2020 Full Year Results
ANNUAL
REPORT
2020
We are evolving our approach to reporting to show a more integrated view of our economic, social and
environmental performance and activities.
Since 2016, we have annually contributed to the Global Reporting Initiative (GRI) Reports for our parent
company, BayWa AG. This 2020 Integrated Annual Report is T&G Global’s first annual integrated report which
we have prepared in accordance with the GRI Standards: Core option. The GRI Standards are the world’s most
widely used standards for sustainability reporting, helping businesses take responsibility for their impacts.
We have included an index of disclosures against the GRI standards on page 139. To guide the structure of
our report, we continue to incorporate non-financial information, referencing the Integrated Reporting <IR>
framework. <IR> can be used in conjunction with GRI principles and indicators. We have not sought external
assurance for the non-financial information in this report. This report is for the period 1 January 2020 to
31 December 2020 and includes T&G Global Limited and its subsidiaries.
T&G Global also participates in the Climate Disclosure Project (CDP) as part of the BayWa Group. The CDP is
an international non-profit organisation that assesses the commitment of companies and public bodies to
environmental and climate protection each year. BayWa AG participated in the climate rating of the CDP for
the first time in 2019. In 2020, its second year of participation, BayWa Group achieved a climate rating of B,
thus improving by one score compared to the previous year (2019: C). This success can be attributed, among
other things, to a more substantiated disclosure of climate risks and opportunities, a more harmonious linking
of climate and corporate strategy, and additionally reported categories in Scope 3 emissions across the BayWa
Group. With a CDP rating of B, BayWa Group is above both the European and the industry average.
In this report, we use some words in Māori, including: Aotearoa, which is New Zealand’s Māori name; whānau
which means a family group, extended family; kaitiaki which means a guardian, caregiver, custodian; and
kaitiakitanga which means guardianship, stewardship, trustee.
About this report
Please note, the photos in this report were taken both before and after the arrival
of COVID-19, so physical distancing and facemasks are not always in-place.
2 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
ABOUT THIS REPORT 2
CHAIRMAN’S REVIEW 4
CEO’S REVIEW 6
RESPONDING TO COVID-19 9
CFO’S REVIEW 10
HIGHS AND LOWS 12
OUR BUSINESS 14
• OUR FOOTPRINT 15
• HOW WE CREATE VALUE 18
OUR STRATEGY 20
• GROW GREAT BRANDS 21
• WIN IN KEY GLOBAL MARKETS 25
• LEAD AOTEAROA’S FRESH PRODUCE FUTURE 28
BUILDING A HIGH-PERFORMANCE CULTURE 32
KAITIAKITANGA 36
• OUR PEOPLE 38
• OUR PLACE 44
• OUR PRODUCE 54
BOARD OF DIRECTORS 60
CORPORATE GOVERNANCE 62
EXECUTIVE LEADERSHIP TEAM 64
STATUTORY INFORMATION 66
AUDITOR’S REPORT 70
FINANCIAL CONTENTS 75
INCOME STATEMENT 76
STATEMENT OF COMPREHENSIVE INCOME 77
STATEMENT OF CHANGES IN EQUITY 78
BALANCE SHEET 79
STATEMENT OF CASH FLOWS 80
NOTES TO THE FINANCIAL STATEMENTS 82
FIVE YEAR FINANCIAL REVIEW 135
APPENDICES 136
• RESPONDING TO WHAT’S IMPORTANT 137
• GRI INDEX 139
• EMPLOYEE AND WORKFORCE DATA 142
• ASSOCIATIONS AND MEMBERSHIPS 145
DIRECTORY 147
CONTENTS
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 3
PROF. KLAUS JOSEF LUTZ
CHAIRMAN
CHAIRMAN'S REVIEW
“T&G was able to
successfully build on
the foundations laid
over the last two years
and deliver a strong
profit result.”
4 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
On behalf of the Board of
Directors, I am delighted to
present the Annual Report
for T&G Global Limited and
its subsidiary companies
(“T&G”), for the year ended
31 December 2020.
In 2020, despite the pervasive challenges
associated with COVID-19, T&G was able
to successfully build on the foundations
laid over the last two years and deliver
a strong profit result. Importantly, in
spite of the impact of various one-off
and climate-related factors, there has
been a substantial improvement in the
organisation’s underlying performance.
Our Apples business finished well ahead
of the prior year, due to a strong southern
hemisphere season and robust market
performance in Europe, North America
and Asia. The International Trading
business also had an improved result
over 2019. The Board has been pleased
with the progress in integrating Freshmax
New Zealand Ltd, which was acquired
in the midst of a COVID-19 lockdown in
Aotearoa New Zealand, into the broader
T&G Fresh business. The combined sales
performance has maintained strong
momentum, as the businesses have
been combined with minimal disruption,
with planned acquisition synergies on
track across all areas of the business.
These factors, combined with a firm
focus on cost savings across the Group,
contributed to the year’s result.
We have continued our programme of
divesting underperforming and non-core
assets during the year. In December, we
were delighted to announce the sale and
leaseback of our 8.03 hectare Nelson
coolstore and packhouse site, with the
settlement concluded before year end.
The sale generated proceeds of $50.5
million, which we plan to reinvest back
into our business in growing our global
markets, developing and acquiring new
genetics, and investing in our physical
assets and technology.
Additionally, in light of the stronger 2020
performance, the Board was able to
declare a fully-imputed interim dividend
in December of 6 cents per share.
HEALTH AND SAFETY
T&G has an ambitious health and
safety strategic plan. The strength
of both our Executive team and our
Health and Safety team has been
integral to our effective management
and leadership through COVID-19. The
physical distancing requirements, care
of vulnerable workers, along with the
pandemic’s impact on the personal
welfare of everyone, has highlighted
the need for a broader approach to
employee wellbeing. Maintaining and
improving the welfare of our people is
an absolute key priority for T&G and is
critical to the success of our company.
IN MEMORIAM
In June, former Chairman and long-
standing Director, Tony Gibbs, sadly
passed away following a period of ill
health. Tony led T&G Global for 16 years
from 1995 until 2011. Throughout his
tenure, he reshaped the business to
focus on its core strengths, expanding
it from a domestic fruit and vegetable
seller into a significant player in the
international fresh produce industry,
introducing new varieties, including
Envy™ and JAZZ™ apples.
LOOKING AHEAD
While 2020 was a challenging year,
the global economy faces a number
of significant ongoing economic risks,
including logistics disruption, cyber-
security, geopolitical threats, civil unrest
and the pervasive impact of COVID-19.
The last 12 months have demonstrated
that we have the resilience, systems and
strategy to be able to respond to these
challenges with agility. Additionally, while
our industry is particularly vulnerable
to the impact of extreme weather-
related events, we are confident that our
investment in our people and systems has
established a strong platform for growth
long into the future.
I would like to thank our leadership team
and employees around the world for
their dedication, passion and energy in
delivering a great result for 2020. We
look forward to building on this strong
momentum for 2021.
PROF. KLAUS JOSEF LUTZ
CHAIRMAN
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 5
CEO'S REVIEW
GARETH EDGECOMBE
CHIEF EXECUTIVE OFFICER
Revenue
$1.4b
(up $0.2 billion)
Net profit (before tax)
$22m
(up $11.7 million)
–––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––
Operating profit
$32.4m
(up $15.9 million)
6 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
It has been a year of
extraordinary challenges,
with the COVID-19 pandemic
creating uncertainty and
volatility. Around the
world, people, companies
and industries have been
impacted, and at T&G, we
haven’t been immune.
But what has shone through is the
resilience and adaptability of our people,
their care for each other and for what they
do, and the strength of our underlying
business. United by our purpose,
mindsets and sharpened global strategy,
together we’ve delivered strong growth for
the year ending 31 December 2020.
DELIVERING TOGETHER
Our operating profit has increased to
$32.4 million, from $16.5 million last year,
and revenue is up to $1.4 billion, from
$1.2 billion in 2019. Net profit before tax
increased to $22.0 million, from $10.3
million the year prior.
This result hasn’t been easy. It’s the
outcome of a concerted transformation
over the past few years to strengthen
our balance sheet, become customer-
led, deliver value from our intellectual
property and build a high-performance
culture. While we still have a way
to go, our strong underlying results
demonstrate our strategy and
performance is delivering.
Globally, we were privileged to operate
as an Essential Service during COVID-19
lockdowns, and this ensured we kept
fresh produce moving to New Zealanders
and consumers around the world.
This was underpinned by the great
momentum in our core business.
Our Apples business had an outstanding
year, improving its operating profit by
56%, from $33.5 million in 2019 to $52.1
million in 2020. This was a result of a
sustained focus on harnessing the best
genetics, building premium brands,
delivering strong sales momentum in Asia
– one of our key growth markets – and
continually optimising our supply chain.
Our Aotearoa New Zealand Envy™
crop saw a 23% increase in sales, with
1.9 million Tray Carton Equivalents
(TCEs) sold – and while we faced some
challenges with internal browning,
the crop sold out before the arrival of
northern hemisphere fruit, thanks to
strong consumer demand. JAZZ™ remains
a real focus for us. It’s a great apple
and we have a high quality, closed loop
programme, however we haven’t yet
successfully built demand to meet supply,
and as a result its pricing struggles. This
will be an area of critical focus in 2021.
STRENGTHENING OUR
FOUNDATION
During the year we identified that our
strategy, which was set two years prior,
had served us really well during the initial
stages of our transformation, however,
to realise our future vision, it needed
refining. The outcome is not a new
strategy, we’ve simply concentrated our
efforts on the three areas where we know
we can win: Grow great brands; Win in
key markets; and Lead Aotearoa’s fresh
produce future. Detailed information can
be found on page 20.
In April, we acquired and integrated
Freshmax New Zealand’s fresh produce
division, thereby creating T&G Fresh. By
combining the strengths and cultures of
both businesses, T&G Fresh will help play
a leadership role in creating a strong,
sustainable, customer-led sector in
Aotearoa.
To help fund further growth initiatives,
including investment back into our
business, we closed the year out strongly
with the sale and lease-back of our
Nayland Road post-harvest facility in
Nelson for $50.5 million.
Underpinning and enabling the delivery
of our strategy is our high-performance
culture and our role as kaitiaki.
COVID-19 provided a catalyst to embrace
a digital-first ethos and this provided the
foundation for FLOW, our flexible and
optimised way of working. The benefits
from a productivity, personal and
organisational culture perspective have
been immense, and we’ve now adopted
a permanent hybrid model for many of
our roles.
From our sharpened global strategy, we’ve
also reset our sustainability framework,
which we call Kaitiakitanga. Kaitiakitanga
is integral to how we do business, and
with a new framework and defined
commitments, it will help us balance the
needs of our people, place and produce,
alongside our economic decisions.
OUR FOCUS FOR THE YEAR AHEAD
Looking to 2021, there’s a lot of
uncertainty on the horizon. COVID-19
continues to impact our people, their
families and many markets, as countries
respond to the pandemic. Given
border restrictions, it’s also affecting
our experienced Recognised Seasonal
Employee (RSE) workers, with reduced
numbers entering Aotearoa New Zealand
for the 2021 harvest. To address this, in
2020 we launched an innovative Kiwi-
focused recruitment campaign which is
delivering positive results.
At the same time, the hail and heavy
rain which hit Nelson and Otago in late
December has impacted 2021 crops,
with Nelson bearing the brunt of the
damage. JAZZ™ was most affected by the
hail, and we expect a decline in volumes
across some varieties this year. While full
assessments continue, some allowance
has been built into the fair value of our
biological assets.
To help navigate this, in 2021 we will be
nimble and adaptable, harnessing our
strengths to stay on strategy and provide
our full support to our people and
communities. Key areas of focus include:
• Maximising Envy’s™ growth potential
• Accelerating our JAZZ™ demand
strategy and brand refresh
• Maximising our IP by investing in new
genetics and partnerships
• Further strengthening our capabilities
in Asia to grow sales
• Capturing value and efficiencies
through continuous improvement
• Strengthening T&G Fresh’s categories
and partnerships
• Delivering positive change through
Kaitiakitanga
• At every level, building and developing
leadership capabilities
As a global fresh produce business, we’re
in an incredible position with immense
opportunity. While consumers have
always sought out safe, trusted, high-
quality food, this year has shown the
increased value they place on sustainable
nutrition. This is something we do well,
and we know we can do it even better. I’m
looking forward to working with our team
to deliver this.
GARETH EDGECOMBE
CHIEF EXECUTIVE OFFICER
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 7
8 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
This has been a uniquely challenging
year. As an Essential Service, we were
privileged to operate globally throughout
the pandemic, helping to provide healthy
fruit and vegetables to consumers around
the world.
To do this, our team worked at a time
when many people were anxious for their
own safety, and that of their families
and communities. We did everything we
could to keep them safe – moving early
to reduce people movements, adhering
to physical distancing requirements,
maintaining strict hygiene standards and
identifying our vulnerable teammates
to make sure they were kept safe. We
created ‘assurance monitor’ roles, where
office-based team members, as well as
temporary staff, provided our operational
team leaders with an additional set of
eyes, helping with the safe running of
our business. The safety of our people
was our number one priority and without
being able to deliver a safe environment
for them, we couldn’t have performed at
the level that we did.
Navigating the challenges that COVID-19
presented to our business really
demonstrated everything that is great
about T&G. United by our purpose,
strategy and mindsets, our team rose
to the challenge. They drew upon their
strengths and expertise to solve problems,
collaborated to come up with unique
solutions, and supported each other to
stay safe and keep our business running.
As an example, as global supply chains
started to slow, we took the bold step
and chartered a ship to move about
31 million apples to Antwerp, as a way
around potential container shortages and
port closures. This required a huge team
effort, with 13 packhouses in the Hawke’s
Bay and Nelson working quickly over a
six-week period, along with our teams in
Aotearoa New Zealand and Europe. With
our apples in market early, we seamlessly
moved from northern hemisphere to
southern hemisphere supply, ensuring
our independent growers’ apples, as well
as our own, were sold at good prices.
In Asia, the majority of premium produce
sales take place in wholesale markets,
but the threat these markets posed to
the spread of COVID-19 meant they
closed early on in the pandemic, and
at the end of 2020 some still remained
closed. While this did impact our results,
the benefit of our in-market sales model
provided a significant advantage for us.
Our team on the ground adapted quickly,
moving product between customers and
countries, enabling us to get the best
value possible.
At home in Aotearoa New Zealand, our
T&G Fresh business was impacted with
the restrictions on physical openings for
independent retailers and foodservice
operators during various alert levels. For
the first time in 123 years, our market
floors were closed to customers, with
our team embracing live streams and
photos to share the day’s produce with
customers.
Our independent growers are part of our
whānau, as are our RSE team members,
and we did everything possible to share
information, keep them safe and maintain
operations. This included our RSE team
working, travelling and staying in bubbles.
With borders closed and many of our RSE
workers stranded awaiting repatriation,
we maintained their employment
throughout the year, working with the
community to provide warm clothing,
bedding and heaters. In addition, our
employees donated more than $35,000 to
provide them with supermarket vouchers.
We also moved quickly to support our
communities and those facing food
insecurity, with fresh produce donations
in Aotearoa New Zealand, China and
the United States, including becoming a
foundational partner of the New Zealand
Food Network (NZFN). This was the
genesis of our Fairgrow charity, which
donated more than 264,000kg of produce
to New Zealanders in need in the last half
of 2020. See page 51 and 59 for further
information.
