Jane Trought - CFO
Contact person for this announcement Mark Turnbull - CEO
Contact phone number +64 21 714 885
Contact email address mark@foleywines.co.nz
Date of release through MAP
27 August 2020
---
AANNNNUUAALL RREEPPOORRTT
| 2020
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
FOLEY WINES LIMITED | ANNUAL REPORT 2019
FFoolleeyy WWiinneess iiss aa ccoolllleeccttiioonn ooff iiccoonniicc
wwiinneerriieess aanndd bbrraannddss ffrroomm NNeeww ZZeeaallaanndd’’ss
mmoosstt aaccccllaaiimmeedd wwiinnee rreeggiioonnss
made by
land &
hand
Each with a unique story of New Zealand to tell, our
wineries and distillery are linked by a common
unrelenting purpose; to make great wine that people
love to drink around the world – made by land & hand.
Performance Highlights 3
Chief Executive Officer (CEO) and Directors’ Report 4 – 16
Directors’ Responsibility Statement 17
Financial Statements
Income Statement 20
Statement of Comprehensive Income 21
Statement of Changes in Equity 22
Statement of Financial Position 23 – 24
Statements of Cash Flows 25
Notes to the Financial Statements 26 – 72
Independent Auditor’s Report 73 – 76
Corporate Governance Statement 77 – 85
Statutory Information 86 – 92
Company Directory 93
Contents
FFoolleeyy WWiinneess iiss aa ccoolllleeccttiioonn ooff iiccoonniicc
wwiinneerriieess aanndd bbrraannddss ffrroomm NNeeww ZZeeaallaanndd’’ss
mmoosstt aaccccllaaiimmeedd wwiinnee rreeggi ioonnss
made by
land &
hand
Each with a unique story of New Zealand to tell, our
wineries and distillery are linked by a common
unrelenting purpose; to make great wine that people
love to drink around the world – made by land & hand.
Foley Wines is a collection of iconic
wineries and brands from New Zealand’s
most acclaimed wine regions
1
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
PPeerrffoor rmma annccee
HHiigghhlliigghhttss
CONTINUED PREMIUMISATION
CASE SALES533,000 (up 2%)
DOMESTIC CASES157,000 (up 32.8%)
BOTTLED SALES REVENUE$49,951,000 (up 13.4%)
OPERATING EARNINGS$7,750,000 (up 53.2%)
REPORTED PROFIT AFTER TAX$ 6,921,000 (up 96.7%)
OPERATING EBITDA$15,163,000 (up 53.2%)
OPERATING CASHFLOW$10,792,000 (up 68.3%)
DECLARED DIVIDEND3 cents per share fully imputed
2020 has been a year of significant progress, but one which was also impacted
by Covid-19. The strategy has been one of continued premiumisation, which
put simply is around value over volume, by selling premium wine at higher
price points through high quality channels.
Martinborough Vineyard
Martinborough
Te Kairanga
Martinborough
Vavasour
Awatere Valley, Marlborough
Grove Mill
Wairau Valley, Marlborough
Our wineries
&
distillery
Lighthouse Gin
Martinborough
Mt Difficulty
Central Otago
PPeerrffoorrmmaannccee
HHiigghhlliigghhttss
CONTINUED PREMIUMISATION
CASE SALES533,000 (up 2%)
DOMESTIC CASES157,000 (up 32.8%)
BOTTLED SALES REVENUE$49,951,000 (up 13.4%)
OPERATING EARNINGS$7,750,000 (up 53.2%)
REPORTED PROFIT AFTER TAX$ 6,921,000 (up 96.7%)
OPERATING EBITDA$15,163,000 (up 53.2%)
OPERATING CASHFLOW$10,792,000 (up 68.3%)
DECLARED DIVIDEND3 cents per share fully imputed
2020 has been a year of significant progress, but one which was also impacted
by Covid-19. The strategy has been one of continued premiumisation, which
put simply is around value over volume, by selling premium wine at higher
price points through high quality channels.
PPeerrffoor rmma annccee
HHiigghhlliigghhttss
CONTINUED PREMIUMISATION
CASE SALES533,000 (up 2%)
DOMESTIC CASES157,000 (up 32.8%)
BOTTLED SALES REVENUE$49,951,000 (up 13.4%)
OPERATING EARNINGS$7,750,000 (up 53.2%)
REPORTED PROFIT AFTER TAX$ 6,921,000 (up 96.7%)
OPERATING EBITDA$15,163,000 (up 53.2%)
OPERATING CASHFLOW$10,792,000 (up 68.3%)
DECLARED DIVIDEND3 cents per share fully imputed
2020 has been a year of significant progress, but one which was also impacted
by Covid-19. The strategy has been one of continued premiumisation, which
put simply is around value over volume, by selling premium wine at higher
price points through high quality channels.
Our wineries
& distillery
Performance
Highlights
CASE SALECASE SALESS
DOMESTIC CASEDOMESTIC CASESS
BOTTLED SALES REVENUBOTTLED SALES REVENUEE
OPERATING EARNINGSOPERATING EARNINGS
REPORTED PROFIT AFTER TAREPORTED PROFIT AFTER TAXX
OPERATING EBITDAOPERATING EBITDA
OPERATING CASHFLOWOPERATING CASHFLOW
DECLARED DIVIDENDDECLARED DIVIDEND
23
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
JUNE ‘20JUNE ‘19% CHANGEJUNE ‘18% CHANGE
New Zealand157118+33%144+9%
Australia132138(4)%113+17%
USA/Canada121145(17)%122(1)%
UK/Europe9297(5)%73+26%
Rest of World3124+29%19+63%
TOTAL
533522+2%471+13%
Bottled
c
ase sales
BOTTLED CASE SALES (000’S) 12 MONTHS TO JUNE
OOppeerraattiinngg
PPeerrffoorrmmaannccee
ANOTHER RECORD YEAR
The Company reports a record operating profit before revaluations and incometax
(“operating earnings”) of $7,750,000 comparedwith$5,059,000 for the previous
financial year.As outlined previously,we are of thefirmbelief that operating
performance (underlying profit)is the keymetricto demonstrate the progress the
Companyis making dueto the complexity around the accounting standards andfair
value adjustments.
Profit for the period net oftax attributable for the shareholderswas$6,921,000, up
96.7% comparedwith$3,518,000 the previous year.Afteradjusting for the one-off
deferredtax adjustment of $1,519,000 required dueto the re-introduction of the
depreciation on commercial buildings from the 2020/2021tax year the net profitwas
$5,402,000, up 53.6% on the prior year.
PPeerrffoor rmma annccee
HHiigghhlliigghhttss
CONTINUED PREMIUMISATION
CASE SALES533,000 (up 2%)
DOMESTIC CASES157,000 (up 32.8%)
BOTTLED SALES REVENUE$49,951,000 (up 13.4%)
OPERATING EARNINGS$7,750,000 (up 53.2%)
REPORTED PROFIT AFTER TAX$ 6,921,000 (up 96.7%)
OPERATING EBITDA$15,163,000 (up 53.2%)
OPERATING CASHFLOW$10,792,000 (up 68.3%)
DECLARED DIVIDEND3 cents per share fully imputed
2020 has been a year of significant progress, but one which was also impacted
by Covid-19. The strategy has been one of continued premiumisation, which
put simply is around value over volume, by selling premium wine at higher
price points through high quality channels.
Bottled
case sales
PPeerrffoor rmma annccee
HHiigghhlliigghhttss
CONTINUED PREMIUMISATION
CASE SALES533,000 (up 2%)
DOMESTIC CASES157,000 (up 32.8%)
BOTTLED SALES REVENUE$49,951,000 (up 13.4%)
OPERATING EARNINGS$7,750,000 (up 53.2%)
REPORTED PROFIT AFTER TAX$ 6,921,000 (up 96.7%)
OPERATING EBITDA$15,163,000 (up 53.2%)
OPERATING CASHFLOW$10,792,000 (up 68.3%)
DECLARED DIVIDEND3 cents per share fully imputed
2020 has been a year of significant progress, but one which was also impacted
by Covid-19. The strategy has been one of continued premiumisation, which
put simply is around value over volume, by selling premium wine at higher
price points through high quality channels.
Operating
Performance
45
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
CEO & DIRECTORS’ REPORT
PPoossiittiivvee MMoommeennttuumm
On behalf of Directors of Foley WinesLimited(FWL)we are pleasedto present the
2020 operating results and annual report for the 12 months ended 30 June 2020.
COVID-19
Alongwithmany businesses around the world, Covid-19 had significant implications for
the business. Thankfullywe wereable to harvest grapes duringalertlevel 4 understrict
conditions. However, our portfoliois a premium portfolio thatis servedin restaurants
(on-premise) and airlines around the world.As weall know, these sectors have been hard
hit globallywithmany businesses closed for a long period. Some, e.g.in Victoria and
Auckland, have reopened and subsequently closed again.
Whilecasesalesfor the Companywereup 2% for the year,casesalesfor the final
quarterweredown approximately 27,000casescomparedwiththe prior year. However,
this doesn’treflectthe positive momentum the businessis gaining on thesalesfrontas
all marketswereperformingwellpriorto the disruption of Covid-19. The export data
outlined above does notreflectthe genuine progress being made.
This year significant new routesto market have been securedin Australia andAsia,sales
for whichare not reflectedin 2020. These new channelsare for premium brands that
retailfor over $20 per bottle andare a reflection of our premiumisation strategy gaining
attention. Our intentionis tofocus on channels that want brands, and thisis very much a
value over volume play.
“Despite global
headwinds, genuine
progress is being made.”
Mark Turnbull, CEO and Director
As outlinedin 2019, the value of the Company’s portfolio and centralised business
modelis creating significant opportunitieswithretailersand importers seeking premium
brands and streamlined procurement. The abilityto supply five winery brands from three
acclaimedregions and acraftgin, withone point of contact,is gaining attention around
the world.It is fundamentalwe keepto this course and continueto build our brands,
underpinned by high quality winemaking.
Finally, like many businesseswe wereeligible for the wage subsidy. This enabled usto
retainall staffacross the Company and nostaffhave lost their jobs. This meanswe were
able to quickly reopen both thecellardoors andalso the restaurantat Mt Difficultyto a
7dayaweekoperation.
CASHFLOW
Operatingcashflowwas $10,792,000 for the year, up from $6,413,000 the previous year.
This year’s cashflowwas significantly influenced by increased profitability.
Capital expenditurewas $4,417,000 for the year, comparedwith$2,948,000 the previous
year. A keyitemof expenditurewas a new amenities buildingat the GroveMillwinery.
Thisfacilityensures improved working conditions for theteamthere which has
increasedin staffnumbers over the years since this businesswas acquired. However the
intention continuesto be that the Company’s capital expenditureis lessthan annual
depreciation other than significant one-off investments for growth.
The Companyis forecastingto reduce this year’s capital expenditure by 50%, not
including the proposed new developmentin Martinborough.
The total dividend paid for the yearwas $1,972,000.
PPeerrffoor rmma annccee
HHiigghhlliigghhttss
CONTINUED PREMIUMISATION
CASE SALES533,000 (up 2%)
DOMESTIC CASES157,000 (up 32.8%)
BOTTLED SALES REVENUE$49,951,000 (up 13.4%)
OPERATING EARNINGS$7,750,000 (up 53.2%)
REPORTED PROFIT AFTER TAX$ 6,921,000 (up 96.7%)
OPERATING EBITDA$15,163,000 (up 53.2%)
OPERATING CASHFLOW$10,792,000 (up 68.3%)
DECLARED DIVIDEND3 cents per share fully imputed
2020 has been a year of significant progress, but one which was also impacted
by Covid-19. The strategy has been one of continued premiumisation, which
put simply is around value over volume, by selling premium wine at higher
price points through high quality channels.
Positive Momentum
“Despite global
headwinds, genuine
progress is being made.”
67
FOLEY WINES LIMITEDFOLEY WINES LIMITED | CEO AND DIRECTORS’ REPORTFOLEY WINES LIMITEDFOLEY WINES LIMITED | CEO AND DIRECTORS’ REPORT
MTDIFFICULTYCASESALES
Mt Difficultywas acquired on 3 January 2019 and the 2020 year represents thefirst full
years trading.Salesrevenuewas $11 .3m at anaverage selling price of $157 percasefor
the full year.
Mt Difficultysaleswereprobably the most adverselyaffectedby Covid-19in the
portfolio dueto itson-premise focus,as outlined above. Thecellardoor and restaurant
was closed for most of the final quarter. Furthermore,casesalesweredown 28% for the
last quarter comparedto the samequarterlast year.
LIGHTHOUSEGIN
LighthouseGin continuesto be asmallbut important part of the business.Saleswere
35,540litres(equivalentto approximately 50,772 700mlbottles) comparedwith24,309
litres(equivalentto approximately 34,727 700mlbottles)in the prior 12 months.
Lighthouse continuesto go from strengthto strengthin Australia, provingto be a hugely
successful product for our keyretailpartnerin that market.
Lighthouse continuesto garner international recognitionwithGold and 95 Points
recently awarded by the International Wine & Spirits Competitionin London. This
follows the covetedtitleof ‘Master’awardedlast yearat the Spirits BusinessGin
Masterscompetitionin the UK and demonstrates the high quality of LighthouseGin .
The Company continuesto be very optimistic that this growthwill continuein the year
ahead and intendsto build a new purpose-designed distilleryin 2021.
9
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
8
FOLEY WINES LIMITEDFOLEY WINES LIMITED | CEO AND DIRECTORS’ REPORT
T
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GOLD
2019
GIN FOR
GIN LOVERS
WE DON’T CUT CORNERS. IT TOOK US FIVE YEARS TO PERFECT
OUR GIN, AND TEN YEARS ON, I STILL HAND ZEST THE YEN BEN
LEMONS AND NAVEL ORANGES TO COAX THE DELICATE OILS FROM
THEIR SKINS. I STILL COLLECT PURE, NATURAL SPRING WATER
THAT HAS TAKEN YEARS TO FILTER THROUGH THE REMUTAKA
RANGES. I STILL TWICE-DISTIL AND TASTE EVERY BATCH FOR
THAT HALLMARK LIGHTHOUSE STYLE – A REMARKABLY CLEAN,
SMOOTH, CITRUSY GIN THAT’S TRUE TO ITS LONDON DRY STYLE.
AND WHEN THE GLOBAL GIN MASTERS COMPETITION AWARDS
US THEIR HIGHEST ACCOLADE – ‘MASTER’ – I SMILE AND SIT
BACK WITH THE PERFECT GIN & TONIC.
We continueto reduceour relianceon awardsand accoladesas we shiftto engaging
consumerswithour genuinebrandstories. However,positiveresultsdo continueto serve
as a valuabledecision-makingtool for consumersnavigatingwineand gin shelves,and
standas a testamentto the teams’skill in the vineyards,wineriesand distillery.
•RussianJackPinotGris 2019,PinotGris Trophyat the NewZealandWineof the Year
Awards2019
•MartinboroughVineyardTe TeraSauvignonBlanc2019,WairarapaRegionalTrophy
at the NewZealandWineof the YearAwards2019
•DashwoodPinotNoir2018and VavasourSauvignonBlanc2019,Top 100 & Blue
Goldat the SydneyInternationalWineCompetition2020
•LighthouseGin,Goldwith95 Pointsat the InternationalWine& SpiritsCompetition
2020
•LighthouseGin, ‘Master’at the DrinksBusinessGin Masters2019
BUILDINGPOWERFULBRANDS
The2020yearsawfurtherinvestmentin buildingthepremiumpositioningandprofileof
ourbrandsto ensureourmulti-channeldistributiondeliversa strongrateofsaleforour
customers.
Significantinvestmentin advertisingwithanincreasingemphasisontargeteddigitaland
outdooradvertisinghascontinuedtobuildbrandawarenessandappetiteamongst
premiumwinelovers. Atthesametime,PRcoveragein highqualitylifestyletitleshas
broughtourbrands’genuinestoriesof peopleandplaceto newandengagedaudiences.
TherelaunchoftheFoleyWineClubwebsitegivesusa powerfulplatformto showcase
ourportfolioofpremiumbrandsandselldirectlytoconsumers,includingrareand
librarywineswhichhavelimitedavailabilityin themarket. In tandemwiththelaunchof
theFoleyRewardsloyaltyprogramme, wehaveachieveda significantincreaseinthe
numberswearereachingthroughthisplatform.
FOLEY WINES LIMITEDFOLEY WINES LIMITED | CEO AND DIRECTORS’ REPORT FOLEY WINES LIMITEDFOLEY WINES LIMITED | CEO AND DIRECTORS’ REPORT
1011
Te Kairanga digital billboard, PONSONBY
Mt Difficulty digital billboard, PARNELL
2020HARVEST
The harvest totalled 7,802 tonnes across the Marlborough, Martinborough and
Mt Difficulty wineries,an overall decrease of 6% onlast year’s harvest of 8,304 tonnes.
The harvest decreasewas predominately driven by contracted growers being down 15%
on last year while fruit fromFWL’sown vineyardswas up 1.8%
Foley Wines Group Chief WinemakerAlastairMalingMWsaid,“Witha long drawn out
summer and perfect conditions overMarchand Aprilin Martinborough, Marlborough
and Central Otago the quality of wines from 2020will be some of the bestin recent
years.”
1213
FOLEY WINES LIMITEDFOLEY WINES LIMITED | CEO AND DIRECTORS’ REPORTFOLEY WINES LIMITEDFOLEY WINES LIMITED | CEO AND DIRECTORS’ REPORT
SUSTAINABILITY
It is the view of the Company that acting sustainablyis a matterof urgency, not a ‘niceto
have’. Events during the course of the year, including the bushfiresinAustralia, have
propelled environmental issues even further into the forefront of consumers’ minds.
The practical, tangible sustainability practices that underpin our operations go beyond
the Sustainable WinegrowingNewZealand accreditation held byeachof our wineries.
Our practicescarrythrough from vineyardstopackaging,withfurther steps toward
safeguarding our environment for future generations made during the 2020 year.
RecycledNewZealandGlass
Inanindustry dominated by coal-powered
glass produced overseas,wehave chosento
bottle our winesinNewZealand, using
NewZealand sourced, recycled glass,
reducing our carbon footprint and supporting
our local industry.
Industry-leading Water Conservation
Winerywastewaterat allwineriesis
recycledtoirrigate our vineyards and
native plantings through systems held up
asbenchmarksinMarlborough and
Central Otago.
RestoringLocalHabitats
The wetlandswehave established beside
our central bottling and warehousingfacility
playsanimportant roleinmaintaining a
healthyeco-system andis a thriving habitat
for local fauna.Atour most recent planting
day 700 beneficial native specieswere
planted and 58 predatorswereremovedin
the past year.
SmallFootprintsPartOfTheLandscape
Oursmallwineriesarepositioned amongst our
vineyards, reducing the carbon footprint of
incoming grapes during harvest, and integrating
into the landscape. The living roofat MtDifficulty
is designedtoencourage biodiversity, evaporative
cooling and heat retention.
PoweredBySolar
Solar energyat four of our five
wineries reduces our use of
energy from themaingrid.
1415
FOLEY WINES LIMITEDFOLEY WINES LIMITED | CEO AND DIRECTORS’ REPORTFOLEY WINES LIMITEDFOLEY WINES LIMITED | CEO AND DIRECTORS’ REPORT
For the year ended 30 June 2020
OUTLOOK
Over the course of the pasttwo years the Company has demonstrated thatit is gaining
momentumwithits premiumisation strategy. However, the worldis inextremely
uncertaintimesdue to Covid-19, meaning the abilityto give guidanceis extremely
difficult. The Company haslaid a strong foundation for growthto take advantage of
opportunitiesas theyariseand will continueto focus on brand building and developing
new routesto marketat the premium price points.
DIVIDEND
The Directors consider that the underlying operational performance and cashflows and
the work done on securing new distribution channels justify retaining a fully imputed
dividend of 3 cents per share.FWLhas a strong balance sheet andis focused on
increasing the dividend yieldto Shareholdersas the Company grows. The policy of the
Boardis toevaluate present and projectedcashflows, sustainable operating earnings
and, if prudent,to declare a dividend subjectto current and future capital and acquisition
expenditure requirements.
For and on behalf of the Board of Directors
Mark Turnbull
CEO and Director
The Directors are responsible for the preparation, in accordance with New Zealand law
and generally accepted accounting practice, of financial statements which fairly present the
financial position of Foley Wines Limited and Group as at 30 June 2020 and the results of
their operations and cash flows for the year ended 30 June 2020.
The Directors consider that the financial statements of the Company and the Group have been
prepared using accounting policies appropriate to the Company and Group circumstances,
consistently applied and supported by reasonable and prudent judgements and estimates, and
that all applicable New Zealand Equivalents to International Financial Reporting Standards
have been followed.
The Directors have responsibility for ensuring that proper accounting records have been
kept which enable, with reasonable accuracy, the determination of the financial position of
the Company and Group and enable them to ensure that the financial statements comply
with the Financial Markets Conduct Act 2013 and Financial Reporting Act 2013.
The Directors have responsibility for the maintenance of a system of internal control designed
to provide reasonable assurance as to the integrity and reliability of financial reporting.
The Directors consider that adequate steps have been taken to safeguard the assets of the
Company and Group and to prevent and detect fraud and other irregularities.
The Directors are pleased to present the financial statements of Foley Wines Limited and
Group for the year ended 30 June 2020.