COVID-19 has fast tracked our digital-first
evolution where we’ve discovered new
ways to stay connected with our office-
based team members working from home
during the pandemic. The impact both
professionally and personally has been
immense. We have now permanently
adopted a hybrid model, FLOW – our
flexible and optimised way of working,
with our people and teams deciding what
works best for them for a place of work.
It’s also shown us we don’t need to travel
as much, thereby reducing costs and
greenhouse gas (GHG) emissions.
Together, our people united more than
ever, working as one team to keep each
other safe, our business running, and
our fresh produce supply chain moving
to benefit our customers, consumers,
communities and shareholders.
RESPONDING
TO COVID-19
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 9
CFO'S REVIEW
BASTIAN VON STREIT
CHIEF FINANCIAL OFFICER
–––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––
Apples
operating profit
$ 5 2 .1m
(up 56%)
Profit (after tax)
$16.6m
(up $10 million)
Apples revenue
$875.2m
(up 24%)
10 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
In a year full of challenges,
we’ve delivered a strong
result, increasing revenue
from $1.2 billion in 2019 to
$1.4 billion in 2020. This
was driven by excellent
performance from our Apples
business, as well as additional
revenue earned in Aotearoa
New Zealand following our
acquisition of Freshmax
New Zealand in April 2020.
Profit after tax has more than doubled,
increasing by $10.0 million, from
$6.6 million in 2019 to $16.6 million
in 2020. This is attributed not only to
our increased revenue, but also to the
realisation of benefits from our 2019
restructure and the steps taken in 2020
to reduce operating expenses and
discretionary spend as COVID-19 began
to impact our business.
Our improved 2020 financial results
demonstrate the strength of our strategy
and the momentum in our business. While
there were many challenges throughout
the year – from the harvesting of apples,
right through to reduced demand in
Aotearoa New Zealand as some of our
customers were adversely impacted during
lockdown – through our team’s hard work
and resilience we have delivered.
INCREASING OPERATING
PERFORMANCE IN
CHALLENGING MARKETS
APPLES
The 2020 New Zealand apple season
delivered significantly better fruit sizes,
volumes and quality than the previous
year. This lifted revenue in our major
sales markets of North America, Asia and
Europe. Additionally, some markets, such
as the UK, benefitted from a COVID-19
related increase in supermarket sales.
Combined with improved efficiencies in
our Apples Operation, these factors offset
the impact of a reduction in throughput
in our packhouses as well as increased
supply chain costs.
Overall, revenue for our Apples business
grew by 24%, to $875.2 million. As a result
of increased revenue and efficiency gains,
operating profit increased by 56%, from
$33.5 million in 2019 to $52.1 million
in 2020.
INTERNATIONAL TRADING
Our International Trading division
experienced a 21% decline in revenue,
from $226.5 million in 2019 to $178.7
million in 2020. While revenue in our North
American business was solid and Asia saw
some uplift, this result is largely due to the
difficult trading conditions experienced in
Australia as a result of COVID-19.
This year, our Peruvian grape farm
experienced the region’s worst drought
since 2002, however a good crop was
harvested at the end of the year because
of our investment over recent years to
improve water storage and supply. The
drought adversely impacted fruit quality
and increased the proportion of Class 2
product, which impacted average
selling prices.
Despite these challenges, the operating
result for International Trading increased
from $0.8 million in 2019 to $2.3 million
in 2020.
T&G FRESH
Revenue for T&G Fresh increased by $75.0
million, to $357.7 million in 2020. Our
acquisition of Freshmax New Zealand and
its subsequent integration into T&G Fresh
has been a key contributor to this result.
Since May, it has contributed around $3.3
million to T&G Fresh’s operating profit,
with additional synergies in our Markets
business expected to be realised from
2021 onwards.
The lockdown in New Zealand between
March and April restricted the ability for
some of our foodservice and independent
customers to physically operate. This
decreased both demand and price for
tomatoes, as well as an overall decrease
in demand in our wholesale markets,
resulting in a negative impact on
revenues. Despite a lack of tourism, our
Pacific Islands business made its way
through the pandemic very well by selling
a broader range of products, thereby
finishing the year above last year’s
operating result.
Overall, T&G Fresh’s operating result has
decreased by $0.6 million from $19.0
million in 2019 to $18.4 million in 2020.
However, the prior year operating result
included $3.9 million of revaluation gains
not repeated in 2020, and the underlying
operating performance in 2020 improved
by $3.3 million from the previous year.
OTHER BUSINESS
Other Business contains the overhead
expenses not allocated to our various
business divisions. In 2020, its operating
loss of $40.5 million is $3.7 million higher
than in 2019, when it was $36.8 million.
Outside of our trading divisions, we saw
our share of profit from associates and
joint ventures decrease from $3.3 million
in 2019 to $2.4 million in 2020, largely due
to the cessation of business of associate
company Allen Blair Properties Ltd. Other
income decreased by $3.8 million in 2020,
as the previous year’s result included
gains from the sale of our post-harvest
facility and orchards in Kerikeri.
Due to reduced borrowings, our net
financing expenses have decreased by
$0.6 million compared to 2019.
Earnings per share has lifted from 0.7
cents per share in 2019 to 9 cents per
share in 2020.
FURTHER STRENGTHENING OF OUR
FINANCIAL POSITION
Total assets increased from $854.2
million at the end of 2019, to $980.7
million at 31 December 2020. This was
primarily driven by the acquisition
of Freshmax New Zealand, including
intangible assets and goodwill, as well
as further redevelopments of orchards.
Other contributing factors included the
revaluation of assets ($38.9 million),
offsetting the effect of the sale of our
Nelson property.
Total liabilities increased by $81.2 million,
reflecting to a large extent additional
lease liabilities from the renewal of
orchard land leases, as well as the lease-
back of our Nelson post-harvest facility
sold in December 2020.
T&G Group equity increased by $45.4
million, with $38.9 million of the increase
coming from revaluation gains recognised
directly in reserves.
Our capital expenditure during the year
was $46.8 million, an increase of $7.3
million from the previous year. This
reflects the Group’s commitment to
recycling capital on growing the business
with a major focus on further orchard
developments and related bearer
plants, as well as capital improvements
to futureproof strategic assets. We
spent $27.9 million on the acquisition of
Freshmax New Zealand. The increase in
net assets has seen net tangible assets
per share increase from $3.56 in 2019 to
$3.61 in 2020.
BASTIAN VON STREIT
CHIEF FINANCIAL OFFICER
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 11
HIGHS AND LOWS
Revenue
$1.4 billion
UP by $0.2 billion
Operating profit
$32.4 million
UP by $15.9 million
Net profit before tax
$22 million
UP by $11.7 million
HIGHS
Fairgrow charity
launched; donates
264,475kg
of fresh produce
People Connection Meter
75%
3% above global benchmark
Greenhouse gas emissions* reduced
10.2% versus 2017 baseline
*Greenhouse gas emissions
includes Scope 1 and 2 only
Acquired Freshmax
New Zealand
and
integrated it into T&G Fresh
12 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
Downward trend in recordable injuries
per 200,000 work hours
from 10.5 in 2019 to
8.8 in 2020*
* The calculation methodology for 2020 has been updated. The comparison
to our 2019 result is an improvement of 16.2%.
Full or partial closure of
wholesale markets in
Asia
Lockdowns restricted
the physical opening of
independent retailers
and foodservice outlets in
Aotearoa New Zealand
Border
restrictions
made it difficult for seasonal
team members to return
home or enter Aotearoa
New Zealand
LOWS
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 13
OUR BUSINESS
Growing healthier futures through fresh fruit
and vegetables.
Mā te hua whenua, mā te hua rākau, ka tipu,
ka rea mā te tau anamata.
Our story began more than 123 years ago when
the company started as Turners and Growers,
only located in Auckland. Today, as T&G, our 2,000
people are located in 13 countries, where we grow
apples, tomatoes, citrus, grapes and blueberries,
and partner with dedicated independent growers
to market, sell and distribute nutritious high-quality
fresh produce to customers and consumers in more
than 60 countries.
Driven by our purpose and united by our clear
strategy, we’re focused on growing great brands,
winning in key global markets and leading
Aotearoa’s fresh produce future.
Our high-performance culture and people
strategy creates the environment to achieve this,
empowering our people to be safe, thrive and
perform at their best.
As kaitiaki we’re committed to having a positive
impact on our land, people, produce, resources and
community, and our Kaitiakitanga framework guides
everything we do.
Together, this ensures that every day we create
value for our people, growers, customers,
consumers, communities and shareholders.
14 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
TAIPA
KERIKERI
TŪĀKAU
ŌHAUPŌ
REPOROA
GISBORNE
HAWKE'S BAY
NELSON
AUCKLAND*
WHANGĀREI
HAMILTON
NEW PLYMOUTH
TAUR ANGA
CHRISTCHURCH
DUNEDIN
WELLINGTON
PALMERSTON NORTH
CENTRAL OTAGO
KEY
SITES
(Group office*, sales, market
floors, distribution centres)
GROWING SITES / REGIONS
T&G apple, blueberry, tomato and citrus
regions, and third party apple suppliers
Note: In addition, T&G Fresh partners with over 1,000
third party fruit and vegetable growers throughout
New Zealand
POST-HARVEST AND
PACKING FACILITIES
T&G facilities and third party
apple facilities
OUR FOOTPRINT
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 15
ASIA
Revenue ($’000)
$355,898
Employees (permanent)
25
Offices (Group or Sales)
5
GROWING REGIONS:
South Korea
Thailand
• Boeun • Yesan
• Geochang • Hongcheon
GROWING REGIONS:
Egypt
Morocco
South Africa
Zambia
• Eastern Cape
• Western Cape
UK & EUROPE
Revenue ($’000)
$535,839
Employees (permanent)
493
Offices (Group or Sales)
3
KEY
GLOBAL MARKETS
WE SERVE
GROWING REGIONS
Own and third party
OFFICES
In addition, our licenced grower
partners sell their JAZZ™ and Envy™
in Chile, Brazil, Argentina, Australia
and South Africa under licence.
Note: Employee (permanent)
numbers exclude seasonal team
members.
OUR FOOTPRINT
GROWING REGIONS:
Austria
France
Germany
Italy
Portugal
Spain
Switzerland
UK
• Graz • Innsbruck
• Loire Valley • Occitanie
• Provence
• Lindau • Mannheim
• Bolzano
• Soria
• Lausanne
• Martigny
• Herefordshire
• Kent
• Lincolnshire
• Suffolk
• Sussex
16 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
AMERICAS
Revenue ($’000)
$87,649
Employees (permanent)
170
Offices (Group or Sales)
5
GROWING REGIONS:
Argentina
Canada
Chile
Ecuador
Guatemala
Mexico
Panama
Peru
USA
• British Columbia
• Angol • Talca
• Temuco
• Ica
• Piura
• California • Oregon
• Washington State
AUSTRALIA &
PACIFIC ISLANDS
Revenue ($’000)
$101,310
Employees (permanent)
99
Offices (Group or Sales)
4
GROWING REGIONS:
New South
Wales
South
Australia
Tasmania
Victoria
Western
Australia
Pacific
Islands
• Coffs Harbour
• Griffith
• Adelaide • Loxton
• Renmark
• Huon Valley
• Koo Wee Rup
• Mildura
• Narre Warren
• Robinvale
• Shepparton
• Swan Hill
• Warragul
• Channybearup
• Bullsbrook
• New Caledonia
• Samoa
• Tonga
GROWING REGIONS:
• Auckland
• Central Otago
• Gisborne
• Hawke’s Bay
• Kerikeri
• Nelson
• Ōhaupō
• Reporoa
• Taipa
• Tūākau
NEW ZEALAND
Revenue ($’000)
$331,894
Employees (permanent)
1,184
Offices (Group, Sales or Markets)
12
®
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 17
INPUTS
SOCIAL CAPITAL
T&G relies on strong and trusted relationships with growers,
distributors, customers and external stakeholders around the
world to enable year-round supply of key varieties into global
markets.
INTELLECTUAL CAPITAL
Intellectual property, including premium brands and in-
market expertise are key to our competitive advantage and
future growth.
FINANCIAL CAPITAL
We invest financial capital across our operations (including
land, glasshouses, orchards and post-harvest infrastructure),
support growers and invest in genetics and facilities.
PHYSICAL CAPITAL
Tangible assets including land, packhouses, cool stores,
trucks, post-harvest facilities, 12 market locations, vehicles,
equipment and our in-market facilities, enable us to supply
key global markets.
HUMAN CAPITAL
A diverse, talented, global workforce, with the best knowledge
and insights, ensures we have the skills to develop, grow, pick,
sell and deliver our produce to the world’s consumers.
NATURAL CAPITAL
Natural resources are fundamental to our business and future
prosperity. Soil, water, atmosphere, energy and sunshine,
and our precious pollinators, are utilised to grow healthy and
nutritious produce.
OUTCOMES
LEADERSHIP
Creating a sustainable business model creates prosperity for
our growers, employment in our communities and year-round
supply of fresh produce for our customers.
LOYALTY
Meeting consumer and customer needs through high quality
premium produce and brands, and the rights to unique Plant
Variety Rights (PVRs), drives loyalty from our customers and
consumers and enhanced returns for our growers.
FUEL FOR GROWTH
Recycling capital is future-proofing our business for a more
sustainable future, including improved efficiencies, stronger
yields, enhanced returns and fit-for-purpose assets.
GLOBAL REACH
Our infrastructure gives us the scope to drive sustainable
performance across our supply chain, and provide a secure
global network for year-round supply of healthy produce and
our premium brands.
GREAT WORKPLACE
Creating a high performing, exciting, global workplace that
attracts the best talent armed with the best global knowledge,
invests in its people, has efficient processes and is a safe place
to work.
GUARDIANSHIP
Land that is healthy and continues to support fresh produce
production.
A strong focus on conserving water, reducing our greenhouse
gas emissions and reusing resources, while providing healthy
and nutritious produce to the world.
HOW WE CREATE VALUE
18 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
W
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We grow, partner, source and supply high quality fresh
produce which is desired by consumers and customers
around the world.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 19
OUR STRATEGY
Two years ago, we set out to realise this, developing
our enduring purpose – Growing healthier futures
through fresh fruit and vegetables – Mā te hua
whenua, mā te hua rākau, ka tipu, ka rea mā te tau
anamata – which unites us, and captures why we
exist and how we make a difference. Guided by our
purpose and vision, our Executive Leadership team
developed a strategy to begin our transformation
towards a customer-led, premium fresh produce
business. This strategy has served us well over the
past few years. It has been the basis of our evolution
to-date, helping get our business moving and
restoring operational performance.
With our underlying performance now improving,
this year we identified that to achieve our future
vision, our strategy needed to differentiate us in the
market. It needed to be based on our strengths and
advantages, as well as the opportunities we see in the
world. Ultimately, it must focus on where we can win.
The outcome of this Executive-led process is not a
new strategy, we have simply refined it, concentrating
our efforts on three focused areas which will be
enabled by our high-performance culture, our
mindsets and Kaitiakitanga.
T&G is a company with incredible potential.