This annual report is dated 27 August 2020 and is signed in accordance with a resolution of
the Directors made that day pursuant to section 211(1)(k) of the Companies Act 1993.
For and on behalf of the Directors
WP Foley II
Chairman
A M Turnbull
CEO and Director
Directors’ Responsibility
Statement
17
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
16
FOLEY WINES LIMITEDFOLEY WINES LIMITED | CEO AND DIRECTORS’ REPORT
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Financial Statements
18
See our story at
Vavasour.com
YEARS IN THE
AWATERE VALLEY,
AND WE’VE ONLY
JUST BEGUN.
30
I’m the fifth generation Marfell in the Awatere Valley.
It’s a great place to live, and a great place to make wine.
Vavasour was the first to make wine here in 1989. We know
how this stony soil and unforgiving climate conspire to create
wines of great complexity, perfume and elegance. And we’ve
only just begun.
Every year we become more curious and ask more questions
of this valley. Every year we capture more layers of flavour,
intensity and intrigue – wines that keep you coming back for
another sip.
That’s something I can’t just create, that comes from the place.
Stu Marfell
Chief Winemaker
Income
Statement
For the year ended 30 June 2020
Group Group
2020 2019
Notes $’000 $’000
Total Revenue 3 55, 8 56 47,94 3
Expenses
Cost of sales (35,911) (32,364)
Selling, marketing and promotion expenses (5,985) (5,303)
Administration and corporate governance expenses (4,222) (3,051)
Other expenses 4 (144) (680)
Expenses excluding interest (46,262) (41,398)
Operating Profit before interest, impairment,
revaluations & income tax 9,594 6,545
Interest revenue 3 31
Interest expense 5 (1,829) (1,562)
Net finance costs (1,826) (1,531)
Operating Profit before impairment,
revaluations & income tax 7,768 5,014
Impairment
Impairment of inventory 2.2 (d) (18) 45
Operating Profit before revaluations & income tax 7,750 5,059
Revaluation gains and losses
Unrealised gain in fair value of financial asset/liabilities 24(k) 12 187
Unrealised gain on harvested grapes 21 1,243 415
Realised reversal of gain on harvested grapes (594) (513)
Revaluation of property, plant & equipment 2.3.9 (818) (93)
Profit before income tax 7,593 5,055
Income tax expense 6.1 (2,191) (1,537)
Income tax benefit – re-introduction of tax depreciation on buildings 6.1 1,519 –
Profit for the year net of tax, attributable to
Shareholders of the Parent Company 6,921 3,518
Basic Earnings per share cps (after tax) 7 10.53 5.89
Diluted Earnings per share cps (after tax) 7 10.10 5.89
These financial statements should be read in conjunction with the Notes to the Financial Statements on pages 26 to 72.
Statement of
Comprehensive Income
For the year ended 30 June 2020
Group Group
2020 2019
Notes $’000 $’000
Profit for the year 6,921 3,518
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Revaluation of property, plant and equipment 2.3.9 2,888 3,347
Income tax on items taken directly to or transferred from equity 6.2 (334) (450)
Other comprehensive income for the year, net of tax 2,554 2,897
Total comprehensive income for the year, net of tax 9,475 6,415
These financial statements should be read in conjunction with the Notes to the Financial Statements on pages 26 to 72.
2021
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Statement of
Changes in Equity
For the year ended 30 June 2020
GroupNotes
Fully Paid
Ordinary
Shares
$‘000
Asset
Revaluation
Reserve
$’000
Retained
Earnings
$’000
Total
$’000
Equity at 1 July 2019 86,518 16,009 16,780 119,307
Adjustment on initial application of
NZ IFRS 16 including deferred tax 2.3.26 (c) – (2) (1,299) (1,301)
Adjusted balance at 1 July 2019 86,518 16,007 15,481 118,006
Profit for the year – – 6,921 6,921
Other comprehensive income for the year – 2,521 33 2,554
Total comprehensive income for the year – 2,521 6,954 9,475
Distributions to owners 8 – – (1,972) (1,972)
Transactions with owners during the year – – (1,972) (1,972)
Added to equity during the year – 2,521 4,982 7,503
Equity at 30 June 2020 86,518 18,528 20,463 125,509
Dividends paid per share cps 8 3.0
Equity at 1 July 2018 66,518 13,337 14,627 94,482
Profit for the year – – 3,518 3,518
Other comprehensive income for the year – 2,672 225 2,897
Total comprehensive income for the year – 2,672 3,743 6,415
Contributions by owners 9 20,000 – – 20,000
Distributions to owners 8 – – (1,590) (1,590)
Transactions with owners during the year 20,000 – (1,590) 18,410
Added to equity during the year 20,000 2,672 2,153 24,825
Equity at 30 June 2019 86,518 16,009 16,780 119,307
Dividends paid per share cps 8 3.0
These financial statements should be read in conjunction with the Notes to the Financial Statements on pages 26 to 72.
Statement of
Financial Position
As at 30 June 2020
Restated
Group Group
2020 2019
Notes $’000 $’000
CURRENT ASSETS
Cash and cash equivalents 5,921 3,445
Trade and other receivables 17 7,576 9,279
Other financial assets 16 110 93
Inventories 18 46,721 44,080
Biological work in progress 19 & 21 1,511 1,302
Prepaid expenses 406 677
Other current assets 431 356
62,676 59,232
NON-CURRENT ASSETS
Property, plant and equipment 20 102,515 101,245
Right-of-use assets 14.1 11,466 –
Intangible assetss 22 35,122 35,122
149,103 136,367
TOTAL ASSETS 211,779 195,599
These financial statements should be read in conjunction with the Notes to the Financial Statements on pages 26 to 72.
2223
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Statement of
Financial Position
(continued)
As at 30 June 2020
Restated
Group Group
2020 2019
Notes $’000 $’000
CURRENT LIABILITIES
Trade and other payables
12 6,786 7,235
Loans and borrowings
13 7,353 2,261
Lease liabilities
14.2 896 –
Convertible notes
15 10,900 10,900
Other financial liabilities
16 – 3
Current tax liabilities
6.3 1,662 1,0 87
2 7, 5 9 7 21, 4 8 6
NON-CURRENT LIABILITIES
Loans and borrowings
13 31,500 37,601
Lease liabilities
14.2 11,943 –
Other financial liabilities
16 8 –
Deferred tax liabilities
6.4 15,222 17,205
58,673 54,806
TOTAL LIABILITIES
86,270 76,292
EQUITY
Share capital
9 86,518 86,518
Reserves
10 18,528 16,009
Retained earnings
11 20,463 16,780
TOTAL EQUITY
12 5 , 5 0 9 119, 3 07
TOTAL LIABILITIES AND EQUITY
211,779 195,599
These financial statements should be read in conjunction with the Notes to the Financial Statements on pages 26 to 72.
Statement of
Cash Flows
For the year ended 30 June 2020
Group Group
2020 2019
Notes $’000 $’000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided from (applied to)
Receipts from customers 60,628 50,229
Insurance proceeds – 605
Government grants/assistance 638 –
Interest received 3 31
Payments to suppliers and employees (46,838) (42,303)
Interest and other costs of finance paid (1,730) (1,512)
Income tax paid (1,909) (637)
Net cash flow from operating activities 23 10,792 6,413
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was obtained from (applied to)
Sale of property, plant and equipment 74 74
Purchase of property, plant and equipment and
biological assets – excluding Mt Difficulty acquisition (4,417) (2,948)
Acquisition of Mt Difficulty business and assets,
net of cash received 30 - (47,081)
Net cash flow from investing activities (4,343) (49,955)
CASH FLOW FROM FINANCING ACTIVITIES
Cash was provided for (applied to)
Issue of equity share capital 9 – 20,000
Dividends paid 8 (1,972) (1,590)
Loans advanced 13 1,000 30,000
Loans repaid 23 (b) (2,108) (4,191)
Lease liabilities repaid 23 (c) (893) –
Net cash flow from financing activities (3,973) 44,219
Net increase in cash held 2,476 677
Cash and cash equivalents at beginning of year 3,445 2,768
Cash and cash equivalents at end of year 5,921 3,445
Comprising: Cash and cash equivalents 5,921 3,445
These financial statements should be read in conjunction with the Notes to the Financial Statements on pages 26 to 72.
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FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
For the year ended 30 June 2020
Notes to Financial Statements
1. REPORTING ENTITY
Foley Wines Limited (“the Company”, “the Parent”) is a company domiciled in New Zealand, registered under
the Companies Act 1993 and listed on the NZX Main Board (NZSX) of the New Zealand Stock Exchange
(“NZX”). The Company is an FMC reporting entity in terms of the Financial Markets Conduct Act 2013.
The Company is an integrated wine company producing table wines with the marketing and sales of premium
wines in New Zealand and various export markets.
The Company is 52.80% (2019: 52.80%) owned by Foley Family Wines Holdings, New Zealand Limited, which
in turn is owned 80.47% by Foley Family Wines Holdings, Inc., a company domiciled in the United States of
America.
2. SUMMARY OF ACCOUNTING POLICIES
The financial statements of Foley Wines Limited (“the Company”, “the Parent”) and its subsidiaries and controlled
entities (together referred to as “the Group”) have been prepared in accordance with generally accepted
accounting practice in New Zealand (“NZ GAAP”). The Company is a profit-oriented company incorporated in
New Zealand with its registered office at 13 Waihopai Valley Road, RD6, Blenheim 7276, New Zealand.
2.1 STATEMENT OF COMPLIANCE
The Company is a reporting entity for the purpose of the Financial Markets Conduct Act 2013 and its financial
statements comply with that Act.
The financial statements comply with New Zealand equivalents to International Financial Reporting Standards
(‘NZ IFRS’) and other applicable Financial Reporting Standards as appropriate for profit-oriented entities. The
financial statements also comply with International Financial Reporting Standards (“IFRSs”).
The financial statements were authorised for issue by the Directors on 27 August 2020.
2.2 BASIS FOR PREPARATION
The financial statements have been prepared on the historical cost basis except for land and buildings, land
improvements including biological bearer plants (refer note 2.2(a)) and derivative financial instruments each
of which have been measured at fair value. The reporting currency is New Zealand dollars and all values are
rounded to the nearest thousand dollars ($’000).
Judgements, Estimates and Assumptions and Accounting Policies
In the application of NZ IFRS the Directors are required to make judgements, estimates and assumptions about
carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstance, the results of which form the basis of making the judgements. Actual results
may differ from these estimates.
The 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 if the revision affects only that period, or in the
period of the revision and future periods if the revision affects both current and future periods.
Notes to the
Financial Statements
For the year ended 30 June 2020
27
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
26
Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
2.2 BASIS FOR PREPARATION (CONTINUED)
Judgements, Estimates and Assumptions and Accounting Policies (Continued)
The significant areas of estimation, assumptions and critical judgements made in the preparation of these
financial statements are as follows:
(a) Fair Value of Land, Land Improvements and Buildings
The fair value of land, land improvements (vineyards) and buildings is determined by an independent valuer.
The fair value of land, vineyards, including bearer plants (grape vines) and other vineyard infrastructure, and
buildings were determined under the principle of highest and best use at balance date. Fair value is the amount
for which the assets could have been exchanged between a knowledgeable willing buyer and a knowledgeable
willing seller in an arm’s length transaction as at the valuation date. Fair value is determined by direct reference
to recent market transactions on arm’s length terms for vineyards comparable in size, location and varietal mix
to those held by the Group. To determine the fair value the independent valuer uses valuation techniques which
are inherently subjective and involve estimation. The Directors consider that market data exists to support this
basis of valuation but note that the Valuers have this year included clauses in their Valuation Reports noting that
there is market uncertainty due to the Covid-19 outbreak that has resulted in significant valuation uncertainty
and that market conditions are constantly changing. Refer to note 20.
(b) Fair Value of Grapes at the Point of Harvest
The fair value of grapes at the point of harvest is determined by reference to market prices for each variety of
grape grown in the local area at the time of harvest. The Directors’ assessment of the fair value at the point of
harvest is determined after reviewing the market price paid to independent grape growers including reference
to New Zealand Winegrowers annual Grape Price Data.
(c) Lease Accounting
The Group has entered into long-term vineyard leases which allow the Group to control the growing and
harvesting of the grapes used in the production of finished product. After taking into consideration the terms
and conditions within the leases, it is believed that the lessor retains substantially all of the risks and rewards of
ownership and the leases are accordingly classified as operating leases.
Significant estimates and judgements that have been required for the implementation of NZ IFRS 16 Leases are:
• The determination of whether an arrangement contains a lease;
• The determination of lease term for some lease contracts in which the Group is a lessee that include renewal
options and termination options, and the determination whether the Group is reasonably certain to exercise
such option;
• The determination of the incremental borrowing rate used to measure lease liabilities;
• The determination of the expected cost to dismantle and remove lease improvements at end of the lease.
(d) Impairment of Assets other than Goodwill and Indefinite Life Intangibles
The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the
Group and to the particular asset that may lead to impairment. If an impairment trigger exists the recoverable
amount of the asset is determined. At balance date management considered that the indications of impairment
were significant enough to test the Group’s inventories for impairment in this (and the prior) reporting period.
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
2.2 BASIS FOR PREPARATION (CONTINUED)
Judgements, Estimates and Assumptions and Accounting Policies (Continued)
(d) Impairment of Assets other than Goodwill and Indefinite Life Intangibles
(Continued)
In relation to inventories the recoverable amount, or net realisable value, represents the estimated selling price
in the ordinary course of business, less estimated costs of completion and estimated costs to be incurred in the
marketing, selling and distribution. Following this review of net realisable value of inventories an impairment of
inventory of $18,000 for the Group has been recorded in the current year (2019: reversal $45,000).
(e) Impairment of Goodwill and Indefinite Life Intangibles
The Group determines at least annually whether goodwill and indefinite life intangible assets are impaired.
This requires an estimation of the recoverable amount of the cash generating units to which the goodwill and
intangible asset was allocated
The calculation of the recoverable amount of the cash generating unit involves assumptions to be made in terms
of the timing and extent of net cash flows expected to arise from the cash generating unit and the selection of
an appropriate discount rate in order to determine the present value. The Group has determined that in the
current year there is only one cash generating unit for the whole business and the value of the goodwill and
intangible assets was supported by value-in-use calculations. These calculations required the use of estimates.
These estimates are set out in note 22.
(f) Derivative financial instruments
The Group has derivative financial instruments which are classified as level 2, as they have inputs other than
observable quoted prices. In calculating the mark to market values, management has considered the market rates.
(g) Business Combination
The significant estimates, assumptions and judgements in relation to the Mt Difficulty Acquisition are outlined
in note 30.
The Directors continually review all accounting policies and areas of judgement in presenting the financial
statements.
Accounting policies are selected and applied in a manner which ensures that the resulting financial information
satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying
transactions or other events is reported. A summary of significant accounting policies is disclosed in section 2.3.
2.3 SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies have been adopted in the preparation and presentation of the
financial statements:
2.3.1 REVENUE RECOGNITION
Revenue is recognised to depict the transfer of promised goods or services to customers in an amount that
reflects the consideration to which the vendor expects to be entitled in exchange for those goods or services.
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Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3.1 REVENUE RECOGNITION (CONTINUED)
The following specific recognition criteria must also be met before revenue is recognised:
(a) Sale of goods
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with
a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when
it transfers control of a product or service to a customer. Control is considered transferred to the buyer at the
time of delivery of the goods to the customer or at the free on board (FOB) port/delivery point or as otherwise
contractually determined. Delivery occurs when the goods have been shipped to the customer’s specific location.
For sales of goods to retail customers, transfer is at the point the customer purchases the goods at the retail
outlet. Payment of the transaction price is due immediately at the point the customer purchases the goods
(b) Interest revenue
Revenue is recognised as the interest accrues (using the effective interest method which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial instrument to the net carrying
amount of the financial asset).
2.3.2 BORROWING COSTS
Borrowing costs are recognised as an expense when incurred except to the extent that they are directly attributable
to the acquisition, construction or production of a qualifying asset.
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset will be
capitalised as part of the cost of that asset.
2.3.3 IMPAIRMENT OF ASSETS OTHER THAN GOODWILL AND INDEFINITE LIFE
INTANGIBLES
At each reporting date, the Group reviews the carrying value of its tangible and intangible assets and assesses
whether there is any indication that an asset may be impaired. Where an indicator of impairment exists or
when annual impairment testing for an asset is required, the Group makes a formal assessment of recoverable
amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered to be
impaired and is written down to its recoverable amount.
Impairment losses relating to property, plant and equipment are recognised in the current period profit or loss,
unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation
decrease only to the extent that there are sufficient previous reserves.
Financial assets, other than those “at fair value through profit or loss” (FVTPL), are assessed for indicators of
impairment at the end of each reporting period. The Group recognises a loss allowance for lifetime expected
credit losses (ECL) for trade receivables. In determining the expected credit losses for these assets, the Company
has taken into account the historical default experience, the financial position of the counterparties and
considered various external sources of actual and forecast economic information, as appropriate, in estimating
the probability of default of each of these financial assets occurring within their respective loss assessment time
horizon, as well as the loss upon default in each case.
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3.4 CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand, cash at bank and investments on call or in short-term
deposits with an initial maturity of three months or less. Bank overdrafts are shown within loans and borrowings
in current liabilities in the Statement of Financial Position.
For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand, demand deposits
and short-term, highly liquid investments that are readily convertible into known amounts of cash and includes
at call borrowings such as bank overdrafts, used by the Group as part of its day-to-day cash management.
2.3.5 TRADE AND OTHER RECEIVABLES
Trade receivables are recognised at fair value and subsequent to initial recognition are carried at amortised cost
less impairment. Bad debts are written off during the year in which they are identified.
Other receivables are initially recognised at fair value of the consideration received or receivable. Other
receivables are classified as current assets unless the balances are expected to settle at least 12 months after
balance date, in which case they are classified as non-current other receivables. Subsequent measurement of
other non-current receivables occurs at amortised cost less impairment, where the nominal value is discounted
to present value, using the effective interest rate of the asset over the expected period of settlement.
2.3.6 INVENTORIES
All inventories are valued at the lower of cost or deemed cost and net realisable value. Cost is calculated on an
average cost basis. Inventory costs include a systematic allocation of appropriate production overheads that
relate to putting inventories in their present location and condition but exclude borrowing costs. The allocation
of production overheads is based on the normal capacity of the production facilities. The deemed cost for
the Group’s agricultural produce (grapes) is fair value at harvest date less estimated point-of-sale costs in
accordance with NZ IAS 41 ‘Agriculture’.
Net realisable value represents the estimated selling price in the ordinary course of business, less estimated costs
of completion and estimated costs to be incurred in the marketing, selling and distribution.
2.3.7 LEASES
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee. All other leases are classified as operating leases. All leases are accounted
for by recognising a right-of-use asset and a lease liability except for Leases of low value assets; and Leases with
a term of 12 months or less.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease
term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the
case) this is not readily determinable, in which case the Group’s incremental borrowing rate on commencement
of the lease is used. Variable lease payments are only included in the measurement of the lease liability if they
depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable
element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the
period to which they relate.
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Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3.7 LEASES (CONTINUED)
On initial recognition, the carrying value of the lease liability also includes:
• amounts expected to be payable under any residual value guarantee;
• the exercise price of any purchase option granted in favour of the Group if it is reasonably certain to exercise
that option;
• any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of
termination option being exercised.
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives
received, and increased for:
• lease payments made at or before commencement of the lease;
• initial direct costs incurred; and
• the amount of any provision recognised where the group is contractually required to dismantle, remove or
restore the leased asset.
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on
the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a
straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely,
this is judged to be shorter than the lease term. Lease liabilities are remeasured when there is a change in future
lease payments arising from a change in an index or rate or when there is a change in the assessment of the
term of any lease.
2.3.8 AGRICULTURE (BIOLOGICAL ASSET PRODUCE AND BIOLOGICAL WORK IN
PROGRESS)
Agriculture comprises agricultural produce (harvested grapes) from bearer plants (grape vines).
All costs incurred in deriving produce from the current year’s harvest or maintaining agricultural assets (bearer
plants) are recognised as expenses in profit or loss. Costs incurred in deriving produce from a future harvest are
capitalised and treated as Biological work in progress in the Statement of Financial Position.
The fair value of harvested grapes (agricultural produce or “consumable biological asset”) less estimated point-
of-sale costs is recognised in profit or loss as gain/loss on harvested grapes in the period of harvest. The fair
value of grapes is determined by reference to market prices for grapes in the local area, at the time of harvest.
This becomes the deemed “cost” for inventory valuation purposes.
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3.9 PROPERTY, PLANT AND EQUIPMENT
Land, land improvements (vineyards), including bearer plants (grapes vines) and other vineyard infrastructure,
and buildings are valued at fair value less accumulated depreciation. Land and grape vines are not depreciated.
Fair value is determined on the basis of an independent valuation prepared by external valuation experts
annually. The fair values are recognised in the financial statements and are reviewed at the end of each reporting
period to ensure that the carrying value is not materially different from their fair value. Fair value is determined
by reference to market-based evidence, which is the amount for which the assets could be exchanged between
a knowledgeable willing buyer and a knowledgeable willing seller in an arm’s length transaction as at the
valuation date. Any subsequent acquisitions since the last revaluation are recorded at cost less accumulated
depreciation and impairment losses.
Land improvements include all costs incurred in developing vineyards including direct material (including grapes
vines), direct labour and an allocation of overhead and financing cost. These are not depreciated until the
integrated vineyard asset reaches full commercial production which is typically two to three years after planting.