LEAD AOTEAROA’S FRESH PRODUCE FUTURE
OUR S TRATEGY
OUR PURPOSE
KAITIAKITANGA GUIDES EVERYTHING WE DO
OUR MI N D S ETS
• Best genetics in apples, berries and grapes
• Unique varieties and brands loved
by consumers
• World class in growing and post-harvest,
with global partners maximising our
intellectual property
GROW GREAT BRANDSWIN IN KEY GLOBAL MARKETS
• Unlock markets selected for premium
and potential
• Close to customers with capability in-market
• Most efficient end-to-end supply chain
OUR ME ASURES
• Partner of choice
• Best place to work
• Financial returns
• Brand/category performance
HIGH PERFORMANCE CULTURE
• Win in key categories
• Optimise channels to market
• Create valued partnerships
THE WORLD’S LEADING
PREMIUM FRESH
PRODUCE COMPANY
OUR VI S I O N
GROWING HEALTHIER
FUTURES THROUGH FRESH
FRUIT & VEGETABLES
20 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
OUR PROGRESS
Apples business
increases revenue
despite COVID-19
In 2020, our Apples business had a strong year, delivering 24% increase in
revenue, from $707.0 million in 2019 to $875.2 million this year. Despite
COVID-19, this result was achieved through an integrated end-to-end
approach, an unwavering focus on continual improvement, and a lot of
hard work.
While the weather was kind to our 2020 apple harvest, together, our own
orchards and independent growers delivered one of the best harvests we’ve
seen. This was done in the midst of a COVID-19 lockdown, where everyone
quickly adapted and implemented new safe work protocols, while looking
after our vulnerable team members. Through a significant amount of
co-operation, focus and planning, the fruit was harvested within maturity
parameters, resulting in great quality, and is testament to the care and
commitment of our T&G whānau.
At the same time, supply chain challenges, such as potential container
shortages and port closures, required agility and creative solutions. We
chartered a ship to get around any potential impact, moving 31 million
apples to Antwerp in April. This enabled us to seamlessly move from
northern hemisphere supply to southern hemisphere apples and help set
our in-market sales teams up for success.
A significant amount of orchard development work has been undertaken
this year and will continue in 2021. We’ve benchmarked our orchards and
set a target which will see us performing in the top quartile in Aotearoa
New Zealand, across all varieties, and we’re continually redeveloping older
orchards, planting newer varieties on modern, automation-ready structures.
OUR APPROACH
As a fresh produce company, with a large part of our business positioned at the bottom of the world in
Aotearoa New Zealand, we sell into a vast global market, competing against large players and commodity
products.
To create value, it’s vital we harness intellectual property, such as great genetics, world-class growing and
production systems, brands, partnerships and quality, so we can compete globally in the premium space.
Not only will this create value to reinvest in our future growth and deliver returns to our shareholders, it’ll
help build a strong horticultural sector and economy.
As such, we’re focused on identifying and harnessing superior genetics in apples – our legacy category
which we’ll grow extensively into the future – as well as blueberries and table grapes. These unique varieties
will be built into desired brands and grown at scale using best practice, to meet global customer and
consumer demand.
GROW GREAT BRANDS
We will succeed by:
• Selecting and developing the best genetics in three categories – apples, blueberries
and grapes
• Wrapping these unique varieties in brands consumers love and seek out
• Being a world class grower and post-harvest operator, with growing systems and
global partnerships to maximise the potential of our intellectual property
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 21
OUR PROGRESS
Sell-out season
for Envy™
–––––––––––––––––
1.9m
(TCEs) of New
Zealand Envy™
sold in 2020
up
23%
on the
previous year
Our premium Envy™ apple brand had a record season, selling its entire New Zealand crop before
the northern hemisphere crop entered the market.
In 2020, 1.9 million TCEs of New Zealand-grown Envy™ were sold – a 23% increase on the previous
year - across Asia and the USA. This is part of a wider Envy™ sales programme of 5 million TCEs per
annum, grown in both hemispheres.
Envy™ is a standout performer in the premium apple category, delivering returns on average over
NZD$45.00 per TCE to growers. The strength of the 10-year old brand and its orcharding qualities,
means growers have the potential to make more than 15% return on their investment, once their
orchard is at full maturity.
With research validating an additional 25 million TCEs will be required by 2030 to meet long term
consumer demand, especially in China, Vietnam, Thailand and the USA, we’re quickly moving to
invest in new plantings with a licence fee structure. This will enable us to reinvest in generating
demand as well as growing the brand.
In Asia this year, we saw an additional 371,000 TCEs of Envy™ sent to the various markets,
achieving sales growth of 23%. Asian consumers continue to love Envy™ as a variety and as a
premium brand, and our focus in 2021 is to maintain this positioning.
In the USA, Envy™ had a great year. While the wider market saw an over-supply of apples, Envy™
came out on top, remaining the #1 premium branded apple, with double digit growth in dollar and
volume sales. This was supported by strong marketing investment, including our partnership with
American radio personality Ellen K, which reached 43 million people and drove consumers in-store
to purchase. Our strong partnerships with key American and Canadian retailers, including Walmart,
Kroger and Costco, will position us well for future growth in this key market.
With this strong momentum, by 2025 Envy™ will be a billion-dollar brand.
Internal browning
affected some
Envy™
This season, we saw some internal browning in Envy™, especially in the Gisborne crop. Internal
browning is caused by a build-up of carbon dioxide in the fruit tissue, which is a natural result of
fruit respiration. The most affected market was China, with about 65,000 TCEs needing rework. This
resulted in a shortfall of Envy™ in the market. We worked quickly to take action and minimise any
impact on our growers’ livelihoods. The benefit of having established our in-market team was again
very apparent, as they rapidly sorted and scanned using new infrared technology which allowed us
to sell as much of the fruit as possible. We understand the root cause of the internal browning and
have implemented better monitoring of processes throughout our post-harvest network.
Continuous
improvement
delivering better
operational
performance
This year, our operations team began to embed a continuous improvement way of working
to transform operational performance. This way of working is more than a set of systems and
processes to increase efficiencies and reduce waste and costs, it empowers our people to solve
problems and deliver value, supported by great leadership. Already, it’s contributing to better
performance, reduced health and safety incidents, increased engagement and cost savings.
Daily Management Systems have been introduced, from the leadership team through to our
orchard teams, ensuring everyone’s focused on our key measures and where we need to improve.
Each orchard sector is developing their own orchard blueprint, to provide clarity on margin by
block and an actionable plan to remediate as required, such as planting more profitable trees or
better tree husbandry.
As a result of looking at things differently and taking an end-to-end supply chain approach, we’ve
been able to defer anticipated capital upgrades and expenditure.
22 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
OUR PROGRESS
A challenging
year for JAZZ™
JAZZ™ is a great tangy-sweet apple, with big potential.
In the UK, despite COVID-19 related uncertainty, we saw significant demand for fruit, as consumers
bunkered down and adopted healthy lifestyles, seeking foods with a longer shelf life. As a result,
sales volumes for JAZZ™ increased by 21% and sales value was up 20% year-on-year. JAZZ™ is now
the fastest growing apple variety in the UK, and it again won the award for the UK’s tastiest apple
at the United Kingdom National Fruit Show. This positions the brand incredibly well to help create
and drive the premiumisation of the fruit category in the UK.
While JAZZ™ is a more established brand than Envy™, in some markets there has been under-
investment. This became very clear in 2020 when, as COVID-19 hit, American consumers shifted
towards buying more commodity apples. With a lot of competing varieties in the market – as well
as stock left over from the previous season – JAZZ™ was adversely impacted, with lower than
planned sales.
To strengthen the brand, this year we’ve developed a more differentiated positioning for JAZZ™
and refined the brand’s look and feel. This was based on extensive market research in all key
markets. We look forward to rolling it out from the first quarter of 2021, starting with the USA.
In addition to increasing our investment in the brand, to help rebalance demand and supply,
where we have older, under-performing T&G JAZZ™ orchards which can’t be addressed by better
tree husbandry, we’re progressively removing the trees and replanting with Envy™.
Freshworx
recruitment
campaign attracts
Kiwis to the sector
With borders closed, many of our RSE seasonal team members couldn’t return home to their
Pacific Nations (see page 43 for further information). As the year progressed, with borders still
closed and rising unemployment in Aotearoa New Zealand, the nature of the country’s seasonal
workforce needed to change. We launched Freshworx, our largest recruitment campaign ever, to
attract Kiwis to the sector, and we maximised partnerships with iwi, training providers and fellow
primary sector companies. In late 2020, the Government announced that 2,000 RSE workers will be
able to enter the country to help with the forthcoming harvest. While these workers will be shared
across employers, we’re very grateful to have these experienced workers working alongside Kiwis
during our 2021 harvest. Our local recruitment activities will continue strongly in 2021, to ensure
we have adequate resourcing to harvest all crops.
Marketing
Campaign of the
Year in Asia
In November, we won Marketing Campaign of the Year at the Asia Fruit Logistica 2020 Awards for
our marketing activities for Envy™ and JAZZ™, our two premium apple brands.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 23
OUR PROGRESS
First year of
blueberry and
grape strategy
2020 was the first year of our emerging category strategy. It was a difficult year to develop a
foothold – as the blueberry and grape sectors operate with a push-pull model, requiring stable
supply and customer demand at the same time.
Despite these dynamics, we made solid progress against our core goal of obtaining proprietary
blueberry genetics, and our blueberry volumes are doubling year-on-year.
In February 2020, we entered an agreement with Plant & Food Research to breed and
commercialise new varieties of blueberries to be sold globally under our Orchard Rd brand. The
berries will have improved yield and resistance to disease, and consumers will enjoy larger, tastier
berries, with a longer season.
We also teamed up with CarSol Fruit Export S.A., a blueberry multi-national based in Chile, which
will enable year-round supply and sale of high-quality berries into Asia. With our combined
strengths, CarSol will supply berries in Chile, Peru and Portugal, utilising new genetics and modern
growing methods, and we’ll harness our Asian market knowledge and sales and marketing
expertise to reach consumers.
We now have growers across Chile, Peru, Mexico, the USA and Australia co-packing blueberries to
meet our high-quality specifications, with the product sold in markets across Asia.
A successful trial of bulk blueberry shipments to China was completed, with fruit packed into
bulk trays and repacked in-market. This provides better service to customers, with custom packs,
higher fruit quality and 30-40% increased container capacity, thereby increasing shipping volumes
and reducing costs and emissions.
Despite COVID-19 constraints, our extensive international presence of technical and product
experts were still able to scour the world for new genetic varieties, while monitoring trial blocks
in eight countries. We also successfully ran consumer evaluations on new apple varieties in six
countries. The first variety, ‘HOT84A1’, from the Hot Climate Programme, has been successfully
trialled in Spain where it’s proven to be sunburn resistant while retaining excellent eating qualities.
It’s now being tested with partners in Aotearoa New Zealand, South Africa, Europe, the UK and
Australia. See page 48 for further information.
This year, our grape farm in the north of Peru experienced the region’s worst drought since 2002
on top of COVID-19 difficulties. Our team worked incredibly hard to keep our employees safe and
keep the farm operating. Our investments in recent years to improve water storage and supply
proved their worth. A good crop was harvested at the end of the year for sale into export markets
in the fourth quarter of 2020 and early 2021.
WHAT’S NEXT
In 2021, we will:
• Grow Envy™ supply in Aotearoa New
Zealand and the USA, with increased
plantings
• Develop and rollout accelerated demand
plans for Envy™ and JAZZ™ brands,
including introducing our new refreshed
JAZZ™
• Continue securing and commercialising
new proprietary genetics in our core
categories of apples, blueberries and table
grapes
• Think and work differently to develop our
future seasonal workforce labour model
• Further embed continuous improvement
across our growing and post-harvest
operations
24 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
WIN IN KEY
GLOBAL MARKETS
With our roots in Aotearoa New Zealand, we’ll grow globally by:
• Unlocking potential in the ‘right’ premium markets
• Investing in-market capability to be close to our customers and provide great service
• Developing a highly efficient end-to-end supply chain
OUR APPROACH
To succeed in a world where the needs and expectations of consumers are continually changing, we need to build trusted
partnerships with our customers and get as close as possible to selling directly to consumers. To do this well, we must be based in-
market, with our people on the ground. This will also help ensure our business is robust, able to withstand and adapt to volatility in
the global market.
For this reason, over the last few years we’ve intentionally shifted from an export-led model to an in-market model, building teams
with the right capabilities to provide exceptional service. Through an efficient end-to-end supply chain, we then connect our selling to
our growing, ensuring our nutritious produce is accessible 365 days a year.
Our approach is targeted. We’ve identified key markets with significant potential – Asia, the USA, Europe and the UK.
We build out these markets through a very structured transformation process – firstly establishing an entity to import fruit, then
developing our team with the right capabilities, including supply chain, quality, commercial and demand creation expertise. This gives
us the ability to sell through a variety of channels, such as retail, e-commerce and wholesale markets.
OUR PROGRESS
COVID-19
required agility
and grit
In all markets, COVID-19 changed the
playing field – and this was especially the
case in Asia. Our in-market sales teams
became expert at making decisions
based on incomplete information and
actively seeking out opportunities. In
most countries, wholesale markets,
which are a key channel for us, either
fully or partially closed and at the end of
2020, Thailand’s still remained closed.
In retail, consumers moved away from
buying loose apples, especially in China
and Vietnam, which put us in a strong
competitive position given we’re the only
player in the market that sells apples in
multi-packs.
Likewise, sampling plays an important role in driving apple purchasing decisions in-store. However,
this year we had to be innovative with how this was done, such as our live Tmall Envy™ sampling
event. Tmall is a Chinese e-commerce platform owned by Alibaba, where we partnered with a
well-known Chinese actress to showcase Envy™, taste the apple during the live stream and invite
consumers to do the same. Over four million consumers joined the show and we received more
than 10,000 orders within a three-hour period.
While COVID-19 has had a significant impact on 2020 and will continue to impact in 2021, we’ve
been able to manage the risk across our different markets, capitalising on the opportunities, while
continuing to implement our strategy to build out these winning markets.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 25
OUR PROGRESS
Strengthening
capability and
footprint in Asia
We see Asia as our growth engine, with significant potential. In our five key markets – China, Japan,
Thailand, Vietnam and Singapore – we now have presence and capability, and we continue to
export successfully into other markets, such as Malaysia, Indonesia and Taiwan.
Building off the base we’ve created over the last three to four years, in 2020 we made good
progress in further strengthening our presence and capabilities in Asia.
In China, we now have a full trading office with cross functional capability, such as sales, quality,
supply chain, finance and marketing. We’ve secured third party logistics partnerships with strong
local companies and we’re exploring how these partnerships can support our growth ambitions.
Despite some tough trading conditions, China delivered above budget and we’re excited about the
growth we’re seeing in the market. Good headway has been made in growing our direct to retail
channel with customers, such as Alibaba’s grocery chain Hema, which has significantly increased
our business.
Thailand is the most established of our Asian offices where we have cross functional capability
sitting in-market, supporting our customers and partners across our core categories. This year
we’ve made progress with our direct relationships with retailers and this will continue to be a
key focus for 2021 and beyond. Trading conditions in Thailand were very tough in 2020, with the
wholesale markets largely shut down, however through careful cost management and some strong
northern hemisphere apple sales late in 2020, Thailand delivered its budget.
In line with our 2020 plans, we’re now trading as the Importer of Record in Singapore for apples
and starting to capture margin as a return on the investment we’re making in the market.
COVID-19 did create some instability in Singapore but our retail strength reduced our exposure to
this.