Grape vines are not depreciated.
Revaluation increases are taken directly to the revaluation reserve except to the extent that they reverse a previous
revaluation decrease of the same asset that was recognised as an expense in profit or loss, in which case the
increase is credited to profit or loss to the extent of the decrease previously charged.
Decreases in value are debited directly to the revaluation reserve to the extent that they reverse previous surpluses
of the same asset and are otherwise recognised as expenses in profit or loss.
All other items of property, plant and equipment are recorded on the cost basis less accumulated depreciation
and impairment losses.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes
in circumstances indicate that the carrying value may not be recoverable. Resulting impairment losses are
recognised as an expense in profit or loss.
All items of property, plant and equipment other than land and grape vines, are depreciated on a straight line
basis at rates which will write off their cost or revalued amount less estimated residual value over their expected
useful lives. The estimated useful lives, residual values and depreciation methods are reviewed at the end of
each annual reporting period. The estimated useful lives of major classes of assets are as follows:
Buildings 10 – 50 years
Land improvements 5 – 50 years
Plant, equipment and vehicles 1 – 20 years
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected from its use. Any gain or loss arising on de-recognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period
the asset is derecognised.
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Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3.10 INTANGIBLE ASSETS OTHER THAN GOODWILL
Purchased identifiable intangible assets, comprising trademarks, are shown at cost less any accumulated
impairment losses. Trademarks have been assessed as having an indefinite life, since the Company has the
rights to the brand while it is registered and has no intention of relinquishing those rights. Trademarks are not
amortised but are subject to annual impairment testing whereby the recoverable amount is estimated and an
impairment loss is recognised to the extent that the recoverable amount is lower than the carrying amount.
Intangible assets acquired in a business combination and recognised separately from goodwill, such as brands
acquired, are initially recognised at their fair value at the acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less
accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use
or disposal. Gains or losses arising from de-recognition of an intangible asset, measured as the difference
between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when
the asset is derecognised.
2.3.11 PAYABLES
Trade payables and other accounts payable are recognised when the Group becomes obliged to make future
payments resulting from the purchase of goods and services.
2.3.12 LOANS AND BORROWINGS
Borrowings are initially recorded at fair value of the consideration received, net of issue costs directly associated
with the borrowing. Deferred consideration payable as part of a business combination are treated as borrowings
and recorded at fair value at the date of completion of the transaction.
After initial recognition, borrowings are subsequently measured at amortised cost, which present values the
borrowing using the effective interest rate method. Amortised cost is calculated by taking into account any issue
costs, and any discount or premium on issuance.
2.3.13 EMPLOYEE BENEFITS
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 expected to be settled within 12 months are measured at
their nominal values using the remuneration rate expected to apply at the time of settlement. Provisions made
in respect of employee benefits which are not expected to be settled within 12 months are measured as the
present value of the estimated future cash outflows to be made by the Group in respect of services provided by
employees up to reporting date.
Liabilities for short term bonus plans are recognised where there is a contractual or constructive obligation and
accrued on an undiscounted basis.
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3.14 FOREIGN CURRENCIES
In preparing the financial statements of each individual group entity, all transactions denominated in a currency
other than the entity’s functional currency (foreign currencies) occurring during the financial year are translated
into the functional currency using the exchange rate in effect at the date of the transaction. Monetary items
receivable or payable in a foreign currency are translated at the exchange rate existing at balance date. Foreign
exchange gains or losses resulting from the settlement of transactions and from the translation at balance date
are recognised in profit or loss in the period in which they arise.
2.3.15 INCOME TAX
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the
taxable profit or loss for the year. It is calculated using the tax rates and tax laws that have been enacted or
substantively enacted by the reporting date. Current tax for current and prior periods is recognised as a liability
(or asset) to the extent that it is unpaid (or refundable) at the reporting date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences
between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax base
of those items. In principle, deferred tax liabilities are recognised for all taxable temporary differences. 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. However, deferred
tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial
recognition of assets or liabilities which affects neither taxable income nor accounting profit. Furthermore, a
deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when
the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have
been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from the manner in which the consolidated entity expects, at
the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and
liabilities are offset when they relate to income taxes levied by the same taxation authority and the company
intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax is recognised as an expense or income in profit or loss, except when it relates to items
credited or debited directly to equity or in other comprehensive income, in which case the deferred tax or current
tax is also recognised directly in equity or in other comprehensive income.
2.3.16 GOODS AND SERVICES TAX
Revenues, 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, where invoiced.
Cash flows are included in the statement of cash flows on a gross basis.
3435
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3.17 DERIVATIVE FINANCIAL INSTRUMENTS
The Group uses derivative financial instruments including forward exchange contracts, option contracts and
interest rate swaps for the primary purpose of reducing its exposure to fluctuations in foreign currency exchange
rates and interest rates.
Derivatives are initially recognised at fair value on the date the derivative contract is entered into (the trade
date) and are subsequently re-measured to their fair value at each reporting date. The resulting gain or loss is
recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument,
in which event, the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
The Group has not adopted hedge accounting during the year. All derivative financial instruments are measured
at fair value and changes in their fair value are recognised immediately in profit or loss (FVTPL). The fair value
of forward exchange contracts, foreign exchange option contracts and interest rate swaps is based on market
values of equivalent instruments at the reporting date.
2.3.18 FINANCIAL INSTRUMENTS ISSUED BY THE GROUP
Debt and equity instruments
Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of
the contractual agreement.
Transaction costs on the issue of equity instruments
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. Transaction 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.
Interest and dividends
Interest and dividends are classified as expenses or as distributions of profit consistent with the Statement of
Financial Position classification of the related debt or equity instruments or component parts of compound
instruments.
2.3.19 STATEMENT OF CASH FLOWS
The cash flow statement is prepared inclusive of GST.
Definitions of the terms used in the statement of cash flows are:
“Cash and cash equivalents” includes cash on hand, demand deposits and short-term, highly liquid investments
that are readily convertible into known amounts of cash and includes at call borrowings such as bank overdrafts,
used by the Group as part of its day-to-day cash management.
“Investing activities” are those activities relating to the acquisition and disposal of current and non-current
investments, and any other non-current assets, and includes dividends received.
“Financing activities” are those activities relating to changes in equity and debt capital structure of the Group
and dividends paid on the Company’s equity capital.
“Operating activities” include all transactions and other events that are not investing or financing activities.
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3.20 SEGMENT REPORTING
The Group adopted NZ IFRS 8 Operating Segments, with effect from 1 July 2009. NZ IFRS 8 requires operating
segments to be identified on the basis of internal reports about components of the Group that are regularly
reviewed by the chief operating decision maker (CODM) in order to allocate resources to the segment and to
assess its performance. The CODM is considered to be the Board of Directors and has established that the
Group operates in one segment (refer note 27).
2.3.21 GOVERNMENT GRANTS
Government grants are not recognised until there is reasonable assurance that the Group will comply with the
conditions attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group
recognises as expenses the related costs for which the grants are intended to compensate.
2.3.22 BUSINESS COMBINATIONS
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a
business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values
of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and
the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are
generally recognised in profit or loss as incurred.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-
controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the
acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities
assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and
liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests
in the acquiree and the fair value of the acquirer’s previously held interest in the acquiree (if any), the excess is
recognised immediately in profit or loss as a bargain purchase gain
2.3.23 GOODWILL
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the
business (see 2.3.22 above) less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or
groups of cash-generating units) that is expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently
when there is indication that the unit may be impaired. If the recoverable amount of the cash-generating unit
is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of
each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss in the consolidated
income statement. An impairment loss recognised for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the
determination of the profit or loss on disposal.
3637
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3.24 CHANGES IN ACCOUNTING POLICIES
There have been no changes in accounting policies during the year except as noted in 2.3.25.1 below.
2.3.25 ADOPTION STATUS ON RELEVANT FINANCIAL REPORTING STANDARDS AND
INTERPRETATIONS
2.3.25.1 Standards and interpretations effective in the current year
The following Standards and Amendments to NZ IFRS, which are relevant to the Group’s financial statements,
and became effective mandatorily for the annual periods beginning on or after 1 January 2019, were adopted
by the Group from 1 July 2019.
• NZ IFRS 16 Leases – mandatory for annual periods beginning on or after 1 January 2019. NZ IFRS 16 is
the new standard on the recognition, measurement, presentation and disclosure of leases. The standard
replaced NZ IAS 17: Leases. The scope of the new standard includes leases of all assets, with certain
exceptions. A lease is defined as a contract, or part of a contract, that conveys the right to use an asset (the
underlying asset) for a period of time in exchange for consideration. NZ 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 NZ IAS 17: Leases. Lessees are 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 NZ
IAS 17’s dual classification approach.
• NZ IFRIC 23 Uncertainty over Income Tax Treatments - Addresses how to reflect uncertainty in accounting
for income taxes under NZ IAS 12 – mandatory for annual periods beginning on or after 1 January 2019.
The Group had to change its accounting policies and make retrospective adjustments as a result of adopting
NZ IFRS 16 Leases. The impact of the adoption of the leasing standard and the new accounting policies are
disclosed in note 2.3.26 below. The other standards did not have any impact on the Group’s accounting policies
and did not require retrospective adjustments.
2.3.25.2 Standards and interpretations effective in future periods
Certain new Standards, Interpretations and Amendments to existing standards have been published that are
mandatory for later periods and which the Group has not early adopted. The key items include:
• Definition of a Business (Amendments to NZ IFRS 3) - To clarify whether a transaction should be accounted
for as a business combination or as an asset acquisition – mandatory for annual periods beginning on or
after 1 January 2020.
• Definition of Material (Amendments to NZ IAS 1 and NZ IAS 8) – To clarify the requirements for the
definition of material - mandatory for annual periods beginning on or after 1 January 2020.
• Classification of Liabilities as Current or Non-current (Amendments to NZ IAS 1) – To clarify the classification
of debt and other liabilities with an uncertain settlement date in the statement of financial position, including
the settlement of debt by converting to equity – mandatory for annual periods beginning on or after 1
January 2023.
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3.25 ADOPTION STATUS ON RELEVANT FINANCIAL REPORTING STANDARDS AND
INTERPRETATIONS (CONTINUED)
2.3.25.2 Standards and interpretations effective in future periods (Continued)
The Group’s management have completed an initial assessment of the new standards and do not expect the
adoption of these standards to have a material financial impact on the financial statements of the Group but
may affect disclosure.
Management will work through a full analysis of each standard and will provide further information on the
expected impact of adoption of these standards in future reports ahead of their effective dates. The Group does
not expect to adopt these standards before their effective date.
2.3.26 ADOPTION OF NEW AND REVISED STANDARDS – IMPACT OF INITIAL
APPLICATION OF NZ IFRS 16 LEASES
The Group has applied NZ IFRS 16 Leases that is effective for annual periods that begin on or after 1 January
2019 in the current year. The date of initial application of NZ IFRS 16 for the Group is 1 July 2019.
NZ IFRS 16 introduces new or amended requirements with respect to lease accounting. It introduces significant
changes to lessee accounting by removing the distinction between operating and finance lease and requiring
the recognition of a right-of-use asset and a lease liability at commencement for all leases, except for short-
term leases and leases of low value assets when such recognition exemptions are adopted. In contrast to lessee
accounting, the requirements for lessor accounting have remained largely unchanged. Details of these new
requirements are set out in note 2.3.7. The impact of the adoption of NZ IFRS 16 on the Group’s consolidated
financial statements is described below.
The Group has applied NZ IFRS 16 using the modified retrospective approach which:
• Requires the Group to recognise the cumulative effect of initially applying NZ IFRS 16 as an adjustment to
the opening balance of retained earnings at the date of initial application.
• Does not permit restatement of comparatives, which continue to be presented under the previous accounting
policies (under NZ IAS 17 Leases and NZ IFRIC 4 Determining whether an Arrangement Contains a Lease).
a) Impact of the new definition of a lease
The Group has made use of the practical expedient available on transition to NZ IFRS 16 not to reassess whether
a contract is or contains a lease. Accordingly, the definition of a lease in accordance with NZ IAS 17 and NZ
IFRIC 4 will continue to be applied to those leases entered or changed before 1 July 2019.
The change in definition of a lease mainly relates to the concept of control. NZ IFRS 16 determines whether a
contract contains a lease on the basis of whether the customer has the right to control the use of an identified
asset for a period of time in exchange for consideration. This is in contrast to the focus on ‘risks and rewards’ in
NZIAS 17 and NZIFRIC4.
The Group applies the definition of a lease and related guidance set out in NZ IFRS 16 to all lease contracts
entered into or changed on or after 1 July 2019. In preparation for the first-time application of NZ IFRS 16,
the Group has carried out a review which has shown that the new definition in NZ IFRS 16 will not significantly
change the scope of contracts that meet the definition of a lease for the Group.
3839
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3.26 ADOPTION OF NEW AND REVISED STANDARDS – IMPACT OF INITIAL
APPLICATION OF NZ IFRS 16 LEASES (CONTINUED)
(b) Impact on Lessee Accounting
NZ IFRS 16 changes how the Group accounts for leases previously classified as operating leases under NZ IAS
17, which were off balance sheet.
Applying NZ IFRS 16, for all leases (except as noted below), the Group:
a. Recognises right-of-use assets and lease liabilities in the statement of financial position, initially measured
at the present value of the future lease payments, with the right-of-use asset adjusted by the amount of any
prepaid or accrued lease payments;
b. Recognises amortisation (depreciation) of right-of-use assets and interest on lease liabilities in the
consolidated statement of profit or loss and in biological work in progress;
c. Separates the total amount of cash paid into a principal portion (presented within financing activities) and
interest (presented within operating activities) in the consolidated statement of cash flows.
Under IFRS 16, right-of-use assets are tested for impairment in accordance with NZ IAS 36.
For short-term leases (lease term of 12 months or less) and leases of low-value assets (which includes printers
and eftpos terminals), the Group has opted to recognise a lease expense on a straight-line basis as permitted by
NZ IFRS 16. This expense is presented within ‘Selling’ and ‘Administration’ expenses in profit or loss.
The Group has used the following practical expedients when applying the modified retrospective approach to
leases previously classified as operating leases applying NZ IAS 17.
• The Group has applied a single discount rate to a portfolio of leases with reasonably similar characteristics.
• The Group has elected not to recognise right-of-use assets and lease liabilities to leases for which the lease
term ends within 12 months of the date of initial application.
• The Group has excluded initial direct costs from the measurement of the right-of-use asset at the date of
initial application.
• The Group has used hindsight when determining the lease term when the contract contains options to
extend or terminate the lease.
The Group does not have any leases that were previously classified as finance leases under NZ IAS 17.
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3.26 ADOPTION OF NEW AND REVISED STANDARDS – IMPACT OF INITIAL
APPLICATION OF NZ IFRS 16 LEASES (CONTINUED)
(c) Financial impact of initial application of NZ IFRS 16
The weighted average lessees incremental borrowing rate applied to lease liabilities recognised in the statement
of financial position on 1 July 2019 is 3.26% pa.
The following table shows the operating lease commitments disclosed applying NZ IAS 17 at 30 June 2019,
discounted using the incremental borrowing rate at the date of initial application and the lease liabilities
recognised in the statement of financial position at the date of initial application.
Impact on retained earnings as at 1 July 2019:
Group
2019
$’000
Operating lease commitments at 30 June 2019 15,701
Short-term leases not recognised under NZ IFRS 16 (93)
Leases of low-value assets not recognised under NZ IFRS 16 (27)
Correction to lease amounts and terms used for disclosure (854)
Effect of discounting the above amounts (2,874)
Present value of the lease payments due in periods covered by extension
options that are included/excluded in the lease term and previously
excluded/included in operating lease commitments 1,810
Lease liabilities recognised at 1 July 2019 13,663
The Group has recognised $12,408,000 of right-of-use assets on initial recognition and $13,663,000 of lease
liabilities upon transition to NZ IFRS 16 and has de-recognised $552,000 of land improvements relating to
vineyard leases previously recognised as part of the Mt Difficulty acquisition on 3 January 2019 and $(2,000)
of asset revaluations relating to these leases. Deferred tax of $507,000 on the timing difference at the date of
application has been recognised. The difference of $1,299,000 is recognised in retained earnings.
(d) Significant Accounting Policies
The Group has applied NZ IFRS 16 using modified retrospective approach and therefore comparative information
has not been restated and is presented under NZ IAS 17.
Accounting policy subsequent to transition is outlined in note 2.3.7 above.
2.4 BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial statements of the Company and entities controlled
by the Company (its subsidiaries) made up to 30 June each year. Control is achieved when the Company - has
the power over the investee; is exposed, or has rights, to variable returns from its involvement with the investee;
and has the ability to use its power to affects its returns.
4041
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
2.4 BASIS OF CONSOLIDATION (CONTINUED)
The Company reassesses 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 listed above.
Income and expenses of subsidiaries acquired or disposed of during the year are included in the consolidated
Income Statement and Statement of Comprehensive Income from the effective date of acquisition and up to the
effective date of disposal, as appropriate. Total comprehensive income of subsidiaries is attributed to the owners
of the Company and to the non-controlling interests even if this results in the non-controlling interests having a
deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies into line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
Group Group
2020 2019
$’000 $’000
3. PROFIT FOR THE YEAR
Included in profit before income tax for the year are the following:
REVENUE:
Sales revenue – sale of goods – bottled wine 49,951 44,046
Sales revenue – other 5,214 3,663
Total sales revenue 55,165 47,709
Other revenue – insurance proceeds – 234
Other revenue – government grant (refer note 4 re Covid-19) 601 –
Other revenue – dividend received 90 –
Total revenue 55,856 47,943
Sales revenue – other includes the sale of other products such as bulk wine,
spirits, merchandise, restaurant meals and non-alcoholic beverages.
EXPENSES:
Amortisation – lease right-of-use assets 1,009 –
Depreciation 4,560 3,353
Directors’ fees 232 193
Employee benefits expense:
– Short-term employee benefits 9,239 8,202
Excise duty and HPA levy 4,600 3,220
Fees paid to auditors (2020: Deloitte; 2019 PwC):
– Audit of the financial statements (including fees and disbursements) 86 91
Other services (PwC) 3 –
Group Group
2020 2019
$’000 $’000
4. OTHER EXPENSES
Included in other expenses for the year are the following:
Covid-19 related expenses (see note below) 144 –
Acquisition expenses – 216
Capital raising costs – 38
Insurance claim related expenses – 426
144 680
Covid-19 - During the year the Covid-19 Coronavirus pandemic spread throughout the World. On 21 March
2020 the New Zealand Government declared a State of Emergency and implemented a four-tier Alert level
system. New Zealand started in Alert level 2 on 21 March and then moved to Alert level 3 from 23 March which
resulted in the closure of the Group’s cellar doors and restaurant and all of the employees of the company who
were able to work from home did so from that day. The country moved to Alert level 4 lockdown on 25 March
2020 and moved back to Alert level 3 on 27 April 2020 and then Alert level 2 on 13 May 2020. During the Alert
level 4 lockdown period the Company applied to and was approved as an Essential Business which allowed
it to continue to operate under strict conditions to complete the annual harvest of grapes. During this time
the company incurred additional costs of operating such as accommodation and transport costs for workers
to operate within the requirements. The company’s hospitality staff were paid in full during the period of the
closure of the cellar doors and restaurants until 22/23 May 2020. The Company received the Government
Covid-19 Wage Subsidy of $624,000 in April 2020 and Essential Worker Lease Support payments of $14,000
to assist to pay employees who were unable to work from home. The Company qualified for the Wage Subsidy
as it was adversely affected by Covid-19 and its revenue was down by approximately 40% in May 2020 vs May
2019. Sales have subsequently improved and the Board and Management are confident that the Company’s
premiumisation strategy will assist in reducing the ongoing impact of Covid-19 on the results of the Company.
Refer note 2.3.21 for accounting policy for government grants and note 3 for the revenue recorded in the current
period.
The acquisition expenses in the prior year relate to the Mt Difficulty Wines purchase which was completed on 3
January 2019 following the receipt of Overseas Investment Office approval.
The capital raising costs in the prior year related to the $20 million equity share issue approved by the shareholders
to partly fund the Mt Difficulty Wines acquisition.
During the prior year the Group received insurance proceeds for two main insurance claims. The first related
to damage to a wine tank (which was included in property, plant and equipment) and the second to the glycol
contamination of bulk wine due to a tank failure. The material damage insurance policy covered the cost to
replace the tank subject to the first claim and the contaminated products insurance policy covered the cost of the
inventory (bulk wine lost) and business interruption loss of profits on the lost wine.
4243
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
Restated
Group Group
2020 2019
$’000 $’000
5. INTEREST EXPENSE
Interest on loans and borrowings 1,015 804
Interest on convertible notes 710 709
Interest expense on lease liabilities 5 -
Accounting interest cost recorded on deferred consideration payment 99 49
Total Interest expense 1,829 1,562
6. INCOME TAX
6.1 INCOME TAX RECOGNISED IN PROFIT
IIncome tax expense comprises:
Current tax expense – current year 2,470 1,791
Current tax expense – adjustment to prior year 14 –
Current tax expense 2,484 1,791
Deferred tax expense/(benefit) – origination & reversal of temporary differences (293) (254)
Deferred tax expense – adjustment to prior year – –
Deferred tax expense/(benefit) (293) (254)
Total income tax expense 2,191 1,537
Income tax benefit – deferred tax benefit – change in tax base
due to change in depreciation on buildings (1,519) –
Reconciliation of income tax expense:
Profit before income tax 7,593 5,055
Income taxation expense calculated at current rate of 28% 2,126 1,415
Non–deductible expenses 285 87
Other deferred movements (220) 35
Income tax expense as reported 2,191 1,537
The “Income tax benefit – deferred tax benefit – change in tax base due to change in deprecation on buildings”
adjustment of $1,519,000 results from the decrease in deferred tax liability as a result of the Government’s
COVID-19 Response (Taxation and Social Assistance Urgent Measures) Act that received Royal Assent on
25 March 2020 which re-introduced the depreciation deductions for commercial and industrial buildings with
an estimated useful life of 50 years or more from the 2020/21 tax year.
6.2 INCOME TAX RECOGNISED DIRECTLY IN OTHER
COMPREHENSIVE INCOME
The following current and deferred amounts were charged/(credited)
directly to other comprehensive income during the year:
Deferred tax: Revaluation of property, plant and equipment 334 450
Group Group
2020 2019
$’000 $’000
6. INCOME TAX (CONTINUED)
6.3 CURRENT TAX ASSETS AND LIABILITIES
Current tax assets: Tax refund receivable – –
Current tax liabilities: Tax payable 1,662 1,087
6.4 DEFERRED TAX BALANCES
Taxable and deductible temporary differences arise from the following:
Balance SheetIncome Statement
Group
2020
$’000
Group
2019
$’000
Group
2020
$’000
Group
2019
$’000
(i) Deferred tax liabilities
Tax and accounting book differences –
property, plant and equipment 10,407 12,015 (1,943) (60)
Brand intangible assets (value-in-use deferred tax) 5,150 5,150 – –
Inventories and biological work in progress 269 144 125 (66)
Fair value through profit or loss financial assets/liabilities 29 26 3 26)
Other including WET rebate receivable 104 102 2 (50)
Gross deferred tax liabilities 15,959 17,437 (1,813) (150)
(ii) Deferred tax assets
Annual, sick leave and employee entitlements,
accruals and provisions (214) (231) 17 (131)
Fair value through profit or loss financial assets/liabilities – (1) 1 27
Lease liabilities and right-of use assets (523) – (17) –
Gross deferred tax assets (737) (232) 1 (104)
Net deferred tax liabilities 15,222 17,205
Deferred tax expense/(benefit) (1,812) (254)
Disclosed in the Income Statement as part of:
Income tax expense (refer note 6.1) (293) (254)
Income tax benefit – change in depreciation on buildings (refer note 6.1) (1,519) –
All deferred tax assets and liabilities are disclosed as non-current.
During the year it was confirmed that the depreciation of commercial buildings was to be re-introduced from
the 2020/2021 tax year. This has resulted in the reversal of the previous deferred tax on the non-deductible
buildings of $1,519,000 being taken out of deferred tax and a deferred tax benefit recognised in profit and loss
(refer note 6.1).
4445
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020
6. INCOME TAX (CONTINUED)
Group Group
2020 2019
$’000 $’000
6.5 IMPUTATION CREDITS
Imputation credits available for subsequent reporting
periods based on a tax rate of 28% 5,727 4,011
The above amounts represent the balance of the imputation account as at the end of the reporting period,
adjusted for:
a. Imputation credits that will arise from the payment of the amount of the provision for income tax
b. Imputation debits that will arise from the payment of dividends recognised as a liability at the reporting
date; and
c. Imputation credits that will arise from the receipt of dividends recognised as receivables at the reporting
date.
7. EARNINGS PER SHARE
Group Group
2020 2019
cents per cents per
shares shares
Basic Earnings per share 10.53 5.89
The calculation of basic earnings per share in respect of 2020 is based on profit of $6,921,000 (2019: $3,518,000)
and the weighted average of 65,736,148 ordinary shares on issue during the year (2019: 59,759,612).
Diluted Earnings per share 10.10 5.89
The calculation of diluted earnings per share in respect of 2020 based on profit of $7,433,000 (2019:
$4,028,000), being profit for the year adjusted for the interest on the convertible notes after income tax, and
the weighted average of 73,599,173 ordinary shares on issue during the year (2019: 67,622,637) becomes anti-
dilutive in the comparative year and therefore the diluted earnings per share is the same as basic earnings per
share in that year.
The weighted average number of ordinary shares for the purposes of diluted earnings per share reconciles to
the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows:
Group Group
2020 2019
Number of Number of
shares shares
Weighted average number of ordinary shares (Basic) 65,736,148 59,759,612
Convertible notes outstanding at year end 7,863,025 7,863,025
Weighted average number of ordinary shares (Diluted) 73,599,173 67,622,637
8. DISTRIBUTION TO OWNERS
The Company paid a final dividend for 2019 of 3 cents per share fully imputed on 18 October 2019 totalling
$1,972,000 (2019: $1,590,000: 3 cents per share paid 18 September 2018). No final dividend for the financial
year has been declared and included in these financial statements. A final dividend of 3 cents per share fully
imputed, was approved by the Board on 27 August 2020 for payment on 23 October 2020 (refer note 31).
Parent 2020
Number of
shares issued
Parent 2019
Number of
shares issued
Group
2020
$’000
Group
2019
$’000
9. SHARE CAPITAL
FULLY PAID UP ORDINARY SHARES
Balance at beginning of financial year 65,736,148 52,222,534 86,518 66,518
Movements in share capital – 13,513,614 – 20,000
Balance at end of financial year 65,736,148 65,736,148 86,518 86,518
The Company has only one class of shares and all shares have the same voting rights and share equally in
dividends and any surpluses on winding up. The shares have no par value.
Share issues during the year:
There were no share issues during the year.
There were 13,513,614 ordinary shares issued during the prior year as follows:
3 July 2018 – Share Purchase Plan Share Issue - 765,634 shares at $1.48 – a total $1,133,000;
19 December 2018 – Share Placement Share Issues - 12,747,980 shares at $1.48 – a total of $18,867,000.
Shares reserved for issuance:
Convertible notes on issue at year end – convertible to 7,863,025 ordinary shares – refer note 15
(2019: 7,863,025).
Group Group
2020 2019
$’000 $’000
10. RESERVES
ASSET REVALUATION RESERVE
Balance at beginning of financial year 16,009 13,337
Adjustment on initial application of NZ IFRS16 Leases (2) –
Revaluation increments/(decrements) 2,888 3,347
Reversal of previous revaluation decrements taken through profit & loss (16) (225)
Transferred to retained earnings (17) –
Deferred tax liability arising on revaluation (note 6.2) (334) (450)
Balance at end of financial year 18,528 16,0 09
The asset revaluation reserve arises on the revaluation of land, buildings and land improvements. Where a
revalued asset is sold that proportion of the asset revaluation reserve which relates to that asset, and is effectively
realised, is transferred directly to retained earnings.
47
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
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FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020
Group Group
2020 2019
$’000 $’000
11. RETAINED EARNINGS
Balance at beginning of financial year 16,780 14,627
Adjustment on initial application of NZ IFRS16 Leases incl deferred tax (1,299) –
Profit for the year net of tax, attributable to Shareholders of the Parent Co. 6,921 3,518
Dividends paid relating to 2019 (2019: 2018) (1,972) (1,590)
20,430 16,555
Reversal of previous revaluation reserve taken through profit & loss 16 225
Transferred from asset revaluation reserve 17 –
Balance at end of financial year 20,463 16,78 0
12. TRADE AND OTHER PAYABLES
Trade creditors 4,609 4,674
Employee entitlements 1,322 997
Other accruals 855 1,564
6 , 7 8 6 7, 2 3 5
13. LOANS AND BORROWINGS
At amortised cost:
Interest
Rate %
Interest
Rate Review
Date
Expiry
Date
Group
2020
$’000
Group
2019
$’000
Bank of New Zealand Term Loan #03 1.87% pa 31/7/20 31/8/20 6,000 5,001
Bank of New Zealand Term Loan #05 2.28% pa 3/7/20 5/1/22 27,653 29,760
Endovanerra Ltd (formerly Mt Difficulty
Wines Ltd) – Deferred Consideration Payment 0% pa 3/7/20 5,200 5,101
TOTAL LOANS AND BORROWINGS 38,853 39,862
Weighted average effective interest rate on
BNZ Term Loans 2.21% 3.56%
Loans due within 1 year 7,353 2,261
Total current loans and borrowings 7,353 2,261
Loans due 1 to 2 years 25,500 12,101
Loans due 2 to 5 years 6,000 25,500
Loans due after 5 years – –
Total non-current loans and borrowings 31,500 37,601
Total loans and borrowings 38,853 3 9, 8 62
For loans covered by interest rate swap contracts (swaps) interest is charged on the underlying loan based on
the 1 month floating rate. Interest rate swaps have been taken out by the Group to convert this floating interest
rate obligation to a fixed interest rate obligation. Refer note 24 for further details of interest rate swap contracts.
13. LOANS AND BORROWINGS (CONTINUED)
BANK OF NEW ZEALAND FACILITIES
The details and terms of the BNZ facilities are as follows:
• The $5 million Market Connect Overdraft Facility to fund ongoing working capital requirements. The interest
rate payable on the facility is the BNZ Market Connect Overdraft Prime Rate (with 0% margin). An overdraft
facility fee of 0.80%pa is payable in arrears. All outstanding debt under the facility is repayable upon
demand. The balance available to be drawn down at 30 June 2020 was $5 million (2019: $5m).
• The $20 million term loan facility (loan #03). This loan facility is an interest only facility until maturity on
31 August 2020. The full facility limit of $20 million is available for redraw throughout the term. Interest
is payable at 1.55% per annum above the base rate. The base rate is the ‘BKBM’ rate as quoted on the
Reuters Monitor Money Rates Services page. A non-utilisation fee is payable of 0.4% pa. All outstanding
debt under the facility is repayable on the maturity date. The balance available at 30 June 2020 was $14
million (2019: $15m).
On 30 June 2020 the Company entered into a banking facility document with Bank of New Zealand (BNZ)
for a new $20 million term loan facility (loan #06) to refinance the term loan facility maturing on 31 August
2020 (loan #3). This loan facility is an interest only facility until maturity on 31 August 2023. The full facility
limit of $20 million is available for redraw throughout the term. Interest is payable at 1.95% per annum
above the base rate. The base rate is the one month ‘BKBM’ rate. On 24 August 2020 $11 million of this
facility was drawn down and used to repay BNZ term loan #03 (refer note 31).
• The $30 million term loan (loan #05). The loan was drawn down in full on 3 January 2019 and matures on
5 January 2022. The terms of the agreement are as follows: Principal repayments of $500,000 are payable
quarterly and the facility limit reduces by this amount each quarter. Interest is payable at 1.75% per annum
above the base rate. The base rate is the three month ‘BKBM’ rate as quoted on the Reuters Monitor Money
Rates Services page.
An event of review occurs under the BNZ facilities if entities owned or controlled by Mr William Foley no longer
own at least 50.10% of the Group.
SECURITY
The Bank has registered a first ranking general security agreement over all the present and after acquired
property of the Company and of its wholly owned subsidiaries, a specific security agreement over any separately
identifiable intellectual property of the Company or its wholly owned subsidiaries and a first ranking mortgage
over all of the land and improvements owned by the Company.
BANK COVENANTS
The Company complied with all of the financial covenants imposed by the Bank of NZ during the year.
MT DIFFICULTY ACQUISITION DEFERRED CONSIDERATION PAYMENT
In accordance with the Sale and Purchase Agreement the Deferred Consideration Payment of $5,200,000 is due
for payment on 3 July 2020. The fair value of this payment at balance date is $5,200,000 (2019: $5,101,000)
(refer note 30).
49
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
48
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
14. LEASES
14.1 LEASE RIGHT OF USE ASSETS
Group
Land
$’000
Buildings
$’000
Land
Improve-
ments
$’000
Plant,
Equip. &
Vehicles
$’000
Total
$’000
Year ended 30 June 2020
Net carrying amount
At 1 July 2019 7,714 160 4,524 10 12,408
Additions – – 67 – 67
Amortisation charge for the period (446) (69) (488) (6) (1,009)
At 30 June 2020 7,268 91 4,103 4 11,466
The Group leases vineyard land, office space (buildings), producing vineyards (land improvements) and a motor
vehicle. The average lease term is 11.3 years at 30 June 2020.
The vineyard land lease agreements have normal provisions for periodic rent reviews to market rates and the
producing vineyard lease agreements have annual CPI linked rent reviews.
The maturity analysis of lease liabilities relating to these leases is presented below.
Group
2020
$’000
Amounts recognised in profit and loss:
Amortisation expense on right-of-use assets 74
Interest expense on lease liabilities 5
Expense relating to short-term leases –
Expense relating to leases of low value assets 15
Amounts capitalised to biological work in progress:
Amortisation expense on right-of-use assets 935
Interest expense on lease liabilities 431
Expense relating to short-term leases 193
Expense relating to leases of low value assets –
At 30 June 2020, the Group is committed to $16,000 for short-term leases.
The total cash outflow for leases during the period was $1,535,000 (2019: $1,184,000).
14. LEASES (CONTINUED)
14.2 LEASE LIABILITIES
Group
2020
$’000
Classified as:
Current 896
Non-Current 11,943
Total 12,839
Maturity analysis (undiscounted cash flows):
Year 1 1,302
Ye ar 2 1,136
Year 3 1,072
Year 4 1,052
Year 4 1,051
Over 5 Years 12,481
Total 18,094
The Group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored
within the Group’s treasury function.
All lease obligations are denominated in New Zealand dollars.
5051
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
Group Group
2020 2019
$’000 $’000
15. CONVERTIBLE NOTES
Foley Family Wines Holdings, New Zealand Limited 10,900 10,900
Disclosed as:
Current convertible notes 10,900 10,900
As part of the merger transaction with The New Zealand Wine Company Limited (renamed Foley Family Wines
Limited and later Foley Wines Limited (“FWL”)) on 4 September 2012, the Company issued an 18 month
convertible note to Foley Family Wines Holdings, New Zealand Limited (“Foley Holdings”) for the principal
amount of $10,900,000 thereby assuming Foley Family Wines NZ Limited’s current loan liability to Foley Family
Wines Holdings, New Zealand Limited of the same amount under a promissory note.
The principal terms of the Convertible Note are:
• the term of the Convertible Note is a minimum term of 18 months. After that period or earlier if FWL is in
breach of its obligations under the Convertible Note, the Convertible Note converts at the option of Foley
Holdings or alternatively Foley Holdings may demand repayment in lieu of conversion;
• the issue price on the conversion of any shares under the Convertible Note is $1.386 per share which is
the same price at which the shares have been issued to Foley Holdings pursuant to the Merger of The New
Zealand Wine Company Limited and Foley Family Wines New Zealand Limited. On conversion of the
Convertible Note issued by FWL, 7,863,025 shares in FWL could be issued to Foley Holdings at a price of
$1.386 per share by way of off-set against the amount owing to Foley Holdings under the Convertible Note.
Assuming no change in the shares on issue in FWL between the date of the issue of the Convertible Note
and its conversion to new shares, this would when aggregated with the shares issued under the Merger
increase the holdings of Foley Holdings in FWL to 83%.
• the Convertible Note does not give Foley Holdings any right to vote. Foley Holdings will acquire voting rights
with the ordinary shares it receives on any exercise of the right to convert under the Convertible Note;
• interest is payable, quarterly in arrears (not compounding), on the Convertible Note pending conversion
at the rate of 6.5% pa. The interest rate has been agreed between FWL and Foley Holdings as being
representative of market rates for an unsecured loan of its type; and
• all shares issued pursuant to the exercise of the Convertible Note will rank equally in all respects with all
other FWL shares on issue
The Convertible Note can be converted at the option of Foley Holdings after 18 months from the date of issue,
that is, from 4 March 2014, and there are no performance hurdles required to be met before conversion can
occur. The Convertible Note has been classified as current. At balance date, and up to the date of these financial
statements, no notification had been received to convert the note.
Group Group
2020 2019
$’000 $’000
16. OTHER FINANCIAL ASSETS/(LIABILITIES)
At fair value:
Foreign currency forward contracts 110 89
Foreign currency option contracts – 4
Other financial assets – FVTPL – Current 110 93
Other financial assets – FVTPL – Total 110 93
Interest rate swap contracts – (3)
Other financial liabilities – FVTPL – Current – (3))
Foreign currency forward contracts (8) –
Other financial liabilities – FVTPL – Non Current (8) –
Other financial liabilities – FVTPL – Total (8) (3)
Derivative financial instruments are used by the Group in the normal course of business in order to hedge
exposure to fluctuations in interest and foreign exchange rates. Refer note 24 for details of financial instruments
used by the Group.
Group Group
2020 2019
$’000 $’000
17. TRADE AND OTHER RECEIVABLES
Trade receivables 7,097 8,756
Impairment of trade receivables – –
Other receivables 479 523
7, 5 76 9, 2 7 9
The carrying amount disclosed above is a reasonable approximation of fair value. Trade receivables are non-
interest bearing and are generally due the last working day of the month following invoice for domestic customers
and 30-120 day terms for export customers.
Not Past Due 6,936 8,756
Past Due 1–30 days 28 –
Past Due 31–60 days 117 –
Past Due 61–90 days 6 –
Past Due > 91 days 10 –
7, 0 9 7 8,756
5253
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
17. TRADE AND OTHER RECEIVABLES (CONTINUED)
Trade receivables that are less than 90 days past due are generally not considered impaired. As of 30 June 2020
trade receivables of $10,000 (2019: $Nil) were past due but not impaired.
The Group recognises a loss allowance for lifetime expected credit losses (ECL) for trade receivables. The
expected credit losses on these financial assets are estimated using a provision matrix based on the Group’s
historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions
and an assessment of both the current as well as the forecast direction of conditions at the reporting date. Based
on the assessment undertaken at balance date the Group has not recorded an Impairment of Trade Receivables
in the current year (2019: $Nil). No bad debts were written off during the year (2019: $Nil) and nothing was
recovered from a bad debt written off in the previous financial years (2019: $Nil). The gross debt relating to the
trade receivables which were considered to be impaired at balance date was $Nil (2019: $Nil).
Group Group
2020 2019
$’000 $’000
18. INVENTORIES
Raw materials 422 746
Consumable stores 122 104
Work in progress 31,115 30,403
Finished goods 15,079 12,827
Impairment of inventory (18) –
Total inventories at lower of cost and net realisable value 46,721 44,080
Impairment of Inventory:
Opening balance – 45
Impairment charge reversal during the year – (45)
Impairment charge during the year 18 –
Closing balance 18 –
19. BIOLOGICAL WORK IN PROGRESS
Growing costs related to next harvest 1,511 1,302
The growth on the vines in the period from harvest to 30 June 2020 cannot be reliably measured due to the lack
of market information and the variables in completing the biological transformation process between balance
date and the time of harvest. As allowed under NZ IAS 41 the cost of agricultural activity in the period to 30
June has been recognised as work in progress for the next harvest. This assumes the cost of the agricultural
activity approximates fair value in determining the value of the biological transformation that has occurred in
that period. The value of work in progress at balance date was $1,511,000 (2019: $1,302,000).
20. PROPERTY, PLANT AND EQUIPMENT
Group
Freehold
Land at
Fair Value
$’000
Freehold
Buildings
at Fair
Value
$’000
Land
Improve-
ments at
Fair Value
$’000
Plant,
Equip. &
Vehicles
at Cost
$’000
Total
$’000
Year ended 30 June 2020
At 1 July 2019, net of accumulated
depreciation and impairment 28,704 18,287 33,541 20,713 101,245
De-recognised on initial application of NZ IFRS16 – – (552) – (552)
Additions – 656 70 3,691 4,417
Disposals – (11) (9) (87) (107)
Revaluations 1,661 551 (140) – 2,070
Depreciation charge for the year – (373) (393) (3,794) (4,560)
At 30 June 2020, net of accumulated
depreciation and impairment 30,365 19,110 32,517 20,523 102,515
At 30 June 2020
Cost or fair value 30,365 19,110 32,517 41,934 123,926
Accumulated depreciation
(accum impairment nil) – – – (21,411) (21,411)
Net carrying amount 30,365 19,110 32,517 20,523 102, 515
Year ended 30 June 2019
At 1 July 2018, net of accumulated
depreciation and impairment 19,473 13,647 26,435 15,079 74,634
Additions excluding Mt Difficulty acquisition 19 141 467 2,577 3,204
Additions – Mt Difficulty acquisition 7,700 4,500 5,856 5,852 23,908
Disposals – (4) (70) (148) (222)
Revaluations 1,512 326 1,236 – 3,074
Depreciation charge for the year – (323) (383) (2,647) (3,353)
At 30 June 2019, net of accumulated
depreciation and impairment 28,704 18,287 33,541 20,713 101,245
At 30 June 2019:
Cost or fair value 28,704 18,287 33,541 36,224 116,756
Accumulated depreciation
(accum impairment nil) – – – (15,511) (15,511)
Net carrying amount 28,704 18,287 33,541 20,713 101,245
COMMITMENTS
At balance date the Group had capital commitments of $130,000 for a CARL copper pot still (2019: $500,000
for an Amenities Building at the Grove Mill/Waihopai Valley site).