Japan continues to perform well, particularly for JAZZ™, where we are starting to see some good
growth and performance in grapes and berries. COVID-19 mainly impacted Japan’s foodservice
channel which, given it’s currently underrepresented in our business, limited our exposure.
Vietnam is a very exciting market for us, where we have recently appointed a Country Manager to
realise the market’s potential. Pending any further COVID-19 related disruption, we will become an
Importer of Record in the first half of 2021 and begin trading. Our strategy in Vietnam is focused
on going broader regionally and more direct to retail, and we’re confident this will become an even
stronger market for us.
Overall, the impact of COVID-19 in Asia made trading difficult but we were able to deal with issues
quickly, re-route product to markets that were open, and chase the best value possible. Our strong
finish to the year is evidence of this. In line with our strategy, by having more people on the ground
in Asia to deal with issues quickly and work together to find alternative and creative solutions, we
were in a stronger position relative to some competitors who were having to manage everything
from Aotearoa New Zealand.
Opening up new
markets, channels
and customers
In all markets, we continue to look for growth opportunities and this year we had some real
success in our secondary markets. In India, we were able to sell directly to end customers resulting
in a trebling of total exports to India. This includes two new customers – one in retail and one in
wholesale distribution, and we’ve also started to work with retailers in Bangladesh. We have also
broadened our coverage in Malaysia with new customers, and in Russia we’ve made real progress
in selling JAZZ™, which we’re confident we will be able to replicate in coming seasons.
Hard work in the
USA paying off
In 2019, we made some significant changes to our sales model in the North American market,
providing us with greater control of our fruit and taking more of a brand-led approach with the
trade. This hard work resulted in the 2019 and 2020 seasons running more smoothly. This year,
COVID-19 provided challenges for parts of our portfolio and particularly JAZZ™, which competed
with many other varieties for shelf space as retailers simplified their business in light of COVID-19
and started to consolidate their SKUs and the apples they stock. Envy™ had a great year and
continues to go from strength to strength. A huge amount of work is going into building out the
consumer franchise and desire for Envy™ in the USA, and we continue to make changes to our
model to ensure we have as much influence as possible over this premium brand.
A strong 2020 for
Europe
Europe had a strong 2020, delivering a result well ahead of its budget – with consumer demand
for JAZZ™ and Braeburn apples high and consistent. With the majority of our apples going into
retail channels, we were able to increase sales and redirect apples from other markets to help
meet customer and consumer demand, while maintaining good prices. This gives us confidence
in the work we’re doing to review our model in Europe and access the true potential we see in this
market for JAZZ™.
26 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
OUR PROGRESS
UK harnesses
COVID-19 retail
boom
Worldwide Fruit, our joint venture partner in the United Kingdom, had a stellar year – delivering
more than 50% above budget, with apple results well ahead of the year prior. This business is a
full-service produce provider to retailers, with a diverse category portfolio. Worldwide Fruit’s strong
and productive partnerships with the UK’s largest retailers, meant it was well positioned to take
advantage of the retail boom and pick up business where other suppliers fell short on supply.
Strengthening our
supply chain and
driving efficiency
In 2020, we’ve shone the spotlight on our supply chain, starting to identify where we can be more
efficient and more customer centric. A good example of this is our project looking at our JAZZ™
end-to-end supply chain to ensure we’re managing this variety at a cost level as closely and as
effectively as possible. Other initiatives include looking at bulk format shipping, as well as early
packing and shipping to capitalise on early sales opportunities before New Zealand apples start to
arrive in volume. In addition, we are developing the best practice sales and operations processes to
ensure we’re getting the right fruit to the right place at the right time, and always at the best price.
WHAT’S NEXT
In 2021, we will:
• Develop and rollout accelerated demand plans for each key market, identifying the
growth we’re looking for, where it’ll come from and how we’ll achieve it
• Further expand our USA presence, including new Envy™ plantings in Washington
State, strengthening our supply chain and building out our consumer offerings for
Envy™ and JAZZ™
• Continue building out our supply chain capability to support our apples and
emerging categories, such as quality control and warehouse inventory management
• Strengthen in-market marketing and sales capabilities via a sales transformation
programme with priorities being pricing, key account management and business
development
• Become an Importer of Record in Singapore for blueberries and in Vietnam for
apples, and build out both offices and people and organisational capability
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 27
LEAD AOTEAROA’S
FRESH PRODUCE FUTURE
We’ll help power our sector forward by:
• Winning in key categories
• Optimising channels to market
• Creating valued partnerships
OUR APPROACH
Aotearoa New Zealand is our home. For more than 123 years, we’ve nourished generations of Kiwis with our nutritious fruit and
vegetables, and we’re committed to doing the same for generations to come.
As Kiwis’ needs change and as retailers and foodservice providers adapt to meet their needs, we’ll be there, exceeding their
expectations. We’ll do this through T&G Fresh, our New Zealand business unit which has its own management and governance. It’s
divided into two parts: T&G Farms and T&G Markets.
T&G Farms is our vertically integrated growing business. It starts with our growers – either directly or through partnerships with
other passionate growers – and spans our entire supply chain to retail partnerships.
We know that to be competitive in today’s market we must be a strong grower and provide a unique offering. T&G Farms will do
this by having the best genetics; a great category and product portfolio, matching customer and consumer needs; building leading
brands; and strong, value-driving partnerships.
Our T&G Markets business represents more than 1,200 independent growers who sell their fresh produce through one of our 12
national trading floors to independent retailers and foodservice providers. It sells and imports a full range of produce, and partners
with T&G Farms to provide surety of supply in our key categories, including tomatoes, root crops, citrus, apples and berries.
In addition, T&G Fresh exports fresh produce to the Pacific Islands, Australia, Asia, Europe and North America, providing our own
growing operations and independent growers a one stop marketing solution.
28 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
OUR PROGRESS
COVID-19
impacted the
sector
In late March 2020, Aotearoa New Zealand went into its first Alert Level 4 lockdown to protect the
community and help stamp out the virus. In the week leading up to lockdown, we experienced
exceptional demand for staple vegetables, such as potatoes, carrots and onions, as Kiwis
stockpiled. Orders doubled during the week, and on one day we delivered five times the usual
volumes to one of our customers’ distribution centres. As a result, our Pukekohe pre-pack team
worked incredible hours and were joined by people from across the business, including some of
our Finance team, to help fulfil the increased demand.
Unlike supermarkets, under Alert Level 4, independent retailers and foodservice operators were not
classified as an Essential Service and were unable to physically open. This had a significant impact
on many of our customers, as well as our own business. In our tomatoes business, about 40% of
sales are to foodservice customers, however given many were restricted in their ability to operate
during lockdown, our tomatoes business was hit particularly hard. This was further impacted in the
last quarter of the year, due to reduced capacity and higher costs on airfreight. We weren’t alone, as
the lockdown also impacted other growers who were in peak season, and without a market for their
various grade produce, were left with large volumes of produce to donate or dump.
During this time – and for the first time in 123 years – our market floors were also closed to
customers. Fortunately, we were able to remain open for business and our customers were able
to order and purchase produce via our T&G Fresh online ordering tool ‘FirstPick’. Our team rapidly
adjusted to a new way of selling produce, embracing live streams and photos to share the days
produce with customers, and arranging contactless deliveries and pickups. Across our business
we dealt with significant volumes, as evidenced by our customers who have online businesses and
experienced over 100% growth over this period.
Our team did this while quickly adapting to new ways of working, maintaining physical distancing
and keeping themselves, their families, workmates and communities safe. Through their care,
commitment and hard work, we kept fresh produce flowing in Aotearoa New Zealand.
Freshmax
acquisition brings
new strengths
and scale
In April – in the middle of an Alert Level 4 lockdown – we took ownership of Freshmax New
Zealand’s domestic fruit and vegetable business and created T&G Fresh. This brought the strengths
of both organisations together under a new business and brand, supported by a newly established
leadership team and dedicated governance structure.
We were joined by a team of 240 people, three market sites in Auckland, Wellington and
Christchurch, a national distribution business, passionate independent avocado and strawberry
growers, as well as a partnership to supply fresh produce to an in-home meal kit delivery partner.
Joining during lockdown was never going to be easy, with people unable to meet physically and
having to use different systems and processes. What got us through was our newly combined team
– their mindset, resilience and openness to change. Everyone stayed focused on what needed to
be done and maintained continuity to our customers and consumers.
With COVID-19 impacting independent retailers and foodservice providers, our volumes and
sales were significantly reduced. Through the strength of our newly acquired business we were
able to minimise the impact. While T&G Fresh’s operating result decreased by $0.6 million from
$19.0 million in 2019 to $18.4 million in 2020, the prior year’s operating result included $3.9
million of revaluation gains not repeated in 2020. Therefore, T&G Fresh’s underlying operating
performance in 2020 improved by $3.3 million from the previous year.
In the second half of the year, we made some changes to our business, especially in our Markets
where, as a result of the acquisition, we had multiple wholesale markets in three cities. We now
operate from single sites in Auckland, Wellington and Christchurch, providing a renewed buzz and
increased foot traffic. It has however put pressure on our teams and processes, and highlighted
areas for improvement as a result of combined volumes. We have begun to address this and will
continue to do so in 2021.
Following the integration of our Markets, we now have a solid foundation to build upon as we
further invest in technology and progress our plans to optimise our channels-to-markets.
Creating a
high-performance
culture
With our newly combined team, we’re actively moving towards creating a high-performance culture.
This year, we’ve established a new T&G Fresh leadership team, bringing in consumer goods and
supply chain expertise and capabilities. A clear vision has been developed to guide us forward – to
be Aotearoa’s most trusted and innovative fresh produce brand, delivering excellence – and we
have a clear strategy as to how we’ll do this.
We’ve also made a real step-change in how we engage and involve our people in helping shape and
deliver our future. In late 2020, more than 90% of our people attended one of our 43 Fresh Future
workshops across the country, where we shared our new strategy and gathered ideas about how
everyone is able to connect and contribute to it. The sessions were invaluable and really showed
the benefit of a positive and open team culture.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 29
OUR PROGRESS
Adaptability
powers our Fiji
business forward
With international tourism virtually ground to a halt, our Fijian business was significantly impacted.
As a business that has grown to serve the cruise and tourism sector, as well as the domestic
market, with nutritious fresh produce, it instantly lost a significant part of its revenue as a result of
COVID-19 and the resultant loss of tourism to Fiji. However, this did not stop our team who quickly
shifted to selling a variety of food to local Fijians. This agility and a winning mindset enabled the
team to deliver above last year’s operating result.
Innovative
premium
strawberries to be
grown and sold in
Aotearoa
New Zealanders will benefit from an exclusive partnership we now have with one of the world’s
leading strawberry breeding companies, California-based Plant Sciences Incorporated (PSI). Signed
in June, we will test, grow and market unique strawberry varieties, resulting in bigger, tastier, year-
round premium strawberries.
Despite the challenges of COVID-19, in 2020 we were able to access a small quantity of propagated
plants in our four new licensed varieties. Next year, this will significantly increase to over 150,000
plants across the four varieties, and we’ve already begun to work with New Zealand strawberry
growers to prepare them for trialling and transitioning to these new genetics. Initial feedback
from early trials is exciting, with higher yields, better fruit quality, a longer shelf-life, growing and
harvesting efficiencies, as well as superior flavour and texture. The relationship with PSI sees
T&G Fresh having access to a pipeline of new material and in 2020 we selected a further four new
varieties for commercial trial in New Zealand and these are now going through the quarantine
process and will be available for growers in the coming years.
We’re excited to be working with the support of our Innovation and Technical team to provide
growers with new varieties which can reduce their growing costs and increase productivity, as well
as delight Kiwis with great tasting, longer lasting strawberries. In 2021, we will continue to import
further complementary strawberry varieties as well as introduce other exciting new berry types
and varieties to our grower and customer base.
JAZZ™ Juniors
delight Kiwis
In July, we partnered with Countdown Supermarkets in a ‘Back to School’ campaign which featured
JAZZ™ Juniors, resulting in a 30% increase in JAZZ™ Junior 6-pack sales during the promotion.
Reaching over 2 million shoppers, the integrated campaign spanned Countdown’s digital mailer,
instore and online promotions, as well as PR and social media activity where great lunch box ideas
were shared. This campaign helped lift total JAZZ™ Junior sales in 2020, with a 68% increase in
value and 118% increase in volumes sold in Aotearoa New Zealand.
Innovative grafting
transforms
mandarin
orchards
Throughout 2019 and 2020, we’ve transformed more than 20 hectares of our Northland mandarin
orchards using novel grafting techniques. Having collected graft wood from mature Afourer
mandarin trees, our team embedded it onto 24,000 freshly cut stumps of rootstock which previously
grew Satsuma mandarins. Since then, the trees have grown incredibly well, with the first 10 hectares
bearing fruit in 2020. Afourer mandarins are a new late-season variety, with a bright orange colour
and excellent flavour. Given it harvests after the Satsuma season, it enables us to provide Kiwis with
mandarins for a longer-period of time, as well as opening up export opportunities into Hong Kong
and Japan. In 2021 we expect an initial commercial crop of around 25 tonnes.
WHAT’S NEXT
In 2021, we will:
• Continue deepening our vertical growing business
and grower partnerships, bringing innovation to our
key categories and expanding our category range
• Build strong partnerships with our retail customers,
providing valuable insights into the industry and
supporting the delivery of their strategies
• Roll out and embed a continuous improvement way
of working
• Drive a digital transformation of our Aotearoa New
Zealand Markets
• Continue building a high-performance culture
30 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 31
BUILDING
A HIGH-
PERFORMANCE
CULTURE
The world is changing at pace. While
the opportunities in front of us are
substantial and exciting, the reality is,
business is becoming more competitive
and fast paced. Standing still is not an
option.
Building a high-performance culture
is an intentional process at T&G. Our
intent is to create the environment
which will enable our people and teams
to perform at their best, day after day,
year after year.
32 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
We’ve used a well-established performance framework to help us understand
what needs to be done to create an environment that delivers high-performance.
Our people strategy is designed around this high-performance framework.
re-draw
CULTURE
It has been said externally that “culture eats strategy for lunch”. At T&G, we’re
purposefully shaping our culture so our people understand what we want to achieve,
have the ability to influence outcomes, can operate with autonomy, know and feel their
ideas are valued, and have a sense of ownership for the outcomes. Shaping culture
starts with having a conversation as a team. We call that culture action planning and it’s
our approach to shaping our T&G culture.
In 2020, we intended to conduct an in-depth culture survey to help measure the
progress of our culture programme. However in the first quarter of the year as
COVID-19 began to challenge our people and their families, as well as every facet of
our business, we decided it was more critical to measure connection, including the
wellbeing of our people, their stress levels, productivity and quality of leadership.
In May, in the midst of New Zealand’s lockdown, we rolled out Human Synergistics’
Connection Meter to our global workforce, discovering 74% of our people felt
connected. Throughout the year it rose to a high of 77%, before finishing in November
at 75% (3% above the global benchmark). The survey insights for each team inform
their culture action plans. We intend to continue with quarterly Connection Meter
surveys in 2021.
PERFORMANCE
We have a structured Performance Management System – Thrive. This system is how
we connect the dots between strategy and individual performance, focus people on the
two to three key deliverables which will move the dial and agree the performance range
for high and low performance. Our reward and recognition systems are informed by
the outcomes of the performance system.