5455
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020
20. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
REVALUATION OF LAND, BUILDINGS AND LAND IMPROVEMENTS
Land, buildings and land improvements (which includes biological bearer assets) shown at valuation were valued
at fair value under the principle of highest and best use by Alexander Hayward Limited, registered independent
valuers, for the Marlborough properties, Telfer Young (Hawkes Bay) Limited, registered independent valuers,
for the Martinborough properties, and Colliers International (2019: Logan Stone Ltd), registered independent
valuers, for the Central Otago properties, on 30 June 2020 (2019: 30 June 2019). Fair value is the amount for
which the assets could have been exchanged between a knowledgeable willing buyer and a knowledgeable
willing seller in an arm’s length transaction as at the valuation date.
Freehold land and land improvements at fair value (viticulture planted land) is valued by reference to recent
market transactions on arm’s length terms for similar assets, considering grape varietal, soil quality and access
to water on a per hectare basis. Adopted rates per hectare range from $88,000 to $239,000. The Valuers
have determined an adopted rate based on comparable transactions adjusted for the specific characteristics of
the viticulture planted land. Adopted values increase as the adopted rate per hectare increases. The valuation
includes inputs which are adjusted for the size, location and varietal mix held by the Group. Based on these
valuation techniques these fair values are included in Level 3 in the fair value hierarchy (refer note 24(j)). Freehold
Buildings are valued using a combination of the income approach and optimised depreciated replacement cost
method. The valuation comprises inputs for estimated rental, adopted capitalisation rates and estimated cost
to replace the assets on a like for like basis. The adopted capitalisation rates range from 7.75% to 8.75%. As
capitalisation rates decrease adopted building values increase. Based on these valuation techniques these fair
values are included in Level 3 in the fair value hierarchy (refer note 24(j)).
The Directors note that the Valuers have this year included clauses in their Valuation Reports noting that there is
market uncertainty due to the Covid-19 outbreak that has resulted in significant valuation uncertainty and that
market conditions are constantly changing.
The carrying amount of land, buildings and land improvements had they been recognised under the historic
cost model would have been $16,016,000, $17,355,000 and $18,597,000 respectively (2019: $16,016,000,
$16,710,000, $18,351,000). Land Improvements comprise of vineyards including biological bearer plants
(grape vines). The valuation of bearer plants at 30 June 2020 was $24,438,000 (2019: $24,631,000).
21. BIOLOGICAL ASSET PRODUCE
Biological assets consist of grape vines (bearer plants). Bearer plants are classified as Property, Plant and
Equipment and are included as part of land improvements (vineyard) in note 20. The Company grows
grapes to use in the production of wine, as part of normal operations. Vineyards are located in Marlborough,
Martinborough and Central Otago, New Zealand. Grapes are harvested between March and May each year.
At 30 June 2020 the Group held approximately 250 hectares of land owned or leased by the Company in
Marlborough (2019: 250), 190 hectares of land owned or leased by the Group in Martinborough (2019: 190)
and 180 hectares of land owned or leased by the Group in Central Otago (2019: 180). 200 hectares are
currently in commercial production in Marlborough (2019: 200), 137 hectares in Martinborough (2019: 137)
and 161 hectares in Central Otago (2019: 161).
21. BIOLOGICAL ASSET PRODUCE (CONTINUED)
During the year ended 30 June 2020 the Company harvested 4,378 tonnes of grapes (2019: 4,301). The
grapes harvested are recognised at fair value at the point of harvest after taking into consideration 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 sale to fair value is recognised in inventory and the revaluation gains and
losses section of the Income Statement. The fair value adjustment for the 2020 harvest was $1,243,000 (2019:
$415,000). Refer to note 19 for recognition of the biological transformation between the time of harvest and
balance date.
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 production of 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 this financial 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. The Group manages
this risk by diversifying its vineyards across the Marlborough, Martinborough and Central Otago regions and
through the use of windmills and helicopters for normal frost protection purposes.
Restated
Group Group
2020 2019
$’000 $’000
22. INTANGIBLE ASSETS
TRADEMARKS
At start of period, net of impairment 151 151
Additions during the year – –
At 30 June, net of impairment 151 151
Cost (gross carrying value) 151 151
Accumulated impairment losses – –
Net carrying amount 151 151
Trademarks pertain to the registration of trademarks in local and overseas jurisdictions for the Company’s
brands. Trademarks are carried at cost, less any accumulated impairment losses. Trademarks have been
assessed as having an indefinite life since the Company has the rights to the brand while it is registered and has
no intention of relinquishing those rights. The recoverable amount is estimated annually and an impairment loss
recognised to the extent that the recoverable amount is lower than the carrying amount.
57
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
56
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
Restated
Group Group
2020 2019
$’000 $’000
22. INTANGIBLE ASSETS (CONTINUED)
GOODWILL
At start of period, net of impairment 16,303 4,727
Additions during the year – 11,576
At 30 June, net of impairment 16,303 16,303
Cost (gross carrying value) 16,303 16,303
Accumulated impairment losses – –
Net carrying amount 16,303 16,303
After initial recognition, goodwill acquired is measured at cost less any accumulated impairment losses. Goodwill
is not amortised but is subject to impairment testing on an annual basis or whenever there is an indication of
impairment. Goodwill relates to the acquisition of the Vavasour Wines’ business assets on 1 September 2003,
Goldwater Wines’ business assets on 1 April 2006, Clifford Bay’s business assets on 1 March 2007, the reverse
acquisition of The New Zealand Wine Company Ltd (Grove Mill) on 4 September 2012, the acquisition of
Martinborough Vineyards on 30 June 2014 and the acquisition of Mt Difficulty Wines’ business and assets on
3 January 2019. The value of Goodwill at balance date includes a deferred tax liability on acquired indefinite
life intangibles (brands) of $5,150,000 (2019: $2,212,000) and acquired non-depreciable buildings in the prior
year of $1,782,000.
BRANDS AND INTELLECTUAL PROPERTY
At start of period, net of impairment 18,668 8,175
Additions – current year additions – 10,493
Impairment – –
At 30 June, net of impairment 18,668 18,668
Cost (gross carrying value) 18,668 18,668
Accumulated impairment losses – –
Net carrying amount 18,668 18,668
Brands are regarded as having indefinite useful lives as there are no legal restrictions on the use of the brands
or technological barriers to their ongoing usefulness. Brands are not amortised but are subject to impairment
testing on an annual basis or whenever there is an indication of impairment. The Brands included are Vavasour,
Goldwater, Dashwood, Clifford Bay, Martinborough Vineyard and Lighthouse Gin.
TOTAL INTANGIBLE ASSETS 35,122 35,122
22. INTANGIBLE ASSETS (CONTINUED)
(A) IMPAIRMENT TESTS FOR GOODWILL AND INTANGIBLES WITH INDEFINITE
USEFUL LIVES
The Group has determined that in the current year the value of the goodwill and intangible assets was supported
by value-in use calculations performed for the cash generating unit, being the whole business. The recoverable
amount of the cash generating unit was determined based on pre-tax cash flow projections based on the current
results of the Group and the following key assumptions: Earnings Before Interest and Tax estimated growth
rate: 3% pa (2019: 3%); Terminal value of 2.61% (2019: 3%); a period of projection of five years and a pre-tax
discount rate 6.3% pa (2019: 6.3% pa). The discount rate used is consistent with companies operating in the
same industry. No reasonable possible change in assumptions would lead to an impairment. The recoverable
amount determined did not indicate any impairment and no adjustment was deemed to be required.
Group Group
2020 2019
$’000 $’000
23. CASH FLOW INFORMATION
(A) RECONCILIATION OF PROFIT FOR THE YEAR
TO NET CASH FLOW FROM OPERATING ACTIVITIES
PROFIT AFTER INCOME TAX FOR THE YEAR 6,921 3,518
NON–CASH ITEMS:
Depreciation 4,560 3,353
Amortisation 1,0 09 –
Increase/(decrease) in deferred tax (1,812) (254)
Impairment loss/(gain) recognised on trade and other receivables – –
Impairment loss/(gain) recognised on inventories 18 (45)
Accounting interest recorded on deferred consideration payment 99 –
Adjustments resulting from revaluation of grapes (649) 98
Loss/(gain) on disposal of property, plant and equipment 33 156
Loss/(gain) on asset revaluations 818 93
4,076 3,401
MOVEMENTS IN WORKING CAPITAL BALANCES:
Trade and other receivables 1,70 4 145
Inventories (2,010) (2,825)
Biological work in progress (209) (429)
Prepaid expenses and other current assets 196 (448)
Trade and other payables (449) 2,085
Other financial assets/liabilities (12) (188)
Current tax assets/liabilities 575 1,154
(205) (506)
NET CASH FLOW FROM OPERATING ACTIVITIES 10,792 6,413
5859
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
Group Group
2020 2019
$’000 $’000
23. CASH FLOW INFORMATION (CONTINUED)
(B) NET LOANS AND BORROWINGS RECONCILIATION
Total Loans and borrowings (refer note 13) 38,853 39,862
Loans advanced during the year 1,000 30,000
Loans repaid during the year (2,10 8) (4,191)
Net movement in net debt – all cash flows (1,10 8) 25, 8 09
(B) NET LOANS AND BORROWINGS RECONCILIATION
Total Lease liabilities repayable (refer note 14.2) 12,839 –
Leases recognised on initial application of NZ IFRS 16 – non-cash 13,665 –
Leases recognised due to lease remeasurement – non-cash 67 –
Lease liabilities repaid during the year - cash outflows (893) –
Lease liabilities – net movement 12,839 –
24. FINANCIAL INSTRUMENTS
(A) CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern
while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital
structure of the Group consists of debt, which includes loans and borrowings disclosed in note 13, cash and cash
equivalents and equity, comprising issued capital, reserves and retained earnings as disclosed in notes 9, 10 and
11 respectively. The Group’s Board of Directors reviews the capital structure on a semi-annual basis. As part of
the review the Board considers the cost of capital and the risks associated with each class of capital as well as
the requirement by the Group’s bank, Bank of New Zealand, to maintain adjusted tangible equity percentage
at a level of at least 50% of adjusted total tangible assets. The Board will balance the Group’s overall capital
structure through the payment of dividends, new share issues as well as the issue of new debt or the redemption
of existing debt. The Group’s overall strategy remains unchanged from 2019.
(B) SIGNIFICANT ACCOUNTING POLICIES
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognised, in respect of each class of
financial asset, financial liability and equity instrument are disclosed in note 2 to the financial statements.
(C) FINANCIAL RISK MANAGEMENT OBJECTIVES
The Group is exposed to financial risks relating to the operations of the Group. These risks include agricultural
risk, market risk (including currency risk and interest rate risk), credit risk and liquidity risk.
24. FINANCIAL INSTRUMENTS (CONTINUED)
(C) FINANCIAL RISK MANAGEMENT OBJECTIVES (CONTINUED)
The agricultural activity of the Group consists of the management of vineyards to produce grapes for use in
the production of 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 Group’s strategy to manage
this financial risk is to actively review and manage its working capital requirements. In addition, the Group
maintains credit facilities at a level sufficient to fund the Group’s working capital during the period between cash
expenditure and cash inflow. At balance date, the Group had unused credit facilities in the form of undrawn
bank overdrafts and loan facilities of $19 million (2019: $20 million).
The Group seeks to minimise the effects of these risks, by obtaining independent advice and using derivative
financial instruments to hedge these risk exposures. The use of financial derivatives is governed by the Group’s
policies approved by the Board of Directors, which provide written principles on the use of financial derivatives.
Compliance with policies and exposure limits is reviewed by the Board of Directors on a periodic basis. The Group
does not enter into or trade financial instruments, including derivative financial instruments, for speculative
purposes.
(D) MARKET RISK
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates
(refer note 24(e)) and interest rates (refer note 24(f)). The Group enters into a variety of derivative financial
instruments to manage its exposure to interest rate and foreign currency risk, including:
(i) forward foreign exchange contracts and foreign currency option contracts to hedge the exchange rate risk
arising on the export of wine principally to the United States, United Kingdom, Europe and Australia; and
(ii) interest rate swaps to mitigate the risk of rising interest rates.
There has been no change to the Group’s exposure to market risks or the manner in which it manages and
measures the risk.
(E) FOREIGN CURRENCY RISK MANAGEMENT
The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange
rate fluctuations arise. Exchange rate exposures are managed within approved parameters utilising forward
foreign exchange contracts and foreign exchange option contracts.
Foreign currency denominated assets and liabilities at balance date are:
Group Group
2020 2019
$’000 $’000
Cash and cash equivalents 967 1,655
Trade and other receivables 5,219 6,027
Trade and other payables (142) (373)
Net exposure at balance date 6,044 7, 3 0 9
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FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
24. FINANCIAL INSTRUMENTS (CONTINUED)
(E) FOREIGN CURRENCY RISK MANAGEMENT (CONTINUED)
SENSITIVITY ANALYSIS
The Group is mainly exposed to US dollars (USD), Great British pounds (GBP), Australian dollars (AUD) and
Euro (EUR). If there was a 10% upward movement in the New Zealand dollar against the relevant currencies
the profit before tax and equity would decrease by $222,000, $120,000, $164,000 and $44,000 respectively
for the Group (2019: $259,000, $114,000, $256,000 and $35,000). If there was a 10% downward movement
in the New Zealand dollar against the relevant currencies the profit before tax and equity would increase
by $271,000, $146,000, $201,000 and $53,000 respectively for the Group (2019: $317,000, $140,000,
$313,000 and $42,000). The 10% sensitivity rate used represents management’s assessment of the reasonably
possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency
denominated monetary items and adjusts their translation at the year end for the listed percentage change in
foreign currency rates.
FORWARD FOREIGN EXCHANGE CONTRACTS AND OPTION CONTRACTS
It is the policy of the Group to enter into forward foreign exchange contracts to cover specific foreign currency
payments and receipts up to 100% of the exposure generated. The Group also enters into forward foreign
exchange contracts and option contracts including collars to manage the risk associated with anticipated sales
and purchase transactions out to 60 months within 25-100% of the exposure generated, subject to certain
criteria being met. Forward foreign exchange contracts and option contracts are measured at fair value through
profit or loss. The fair value of forward foreign exchange contracts and option contracts is based on market
values of equivalent instruments at the reporting date.
The aggregate notional principal of forward foreign exchange contracts outstanding for the Group as at
balance date was $9,686,000 (2019: $6,291,000). The aggregate notional principal of foreign exchange option
contracts outstanding at balance date was a net of $Nil (2019: $214,000).
(F) INTEREST RATE RISK MANAGEMENT
The Company and the Group is exposed to interest rate risk as it borrows funds at both fixed and floating interest
rates. The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate
borrowings, by use of interest rate swap contracts. Hedging activities are evaluated regularly with the assistance
of independent advice to align with interest rate views and defined risk appetite; ensuring optimal hedging
strategies are applied or protecting interest expense through different interest rate cycles. The Company and
the Group’s exposure to interest rates on financial assets and financial liabilities are detailed in the liquidity risk
management section of this note or in note 13.
SENSITIVITY ANALYSIS
The sensitivity analyses below have been determined based on the exposure to interest rates for both derivative
and non-derivative instruments at the reporting date and the stipulated change taking place at the beginning
of the financial year and held constant throughout the reporting period. A 100 basis point (1%) increase or
decrease is used and represents management’s assessment of the reasonably possible change in interest rates.
At balance date, if interest rates had been 1% lower or higher and all other variables were held constant,
the Company and Group’s net profit and equity would increase/decrease by approximately $341,000 (2019:
$214,000) respectively. This is mainly attributable to the Group’s exposure to interest rates on its variable rate
borrowings.
24. FINANCIAL INSTRUMENTS (CONTINUED)
(F) INTEREST RATE RISK MANAGEMENT (CONTINUED)
SENSITIVITY ANALYSIS (CONTINUED)
The Company and Group’s sensitivity to interest rates has increased during the current year mainly due to the
increase in floating interest rate exposure.
INTEREST RATE SWAP CONTRACTS
Under interest rate swap contracts, the Group agrees to exchange the difference between the fixed and floating
rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Group to
mitigate the risk of changing interest rates on debt held. The fair value of interest rate swaps are based on
market values of equivalent instruments at the reporting date as disclosed below.
The aggregate notional principal amount of the outstanding interest rate swap contracts at balance date was
$Nil (2019: $233,000). The interest rate applicable to the interest rate swap contract during the year was 6.01%
pa (2019: 5.30% pa – 6.01% pa).
Interest rate swap contracts exchanging floating rate interest amounts for fixed rate interest amounts are used
to reduce the Group’s cash flow exposure resulting from variable interest rates on borrowings. These are
measured at fair value through profit or loss. The interest rate swaps and the interest payments on the loan
occur simultaneously on a monthly basis. The floating rate on the interest rate swaps is the 1 month BKBM rate.
The Group will settle the difference between the fixed and floating interest rate on a net basis.
(G) CREDIT RISK MANAGEMENT
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Group. The Group has adopted a policy of only dealing with credit worthy counterparties as a
means of mitigating the risk of financial loss from defaults. The Group’s exposure and the credit ratings of
its counterparties are continuously monitored and the aggregate value of transactions concluded is spread
amongst approved counterparties. Credit exposure is controlled by counterparty limits that are approved by the
Board of Directors and are monitored on a regular basis. The Group does not require collateral in respect of
trade and other receivables.
A default on a financial asset is when the counterparty fails to make contractual payments within 60 days
of when they fall due. Probability of default constitutes a key input in measuring expected credit loss (ECL).
Probability of default is an estimate of the likelihood of default over a given time horizon, the calculation of which
includes historical data, assumptions and expectations of future conditions.
Trade receivables consist of a large number of customers, spread across diverse industries and geographical
areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable and, where
appropriate, trade credit insurance is purchased.
The Group does not have any significant concentrations of net credit risk. The Company does not expect the
non-performance of any obligations at balance date. The credit risk on liquid funds and derivative financial
instruments is limited because the counterparties are banks with high credit-ratings assigned by international
agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses,
represent the Group’s maximum exposure to credit risk.
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FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
24. FINANCIAL INSTRUMENTS (CONTINUED)
(H) LIQUIDITY RISK MANAGEMENT
Liquidity risk represents the Group’s ability to meet its contractual obligations. Ultimate responsibility for liquidity
risk management rests with the Board of Directors, who has built an appropriate liquidity risk management
framework for the management of the Group’s short, medium and long-term funding and liquidity management
requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and
reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity
profiles of financial assets and liabilities. At balance date, the Group had unused credit facilities in the form of
undrawn bank overdrafts and loan facilities of $19 million (2019: $20 million) to further reduce liquidity risk
LIQUIDITY TABLES
The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities.
The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest
date on which the Group can be required to pay. Refer to note 13 for the weighted average effective interest
rate..
Less than
1 year
$’000
1-2
years
$’000
2-5
years
$’000
Over
5 years
$’000
Group 2020
Trade and other payables 6,786 – – –
Loans and borrowings 7,800 25,896 6,000 –
Convertible notes 11,609 – – –
Lease liabilities 1,302 1,136 3,175 12,481
27,497 27,032 9,175 12,481
Group 2019
Trade and other payables 7,235 – – –
Loans and borrowings 3,157 14,154 26,142 –
Convertible notes 11,609 – – –
22,001 14,154 26,142 –
24. FINANCIAL INSTRUMENTS (CONTINUED)
(H) LIQUIDITY RISK MANAGEMENT (CONTINUED)
LIQUIDITY TABLES (CONTINUED)
The following table details the Group’s liquidity analysis for its derivative financial instruments. The table has
been drawn up based on the undiscounted net cash inflows/(outflows) on the derivative instrument that settle on
a net basis and the undiscounted gross inflows and (outflows) on those derivatives that require gross settlement.
When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to
the projected interest rates as illustrated by the yield curves existing at the reporting date.
Less than
6 mths
$’000
6 -12
mths
$’000
1-2
years
$’000
Over
2 years
$’000
Group 2020
Forward exchange contracts – cash inflows 4,848 2,975 1,863 –
Forward exchange contracts – cash outflows (4,795) (2,918) (1,871) –
53 57 (8) –
Group 2019
Interest rate swaps – net settled cash flows (2) – – –
Forward exchange contracts – cash inflows 4,598 2,046 – –
Forward exchange contracts – cash outflows (4,722) (2,015) – –
Foreign currency option contracts – cash inflows 214 – – –
Foreign currency option contracts – cash outflows (209) – – –
(121) 31 – –
(I) FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair values of financial assets and liabilities are determined as follows:
• the fair value of financial assets and liabilities with standard terms and conditions and traded on active
markets are determined with reference to the quoted market prices; and
• the fair value of derivative instruments are calculated based on discounted cash flows using market inputs.
The Directors consider that the carrying value of all financial instrument assets and liabilities in the financial
statements approximate their fair value.
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FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
24. FINANCIAL INSTRUMENTS (CONTINUED)
(J) FAIR VALUE MEASUREMENTS RECOGNISED IN THE STATEMENT OF FINANCIAL
POSITION
The following table provides an analysis of financial instruments that are measured subsequent to initial
recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities;
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
from prices); and
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the
assets or liability that are not based on observable market data (unobservable inputs).
Group Group
2020 2019
$’000 $’000
Financial assets FVTPL
Other financial assets (derivative financial assets) – Current 110 93
Other financial assets (derivative financial assets) – Non–Current – –
Total financial assets 110 93
Financial liabilities FVTPL
Other financial liabilities (derivative financial liabilities) – Current – (3)
Other financial liabilities (derivative financial liabilities) – Non–Current (8) –
Total financial liabilities (8) (3)
All financial assets and liabilities of the Group that are measured at fair value subsequent to initial recognition are
included in Level 2 as the fair value of these instruments are not quoted on an active market and is determined
by using valuation techniques. These valuation techniques rely on observable market data. There were no
transfers between Level 1 and 2 during the year.
(K) CHANGE IN FAIR VALUE OF FINANCIAL ASSETS/LIABILITIES
Foreign currency forward contracts 13 169
Foreign currency option contracts (4) 4
Interest rate swaps 3 14
12 187
25. DIRECTORS AND KEY MANAGEMENT PERSONNEL COMPENSATION
Key management personnel are the Directors of the Company and the executives with the greatest authority for
the strategic direction of the Company. The compensation of the Directors and the key management personnel
is set out below:
Short-term employee benefits 2,304 1,651
26. RELATED PARTY DISCLOSURES
(A) INVESTMENT IN SUBSIDIARIES
The Parent entity in the consolidated entity is Foley Wines Limited. The Parent entity of Foley Wines Limited is
Foley Family Wines Holdings, New Zealand Limited who own 52.80% (2019: 52.80%) of the shares in Foley
Wines Limited. The ultimate parent is Foley Family Wines Holdings, Inc., who own 80.47% of Foley Family Wines
Holdings, New Zealand Limited and as such owns 42.49% (2019: 42.49%) of the Company.
The consolidated financial statements include the financial statements of Foley Wines Limited (FWL) and the
following subsidiaries:
Name of EntityPrincipal ActivityParent Company
Country of
Incorpo-
ration
Ownership
Interest %
2020
Ownership
Interest %
2019
Vavasour Wines LtdNon-operatingFoley Wines LtdNZ100%100%
Goldwater Wines LtdNon-operatingFoley Wines LtdNZ100%100%
Clifford Bay Wines LtdNon-operatingFoley Wines LtdNZ100%100%
Te Kairanga Wines LtdNon-operatingFoley Wines LtdNZ100%100%
Grove Mill Wine Company LtdNon-operatingFoley Wines LtdNZ100%100%
Sanctuary Wine Company LtdNon-operatingFoley Wines LtdNZ100%100%
The New Zealand Wine
Company LtdNon-operatingFoley Wines LtdNZ100%100%
Martinborough Vineyard Wines
LtdNon-operatingFoley Wines LtdNZ100%100%
Mt Difficulty Wines Ltd Non-operatingFoley Wines LtdNZ100%100%
Burnt Spur LtdNon-operatingFoley Wines LtdNZ100%100%
The New Zealand Wine Company (Europe) Ltd was dissolved on 12 February 2019.
Martinborough Terraces Ltd changed its company name to Mt Difficulty Wines Ltd on 3 January 2019.
(B) TRANSACTIONS WITH RELATED PARTIES – DIRECTORS AND KEY MANAGEMENT
PERSONNEL
Details of the compensation paid to Directors and key management personnel are set out in note 25.
Group Group
2020 2019
$’000 $’000
Certain Directors and key management personnel have interests in contracts
with the Group as follows. All transactions were at normal commercial rates.
AM Turnbull (Lighthouse Distillery Ltd – purchase of Spirits for resale) 192 579
AM Turnbull (Lighthouse Distillery Ltd – charges from FWL for
labour, rent, electricity and administration) 62 78
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Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
26. RELATED PARTY DISCLOSURES (CONTINUED)
(C) TRANSACTIONS WITH OTHER RELATED PARTIES
Material transactions with related parties during the period are set out below:
(i) Sales were made to Foley Family Wines, Inc., a 100% owned subsidiary of Foley Family Wines Holdings,
Inc., the ultimate parent of Foley Wines Limited. Sales for the year were $8,787,000 (2019: $9,184,000).
(ii) Marketing support services were provided by Foley Family Wines Inc., a 100% owned subsidiary of Foley
Family Wines Holdings, Inc., the ultimate parent of Foley Wines Limited. Marketing support charges for
the year were $114,000 (2019: $108,000).
(iii) Interest was paid/payable to Foley Family Wines Holdings, New Zealand Limited the parent of the Foley
Wines Limited under the convertible note (note 15). Interest paid/payable for the year was $710,000
(2019: $709,000).
(iv) Sales were made to Wharekauhau Country Estate Limited, a luxury lodge 74.6% owned by Bill Foley,
the majority shareholder of the ultimate parent. Sales for the year totalled $48,000 (2019: $30,000).
Administration Charges for the year totalled $Nil (2019: $2,000). Accommodation, meals and events
provided by Wharekauhau to the Company during the year totalled $34,000 (2019: $22,000).
(v) Lighthouse Gin product was purchased for global distribution from Lighthouse Distillery Limited, a
company owned by Mark Turnbull, CEO and Director of Foley Wines Limited. Purchases during the period
totalled $192,000 (2019: $579,000). Administration services, rental, electricity and contract distilling
services were provided to Lighthouse Distillery Limited during the period of $62,000 (2019: $78,000).
Group Group
2020 2019
$’000 $’000
Amounts owing to related parties as at balance date:
Foley Family Wines Holdings, New Zealand Limited – convertible note 10,900 10,900
Wharekauhau Country Estate Limited – 1
Lighthouse Distillery Limited 48 27
Amounts owing from related parties as at balance date:
Foley Family Wines, Inc. 1, 8 07 2,010
Wharekauhau Country Estate Limited 7 5
Lighthouse Distillery Limited 11 2 0
27. SEGMENT INFORMATION
The Group operates in the wine industry and is considered to operate in one segment. Financial information
available to management including the chief operating decision maker is principally based on the information
provided in these financial statements. There are therefore no additional disclosures included in these financial
statements.
Included in sales revenue are revenues of approximately $16,664,000 (2019: $11,256,000), $8,787,000 (2019:
$9,184,000) and $4,765,000 (2019: $4,844,000) which arose from sales to the Group’s largest customers. No
other single customers contributed 10% or more to the Group’s revenue in either 2020 or 2019. The second
largest customer is a related party – refer note 26.
The Group derived sales revenue from New Zealand customers of $24,924,000 and overseas customers of
$30,241,000 (2019: NZ $17,612,000; Overseas $29,726,000).
28. COMMITMENTS
In the ordinary course of business the Group has Grower Agreements which would require it to purchase grapes
during harvest which occurs between March and May each year throughout the period of the Agreement.
At balance date the Group had capital commitments of $130,000 for a CARL copper pot still (2019: $500,000
for an Amenities Building at the Grove Mill/Waihopai Valley site). The Group has also committed to a capital
expenditure project not exceeding $3 million for the Mt Difficulty Restaurant redevelopment.
29. CONTINGENT LIABILITIES
There were no contingent liabilities at balance date (2019: Nil).
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Notes to the
Financial Statements
(continued)
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
30. MT DIFFICULTY WINES ACQUISITION
On 3 January 2019 the Company completed its purchase of the assets and business of Mt Difficulty Wines, a
wine business with a winery, vineyards and cellar door/restaurant located in Central Otago.
The impact of this acquisition on the balance sheet was as follows:
Group Group
2019 2019
Final Preliminary
$’000 $’000
Cash 1 1
Trade and other receivables 381 381
Inventories 8, 612 8, 612
Biological work in progress 2,489 2,489
Prepayments 201 201
Property, plant and equipment 23,908 23,908
Intangible assets (brands) 10,493 -
Total assets acquired 46,085 35,592
Trade and other payables (247) (247)
Deferred tax (5,281) (2,343)
Total liabilities acquired (5,528) (2,590)
Net assets acquired 40,557 33,002
Goodwill on acquisition 11, 576 19,131
Total net assets acquired 52,133 52,133
Funded as follows:
Liabilities – Loans and borrowings 2 7, 0 8 2 2 7, 0 8 2
Equity – Share capital 20,000 20,000
Total paid in the financial year to 30 June 2019 47, 0 8 2 47, 0 8 2
Liabilities – Loans and borrowings – Deferred consideration 5,051 5,051
Total amount paid/payable 52,133 52,133
30. MT DIFFICULTY WINES ACQUISITION (CONTINUED)
The Deferred Consideration Payment of $5,200,000 is due to be paid on 3 July 2020 in accordance with the
Sale and Purchase Agreement. The fair value (net present value) of the deferred consideration at acquisition date
was $5,051,000. At year end the fair value of this payment was $5,200,000 and is included in Current Loans
and borrowings (2019: $5,101,000 included in Non-current Loans and borrowings).
The acquisition aligns with and supports the Company’s strategic direction to become NZ’s most revered wine
group by becoming a super-premium wine producer and a leader in the super-premium category. The addition
of a third iconic wine region, providing geographical diversification, complement the Foley Wines branded
wine portfolio and provide further opportunity to strengthen distribution in New Zealand and internationally.
The goodwill is attributable to the key customer contracts and high profitability of the acquired business and
synergies from combining the businesses. It will not be deductible for tax purposes.
Further analysis undertaken determined that there were identifiable intangible assets, being brands of
$10,493,000, that were able to be fair valued at the acquisition date and separately recognised in the financial
statements. This resulted in an increase in the deferred tax (being the value-in-use deferred tax on brands) of
$2,938,000 and a reduction in the Goodwill recognised on the acquisition of $7,555,000. The fair value of the
brand intangible assets acquired were determined using a relief-from-royalty valuation method.
SIGNIFICANT ESTIMATE: CONTINGENT CONSIDERATION: Mt Difficulty Cellar Door and Restaurant
Development (Redevelopment) - If the total aggregate cost to the Company of the Redevelopment (exclusive of
GST) (Redevelopment Final Cost) is less than $3,000,000 then upon final completion and operation of the
Redevelopment, the Company will be required to pay to the previous Mt Difficulty Wines (shareholders), as an
adjustment to the purchase price, the difference (if any) between $3,000,000 and the Redevelopment Final
Cost. Based on the information available at balance date the Company does not expect that there will be any
further amount payable for the purchase under this provision.
ACQUIRED RECEIVABLES: The fair value and gross contractual value of acquired trade receivables
is $381,000. This has all subsequently been collected therefore there is no portion of this estimated to be
uncollectible.
TRANSACTION COSTS:The acquisition-related costs in the prior year (included in Other expenses - refer
Note 4) were $591,000. In addition, the costs associated with the equity share capital issues to partly fund the
acquisition in the prior year were $38,000 (Note 4).
There were no acquisitions in the year ended 30 June 2020.
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FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Notes to the
Financial Statements
(continued)
For the year ended 30 June 2020
31. SUBSEQUENT EVENTS
On 3 July 2020 the interest rate on the BNZ Term Loan #05 facility was reviewed. The new interest rate on this
loan facility for the period from 3 July 2020 to 5 October 2020 was 2.11% pa.
On 31 July 2020 the interest rate on the BNZ Term Loan #03 facility was reviewed. The new interest rate on this
facility for the period from 31 July 2020 to 31 August 2020 remained at 1.87% pa.
On 3 July 2020 $5,000,000 was redrawn on the BNZ term loan facility #03.
On 3 July 2020 the Deferred Consideration Payment for the Mt Difficulty Wines acquisition of $5,200,000 was
paid to Endovanerra Ltd (formerly Mt Difficulty Wines Ltd).
On 24 August 2020 $11 million was drawn down against the new BNZ term loan #06 facility and the $11
million simultaneously repaid the balance outstanding on BNZ term loan #03 that was repayable in full on 31
August 2020. The interest rate on this new loan facility for the period from 24 August 2020 to 31 August 2020
was 2.27% pa.
On 27 August 2020, the Board approved a final dividend on 3 cents per share, fully imputed, for payment on
23 October 2020.
No other material events have occurred since balance date.
Group Group
2020 2019
$ $
32. NET TANGIBLE ASSETS PER SHARE
Net tangible assets per share 1.37 1.33
The calculation of net tangible per share in respect of 2020 is based on net tangible assets of $90,387,000,
being Net assets $125,509,000 less intangible assets $35,122,000 (2019: $87,123,000 being $119,307,000
less $32,184,000) and the 65,736,148 ordinary shares on issue at balance date (2019: 65,736,148).
33. FOREIGN CURRENCY EXCHANGE RATES
The following spot foreign exchange rates
have been applied at balance date:
NZ $1.00 =
30 June 2020
30 June 2019
FWL BuyFWL SellFWL BuyFWL Sell
Australian dollar 0.9317 0.9385 0.9528 0.9596
United States dollar 0.6388 0.6441 0.6671 0.6726
Great British pound 0.5201 0.5225 0.5265 0.5289
Euro 0.5688 0.5737 0.5868 0.5919
Independent
Auditor’s Report
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FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
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FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
7475
55
Key audit matter How our audit addressed the key audit matter
Valuation of land, land improvements and buildings
As disclosed in Note 20 of the financial statements, the
Company has recorded the following assets at fair value:
Freehold land
$30.3 million
Freehold buildings
$19.1 million
Land improvements
$32.5 million
$81.9 million
Land improvements comprise vineyards including $24.4
million of grape vine biological bearer plants.
Independent valuers determined the fair values at balance
date. The valuations of freehold land and land improvements
are prepared using a "comparative sales" basis and include
an assumption over the comparability of certain key inputs,
such as location, size of parcel of land, soil quality, vine
varietal and access to water at each of the wineries and
vineyards.
The valuation of Freehold buildings are prepared using either
or a combination of income or replacement cost methods
and include assumptions for estimated rental, capitalization
rates and estimated replacement costs.
The valuers have determined a value for each property as a
whole taking into account the valuation methods above and
current market conditions to arrive at a range of valuation
outcomes, from which they derive a fair value estimate.
The outbreak of the Novel Coronavirus (Covid-19) was
declared as a 'Global Pandemic' by the World Health
Organisation on 11 March 2020. Certain travel restrictions
were implemented by many countries, including New
Zealand.
The market that comparable properties are transacted in is
being impacted by the uncertainty that the Covid-19
outbreak has caused. The landscape and market conditions
are changing daily at present. Given the market conditions
that existed at 30 June 2020, the independent valuers
reported on a basis of “significant valuation uncertainty” and
note that, as a result, less certainty and a higher degree of
caution should be attached to the valuations.
The valuation of these assets is a key audit matter due to the
subj
ective judgements and assumptions in the valuations,
including those that relate to the impact of COVID-19.
We have evaluated the appropriateness of the valuation in
respect of the land, buildings and land improvements by
performing the following:
• Assessing the independence, objectivity and
competence of each valuer;
• Holding discussions with the valuers to understand
the procedures and processes they performed in
undertaking the valuations and the methodology
they used. We discussed the following with each
valuer:
o Valuation methodology used for each asset
type and comparative sales transactions used
given the current market conditions which
have been disrupted due to Covid-19;
oHow those current market conditions were
reflected in the valuations;
o How they obtained knowledge of the
characteristics of each vineyard, for example
by site inspection to confirm soil type,
location and grape varietal; and
o How they have determined the key inputs for
each asset type.
• Involving our internal valuation expert to consider
and challenge the reasonableness of the
assumptions and valuation methodology applied;
• Reviewing the valuations for any limitations of
scope, as a result of Covid-19, that would impact
the reliability of the valuations; and
• Evaluating the related disclosures included in Note
20 to the financial statements
55
Independent Auditor’s Report
To the Shareholders of Foley Wines Limited
Opinion
Basis for opinion
Audit materiality
Key audit matters
We have audited the consolidated financial statements of Foley Wines Limited (the
‘Company’) and its subsidiaries (the ‘Group’), which comprise the consolidated statement
of financial position as at 30 June 2020, and the consolidated income statement,
statement of comprehensive income, statement of changes in equity and 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, the accompanying consolidated financial statements, on pages 20 to 72,
present fairly, in all material respects, the consolidated financial position of the Group as
at 30 June 2020, and its consolidated financial performance and cash flows for the year
then ended in accordance with New Zealand Equivalents to International Financial
Reporting Standards (‘NZ IFRS’) and International Financial Reporting Standards (‘IFRS’).
We conducted our audit in accordance with International Standards on Auditing (‘ISAs’)
and International Standards on Auditing (New Zealan
d) (‘ISAs (NZ)’). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (including International
Independence Standards)
(New Zealand) issued by the New Zealand Auditing and
Assurance Standards Board and th e International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants (including International
Independence Standards)
, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Other than in our capacity as auditor, we have no relationship with or interests in the
Company
or any of its subsidiaries, except that partners and employees of our firm deal
with the Company on normal terms within the ordinary course of trading activities of the
business of the Company.
We consider materiality primarily in terms of the magnitude of misstatement in the
consolidated
financial statements of the Group that in our judgement would make it
probable that the economic decisions of a reasonably knowledgeable person would be
changed
or influenced (t he ‘quantitative’ materiality). In addition, we also assess whether
other matters that come to our attention during the audit would in our judgement change
or influence the decisions of such a person (t he ‘qualitative’ materiality). We use
materiality both in planning the sc ope of our audit work and in evaluating the results of
our work.
Key audit matters ar e those matters that, in our professional judgement, were of most
significance in our audit of t he
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.
55
Independent Auditor’s Report
To the Shareholders ofFoley Wines Limited
OpinionWehave audited the consolidated financial statements of Foley Wines Limited (the
‘Company’) and its subsidiaries(the ‘Group’), which comprise the consolidated statement
of financial position as at 30 June 2020, and the consolidated income statement,
statement of comprehensive income, statement of changes in equity and statement of
cash flows for the year then ended, and notesto the consolidated financial statements,
including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements, on pages8 to 53,
present fairly, in all material respects, theconsolidated financial position of the Groupas
at30 June 2020, and its consolidated financial performance and cash flows for the year
then ended in accordance with New Zealand Equivalents to International Financial
Reporting Standards (‘NZ IFRS’) and International Financial Reporting Standards (‘IFRS’).
Basis for opinionWe conducted our audit in accordance with International Standards on Auditing (‘ISAs’)
and International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities
under those standards are further described in theAuditor’s Responsibilities for the Audit
of the Financial Statementssection of our report.
We believe that the audit evidence we have obtained issufficient and appropriate to
provide a basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (including International
Independence Standards)(New Zealand)issued by the New Zealand Auditing and
Assurance Standards Board and the International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants (including International
Independence Standards), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Other than in our capacity as auditor, we have no relationship with or interests in the
Companyor any of its subsidiaries, except that partners and employees of our firm deal
with the Company on normal terms within the ordinary course of trading activities of the
business of the Company.
Audit materiality
We consider materiality primarily in terms of the magnitude of misstatement in the
consolidated financial statements of the Groupthat in our judgement would make it
probable that the economic decisions of a reasonably knowledgeable person would be
changedor influenced (the ‘quantitative’ materiality). In addition, we also assess whether
other matters that come to our attention during the audit would in our judgement change
or influence the decisions of such a person (the ‘qualitative’ materiality). We use
materiality both in planning the scope of our audit work and in evaluating the results of
our work.
Key audit mattersKey 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 theconsolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
76
56
Other information The directors are responsible on behalf of the Group for the other information. The other
information comprises the information in the Annual Report that accompanies the consolidated
financial statements and the audit report.
Our opinion on the consolidated financial statements does not cover the other information and
we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and consider whether it is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If so, we are required to report that fact. We have
nothing to report in this regard.
Directors’ responsibilities
for the consolidated
financial statements
The directors are responsible on behalf of the Group for the preparation and fair presentation of
the consolidated financial statements in accordance with NZ IFRS and IFRS, 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 on behalf of the
Group 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 and 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 the consolidated financial statements
is located on the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-
report-1
This description forms part of our auditor’s report.
Restriction on use This report is made solely to the Company’s shareholders, as a body. Our audit has been
undertaken so that we might state to the Company’s shareholders those matters 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’s shareholders
as a body, for our audit work, for this report, or for the opinions we have formed.
Silvio Bruinsma, Partner
for Deloitte Limited
Wellington, New Zealand
27 August 2020
This a
udit report relates to the consolidated financial statements of Foley Wines Limited (the ‘Company’) for the year ended 30 June 2020
included on the Company’s website. The Directors a
re responsible for the maintenance and integrity of the Company’s website. We have not
been engaged to report on the integrity of the Company’s website. We accept no responsibility for any changes that may have occurred to the
consolidated financial statements since they were initially presented on the website. The audit report refers only to the consolidated financial
statements named above. It does not provide an opinion on any other information which may have been hyperlinked to/from these consolidated
financial statements. If readers of this report are concerned with the inherent risks arising from electronic data communication they should refer
to the published hard copy of the audited consolidated financial statements and related audit report dated 27 2020 to confirm the information
included in the audited consolidated financial statements presented on this website.
August 2020 to confirm the information included in the audited consolidated financial statements presented on this website.
Corporate Governance
Statement
55
Independent Auditor’s Report
To the Shareholders ofFoley Wines Limited
OpinionWehave audited the consolidated financial statements of Foley Wines Limited (the
‘Company’) and its subsidiaries(the ‘Group’), which comprise the consolidated statement
of financial position as at 30 June 2020, and the consolidated income statement,
statement of comprehensive income, statement of changes in equity and statement of
cash flows for the year then ended, and notesto the consolidated financial statements,
including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements, on pages8 to 53,
present fairly, in all material respects, theconsolidated financial position of the Groupas
at30 June 2020, and its consolidated financial performance and cash flows for the year
then ended in accordance with New Zealand Equivalents to International Financial
Reporting Standards (‘NZ IFRS’) and International Financial Reporting Standards (‘IFRS’).
Basis for opinionWe conducted our audit in accordance with International Standards on Auditing (‘ISAs’)
and International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities
under those standards are further described in theAuditor’s Responsibilities for the Audit
of the Financial Statementssection of our report.