T&G HIGH-PERFORMANCE FRAMEWORK
Culture
Performance
Leadership &
Capability
This model is adapted from the Andy Meikle – HPES
HIGH PERFORMANCE
TARGETS
MINIMUM ACCEPTABLE
STANDARD
REWARD SYSTEMS
PERFORMANCE
MANAGEMENT/
IMPROVEMENT SYSTEM
TEAM MEASURES OF
PERFORMANCE
INDIVIDUAL MEASURES
OF PERFORMANCE
PERFORMANCE EXPECTATIONS
STRATEGY & PLAN (WHAT AND HOW)
PURPOSE
FLOW
FLOW
CULTURE
LEADERSHIP & CAPABILITY
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 33
LEADERSHIP AND CAPABILITY
As we continue with our transformation journey and the delivery of our refreshed strategy, we’re asking a lot
of our people. To help them thrive and be their best, we’re investing in their capabilities. This will provide our
people with development and growth opportunities, and help our business innovate, adapt and succeed. This
year, we have invested in the development of our senior and front-line leaders.
In 2020, we were grateful to receive Provincial Growth Funding from the Government to help us develop
an Emerging Leaders Programme. Launched in our operations business in 2020 and run over a 14 week
period, it focused on building the leadership skills of our front-line and future leaders, including effective
communication, continuous improvement, developing people, and leading safety and wellbeing. The results
have been remarkable. More than 51 people have participated, and we’ve watched our people grow in
confidence and capability, taking responsibility for business performance and the environment we operate in.
The programme continues in 2021 and will be expanded to also include our T&G Fresh business.
With our senior leadership teams, we have used the Human Synergistics Life Styles Inventory 360 tool as the
foundation of our development activity. Holding a mirror up to our individual leadership styles and receiving
structured coaching to support everyone to build a constructive leadership approach.
To support our leaders in successfully leading their teams, we hold fortnightly virtual sessions, alternating
between business updates and capability builds. This year, we identified that given the complex nature of our
business, we will focus our 2021 capability build sessions on strengthening commercial acumen.
With four out of ten Kiwis having literacy and/or numeracy challenges, we want to help our people build
the skills and confidence they need to thrive – both at work and personally. With funding from the Tertiary
Education Commission, this year we’ve run Branch Out, a literacy and numeracy programme delivered by
Upskills, a workplace training company in the Hawke’s Bay. Forty team members have participated in the
10 week programme, which will continue in 2021.
PURPOSE
High-performance organisations are purpose-led. At T&G, purpose sits at the centre of everything we do, and
is an enduring guide to inform direction and decision-making across generations of leaders.
Our purpose reflects both the work we do and the environment we create for our people, growers, partners,
customers and consumers. See page 20 for further information on our purpose.
STRATEGY
High-performance organisations also have strong strategic clarity. The strategy determines what must be
done to navigate our way towards our vision; it’s the roadmap to inform the ‘must do’s’ and defines what we
will do and therefore what we won’t do. Our strategy is brought to life and shared through our performance
management system.
In September, we held town hall sessions with all of our global people leaders, bringing to life each element
of our refreshed strategy and providing clarity on their role as leaders. See page 20 for further information on
our strategy.
FLOW
We know flexibility and work-life support are key drivers of employee engagement, performance and
productivity.
COVID-19 lockdowns taught us that flexibility and work-life integration, enabled through technology, are
achievable, effective and deliver incredible benefits. So, to help make our workplace the best place to work, we
created FLOW – a culture where work is what you do and the focus is on the outcomes you deliver – regardless
of your work location. This is T&G FLOW – our flexible and optimised way of working.
At its core, T&G FLOW is ‘digital first’, where technology is critical in helping us work, connect and collaborate,
both internally with our teammates and externally with our partners. It has been very positively embraced
by our people in computer-based roles, providing a better blend between work and personal life, as well as
increased productivity.
34 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
The great thing about the high-performance
framework, is that we can measure whether our
environment is changing (or not). Late last year we
completed our third survey, to determine how we
rate against a high-performance environment. In our
first year (2019) we had seen a 10% improvement
from our baseline survey. In 2020, we delivered a
26% improvement, which means we’re now starting
to operate at the low end of high-performance.
Whilst we still have a long way to go, we’re definitely
building momentum.
These results are now showing up in our financial
performance. 2020 has seen vastly improved
financial results across the business, as we focus on
the strategic initiatives which will drive performance
outcomes, and at the same time address poor
performing areas which create performance drag.
Most importantly, we’ve deliberately worked to
create a high-performance culture, and we’re now
building momentum towards that goal.
THE HIGH-PERFORMANCE
FRAMEWORK – IS IT
DELIVERING?
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 35
KAITIAKITANGA
As kaitiaki, we’re committed to being
a leader in sustainability. For us,
Kaitiakitanga means treating the
land, people, produce, resources
and community with the greatest of
respect and care, as guardians of their
future. It’s a commitment that deeply
resonates with our people, partners
and stakeholders, unifying us in
wanting to do and be better, and
make a genuine, long-lasting, positive
impact in the world.
ASPIRATIONS
OUR
PEOPLE
We're growing a safe, healthy and
passionate team, where everyone's
empowered to be their best and thrive.
Protect & Grow
Fairness in our workplace
OUR
PLACE
As kaitiaki, we're building a healthier
planet by protecting and nurturing our
natural environment and using our
resources responsibly.
Climate Action
Closing the Loop
Lower impact, smarter growing
OUR
PRODUCE
Our safe and sustainable produce
value chain provides nutrition to
our customers and consumers, and
enhances livelihoods.
Safe Food
Responsible Partnerships
Healthy Communities
OUR KAITIAKITANGA FRAMEWORK
36 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
OUR CONTEXT
Like every business, we operate in a world full of volatility, uncertainty and change. How
we navigate this is through a clear strategy, a high-performing culture and an engaged
workforce, and a commitment to creating a better tomorrow.
The world needs to change the way it produces, consumes and accesses nutritious
food. Likewise, the health of our planet needs to improve so we live within our limits,
and we need to create a fairer and more just society. It’s this context that guides us.
As a global fresh produce business, many sustainability challenges such as climate
change, biodiversity loss, waste, inequality and food insecurity, can have a detrimental
impact on our people and activities. These are big, complex challenges which require
everyone to work together and invest in addressing. However, at the same time, we
have an incredible opportunity to play a transformational role in creating a sustainable
future for food. We know the health of people and our planet are interwoven – we
can’t address one without the other, and as we make positive progress with this, it
will improve not only our planet, communities and livelihoods, but also create a more
sustainable, productive and inclusive T&G.
REFINING OUR APPROACH
Since our 2018 introduction of Kaitiakitanga, we’ve made good progress on a number
of our eight supporting aspirations – but there’s still a long way to go. To ensure we’re
focused on what matters most and have absolute clarity on what we want to achieve,
this year we refreshed our Kaitiakitanga strategy to better understand what’s important
to our stakeholders and ensure their expectations are being delivered.
Extensive interviews were conducted with both internal and external stakeholders in
late 2019 and in the first half of 2020, to identify key areas we need to focus on due to
their ability to either potentially impact our business or our potential impact on them.
According to our stakeholders, what matters most is:
• Environment: Materials and energy; GHG emissions and climate change adaption;
water and soil quality, and land degradation
• Social: Health and safety; labour rights, working conditions and fair trading
• Economic and governance: Quality and traceability of our fresh produce;
vulnerability of production, supply and markets; and compliance.
To ensure our Kaitiakitanga framework, targets and initiatives address these priority
opportunities and risks, we assessed their relevance at each step of our end-to-end
supply chain, resulting in the refinement of our entire Kaitiakitanga framework.
Our new framework has three key pillars: Our People, Our Place and Our Produce,
each underpinned by aspirations, which we’ll further support with clear targets
and objectives. It applies to our entire global business, spanning growing, packing,
distribution, marketing and sales. We have strengthened it from our initial 2018
strategy by extending its focus to now include food safety and quality, fairness in our
workplace, as well as exploring Scope 3 emissions. We have now set out key activities
for the short term, as well as our objectives and targets for the medium-to-long term.
The outcome from this process is a holistic, robust Kaitiakitanga framework which will
steer our business forward, delivering a positive impact to all of our key stakeholders,
including contributing to multiple United Nations Sustainable Development Goals (SDGs).
OUR THREE PILLARS AND THEIR RESPECTIVE ASPIRATIONS
CONTRIBUTE TO THE FOLLOWING UNITED NATIONS SUSTAINABLE
DEVELOPMENT GOALS
Ngati Tahu-Ngati Whaoa blessing the site
of New Zealand’s first commercial food
waste-to-bioenergy facility at Reporoa
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 37
OUR PEOPLE
We’re growing a safe, healthy and
passionate team, where everyone’s
empowered to be their best and thrive.
Every day, our incredible team of 2,000 people put their energy,
effort and passion into growing, distributing, selling and
delighting people around the world with nutritious fresh fruit
and vegetables.
We believe that success for T&G is all about our people – a
talented team with clear goals, who are respected, inspired and
empowered to do their best. This is what will create the most
success for our business.
To help them be their best, we’re creating a caring workplace.
This means the health, safety and wellbeing of our people is
paramount, that they have a real sense of belonging, and can
comfortably and confidently bring their true self to work. We
know that this, combined with the high-performance culture
we’re creating (see page 32 for further information), will make us
the best place to work and help drive our future success.
38 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
OUR COMMITMENTS
AND PROGRESS
2020 PROGRESS
Reduce Total Recordable Injury Frequency Rate (TRIFR) by 20%
Progress: Overall reduction of 16.2% compared to 2019
2025 TARGETS
A total recordable injury rate (TRIFR) less than 5
Progress: A decrease to 8.8, equating to a 16.2% reduction towards the target
Robust infrastructure to promote inclusion and diversity
Progress: Became a member of Diversity Works and completed a stocktake
Inclusive leadership that reflects the T&G population, supported by mentoring and
training emerging leaders and key talent
Progress: Emerging Leaders Programme completed in Hawke’s Bay operations
Non-biased recruiting practices, from advertising to hiring
Progress: 2021 target set to create framework and action plan
2030 VISION
A ‘leading’ safety culture where everyone goes home safe every day and T&G is seen
as best in industry
Progress: Completed first year of strategic action plan to take us to ‘leading’
Grow from a ‘starter’ inclusion and diversity organisation, to being an industry
‘champion’ of inclusion and diversity
Progress: New flexible work and parental leave policies
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 39
OUR PROGRESS
TRIFR tracking in
right direction
16.2%
Total Recordable
Injury Frequency
Rate (TRIFR)
This year, with the inclusion of the Freshmax New Zealand business which we acquired in April
2020, we reduced our Total Recordable Injuries by 37, from 213 in 2019 to 176 in 2020. This resulted
in a 16.2% reduction in our Total Recordable Injury Frequency Rate (TRIFR) against a target of 20%.
While we did not meet our ambitious target, we’re continuing to make our workplace safer.
Through a concerted transformation in its way of working, our operations business has reduced
its TRIFR by 27.2%, from 13.6 in 2019 to 10.0 in 2020. The holistic approach the team has adopted
to health and safety starts with strong leadership, embedding a continuous improvement mindset
and supporting processes, and the early intervention of physiotherapy and modified duties for
workers who experience pain and discomfort.
Strengthening
leadership
through training
Our Protect and Grow leadership training programme commenced at the end of 2019 and has four
modules: CARE, RISK, ENGAGE and LEARN. All operational people leaders and health and safety
representatives participate in the programme.
The introduction of our first training module in late 2019, CARE, has seen behavioural based
safety conversations and observations, which we call CARE Conversations, introduced across our
Aotearoa New Zealand operations, with an average of 24 happening per employee in 2020.
Hazard and risk management training got underway this year, with 240 of our people leaders and
health and safety representatives completing the second training module, RISK. Further training
on practical application of our risk assessment tools has been piloted and will be delivered to this
group in 2021.
Likewise, we have successfully piloted our third module, ENGAGE, which covers worker engagement
and running effective toolbox meetings, which will be delivered next year with this group.
The final module, LEARN, will be developed and delivered in 2021. It focuses on incident reporting
and investigation processes to support our continual learning and improvement programme.
OUR APPROACH
2020 is the first full year of our three-year health, safety and wellbeing strategy, which is designed to take
us from a SafePlus grading of ‘developing’ to a business which is graded as ‘leading’. SafePlus is a health
and safety performance improvement toolkit for businesses, which defines what good health and safety
looks like, above and beyond minimum compliance. It’s centred on three fundamental performance areas:
leadership, engagement and risk management. Given the challenges faced this year with COVID-19, an
incredible amount of effort and support went into keeping our people safe while continuing operations as
an Essential Service. We’re therefore encouraged by the progress we’ve made on the transformation of our
health and safety performance.
––––––––––––––––––––––––––––––––
8.8 total recordable
injuries per 200,000 work hours
240
leaders trained in CARE and RISK
We’re building a workplace where everyone goes home safe every day, and our
people have the tools and knowledge to improve their own and their colleagues’
health, safety and wellbeing.
We want to have a leading safety and wellness culture. To do this, we need to look after our people’s safety,
providing them with the knowledge and tools they need to keep themselves and their workmates safe and well.
PROTECT AND GROW
40 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
WHAT’S NEXT
In 2021, we will:
• Continue with our Protect and Grow
leadership training
• Continue with the critical hazard and
risk management programme of work
• Introduce a global mental health
programme
• Replace our incident reporting system
Critical hazard
and risk
management
In 2020, we commenced a three-year
programme of work to assess, using bowtie
methodology, the risks associated with our
critical hazards.
Critical hazards are those that if uncontrolled,
could lead to serious consequences. We define
a critical hazard as “one that has the potential
to cause one or more fatalities (acute harm) or in
the situation of cumulative exposure may have the
potential to cause significantly life changing harm
or death (chronic harm).”
During the year, bowtie risk analysis workshops
were held with our people to conduct detailed
assessment of the risks associated with
vehicles, and mobile plant and equipment. The
results of this analysis will be used to develop
critical risk standards and control plans in 2021.
Identify critical
hazards and
unwanted
events
Develop critical
risk standard
and critical
control plans
Conduct
bowtie
analysis
Conduct review
and reporting
activities
Determine
which controls
identified in
the bowtie are
critical
Implement
in relevant
parts of the
organisation
1
2
3
6
5
4
Learning from
critical events
Pivotal to our continual improvement programme, is actively reviewing all T&G incidents as well
as any within the wider sector and business community. In 2020, we notified regulators of five
incidents. Four were in New Zealand, which everyone has recovered from and no subsequent
action was taken by regulators. There was also one event reported to the regulator in Peru, this
investigation is still open and the worker remains in hospital in a stable condition.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 41
OUR APPROACH
Over the years, T&G has organically grown into a diverse business. However, without a deliberate plan
we haven’t had a baseline to understand and measure where we’re at and what we do, nor a structured
programme of activity to build on this and truly create a workplace where difference is valued and embraced.
We’re committed to actively cultivating this culture going forward through the development of a global
inclusion and diversity strategy and framework.
OUR PROGRESS
Diversity Works
membership
This year we became a member of Diversity Works, New Zealand’s national
body for diversity and inclusion. Using their diversity and inclusion
framework, we’ve completed a stocktake to capture our data and provide
a baseline. This identified we’re at ‘starter’ level and both the Executive
and Board have agreed our vision is to shift this to become an industry
‘champion’. In 2021, we will build a global programme of work to positively
build towards this and will report on this in next year’s report.