We believe that the audit evidence we have obtained issufficient and appropriate to
provide a basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (including International
Independence Standards)(New Zealand)issued by the New Zealand Auditing and
Assurance Standards Board and the International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants (including International
Independence Standards), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Other than in our capacity as auditor, we have no relationship with or interests in the
Companyor any of its subsidiaries, except that partners and employees of our firm deal
with the Company on normal terms within the ordinary course of trading activities of the
business of the Company.
Audit materiality
We consider materiality primarily in terms of the magnitude of misstatement in the
consolidated financial statements of the Groupthat in our judgement would make it
probable that the economic decisions of a reasonably knowledgeable person would be
changedor influenced (the ‘quantitative’ materiality). In addition, we also assess whether
other matters that come to our attention during the audit would in our judgement change
or influence the decisions of such a person (the ‘qualitative’ materiality). We use
materiality both in planning the scope of our audit work and in evaluating the results of
our work.
Key audit mattersKey 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 theconsolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
77
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Corporate Governance
Statement
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
Corporate Governance
Statement
This statement is designed to provide an overview for Shareholders to reflect the main governance policies and practices
adopted or followed during the financial year ended 30 June 2020 and has been approved by the Board. For further
information refer to the Company’s website (www.foleywines.co.nz).
The Board is committed to high standards of best practice corporate governance and ethical conduct as being integral to
overall business integrity and to delivery of long term shareholder value.
Foley Wines Limited’s (FWL) shares are listed on the NZX Main Board. In this statement we disclose the extent to which
the Board believes that the Group’s policies and practices have complied with the NZX Corporate Governance Code
(NZX Code) contained in Appendix 1 of the NZX Main Board Listing Rules issued on 1 January 2019 which applied to
the Company from 1 July 2019 (or where applicable, an explanation as to why a recommendation was not followed and any
alternative practice followed in lieu of the recommendation).
NZX CODE
PRINCIPLE 1 – CODE OF ETHICAL BEHAVIOUR
“Directors should set high standards of ethical behaviour, model this behaviour and hold management
accountable for these standards being followed throughout the organisation.”
CODE OF ETHICS
The Board maintains a Code of Ethics Policy Statement, reviewed at least bi-annually, to underpin FWL’s vision and
values and expected standards of conduct for Directors and employees.
The Group expects its Directors and employees to act in the best interests of the Company, its Shareholders and stakeholders
and maintain the highest standards of honesty, integrity and ethical conduct in day to day behaviour and decision making.
They must be objective, apply skill and professional competence, and keep information that they obtain in their role
confidential.
New Directors and employees are provided with a copy of the Code of Ethics as part of the induction process and advised
that this is also available on the Group’s website. All Directors and employees must provide acknowledgement that they
have read and understood the content. When the Code is reviewed by the Board a copy of the revised Code is circulated to
all current employees as a reminder of its content.
The Code requires Directors and employees to promptly report material breaches of the Code and sets out a procedure
for doing so.
The Code was last reviewed by the Board in August 2019.
FINANCIAL PRODUCT DEALING POLICY
The Board maintains a Financial Product Dealing Policy that explains what processes are in place to manage the legal
and reputational risks associated with director and staff share trading to provide transparency about expectations and
requirements to protect them from the risk of breaching insider trading laws. In particular:
• directors and employees may not buy or sell FWL shares in the trading “black-out” periods set out in the Policy (these
periods occur prior to the release of FWL’s financial results to the market); and
• directors and employees must obtain consent from the Board to buy or sell FWL’s shares.
Training on the Policy is included as part of the induction process for new directors and employees and a copy of the Policy
is available on the Group’s website.
The Policy was last reviewed by the Board in August 2020.
PRINCIPLE 2 – BOARD COMPOSITION & PERFORMANCE
“To ensure an effective board, there should be a balance of independence, skills, knowledge, experience
and perspectives.”
BOARD CHARTER
The Board operate under a written charter which sets out the respective roles, responsibilities, composition and structure
of the Board and senior management, and this is available on the Group’s website.
The Directors are responsible, collectively as the Board under its Chairman, for the success of FWL and are accountable
to shareholders for the Company’s overall ethical conduct, strategic development, annual performance and long-term
sustainable increase in shareholder value.
The Board exercises its powers on behalf of all Shareholders, except for those powers specifically required to be exercised
by Shareholders by law, the NZX Listing Rules or the FWL Constitution. Except for powers specifically reserved to the
Directors under the Companies Act or the Delegated Authorities Policy, the Board in turn delegates authorities to the
Chief Executive Officer (CEO), with sub-delegations to members of the Management Team, with the CEO (Executive
Director) responsible for the day-to-day management of the FWL business and delivering against the agreed strategic
plans, operating budgets and performance targets.
The Role of the Board is to provide the overall framework for governance, accountability, risk control and deliverability
of the strategic and operating plans. To do so the Board meets with management normally at approximately quarterly
intervals, and more frequently if warranted, otherwise contact shall occur via email or teleconference to ensure Directors
are fully apprised about key Company activities and issues.
The Chairman, on behalf of the Board, is the formal channel of communication to external stakeholders and to the CEO
who in turn has delegated responsibility for management and staff and for achieving agreed policies, business strategies,
operating plans and budgets. The CEO reports regularly to the Chairman on critical issues being faced by the Company,
as well as progress being made against strategic plans.
In addition to the foregoing, the Directors are responsible for preparing and providing to Shareholders the financial
statements, as prescribed in the Financial Reporting Act. These shall give a true and fair view of the financial (and
operational) state of affairs of FWL for the period, as portrayed in the Income Statement, Statement of Comprehensive
Income, Statement of Changes in Equity, Statement of Financial Position and Statement of Cash Flows. These financial
statements are unaudited for the half-year report but must be audited by the External Auditor for the full financial year
report ended 30th June.
The Board Charter is reviewed at least every two years and was last reviewed in August 2019.
DIRECTOR NOMINATION
The responsibility for identifying suitable candidates for recruitment to the Board, is undertaken by the Board, drawing
on advice from independent consultants as appropriate. Nominated candidates are assessed against a number of criteria
which include character, background, professional skills and experience, and their availability to commit to the role. The
Board also considers the Composition of the Board requirements contained in the Constitution and the NZX Listing Rules.
Under the Constitution there shall be a minimum of 3 Directors and the maximum number of Directors may be determined
from time to time by the Board, and unless so determined, is 8. The Board is therefore authorised to appoint one or
more additional Directors to fill a casual vacancy or to expand the Board for increased effectiveness or to help meet the
Company’s objectives.
7879
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Corporate Governance
Statement
(continued)
Corporate Governance
Statement
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
PRINCIPLE 2 – BOARD COMPOSITION & PERFORMANCE (Continued)
DIRECTOR NOMINATION (CONTINUED)
Under the NZX Main Board Listing Rules a minimum of two Directors must be ordinarily resident in New Zealand and
one third of the Directors, and a minimum of two, must be independent, as defined in the NZX Listing Rules. The NZX
Code recommends that the Board consists of a majority of Independent Directors and that Board Chairman is either
independent or that the Board Chairman and the CEO are different people.
Directors are elected by shareholders at the first annual meeting after appointment. After that, at each annual meeting,
the NZX Listing Rules and the Company’s Constitution require Directors to retire after they have served three years
since their last election. Directors who have served for more than nine years on the Board shall retire annually. Retiring
Directors are eligible for re-election.
INDEPENDENCE
During the current financial year there were four Non-Executive Directors, three of which were independent, and one
Executive Director. Details of all Directors as at the date of this report, including their qualifications, length of service
and experience, independence and ownership interests, are shown in Section 1 of the Statutory Information section of this
Annual Report. The Board Chairman is a different person to the CEO.
In order to ensure that any “interest” of a Director in a particular matter to be considered by the Board are known by
each Director, the Company has developed protocols, consistent with obligations imposed by the Companies Act 1993, to
require each Director to disclose any relationships, duties or interests held that may give rise to a potential conflict.
WRITTEN AGREEMENT
The Company provides a letter of appointment to each newly appointed Director setting out the terms of their appointment.
The letter includes information regarding expected time commitments, the board’s responsibilities, remuneration,
independence requirements, disclosure requirements, confidentiality obligations, indemnity and insurance provisions,
intellectual property rights and cessation of appointment.
DIVERSITY
The Board maintains a Diversity and Inclusion Policy that provides a framework to embed and support a diverse workforce
and inclusive workplace environment. The Policy sets out how FWL will set measurable objectives for achieving diversity
and inclusion, and how it will assess its progress towards achieving these objectives. The Policy also sets out the diversity
and inclusion initiatives FWL currently has in place, together with the initiatives it is currently implementing. A copy of
the Policy is available on the Group’s website.
The Diversity and Inclusion scorecard as at 30 June 2020 was:
Board and Key Management Personnel:
Gender Diversity: At 30 June 2020 the Directors were all Male (5) and the Key Management Personnel were 75% Male (3)
and 25% Female (1). These percentages were the same at the prior balance date, 30 June 2019.
For all employees at 30 June 2020 based on information provided by employees:
Gender Diversity: 44% were Male and 56% were Female.
Ethnic Diversity: Ethnicity they identify with: European 85%; Maori 7%; Pacific 3%; Asian 3%; and Other 3%.
Age Breakdown: < 20 1%; 20-29 19%; 30-39 23%; 40-49 30%; 50-59 17%; 60-69 10%.
Information was not collected for employees in the prior year.
PRINCIPLE 2 – BOARD COMPOSITION & PERFORMANCE (Continued)
BOARD PERFORMANCE EVALUATION AND TRAINING
All Non-Executive Directors are expected to participate in performance reviews, particularly prior to the re-election of
a Non-Executive Director to the Board. The findings of the performance review process are used to identify, assess and
enhance Director competencies and to define characteristics or skills which should be sought in future Board candidates.
The Board undertakes a performance evaluation of the Board and its members bi-annually. Directors undertake appropriate
training to remain current on how best to perform their duties as directors of the Company.
PRINCIPLE 3 – BOARD COMMITTEES
“The Board should use committees where this will enhance its effectiveness in key areas, while still
retaining board responsibility.”
To enhance the effectiveness of the Board there is an Audit and Risk Committee. Due to the size of the Board all other
matters including Remuneration matters are considered by the full Board. The Board may establish an ad hoc Committee
at any appropriate time to consider a special issue.
The committees have their own charters setting out the objectives, composition, and responsibilities of the committee.
The Board will periodically review the charters. The Board Chairman may not be the Chairman of the Audit and Risk
Committee. A quorum shall be two Committee members, including the Committee Chairman. Any Director may attend
any Committee meeting as an observer if he/she so wishes. The Committee may request the CEO, Chief Financial Officer
and/or any Management Team member to attend.
AUDIT AND RISK COMMITTEE
The Audit and Risk Committee comprises of three Directors: Grant Graham (Chairman), Anthony Anselmi and Paul
Brock, and meets formally a minimum of two times during the financial year. The Board is of the opinion that sufficient
financial expertise and knowledge of the industry in which the Company operates is possessed by the members of the
Audit and Risk Committee. Details of the qualifications of the Audit and Risk Committee members are set out in Section
1 of the Statutory section of this Annual Report. The primary objective of the Audit and Risk Committee is to assist the
Board of Directors in fulfilling its responsibilities relating to annual reporting, tax planning and compliance, and risk
management practices.
TAKEOVER POLICY
The Takeover Policy sets out the procedure to be followed if there is a takeover offer for FWL. A copy of the Policy is
available on the Group’s website. This Policy is reviewed by the Board at least bi-annually or as required due to legislation
changes. It was last reviewed in August 2019.
PRINCIPLE 4 – REPORTING & DISCLOSURE
“The Board should demand integrity in financial and non-financial reporting, and in the timeliness and
balance of corporate disclosures.”
CONTINUOUS DISCLOSURE
FWL’s Continuous Disclosure Policy sets out FWL’s arrangements to ensure material information is identified, reported,
assessed and, where required, disclosed to the market in a timely manner. The Company is committed to providing
relevant and timely information to its shareholders and to the broader market, in accordance with its obligations under the
NZX Listing Rules.
8081
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Corporate Governance
Statement
(continued)
Corporate Governance
Statement
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
PRINCIPLE 4 – REPORTING & DISCLOSURE (CONTINUED)
CONTINUOUS DISCLOSURE (CONTINUED)
It is the responsibility of the Board to monitor compliance with the Continuous Disclosure Policy. The Board considers at
each board meeting whether any information discussed at the meeting requires disclosure. The Policy is reviewed at least
annually and was last reviewed in August 2020. A copy of the Policy is available on the Group’s website.
CHARTERS AND POLICIES
The key corporate governance documents referred to in this Statement are available on the Group’s website.
FINANCIAL REPORTING
FWL is committed to ensuring integrity and timeliness in its financial reporting and in providing information to the
market and shareholders which reflects a considered view on its present and future prospects.
The Audit and Risk Committee oversees the quality and integrity of external financial reporting including the accuracy,
completeness and timeliness of financial statements, and ensuring the financial reporting is balanced, clear and objective.
It reviews annual and half year financial statements and makes recommendations to the Board concerning the application
of accounting policies and practices, areas of judgement, compliance with accounting standards, NZX and legal
requirements, and the results of the external audit.
NON-FINANCIAL REPORTING
The Group assesses its exposure to environmental, economic and social sustainability as part of the overall framework for
managing risk (see Principle 6 – Risk Management). The Group is committed to improving standards of environmental
performance to enable a more efficient and sustainable future. Accordingly, the Group follows longstanding practices
around management of environmental factors affecting the business, including strategies relating to water conservation,
viticulture management, sustainable wine growing practices and wetland preservation initiatives. Reporting on these
matters are included in the Director and CEO Report.
PRINCIPLE 5 – REMUNERATION
“The remuneration of directors and executives should be transparent, fair and reasonable.”
REMUNERATION – NON-EXECUTIVE DIRECTORS
Remuneration levels are set at competitive levels to attract and retain appropriately qualified and experienced Directors
taking in to account the responsibilities and time commitments provided by those Directors to the Company in discharging
their duties.
Directors’ fees are recommended to and confirmed by Shareholders’ resolution at an Annual Meeting. In accordance
with the Listing Rules the Shareholders approve the total aggregate amount of fees payable to all Directors as Directors’
fees, with the fee allocation to be determined by Directors. Currently the maximum aggregate amount of fees payable to
Directors is $240,000 per annum.
The Company’s policy is to pay all of its Directors in cash. The Directors fees paid during the year are shown in Section
3 of the Statutory Information section of this Annual Report.
PRINCIPLE 5 – REMUNERATION (Continued)
REMUNERATION – NON-EXECUTIVE DIRECTORS (CONTINUED)
The Board reviews annually and recommends to Shareholders any increase in Directors’ fees when profit performance
warrants. The criteria for reviewing Non-Executive Director remuneration includes obtaining advice from external
consultants, where appropriate, information on Board arrangements for other corporations of similar size and complexity,
and the review of current and expected workloads of non-executive Directors. The Board will continue to review its
remuneration strategies in relation to non-executive Directors from time to time, in line with general industry practice.
REMUNERATION POLICY
The purpose of the Remuneration Policy is to outline the principles and approach to remuneration for all employees and
Directors of FWL and to ensure the principles are fair, reasonable and aligned to FWL’s strategic goals.
The Group is committed to applying fair and equitable remuneration and reward practices in the workplace, taking
into account internal and external relativity, the commercial environment, the ability to achieve the Group’s business
objectives and the creation of Shareholder value. Under the Group’s remuneration practices, job size relative to the relevant
competitive market for talent, as well as individual performance against defined key performance objectives, are key
considerations in all remuneration-based decisions.
REMUNERATION – CEO (EXECUTIVE DIRECTOR) AND SENIOR EXECUTIVES
The criteria for reviewing the remuneration for senior executives includes, as appropriate, advice obtained from external
consultants, participation in independent surveys, specific market comparison of individual roles, and level of achievement
against business and personal objectives.
The total remuneration paid to the CEO/Executive Director for the year ended 30 June 2020 is disclosed in Section 3 of
the Statutory Information section of this Annual Report. The remuneration of the CEO comprises both a formal fixed and
an informal variable performance component. Fixed remuneration includes a base salary, car allowance, car parking and
a wine allowance. CEO Mark Turnbull’s annual base salary for the year ended 30 June 2020 was $500,000. This was the
same in the prior year. There were no formal short term or long term incentive schemes in place during the current or prior
year. CEO performance is assessed based on FWL financial performance against plan and progress on executing the long
term strategy of the company. During the year the Board approved a discretionary bonus for performance and achievement
of long term strategic goals for the previous two financial years of $300,000 and $325,000 for the current financial year.
PRINCIPLE 6 – RISK MANAGEMENT
“Directors should have a sound understanding of the material risks faced by the issuer and how to manage
them. The Board should regularly verify that the issuer has appropriate processes that identify and manage
potential and material risks.”
Risk management is an acknowledged important factor in corporate governance. The Board is responsible for the Group’s
risk assessment, management and internal control and considers it has carried out a robust risk assessment process. The
Board has identified a number of risks in the Company’s operations that are commonly faced by other entities in the wine
industry. The Board and management of the Company believe they have taken all reasonable steps to manage and mitigate
those risks.
In viticulture the issues of weather, disease and pest control are an ongoing management activity. Viticultural techniques
are in place and in practice which the Board and Management considers effectively mitigate this risk.
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FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Corporate Governance
Statement
(continued)
Corporate Governance
Statement
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
PRINCIPLE 6 – RISK MANAGEMENT (Continued)
Brand reputation and brand security is an identified risk that is the subject of ongoing surveillance, and techniques and
practices are in place which the Board and Management considers effectively mitigate this risk.
Supply Chain risk is monitored, and the Group has identified a range of suppliers operating in different jurisdictions to
mitigate the risk of the loss of a single supplier.
Grape supply - The quality and quantity of the grape harvest is dependent on seasonal climatic factors such as frosts,
rainfall, sunshine and temperature. Harsh adverse climatic conditions could affect the quality of grapes and hence
marketable quality of and prices received for the Company’s finished wines. To mitigate this risk the Group has diversified
and is further diversifying its grape supplies and vineyards throughout various regions across New Zealand. The Group
sources grapes from owned or leased vineyards as well as from contract growers.
Resource and Water Supply and Waste Disposal Consents – the Group can only operate with approved resource consents.
These have been obtained and are maintained for all of the Group’s winery sites. The Group ensures it holds water rights
for all foreseeable demands for the wineries and its owned and leased vineyards.
Technology risk, particularly in relation to hacking or illegal access and cyber-attacks, is an identified risk that is the
subject of ongoing surveillance, and techniques and practices are in place which the Board and Management considers
effectively mitigate this risk.
The senior management team regularly complete a risk assessment affecting the business and maintain a risk matrix which
is used to monitor and mitigate these risks. A risk matrix measures the impact of the risk and likelihood of occurrence
and outlines the practices and processes in place to address the identified risk. This is provided to the Audit and Risk
Committee and Board annually. The Group maintains insurance policies that it considers adequate to meet insurable risks
taking into consideration the size and nature of the Company’s business and risk profile.
HEALTH AND SAFETY
The Board has responsibility for ensuring the Company maintains a health and safety management system that meets
best practice standards to protect the health and safety of its employees and contractors engaged by the Company. The
Board maintains a Health and Safety Policy, reviewed annually, to underpin the Company’s commitment to providing a
safe working environment for its employees and contractors. The Board receives a monthly Workplace Health and Safety
Report from the Company’s Health and Safety Manager.
The Health and Safety Policy was last reviewed in August 2020.
PRINCIPLE 7 – AUDITORS
“The board should ensure the quality and independence of the external audit process.”
EXTERNAL AUDITOR
The Audit and Risk Committee makes recommendations to the Board on the appointment and removal of the external
auditor.
The Audit and Risk Committee is responsible to ensure the External Auditor’s independence is maintained so that financial
reporting is reliable and credible. The Audit and Risk Committee monitors the nature and extent of other services provided
by the external auditor, and the ratio of audit fees to non-audit fees, to ensure that those services are complementary to the
external audit and compatible with maintaining external audit independence.
The External Auditor is responsible for reviewing and making recommendations on these underlying control systems
to ensure they produce accurate and consistent reports on which Shareholders may rely and, to assist meeting this
PRINCIPLE 7 – AUDITORS (CONTINUED)
EXTERNAL AUDITOR (CONTINUED)
responsibility, the External Auditor shall have full access to all board papers and minutes and all financial and related
records. The Audit and Risk Committee routinely has time with the External Auditor without management present.
It is paramount the independence of The External Auditor is maintained for Shareholders’ benefit.
The Company invites the External Auditor to attend the Annual Meeting of Shareholders and they are available to answer
shareholder questions about the conduct of the audit and the preparation and content of the auditor’s report.
INTERNAL AUDIT
The underlying internal control and accounting and operational systems determine the accuracy of the financial statements
and results presented to the Board. The Group does not have an internal audit function. Procedures have been established
at the Board and executive management levels that are designed to safeguard the assets and interests of the Company and
ensure the integrity of reporting. The Board acknowledges that it is responsible for the overall internal control framework
but recognises that no cost-effective internal control system will preclude all errors and irregularities. The Board has
undertaken a risk review and considers that the Group have a sound system of internal control which is operating effectively
in all material respects in relation to financial reporting risk.