New parental
policy
In October, a new, more substantive parental policy was approved by the
Board, providing enhanced parental leave to our employees and their
whānau. It includes up to 12 weeks of full pay for primary carers, up to
eight weeks of full pay for adoption or surrogacy leave, up to two weeks of
paid partner’s leave, and annual leave payments which will be made at the
employee’s ordinary rate on returning from parental leave.
New flexible
working policy
COVID-19 provided our business with a real catalyst to harness and
permanently embed flexible work. As discussed on page 34, in June, we
introduced a flexible working policy which enables our people to work
flexible hours and locations, to better promote a healthy work/life blend.
As part of this, we launched T&G FLOW – our flexible and optimised way of
working, an initiative to create a culture of flexibility which drives employee
engagement, performance and productivity. This ‘digital first’ culture
enables our people to connect and collaborate regardless of location.
WHAT’S NEXT
In 2021, we’ll develop a global inclusion and diversity (I&D)
strategy and framework, which aims to have:
• Robust infrastructure to promote I&D, for example
contemporaneous policies, training, diverse networks and
cultural celebrations
• Inclusive leadership which reflects our T&G population
• Non-biased recruiting practices, from advertising to hiring
We’re creating positive lasting change by creating an inclusive and diverse business.
Vital to our future success is the creation of an inclusive business and culture, reflecting the diversity of our
communities and enabling our people to succeed and thrive by being themselves. We know a culture which values
all dimensions of diversity, including gender, race, sexual orientation, ability, experiences, backgrounds and beliefs
will not only make us a better place to work, it’ll make us stronger, more innovative and better able to serve our
customers and communities.
FAIRNESS IN OUR WORKPLACE
42 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
When COVID-19 closed borders, many of our team members on
the RSE scheme were unable to get home to their Pacific Islands
after completing our 2019/20 harvest.
As key members of our T&G whānau, many have worked
with us for eight to nine seasons, becoming highly skilled and
experienced, including performing vital roles in technical and
sometimes physically demanding work. Their income, along
with their skills and knowledge, are often reinvested back into
their home nations – providing much-needed investment to our
Pacific neighbours.
Throughout the year, we did everything we could to provide
ongoing work and income for our RSE team members, while we
explored all avenues to get them home to family and friends.
Work was found in our orchards, packhouses and market
floors, shifts were adjusted and shared to ensure everyone
had some income, and we found work with other growers and
horticultural companies.
At the same time, together with local communities, we provided
additional bedding, heaters and warm clothes, given many
weren’t expecting to be in Aotearoa New Zealand over winter.
In addition, our employees launched an internal ‘Give a Little’
campaign to raise funds, which together with company,
employee social club and personal donations, raised more than
$35,000 which was distributed to 270 RSE team members in
supermarket vouchers.
While many of our RSE team remained stranded in New
Zealand throughout 2020, as borders began to open to citizens,
we worked with the horticultural sector and Government to
repatriate 358 of our 600 RSE team home, and we will continue
to do the same in 2021.
“With the support you have graciously given us, we are able to provide for our families back
home while taking care of ourselves in this foreign country. This isn’t the first time you have
offered a helping hand. You have always shown compassion and care and we are extremely
grateful for your kindness, loyalty and commitment to all of us.”
Our Tongan RSE team, based in Riwaka.
HIGHLIGHT ACHIEVEMENT
–––––––––––––––––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––––––––––––––––
up to 12wks full pay for primary carers
up to
8wks full pay for adoption or surrogacy leave
up to
2wks paid partner’s leave
New parental policy
Ni-Vanuatu RSE team members farewelling their T&G
colleagues prior to their repatriation flight home
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 43
OUR PLACE
As kaitiaki, we’re building a healthier
planet by protecting and nurturing our
natural environment and using our
resources responsibly.
Papatūānuku, the earth mother, is where our business starts -
with our natural resources, knowledge and expertise, helping
grow healthier futures through fresh fruit and vegetables. Yet
the way we live, work, travel and produce food is challenging
earth’s natural resources and impacting our business.
In order to leave the planet in a better state while continuing
to provide people with nutritious and accessible food,
transformational change is required to preserve, protect
and restore the environment, and use its finite resources
responsibly. This is echoed in what’s important to our
stakeholders (see page137 for further information) and
increasingly in our customer and market requirements.
At T&G, we’re committed to having a positive impact on our
planet and we’ll do this through our three aspirations of: Climate
Action; Closing the Loop; and Lower Impact, Smarter Growing.
44 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
OUR COMMITMENTS
AND PROGRESS
2020 PROGRESS
Procure Certified Renewable Electricity at 100% of our sites
Progress: Achieved with the purchase of renewable electricity certificates
2025 TARGETS
Reduce GHG emissions* by 22% (T&G operations)
Progress: 10.2% reduction from the 2017 baseline. This includes reductions
achieved from renewable electricity
Reduce energy consumption* by 11% (T&G operations)
Progress: 10.7% reduction in energy, closing in on our target
Zero waste to landfill
Progress: 948 tonnes less to landfill than in 2017 (24% reduction)
Donate and/or supply unharvested produce
Progress: Foundational partner of the New Zealand Food Network and
established our Fairgrow charity
Polybags, punnets and PLU (price look up code) solutions introduced, aligned to
T&G packaging guidelines
Progress: Guidelines introduced for own-brand packaging
2030 VISION
Achieve net zero GHG emissions from our operations
Progress: Broke ground on the anaerobic digestion plant in Reporoa
Innovate with circular system approaches to phase out waste in our operations
Progress: Running extensive pilot trials with partners for tomato vine
waste solutions
Avoid produce waste in our supply chain
Progress: Established our Fairgrow charity
All T&G packaging is recyclable and/or made from renewable resources
Progress: Guidelines introduced for own-brand packaging
Define, develop and promote sustainable growing practices, demonstrating
leadership in sustainable growing
Progress: Analysis of regenerative agricultural principles and practices,
and the potential for introduction in horticulture
* Commitments for our T&G operations refer to our Scope 1 and 2 boundary; see Appendices for more information.
Our energy reduction target supports the BayWa Group climate target of reducing energy consumption by 22% in
terms of EBITDA of the BayWa Group, against a 2017 baseline.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 45
OUR APPROACH
In 2019, we published our targets to reduce our Scope 1 and 2 emissions. These targets follow the climate
strategy developed by the BayWa Group. The BayWa Group was guided by the Intergovernmental Panel on
Climate Change (IPCC) Special Report on 1.5°C global warming and the criteria of the Science Based Targets
Initiative of 2018.
We are committed to contributing to the Paris Agreement target of staying well below 2°C of warming and
to make efforts to keep the global temperature rise below 1.5°C. In doing so, we want to support creating a
carbon positive economy.
To help do this, our ambitious climate action strategy is focused on reducing our GHG emissions footprint by
replacing fossil fuels with renewable energy alternatives, maximising energy efficiency and sourcing electricity
from renewable energy – with this Kaitiakitanga aspiration encompassing energy, GHG emissions and climate
adaption. We have set clear targets for 2025, supported by a long-term goal for 2030.
In our global and diversified business, the majority of our operational (Scope 1 and Scope 2) GHG emissions
come from our tomato glasshouse growing operations and transport fleet, contributing approximately 80% of
direct emissions in 2020. Other contributors include refrigerant leakage and in 2020 we took the opportunity
to retrofit refrigerants on our Auckland sites, resulting in the use of lower global warming potential (GWP)
refrigerants.
Commencing in 2020, we’re expanding our focus on emissions by building on our Scope 1 and 2 emissions
and looking at our Scope 3 emissions, both upstream and downstream, such as shipping and logistics
emissions, and business travel.
OUR PROGRESS
Renewable
electricity
Delivering with renewable energy certificates
In 2020, we delivered on our Kaitiakitanga commitment to purchase renewable electricity across all T&G
Global sites. For our Aotearoa New Zealand sites, we achieved this by purchasing renewable energy
certificates from Meridian Energy, under its certified renewable electricity scheme. For our international
sites, we achieved this via renewable electricity contracts. If such a product isn’t available on a specific
market, we purchased Renewable Electricity Certificates – similar to the approach in Aotearoa New
Zealand. See our highlight achievement on page 49 for further information.
Emissions and
energy reduction
GHG emissions and energy use at our T&G operations (Scope 1 and 2)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
20172018201920202025
GHG emissions
tCo2eTarget
0m
40m
80m
120m
160m
200m
20172018201920202025
Energy consumption (kWh)
Energy (kWh)Target
We’re making a difference on climate change, reducing our emissions, harnessing
clean energy and adapting with innovative solutions.
The climate is pivotal to our business and growing operations, however as it changes, we face significant disruption
from rising global temperatures, reduced rainfall and increasing weather events. Like all food producers, we need to
take action to reduce our harm on the planet and increase our activities to combat climate change.
CLIMATE ACTION
46 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
OUR PROGRESS
Emissions and
energy reduction
2025 target =
22% reduction
in CO
2
from 2017
10.2%
on 2017
Reduced GHG emissions
In line with our target to reduce Scope 1 and 2 emissions by 22% against our 2017 baseline, this year we
reduced our GHG emissions by 10.2%. We achieved this by reducing diesel usage in our transport business
(1,763 tCO
2
e reduction from 2017), a lower demand for natural gas in our tomato glasshouses (891 tCO
2
e
reduction from 2017), and by purchasing renewable electricity certificates for our international sites (921
tCO
2
e reduction from 2017). In 2017, diesel and natural gas collectively accounted for 78% of our Scope 1
and 2 emissions, with 7% contributed by conventional electricity. These reductions see our emissions 10.2%
lower than our 2017 baseline year. Going forward, our savings from conventional electricity will be ongoing
however other savings may change due to operational requirements.
Carbon-neutral anaerobic digestion facility
In August, construction began on Aotearoa New Zealand’s first large-scale food waste-to-bioenergy facility
which is being built by Ecogas on our Reporoa site. Due to be operational in 2022, the anaerobic digestion
facility will recover 75,000 tonnes of organic waste from businesses and kerbside food scrap collections
in the North Island, turning it into sustainable renewable clean energy. By partnering with Ecogas to
build the facility adjacent to our tomato glasshouse operations, we’ll purchase renewable electricity, heat
and CO
2
, which is needed to enhance the growing conditions of our tomatoes. The outcome is a carbon-
neutral, circular economy alternative to natural gas at our Reporoa glasshouse.
Reducing emissions from transport
Safety and fuel efficiency are priority focuses for our transport fleet. Our fleet of 48 leased trucks are all
fitted with the latest safety equipment. To further enhance this, from 2020 onwards, all replaced vehicles
in our transport fleet will be Euro 6 or higher and include full safety and driver aids, such as active
cruise control and telemetrics. This will assist our people in being safer on the road, while reducing fuel
consumption. Training is being rolled out to support the full adoption and delivery of benefits. At the
same time, following a review of our tyres, we’re exploring replacing all tyres with eco-friendly tyres, which
will increase fuel efficiency and reduce CO
2
emissions.
To ensure maximum utilisation of our truck fleet, each day our National Dispatch team plan the routes
and running of the network. Where required, third party suppliers are used to improve utilisation of truck
movements.
Energy consumption tracking downwards
A downward trend of energy consumption has continued in 2020, with a 10.7% reduction ahead of our
2025 target. This has been driven by a reduction in diesel (8%), electricity (19%) and natural gas (6%)
usage, compared to our 2017 baseline. Natural gas, electricity and diesel are our predominant uses of
energy, and we continue to focus our efficiency efforts on these sources.
2%
2%
39%
39%
7%
7%
3%
35,777
2
0
1
7
GHG emissions
1%
2%
26%
35%
5%
28%
3%
19 7, 57 8
2
0
1
7
Energy use
2%
1%
40%
41%
9%
7%
3 2 ,118
2
0
2
0
Resource type (tCO
2
e)
DIESEL
NATURAL GAS
HEATING OIL
ELECTRICITY –
NON-RENEWABLE
REFRIGERANTS
PETROL
LPG
Resource type (kWh)
DIESEL
NATURAL GAS
HEATING OIL
ELECTRICITY –
NON-RENEWABLE
ELECTRICITY –
RENEWABLE
PETROL
LPG
1%1%
27%
37%
6%
1%
176,457
2
0
2
0
27%
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 47
OUR PROGRESS
Climate change
adaption
First climate change adapted apple commercialised
This year, we’ve continued our focus on climate change adaptation through the Hot Climate Programme,
a global pan-industry breeding programme, focused on developing and commercialising apple varieties
which are climate change adapted. We’re the global commercialisation partner for the programme.
The first variety, ‘HOT84A1’ has been successfully trialled in Spain, where temperatures reach more than
40°C. The apple has proven to be sunburn resistant, while retaining excellent eating qualities. It’s now
being tested with our partners in New Zealand, South Africa, Europe, the UK, Australia and Spain, with
reports that it grows well, has an attractive rich red colour with excellent texture and a sweet taste, and
performs equally as well in temperate climates, as it does in hot climates. The first commercial volumes
will be planted in the Iberian Peninsula in February 2021.
Expanding our
emissions focus –
Scope 3 emissions
Less business travel delivers benefits
In 2020, we expanded the scope of our focus to cover business travel. As a result of COVID-19 border
restrictions and closures, this year we significantly reduced our business travel by 65%, resulting in
financial savings and a 66% reduction in emissions. The adoption of a digital-first approach to working, has
shifted many meetings and workshops online. While the future remains incredibly uncertain, our long-term
goal is to continue reducing our business travel, aiming for a 60% reduction versus our 2019 emissions.
Understanding the impact of shipping on our emissions
In the first quarter of 2020, we completed a detailed study of the opportunity to reduce our emissions
when exporting apples from Aotearoa New Zealand. We found the volume of apples shipped and
distance travelled had the largest impact on our total emissions, with little difference in the emissions
between shipping lines. These findings highlighted the importance of working with our shipping line
partners to influence a reduction in GHG emissions through ship design, speed and fuel type. Further
work is required to evaluate the impact of late orders on emissions, whereby export fruit is transported
by truck to the next port in order to meet the sailing.
WHAT’S NEXT
In 2021, we will:
• Continue to procure renewable
electricity at all of our global sites
• Begin testing biogas from the anaerobic
digestor at our Reporoa site
• Develop a decarbonisation strategy for
our vehicle fleet
HOT84A1, the first variety to be commercialised
from the Hot Climate Programme
48 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
In order to achieve our GHG emissions reduction targets, in 2019,
we committed to covering our entire global electricity supply
through renewable sources by the end of 2020.
For our Aotearoa New Zealand sites, we achieved this by
purchasing renewable energy certificates from Meridian Energy,
under its certified renewable electricity scheme. The third-party
renewable energy verifier, New Zealand Energy Certificate
System, audits Meridian’s renewable energy-generating facilities
and then issues renewable energy certificates for each MWh
of energy generated. Customers then purchase renewable
energy certificates to cover the amount of MWh of electricity
they have used. The decision to partner with Meridian was
based on the nature of New Zealand’s electricity grid. While
most of the country’s electricity is generated through renewable
sources, such as hydro stations and wind farms, it’s mixed
with non-renewable energy in the single electricity wholesale
pool. Meridian’s certified renewable energy product enables
us to purchase renewable certification to match our electricity
consumption, ensuring the electricity we use from the grid is
accounted for in Meridian’s renewable energy production.
For our international sites, we achieved our objective of 100%
renewable electricity supply by utilising renewable electricity
contracts. If such a product is not available on a specific market,
we purchased Renewable Electricity Certificates – similar to the
approach in Aotearoa New Zealand – for our 2020 electricity
consumption, to guarantee all electricity we consume is matched
with renewable electricity generation.
This year, we purchased renewable electricity certificates
which are equal to our documented electricity consumption of
43,888 mWh. By sourcing renewable electricity in this way, we’ve
been able to reduce our Scope 2 GHG emissions by 921 tonnes
of CO
2
e.
HIGHLIGHT ACHIEVEMENT
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 49
OUR APPROACH
To achieve our Closing the Loop aspiration, it’s important we understand how we can eliminate waste across
our end-to-end supply chain. The three areas we’ve identified which will make the biggest impact are
packaging and materials, operational waste and food waste.
Packaging often plays a vital role in keeping our produce fresh and safe, reducing food waste, and meeting
market and consumer needs. Yet it also contributes to our direct and indirect waste. With only 14% of
the world’s plastic waste captured for recycling, and then only 5% of that actually
1
recycled, it’s vital that
companies like ours focus on reducing waste upstream.
Our internal packaging guidelines for T&G branded produce seek to use low impact materials, prioritise
recyclable materials, reduce demand for non-renewable resources and be resource efficient. By 2030, all
packaging used on T&G brands will be made from renewable resources or able to be recycled.
Across our business we’re embedding a continuous improvement mindset and methodology, to help us
address operational waste, and improve engagement, productivity and profitability. In 2020, we made great
headway with our operations business and in 2021, T&G Fresh will begin to adopt this way of working too.
With more than 122,000 tonnes of food wasted every year in Aotearoa New Zealand
2
– and about 60% of
this dumped in landfills when it’s perfectly edible – we want to put a stop to produce waste in our business
and instead maximise our home grown produce to help feed people facing food insecurity. This year, we’ve
expanded the scope of this aspiration to also include produce waste.
1
Ellen MacArthur
Foundation, The New
Plastics Economy:
Rethinking the future
of plastics & catalysing
action, 2016
2
The New Zealand
Government’s House
of Representative’s
Environment Committee,
Briefing to investigate
food waste in New
Zealand, March 2020
By supporting a closed-loop system, we retain and regenerate value from produce
and materials. We’re refusing waste by using resources efficiently, seeking
renewable materials, minimising food loss and considering end of life.
In today’s economy, there’s an incredible amount of waste, including food waste, with many businesses having
operated a ‘take-make-waste’ model. From an ecological and cost perspective, we can no longer operate like this. We
want to play an active role in addressing this by transitioning to a closed-loop system.
By doing this, resources will no longer be abandoned to become waste. Instead, we’ll work to design out waste and
pollution and keep products and materials in use, or alternatively, they’ll be used to help regenerate nature.
This is an ambitious but necessary aspiration and we know we can’t deliver it alone. It requires partnering and
collaboration to help us create, develop and implement products and solutions, and potentially even new business
models. It’s a challenge we’re up for.
CLOSING THE LOOP
Delivering a consignment of fresh
carrots to the team at KiwiHarvest
50 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
OUR PROGRESS
Packaging
Removing plastic packaging
This year, we’ve continued to collaborate with our partners to introduce innovative, recyclable
solutions to non-recyclable plastic packaging and polystyrene, such as increasing the amount of
cardboard in our packaging. In Singapore and Japan, more than half of our Orchard Rd grapes
are now packaged in cardboard, and in 2021 we’ll expand this into South Korea. In Vietnam, we
previously packaged some of our JAZZ™ and Envy™ apples in plastic clamshell punnets. While our
larger fruit temporarily remains in these punnets, from July 2021 all of our four and six pack range
will be packaged and sold in cardboard boxes.
Operational waste
Sum of 2017 total Sum of 2018 total
Sum of 2019 total Sum of 2020 total
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
CompostedLandfilledRecycled
Waste volumes
Focus on diverting from landfill continues
In 2020, we sent 2,918 tonnes of waste to landfill, a 5% decrease from 2019. Due to COVID-19
restrictions and many of our people around the world working from home, we’ve reduced our
general waste, thereby reducing our landfill volumes. At the same time, COVID-19 adversly
changed people’s behaviour, increasing their use of single-use consumables, with limited recycling
opportunities.
Nearly half of our landfill volume is ‘pull-out waste’ from our tomato glasshouses, and this presents
an ongoing challenge in reducing our landfill volume. At the end of each season, our glasshouses
pull-out their vines and growing structures (string and clips) for new plantings. The volume of pull-
out waste increased in 2020, and we’re investigating the leading cause of this.
Worms help divert tomato vines from landfill
We’ve long faced the challenge of how best to separate the plastic string which holds our tomato
vines up when we pull out the entire plant at the end of each season. String is the most effective
mechanism for maintaining crop structure across the plant’s lifecycle. Unfortunately, when the
plants are fully grown, they are entangled with the string, meaning they can’t be composted.
Following unsuccessful trials of compostable string over the past three years, we investigated
alternative solutions. This year, our Reporoa site ran a trial using vermiculture to help us dispose
of our tomato vine and leaf waste. By allowing the natural material to decompose with the help of
worms, we were able to decompose the vines naturally, leaving only the plastic string for disposal.
Our next step is to trial recycling solutions for the remaining string and look at ways to scale the
system across all five glasshouses.
Environmental Leadership Award
A highlight for our team was being awarded the Hawke’s Bay Regional Council’s Environmental
Award for Environmental Leadership in Business – Te Hautūtanga Taiao me te Pakihi, in December.
This recognised our commitment to the environment by changing the practice of burning pulled-
out vegetation, and instead developing alternative mulching options which can be sent to compost.
Food waste
Partnering to address food insecurity and produce waste
In July, we became a foundational partner of the New Zealand Food Network (NZFN), helping
address food insecurity and food waste in a sustainable way. NZFN is a new Government-backed
not-for-profit organisation, which acts as a centralised distribution hub for bulk donated food –
helping match supply with demand. To increase the volume of produce donated, we introduced
new practices in our business. In our tomato business, out of spec tomatoes which might have
been misshapen, had size defects or markings, would have been graded into a reject bin and
composted - when in fact, they were perfectly edible. We’ve changed this process to now capture
all edible out of spec produce and divert it to NZFN. See page 59 for further information on NZFN
and our related Fairgrow charity.
WHAT’S NEXT
In 2021, we will:
• Continue replacing polystyrene packaging with cardboard boxes
for Orchard Rd grapes
• Work with industry and suppliers to investigate sourcing a certified
home compostable PLU sticker to meet customer and regional
future requirements, with the view to introducing it in selected
export markets within 12 months of sourcing
• Expand scale of vermiculture trials to determine if this is a solution
for vine waste at all T&G tomato glasshouses
• Investigate innovative methods of scaling up the supply of
produce to Fairgrow
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 51
OUR APPROACH
Globally, we employ a range of practices to enhance the efficiency and sustainability of our growing practices.
We’re currently focused on three key areas: promoting and increasing the use of beneficial insects and thereby
reducing the usage of chemical crop protection measures; increasing water use efficiency; and improving soil
quality and structure.
Our long-term objective is to define and develop sustainable growing systems which demonstrate measurable
benefits and improvements against our baseline. In the short term, this means we’ll focus on setting water
efficiency strategies across our growing operations and determining suitable sites for riparian plantings.
We continue to support local biodiversity by implementing integrated pest management, supporting
pollination services and bee-safe protocols.
3
https://research.wri.
org/wrr-food/executive-
summary-synthesis
We’re investing in innovation and genetics which increases our growing efficiency
and continues to improve the health of our land and ecosystem.
As the global population grows to a projected 9.8 billion in 2050 and incomes grow across the developing world,
overall food demand is projected to increase by more than 50%.
3
At the same time, the world’s natural resources
are limited. Water is becoming increasingly scarce, soil health is degrading and biological diversity is being lost. To
help address this, we will innovate and collaborate to produce nutritious food, while protecting and regenerating
our ecosystem.
LOWER IMPACT, SMARTER GROWING
The Rowling family from
Moana Orchards, Tasman, Nelson
52 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
N
Mn
Mn
Fe
Mn
P
P
P
P
P
P
K
K
N
N
N
Na
Na
Effective
Root Zone
Water monitoring is conducted to ensure water application
is within the active root zone, resulting in efficient water and
nutrient usage by our crops.
OUR PROGRESS
Investigating
regenerative
practices
Our long-term objective is to define and develop sustainable growing systems which demonstrate
measurable benefits and improvements against our baseline for ecosystem services, such as
soil, carbon, water and biodiversity. To understand what’s possible in this space, together with
Zespri, we’re working with Plant and Food Research New Zealand to review regenerative practices
currently in use across Aotearoa New Zealand’s horticultural sector to identify gaps for further
research and development. In early 2021, workshops will be held with T&G and Zespri growers to
identify regenerative outcomes and practices which would benefit our horticultural context. This is
an initial step towards a programme to define and develop new regenerative horticultural practices
which consumers understand and value, and which improve environmental and social outcomes,
as well as production.
Understanding
our water usage
and prioritising
efficiencies
In all of our growing regions we interact with water. T&G’s own growing regions are New Zealand
and Peru. Our apple, grape, blueberry and citrus crops are grown outdoors, and utilise either
drip or other precision irrigation systems. Our tomatoes are grown in glasshouses, utilising drip
irrigation, with all wastewater captured for UV treatment to recycle as much water as possible.
All of our independent growers monitor their water use and applications are made based on soil
moisture. Driven by a focus on continuous improvement, this year we began to map our current
practices across the group, for the purpose of identifying opportunities to improve our efficiency
and define our water management targets and objectives in each of our key categories in 2021.
In 2020, we engaged specialist horticultural consultants to review our previous season’s water
application trends to enable us to develop water management plans for our Hawke’s Bay apple
orchard sectors. Each block now has a water management plan to maintain water levels within
the root zone, preventing over or under watering, which can cause un-due stress to the plant or
contribute to nutrient leaching. Water is measured daily against this metric. Our growers have also
identified water efficiency practices to trial in 2021, such as smart sprayers.
We’ve also made
improvements with the water
recycling systems in our
tomato glasshouses, such as
new ultraviolet sterilising units
replacing aging ones at our
Tuakau glasshouses, resulting
in a decline in fertilizer use.
Although we’re able to
monitor water use in our
day-to-day operations,
we have had limitations
in accessing this data for
inclusion in this Integrated
Report. We continue to work
to overcome these issues.
WHAT’S NEXT
In 2021, we will:
• Complete our review of regenerative outcomes and
practices, for the purposes of defining a vision for
sustainable growing within our apple category which
will then be expanded to other categories
• Continue to improve how we monitor our water usage
and accurately report consumption and discharge
• Trial the use of ‘Smart Sprayer’ technology, which is
designed to reduce inputs such as water and chemicals
by sensing the canopy and adjusting volumes applied to
match the size of the tree
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 53
OUR PRODUCE
Our safe and sustainable produce
value chain provides nutrition to
our customers and consumers, and
enhances livelihoods.
Fruit and vegetables not only taste great, they’re an important
part of a healthy diet, providing essential vitamins, minerals
and fibre. That’s why, every day, we come to work to help grow
healthier futures.
We do this by growing and providing safe, high-quality,
sustainable fresh produce, while building strong mutually
beneficial partnerships.
Yet, we know not everyone can access or afford nutritious food.
This was a challenge before COVID-19 which has now been
exacerbated, as more and more people face food insecurity. At
T&G we’re committed to helping address this for families and
our communities.
OUR COMMITMENTS
AND PROGRESS
As part of our 2021 priorities, we will formalise our
Safe Food, Responsible Partnerships and Healthy
Communities aspirations with short (2022), mid
(2025) and long term (2030) targets.
54 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
WHAT’S NEXT
In 2021, we will:
• Formalise our focus on Safe Food with
short (2022), mid (2025) and long term
targets
• Assess our food safety, quality and
assurance programme, to develop our
desired quality and compliance outcomes,
starting with our T&G Fresh business
• Obtain GLOBALG.A.P certification for our
T&G Fresh sites
• In Australia, explore and implement a food
safety and quality programme which links
in-field, destination market, customer and
independent reports, supported by quality
data analytics
• Ensure all growing partners have the
required certifications
• In our Apples business, roll out visual
reporting and escalation procedures to
enable our people to make optimum fruit
quality decisions
OUR APPROACH
We have a risk-based global food safety, quality and assurance programme. Food safety
and quality is everyone’s responsibility, and to support this we have dedicated teams in
our apples, T&G Fresh and Delica Australia businesses, working to deliver our strategy
to comply with all customer, supplier, Government and global market standards,
certifications and processes. We know the consequences of not applying correct food
safety principles can be catastrophic, compromising the safety of our customers and
consumers, and potentially damaging our reputation. We therefore will continually work
to strengthen our global food safety, quality and assurance programs.
We’re committed to investing in certifications and accreditations which strengthen our
reputation to provide our customers and consumers with trust and confidence in T&G’s
commitment to the highest standards of food safety and quality.
OUR PROGRESS
Meeting customer
requirements
Across our global, diversified business, T&G provides our customers and export markets with
assurances on the safety and quality of our produce, as well as our environmental and social
standards through both the application of our own standards and third-party certifications and
audits. Many of our large customers also have their own requirements which we actively work to
meet and exceed.
This year, all of our apples met GLOBALG.A.P and our post-harvest packing operations BRC
certified. We also met additional requirements, such as Sedex and customer audits for Costco and
Tesco.
We met all pre-requisite programmes in our T&G Fresh business, including our Food Control Plans,
Hazard Analysis and Critical Control Point, as well as Woolworths Vendor QA Programme. We
continue to ensure all growers and suppliers that T&G Fresh trades on behalf of, have recognised
Food Safety certifications.
Our T&G Fresh tomato, citrus and berry operations (which include growing and packing for both
the New Zealand and export markets) has GLOBALG.A.P certification as well as GRASP, which
assesses social practices on farm, such as worker health, safety and welfare.
––––––––––––––––––––––
100%
of New Zealand apple
growers GlobalG.A.P
certified
100%
of our apple
packhouses are BRC
and Sedex compliant
We’re building a world-class, transparent supply chain, committed to the highest
standards of food safety, quality and assurance.
Here at T&G, our entire whānau is passionate about providing safe fruit and vegetables to our customers and
consumers around the world, which is why we have uncompromising standards of food safety and quality.
At the same time, we know consumers increasingly want to know where their food comes from and how it’s produced.
We want to harness the hard work, care and pride which goes into producing our delicious, safe fresh produce, and use
this as a source of value and competitive advantage.
SAFE FOOD
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 55
OUR APPROACH
Our aspiration of responsible partnerships is an emerging area for T&G, as we’re committed to taking positive
steps to develop, enhance and embed in our policies, standards and business. Currently, we’re guided by our
customers and country regulations, however we see the value and difference which can be made when we
partner with individuals and organisations who are aligned with our purpose, Kaitiakitanga aspirations, and
committed to global best practice. As we go forward in 2021 and beyond, this will be an area of focus as we
begin to articulate what responsible partnerships means to us.