PRINCIPLE 8 – SHAREHOLDER RIGHTS & RELATIONS
“The Board should respect the rights of shareholders and foster constructive relationships with
shareholders that encourage them to engage with the issuer.”
INFORMATION FOR AND COMMUNICATION WITH SHAREHOLDERS
The Group is committed to communicating regularly with Shareholders in an open and transparent way. The Board aims to
ensure that all Shareholders are provided with all information necessary to assess the Group’s direction and performance.
To facilitate this general information flow, the Company maintains a comprehensive website including an investor section
(www.foleywines.co.nz). This contains the constitution, annual and half-yearly reports and financial statements, corporate
governance policies and documents, releases to the NZX or media and any presentations to third parties. Contact details
are provided on the website to allow shareholders to contact the Company. Shareholders are actively encouraged to
received communications from FWL and its Share Registrar electronically.
SHAREHOLDER RIGHTS
In accordance with the Companies Act 1993, FWL’s Constitution, and the NZX Listing Rules, the Group refers any major
decisions which may change the nature of FWL to Shareholders for approval at a Shareholders’ meeting.
Resolutions for which requisite Notice are given are voted upon by way of a poll and on the basis of one share, one vote.
There are no priority or special voting shares.
When the Group is seeking additional equity capital it will offer further equity securities to existing shareholders of
the same class on a pro-rata basis, and on no less favourable terms, before further equity securities are offered to other
investors.
NOTICE OF ANNUAL SHAREHOLDERS MEETING
The Group posts any Notices of Shareholder Meetings on its website as soon as these are available. The general practice
is to make these available not less than four weeks prior to the Shareholders’ meeting.
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FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
For the year ended 30 June 2020
Statutory Information
Statutory
Information
1. DIRECTOR PROFILES
WILLIAM P FOLEY II – CHAIRMAN
William P Foley II (Bill) was appointed to the Board in September 2012. Mr. Foley has served as the Executive Chairman
of Fidelity National Financial, Inc. (FNF) since October 2006 and, prior to that, as Chairman of the Board of FNF since
1984. Mr. Foley also served as Chief Executive Officer of FNF from 1984 until May 2007 and as President of FNF from
1984 until December 1994. Mr. Foley also serves as the Executive Chairman of Black Knight since January 2014, Executive
Chairman of Foley Trasimene Acquisition Company since March 2020 and as the Chairman of Cannae Holdings since
July 2017. Mr. Foley also serves as the Chairman of Dun & Bradstreet, which is a Cannae Holdings portfolio company
Within the past five-years, Mr. Foley served as the Vice Chairman of FIS, as the Chairman of Remy, and as a director
of Ceridian from September 2013 to August 2019. Mr. Foley also serves on the board of directors of the Foley Family
Charitable Foundation and the Folded Flag Charitable Foundation. Mr. Foley also is Chairman, CEO and President of
Foley Family Wines Holdings, Inc., which is the holding company of numerous vineyards and wineries located in the
U.S. and in New Zealand. Mr Foley, also is the Executive Chairman and Chief Executive Officer of Black Knight Sports
and Entertainment LLC, which is the private company that owns the Vegas Golden Knights, a National Hockey League
Mr. Foley’s qualifications to serve on the Board include his 30 plus years as a director and executive officer of FNF, his
experience as a board member and executive officer of public and private companies in a wide variety of industries, and
his strong track record of building and maintaining shareholder value and successfully negotiating and implementing
mergers and acquisitions.
PAUL BROCK – DEPUTY CHAIRMAN – NON-EXECUTIVE INDEPENDENT DIRECTOR
Paul Brock was appointed to the Board with effect from 1 November 2018 and was appointed Deputy Chairman. Paul
Brock was the Kiwibank Group Chief Executive from 2010-2017. He was Co-Founder of the bank which was launched in
2002. As Group Chief Executive Paul led the Kiwibank Group through a period of rapid growth and diversification into
business banking, wealth management, insurance and asset finance. The bank is now a major player in the New Zealand
market with one in four New Zealanders holding an account with Kiwibank.
Paul has a strong background in governance, management, growth business development, brand development and
marketing. An extensive background in the financial services industry has also included senior management positions
with Westpac and Trust Bank. Paul has been Chairman of Gareth Morgan Investments Ltd and Kiwibank Investment
Management Ltd and a Director of Kiwi Insurance Ltd, New Zealand Home Loans Ltd, Kiwibank Custodial Services Ltd,
AMP Home Loans Ltd, Kiwi Capital Securities Ltd, Kiwi Capital Funding Ltd and Kiwi Wealth Management Ltd. Paul
is currently Chair of the board of the New Zealand Story Group, a country reputation programme to enhance the New
Zealand brand and increase the benefits to New Zealand from export trade, and is also a member of the Massey University
Business School Advisory Board.
Paul holds a Bachelors degree in Business Studies from Massey University.
ANTHONY ANSELMI O.B.E. – NON-EXECUTIVE INDEPENDENT DIRECTOR
Anthony Anselmi (Tony) was appointed to the Board in September 2012 and is a member of the Audit and Risk Committee.
Tony’s business career began in his late teens in footwear retail, and today the family owned business Overland Footwear
Company Ltd. of which Tony is Chairmen, owns and operates retail stores throughout New Zealand and in the State of
Victoria, Australia. Tony opened a manufacturing plant in 1966 and Fabia Products Ltd soon became one of the larger
footwear manufacturers in New Zealand, selling its products throughout New Zealand, Australia and the Pacific Islands.
He has considerable experience in farming and developed a large area of neglected land into an extensive dairy farming
enterprise. He has also developed a kiwi fruit orchard in Katikati.
87
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
86
Statutory
Information
(continued)
Statutory
Information
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
1. DIRECTOR PROFILES (CONTINUED)
ANTHONY ANSELMI O.B.E. – NON-EXECUTIVE INDEPENDENT DIRECTOR (CONTINUED)
Tony was appointed a Director of the State Owned Enterprise, Forestry Corporation and served on the Board until
it was sold by the Government. He was appointed an inaugural director of Inframax Ltd. a road construction and
maintenance L.A.T.E. owned by the Waitomo District council. Tony was for two years Chairman of the New Zealand
Footwear Manufacturers Federation and served on the board of and later became chairman of the King Country Regional
Development Council.
Tony was an investor in the New Zealand Wine Fund Ltd (Vavasour Wines) and when this was purchased in 2009 by Foley
Family wines Ltd. at the invitation of Mr. Bill Foley transferred his investment to the new company.
GRANT GRAHAM – NON-EXECUTIVE INDEPENDENT DIRECTOR
Grant Graham was appointed to the Board with effect from 1 February 2019 and as Chair of the Board Audit and Risk
Committee. Grant is a Partner at advisory and investment firm Calibre Partners with a strong background in corporate
finance and advisory in valuation, restructuring and as an expert witness.
Over 20 years, Grant has written numerous Independent Advisors’ reports for listed company activity subject to NZX
listing rules and the New Zealand Takeovers’ Code. In the process, he has gained an enviable reputation for the quality of
these reports, his clear and concise communication style, and pragmatic advice.
Grant has a Bachelor of Commerce and is a Chartered Accountant with Chartered Accountants Australia New Zealand
(CAANZ) holding a Certificate of Public Practice and CAANZ Accredited Insolvency Practitioner status. Grant is a
member of the Institute of Directors in New Zealand.
ANTONY MARK TURNBULL – CEO (EXECUTIVE DIRECTOR)
Antony Mark Turnbull (Mark) was appointed Chief Executive Officer and Director of the Company in September 2012.
Mark’s career started as an accountant with Ernst and Young, then for the next 18 years was Managing Partner of the brand
consultancy Designworks. Mark was Chairman of the New Zealand Wine Fund when it was acquired by Foley Family
Wines in 2009. In 2011 Mark had a sabbatical year and attended London Business School where he completed a Masters
of Science in Leadership and Strategy with Distinction. Mark is a Chartered Accountant with Chartered Accountants
Australia and New Zealand.
2. INTEREST REGISTERS
The following entries were recorded in the Directors’ interest register of the Company during the year:
SHARE DEALINGS IN THE SHARES OF FOLEY WINES LIMITED
There were no share transactions during the year.
Share transactions undertaken during the prior year were as follows:
WP Foley II – purchased 8,981,487 jointly with CJ Foley at $1.48 per share on 18 December 2018;
AM Turnbull – purchased 10,136 shares as part of the Share Purchase Plan at $1.48 per share on 3 July 2018 and 40,211
shares on market for $55,127 (an average price per share of $1.37) on 28 November 2018. The balance held at year end
was 60,347 shares.
SHARE DEALINGS IN THE SHARES OF FOLEY WINES LIMITED SUBSIDIARY COMPANIES
There were no transactions during the year (2019: Nil).
2. INTEREST REGISTERS (CONTINUED)
2020 2019
$’000 $’000
TRANSACTIONS
Certain Directors have interests in contracts with Foley Wines Limited.
AM Turnbull (Lighthouse Distillery Ltd – purchase of Spirits for resale) 192 579
AM Turnbull (Lighthouse Distillery Ltd – charges from FWL for labour,
rent, electricity and administration) 62 78
LOANS TO DIRECTORS
No loans to directors were authorised during the year.
IMDEMNITY AND INSURANCE
The Directors’ and Officers’ liability insurance is held to cover risks normally covered by such policies arising out of acts
or omissions of directors and employees in their capacity as such except for specific matters which are expressly excluded.
3. DIRECTORS REMUNERATION AND MEETING ATTENDANCE REGISTER
Directors of the Company during the year and remuneration and other benefits paid to directors by the Company were as
follows:
2020 2019
$’000 $’000
DIRECTORS’ FEES
WP Foley II 85 100
AJ Anselmi 43 39
PR Brock 52 33
GR Graham 52 21
REMUNERATION AND OTHER BENEFITS
AM Turnbull was a Director and the Chief Executive Officer during the year and as such did not receive Director’s
Fees. Remuneration and other benefits paid to Executive Directors during the year was $1,148,000 (2019: $548,000). The
remuneration for the current year included a discretionary bonus approved by the Board for the previous two financial
years of $300,000 and $325,000 for the current financial year. There were no short term or long term incentive schemes
in place during the year.
8889
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Statutory
Information
(continued)
Statutory
Information
(continued)
For the year ended 30 June 2020For the year ended 30 June 2020
3. DIRECTORS REMUNERATION AND MEETING ATTENDANCE REGISTER
(CONTINUED)
MEETING ATTENDANCE REGISTER
The attendance of Directors of the Company at Board meetings and Board Audit and Risk Committee meetings were as
follows:
2020
2020 Audit & Risk
Board Committee
WP Foley II 5 / 5 N/A
AJ Anselmi 5 / 5 4 / 4
PR Brock 5 / 5 4 / 4
GR Graham 5 / 5 4 / 4
AM Turnbull 5 / 5 4 / 4
4. EMPLOYEES’ REMUNERATION
Section 211(1)(g) of the Companies Act 1993 required disclosure of remuneration and other benefits, including redundancy
and other payments made on termination of employment, in excess of $100,000 per year, paid by the Company or any of
its subsidiaries worldwide to any employees who are not Directors of the Company:
Number of Employees
$100,000 – $109,999 3
$110,000 – $119,999 3
$130,000 – $139,999 3
$140,000 – $149,999 2
$240,000 – $249,999 1
$250,000 – $259,999 1
$270,000 – $279,999 1
$380,000 – $389,999 1
5. DONATIONS
Foley Wines Limited made no cash donations during the year (2019: $Nil).
6. SHAREHOLDER BREAKDOWN
Shareholding as at 30 June 2020
Number of
shareholders
Total shares
held
% of share
capital
1-999 522 129,998 0.20%
1,000-9,999 367 1,233,695 1.87%
10,000-49,999 144 2,646,560 4.03%
50,000-99,999 25 1,686,606 2.57%
100,000-499,999 20 3,879,212 5.90%
500,000+ 10 56,160,077 85.43%
1,088 65,736,148 100.00%
7. DIRECTORS’ SHAREHOLDING
As at 30 June 2020 Directors held the following direct interests in the Company.
WP Foley – Individually and with CJ Foley held a direct interest in Foley Wines Limited (FWL) of 61% through his
shareholding in Foley Family Wines Holdings, Inc. (FWLH), the ultimate parent of Foley Family Wines Holdings, New
Zealand Limited (FWLH-NZ) which is the New Zealand based parent company and majority shareholder of FWL,
through his shareholding in FWLH-NZ and through the ownership of 8,981,487 ordinary FWL shares (2019: 61%). This
interest was 64% including the shares to be issued under the Convertible Note (note 15) (2019: 64%).
AJ Anselmi – held a direct interest in FWL of 1.7% through his shareholding in FWLH-NZ (2019: 1.7%). This interest was
1.8% including the shares to be issued under the Convertible Note (note 15) (2019: 1.8%).
AM Turnbull – held a direct interest in FWL of 1.2% (2019: 1.2%) through his shareholding in FWLH-NZ (1.15%; 2019:
1.15%) and through the ownership of 60,347 ordinary FWL shares (0.09% 2019: 0.09%). This interest was 1.3% including
the shares to be issued under the Convertible Note (note 15) (2019: 1.3%).
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FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020 FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
For the year ended 30 June 2020
Statutory
Information
(continued)
For the year ended 30 June 2020
8. 20 LARGEST REGISTERED HOLDERS
Ordinary shares held at 30 June 2020:
Ordinary
shares held
% of share
capital
Foley Family Wines Holdings, New Zealand Limited * 34,708,796 52.80%
WP Foley II & CJ Foley 8,981,487 13.66%
National Nominees New Zealand Limited on behalf of
Milford Asset Management Limited * 3,842,553 5.85%
Accident Compensation Corporation 2,712,589 4.13%
Lion NZ Limited 2,027,027 3.08%
Alfa Lea Horticulture Limited 903,330 1.37%
New Zealand Permanent Trustees Limited - NZCSD 890,000 1.35%
JP Morgan Chase Bank NA NZ Branch - Segregated Clients Acct - NZCSD 875,910 1.33%
Sky Hill Limited 645,572 0.98%
BNP Paribas Nominees (NZ) Limited - NZCSD 572,813 0.87%
Public Trust RIF Nominees Limited - NZCSD 383,930 0.58%
FNZ Custodians Limited 382,698 0.58%
JD Croft 322,388 0.49%
Phaben Holdings Limited 300,001 0.46%
Kynance Holdings Limited 300,000 0.46%
MG Fairhall 295,116 0.45%
Custodial Services Limited 203,490 0.31%
CM & BW Doig 198,794 0.30%
JD Orchard, CS Orchard & JG Orchard 160,000 0.24%
J Fu 147, 4 2 0 0 . 2 2 %
Sub-total 58,853,914 89.53%
Others (1,009 Shareholders) 6,882,234 10.47%
TOTAL 65,736,148 100.00%
* These shareholders are substantial product holders as defined in Section 274 of Sub-part 5 of Part 5 of the Financial
Markets Conduct Act 2013 as they have a substantial holding in the Company.
9. NZX WAIVERS
No waivers were granted in the current year. In the prior year: The Company traded its ordinary shares on the NZX
Alternative Market (NZAX) until 30 November 2018 under the ticker code “FFW”. On 3 December 2018 the Company
migrated to the NZ Main Board (NZSX) and commenced trading Foley Wines Limited ordinary shares under the ticker
code “FWL” (following a company name change on 1 December 2018). As part of the migration process the Company
applied to, and the NZX granted, a number of waivers from certain NZX Main Board Listing Rules. The details of
these waivers can be viewed on the NZX website www.nzx.com (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.
amazonaws.com/attachments/FFW/327240/291048.pdf).
Company
Directory
DIRECTORS:
WP Foley, II (Chairman)
PR Brock (Deputy Chairman)
AJ Anselmi
GR Graham
AM Turnbull (CEO)
HEAD OFFICE ADDRESS:
13 Waihopai Valley Road
RD6, Blenheim, 7276, Marlborough, New Zealand
Telephone +64 3 572 8200
Facsimile +64 3 572 8211
POSTAL ADDRESS:
PO Box 67, Renwick 7243, Marlborough, New Zealand
EMAIL:
info@foleywines.co.nz
WEBSITES:
www.foleywines.co.nz
www.grovemill.co.nz
www.vavasour.com
www.tekairanga.com
www.martinborough-vineyard.co.nz
www.mtdifficulty.nz
www.lighthousegin.co.nz
NATURE OF BUSINESS:
Production and distribution of wine
AUDITORS:
2020: Deloitte Limited, Wellington
2019: PricewaterhouseCoopers, Napier
SOLICITORS:
Bell Gully, Auckland
Jennifer Mills & Associates, Auckland
BANKERS:
Bank of New Zealand, Auckland
REGISTRATION NO.
307139
REGISTERED OFFICE:
13 Waihopai Valley Road, RD6 Blenheim 7276, Marlborough, New Zealand
SHARE REGISTRAR:
Computershare Investor Services Limited
159 Hurstmere Road, Takapuna, North Shore City 0622
Private Bag 92119, Auckland 1142
Telephone +64 9 488 8777
Facsimile +64 9 488 8787
Email: enquiry@computershare.co.nz (please quote CSN or shareholder number)
Website for shareholders to change address or payment instructions or view
investment portfolio: www.computershare.co.nz/investorcentre
SHARE TRADING:
NZX – NZSX Market
Security Code “FWL”
93
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
92
FOLEY WINES LIMITEDFOLEY WINES LIMITED | ANNUAL REPORT 2020
Investors who wish to join the Foley Investors Wine Club,
please email info@foleywines.co.nz
---
CONTINUED MOMENTUM DESPITE GLOBAL HEADWINDS
THURSDAY, AUGUST 27 2020 – Foley Wines announces another record year and genuine progress despite
global headwinds in the Company’s Annual Report to June 2020, published to the New Zealand Stock Exchange
today.
HIGHLIGHTS
Bottled sales revenue $49,951,000 (up 13.4%)
Operating earnings $7,750,000 (up 53.2%)
Reported profit after tax $6,921,000 (up 96.7%)
Dividend of 3 cents per share fully imputed declared
Foley Wines CEO Mark Turnbull said, “2020 has been a year of significant progress, but one which was also
impacted by Covid-19. Despite global headwinds, the strategy has been one of continued premiumisation, which
continues to gain traction in our key markets.”
Although the global situation had significant implications, the business continues to make genuine progress.
“Thankfully we were able to successfully complete harvest during alert level 4 under strict conditions. However,
our portfolio of premium brands is served in restaurants (on-premise) and airlines around the world and these
sectors have been hit hard. While case sales were up 2% for the year, case sales for the final quarter were down
approximately 27,000 cases compared to the prior year. The business was also able to retain all staff during the
global crisis. “Like many businesses we were eligible for the wage subsidy. This enabled us to retain all staff
across the Company and no staff have lost their jobs. This means we were able to quickly reopen both the cellar
doors and also the restaurant at Mt Difficulty to a 7 day a week operation,” said Turnbull
“However, this doesn’t reflect the positive momentum the business is gaining on the sales front as all markets
were performing well prior to the disruption of Covid-19. We are confident that with the foundations laid over
the last 12 months will underpin the future growth of the company” said Turnbull.
The business secured significant new routes to market in Australia and Asia during the year in line with its
premiumisation strategy. “Our intention is to focus on channels that want brands, and this is very much a value
over volume play. As outlined in 2019, the value of the Company’s portfolio and centralised business model is
creating significant opportunities with retailers and importers seeking premium brands and streamlined
procurement. It is fundamental we keep to this course and continue to build our brands, underpinned by high
quality winemaking,” said Turnbull.
The business’s sustainability credentials are also drawing the attention of retailers around the world. “We’ve seen
events during the year, including the bushfires in Australia, propel environmental issues even further into the
forefront of consumers’ minds. The use of recycled glass from New Zealand, the use of solar, recycled paper
stocks are tangible examples of what we’re doing to safeguard our environment,” said Turnbull.
Earlier in the year, the company announced that it would be building a new restaurant, cellar door, distillery and
barrel facility in Martinborough. These plans are well advance with construction planned to start in November
with a planned opening date of December 2021.
– END –
Authorised for public release.
For further information please contact:
Mark Turnbull
CEO, Foley Wines Limited
PO Box 67, Renwick, 7243, Marlborough
Tel: +64 21 714 885
Email: mark@foleywines.co.nz
Notes to Editors:
Foley Wines is a collection of iconic wineries and brands from New Zealand’s most acclaimed wine regions.
Each with a unique story of New Zealand to tell, our wineries are linked by a common unrelenting purpose; to
make great wine that people love to drink around the world – made by land & hand.
Our ambition is to be New Zealand’s most revered wine group through the ownership of iconic wineries in New
Zealand’s most acclaimed regions, inspiring the most discerning retailers and restaurants around the world.
Established in 1988 as Grove Mill Wine Company Ltd, the company merged with Foley Family Wines NZ
Limited in September 2012. The Company listed on the NZAX Board of the NZ Stock Exchange when this was
first established in November 2003 and migrated to the NZX Main Board and changed its name to Foley Wines
Limited (ticker code FWL) on 3 December 2018.
Foley Wines’ major shareholder is Bill Foley who is a major investor in the US wine industry. His company Foley
Family Inc. is a Top 20 wine company in the US, owning 17 wineries with over 150 dedicated sales personnel in
the US market.
Foley Wines wholly owns Martinborough Vineyard and Te Kairanga and the Lighthouse Gin brand in
Martinborough, Grove Mill and Vavasour in Marlborough, and Mt Difficulty in Central Otago.
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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