OUR PROGRESS
Responsible
sourcing
This year, we reviewed our approach to responsible sourcing in our global grape and berry
categories, across growing, third-party supply, importing and exporting, in Aotearoa New Zealand,
Australia and Peru. This was done against global standards.
The findings identified there is opportunity for T&G to potentially go beyond legal compliance. In
2021 we will define what we want to achieve to create impactful change.
Sedex
certifications
Sedex certification demonstrates to our global partners that we’re committed to responsible and
sustainable ethical business practices. This year, we retained Sedex certification across our New
Zealand and global Apples Operation, as well as in Australia. Our T&G Fresh blueberry and citrus
growing operation in Kerikeri also achieved initial Sedex certification, with the final social audit to
take place at a later date.
Through shared social, environmental and economic objectives, we’re building
strong and sustainable partnerships with our growers, customers, suppliers and
communities.
Who T&G partners with influences the impact we have socially, environmentally and economically. We want to have
a positive impact on people’s lives, society and our planet. We are increasingly seeking to build strong, long-lasting,
beneficial partnerships with growers, customers, suppliers and communities.
RESPONSIBLE PARTNERSHIPS
WHAT’S NEXT
In 2021, we will:
• Formalise our focus on Responsible
Partnerships with short (2022), mid
(2025) and long term (2030) targets
• Define responsible sourcing and our
desired outcomes for T&G, focusing on
our third party suppliers and partners,
as well as our own operations
• Ensure all of our growing partners in
Australia have a responsible sourcing
programme in place, for example Sedex
certification
56 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
OUR APPROACH
We support our local communities in a wide range of ways, including produce donations, our Fairgrow charity,
discretionary funding and sponsorship, community investment, and our people using their annual volunteer
day helping others.
We’re building thriving communities by promoting healthy nutrition and helping
address food insecurity.
We’re passionate about the goodness that comes from fresh fruit and vegetables and we want to help improve the
health of our local communities, by promoting nutrition and helping get fresh produce to people who need it the most.
HEALTHY COMMUNITIES
OUR PROGRESS
Garden to Table
programme
2020 was our seventh year supporting the Garden to Table programme in Aotearoa New Zealand.
Established in 2008, Garden to Table is a charity which works with thousands of primary school
children across the country, changing the way they think about food, by teaching them how to
grow, harvest, prepare and share fresh, seasonal food. During the year, our people and growers
visited and spoke to some of the schools involved, including Ruakākā School in Whangārei and
Riccarton Primary School in Christchurch.
In addition, we worked with Garden to Table to develop the Beekist® Real Life Maths resource
for all participating schools, linking it to the country’s maths and science curriculum. A teacher at
Northcote Primary School, in Auckland, said “These maths questions led on to the children wanting
to learn more about pollination. Lots of discussion about tomatoes being a fruit and how important the
bees are in plants being able to produce fruit.”
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 57
–––––––––––––––––––––––––––––
1.8m
serves of fresh fruit and
vegetables donated by Fairgrow
to the New Zealand Food Network
Over
64k
Kiwi children provided with
daily fresh fruit
WHAT’S NEXT
In 2021, we will:
• Formalise our focus on Healthy Communities with short (2022),
mid (2025) and long term targets (2030)
• Scale Fairgrow by encouraging more growers to get involved;
launching an employee matched giving programme; raising
funds to purchase produce not in season and support the
harvesting of non-commercial volumes
• Maximise our partnership with Garden to Table and renew
our support
• Encourage our people to use their annual employee volunteer
day to help make a difference in their local communities
OUR PROGRESS
Fairgrow charity
In July, we became a foundational partner of NZFN, a not-for-profit organisation, providing people
in need with healthy food through the collection and sharing of bulk surplus and donated food
(see page 51 for further information).
In the second half of 2020, we took this partnership to the next stage, establishing Fairgrow,
our own charity which captures and aggregates fresh produce donations to provide to NZFN,
so we can get more fruit and vegetables to New Zealanders in need (see page 59 for further
information).
In the period from July to December 2020, together with our passionate third-party growers, we
donated 264,475 kilograms of fresh fruit and vegetables - this equates to 1.8 million serves of
fresh produce.
JAZZ™ and No
Kid Hungry
Due to COVID-19, by April 2020, schools in the United States had begun to close, and as a result
millions of vulnerable children were losing the school meals they depend upon. For some, it was
the only food they would receive in a given day. JAZZ™ apples teamed up with No Kid Hungry, an
organisation which works to feed children all year round. During the lockdowns, No Kid Hungry
worked to ensure children had three healthy meals a day by developing an online ‘Free Meals
Finder’ and providing emergency relief and grants. JAZZ™ made a cash donation and ran a digital
campaign to help raise awareness and funds. In addition, throughout the year, our sales agents
and retail partners donated JAZZ™ apples to many regional foodbanks and schools.
Shanghai Charity
Foundation
receives Envy™
donations
Throughout 2020, we donated apples to the Shanghai Charity Foundation, one of the largest
non-profit organisations in China. With a mission of ‘caring for elderly and children; sponsoring
students and poverty’, the foundation is focused on providing relief. Our donated Envy™ apples
were provided to hospitals, for both patients and front-line workers, as well as to aged care homes
and orphanages.
Fruit in Schools
Every school day, we provide over 64,000 primary school children in Aotearoa New Zealand, in
regions of high social and health need, with fresh fruit through the Ministry of Health’s Fruit in
Schools programme.
In the first half of the year, we provided fruit to 175 schools in Northland, Hamilton, Gisborne and
Hastings, and following the integration of the Freshmax New Zealand business in April 2020, this
increased to include a further 89 schools in Auckland and Canterbury.
When schools were closed during COVID-19 lockdowns, the programme, which is managed by
United Fresh, was repurposed to provide fresh produce boxes to communities. T&G participated
in this, providing 39,950 boxes of produce.
In 2020, the Government’s Fruit in Schools programme was selected for inclusion in a report for
the UN Food and Agricultural Organisation (FAO) and World Health Organisation (WHO), as an
example of the effective promotion of fresh produce.
58 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
With COVID-19 turning many people’s lives upside down, large
numbers of New Zealanders are finding it difficult to provide
healthy and nutritious food to their families – and this need is
outstripping what’s currently donated.
As a country of nutritious fresh food producers, our T&G team
couldn’t stand by and let people go hungry.
Following our partnership with the New Zealand Food Network
(NZFN) earlier in the year, in December 2020 we launched
Fairgrow, a charity which captures and aggregates surplus and
donated fruit and vegetables from our 1,200 grower partners, as
well as from our own business.
Fairgrow will also raise funds to buy produce when it’s not in
abundance or readily available, thereby providing New Zealanders
in need with greater availability throughout the year. Furthermore,
at various times of the year, when some produce might be left in
the ground or on trees as it may not have a natural commercial
home, Fairgrow will make financial contributions towards helping
harvest and donate some of these crops.
As a foundational partner of NZFN, Fairgrow will use our
extensive grower network and national fresh produce supply
chain to help connect the supply of fresh produce with national
demand from NZFN’s network of food rescue organisations, iwi
and charities. Thereby ensuring our fresh produce gets to the
communities who need it the most.
We know addressing food insecurity will require everyone,
including businesses, Government and community groups, to
work together to take collaborative action. Through Fairgrow, we
want to play an active part in helping address this challenge so
together we can grow healthier futures for all New Zealanders.
1
The Deadman family of Ohakune donating new season carrots to families in need
Andrew Keaney, Managing Director of T&G Fresh, with Gavin Findlay, CEO of the New Zealand Food Network
Gareth Edgecombe, Kim Ferguson, Andrew Keaney, Adrienne Sharp and Declan Keaney with JAZZ™ and Envy™
apple donations for the New Zealand Food Network
1
2
3
2
HIGHLIGHT ACHIEVEMENT
3
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 59
BOARD OF DIRECTORS
CAROL CAMPBELL
INDEPENDENT DIRECTOR
Director since June 2010
Board committees: Chair of the Finance,
Risk and Investment Committee, Member
of the Human Resources Committee.
Carol has extensive finance experience
and a sound understanding of effective
Board Governance. She was a partner at
Ernst & Young for over 25 years and has
been a professional Director for over 10
years.
Carol is a Director and Chair of the Audit
and Risk Committees at NZ Post Limited,
NZME Limited, Asset Plus Limited and
Chubb Insurance New Zealand Limited.
She is also a Director at Kiwibank
Limited and of a number of other private
companies.
Carol has a Bachelor of Commerce from
Auckland University and is a Fellow of the
Chartered Accountants Australia and New
Zealand and a Chartered Member of the
Institute of Directors.
ANDREAS HELBER
NON-INDEPENDENT DIRECTOR
Director since April 2012
Board committees: Member of the
Finance, Risk and Investment Committee.
Andreas Helber has been BayWa’s Chief
Financial Officer since 2010. Mr Helber
began his career at KPMG in Munich
where he qualified as a tax consultant
and auditor.
Mr Helber is a member of the supervisory
boards of a number of private and listed
companies including R+V Allgemeine
Versicherung AG, RWA Raiffeisen Ware
Austria AG, and Unser Lagerhaus
Warenhandelsgesellschaft m.b.H.
PROF. KLAUS JOSEF LUTZ
CHAIRMAN & NON-INDEPENDENT
DIRECTOR
Director since April 2012
Prof. Klaus Josef Lutz has been
Chief Executive Officer of BayWa
Aktiengesellschaft (BayWa) since July
2008. He began his career initially as a
lawyer but soon assumed managerial
positions in a number of different sectors
which enabled him to gain extensive
experience, above all in the restructuring
and development of companies.
He is a member of the supervisory
boards of a number of listed and
private companies including Euro Pool
System International B.V. (chairman),
RWA Raiffeisen Ware Austria AG, Unser
Lagerhaus Warenhandelsgesellschaft
m.b.H and Giesecke & Devrient GmbH
(chairman).
In 2013, Prof. Lutz was appointed as
an honorary professor of Managerial
Economics of Co-operative Societies at
the Technische Universität München.
60 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
BENEDIKT MANGOLD
NON-INDEPENDENT DIRECTOR
Director since September 2019
Benedikt Mangold joined BayWa in
2011, working initially in the Agricultural
Equipment Business Unit. In 2016,
Benedikt moved to New Zealand, working
for T&G Global Ltd as an export trader
before moving into the role as Head of
Strategic Planning and Transformation for
for T&G’s International Trading business.
Since returning to BayWa in early 2019,
Benedikt has been recently appointed
Head of Global Produce at BayWa AG.
Mr Mangold is a director of Al Dahra
BayWa Agriculture LLC and Afrupro
Investments (Pty) Ltd.
RALF TOBIAS PRISKE
NON-INDEPENDENT DIRECTOR
Director since December 2017
Board committees: Member of the
Human Resources Committee.
Ralf Tobias Priske started working for
BayWa in 1998 as a member of the legal
department providing advice to the
various branches of the Company and
had a leading role in the acquisition of the
majority of the shares of T&G by BayWa
in 2012. From 2013 to 2015 he worked for
the renewable energy sector of the BayWa
Group as Deputy Legal Counsel focusing
on establishing the renewable energy
business in the US. In July 2015 Mr Priske
was appointed as BayWa’s Company
Secretary.
ROB HEWETT
INDEPENDENT DIRECTOR
Director since August 2018
Board committees: Chair of the Human
Resources Committee, Member of the
Finance, Risk and Investment Committee.
Rob Hewett is also chair of Farmlands
Co-operative Ltd, co-chair of Silver Fern
Farms Ltd and director and immediate
past chair of Silver Fern Farms Co-
operative Ltd. He is chair of Pioneer
Energy Ltd, and a director of Pulse Energy
Ltd and the Lincoln University Council.
Mr Hewett holds a Master’s Degree in
Commerce and Marketing (Hons), a
BCom (Ag) Economics and is a Chartered
Fellow of the New Zealand Institute of
Directors. He won the 2019 Outstanding
Contribution to New Zealand Co-
operatives award.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 61
CORPORATE GOVERNANCE
ROLE OF THE BOARD
The Board is responsible to shareholders
for the performance of the Company,
which includes setting the objectives
and the strategies for achieving those
objectives, identifying significant areas of
business risk and implementing policies
to deal with those risks, setting the overall
policy framework and monitoring the
continuing performance of the Company
and its management. The Board also
ensures that procedures are in place to
provide effective internal financial control.
Responsibility for the day-to-day
management of T&G is delegated by
the Board to the Chief Executive Officer
(CEO). The Board is committed to act with
integrity and expects high standards of
behaviour and accountability from all staff
members.
BOARD MEMBERSHIP
There are no executive directors across
the Board but a broad mix of skills and
industry experience relevant to the
guidance of the Company’s businesses.
Mrs C.A. Campbell and Mr R.J. Hewett are
independent Directors for the purposes
of the NZX Listing Rules.
CONDUCT OF THE BOARD
The Board has adopted a formal Code
of Ethics which sets out the expected
standards of professional conduct of its
members.
The Board meets at regular intervals and
conducts its affairs to ensure matters
can be discussed openly, frankly and
confidentially. Any potential conflicts of
interest relating to Directors are identified
and disclosed. Affected Directors are
usually not permitted to vote on any
related matter where a conflict exists.
The Board operates a code of conduct
that forbids Directors and other affected
parties to deal in the Company’s shares
at any time when they are in possession
of insider information and during periods
which are deemed by the Board to be
‘closed’ periods. These closed periods
customarily include the end of the six and
12 month reporting cycles, and until such
time as profit announcements have been
publicly disclosed. Closed periods include
any additional period when the Board is
engaged in matters that are likely to have
an impact on the market value of the
shares.
BOARD ACCESS TO ADVICE
The Board has established a procedure
whereby Directors and Board Committees
have the right, in connection with their
duties and responsibilities, to seek
independent professional advice at
the Company’s expense, with the prior
approval of the Chairman.
Independent professional advice
includes professional legal and financial
advice, but excludes any advice on the
personal interests of a Director. The
Board regularly invites key managers and
Executives to attend and present at Board
meetings, and interaction with Directors is
routinely encouraged.
BOARD COMMITTEES
The Board has two constituted
Committees, the Finance, Risk and
Investment Committee (FRIC) and the
Human Resources Committee (HRC), both
of which operate under Board approved
charters.
The FRIC meets at least three times per
year and is responsible for overseeing
compliance with statutory financial
regulations and related responsibilities,
ensuring that effective systems of
accounting and internal control are
established and maintained, overseeing
internal and external audit, and liaising
with T&G’s independent auditors.
This Committee is chaired by Mrs C.A.
Campbell, and comprises Mr R.J. Hewett
and Mr A. Helber. The FRIC members
also meet separately with the auditors as
required.
The HRC is responsible for reviewing,
approving and monitoring T&G’s Health
and Safety Policy, Strategy, Annual Plan
and programme of work. This ensures
the health and safety of all those who
work for or come into contact with
T&G. Additional responsibilities include
ensuring that the remuneration strategy,
policies and practices reward fairly and
responsibly with a clear link to T&G’s
strategic objectives and corporate and
individual performance; and assisting
the Board in succession planning for the
CEO and senior management positions
which identifies and targets individuals
for development. This Committee meets
at least four times per year and comprises
Mr R.J. Hewett (chair), Mrs C.A. Campbell
and Mr R.T. Priske.
The Board has not at this stage
established a Nominations Committee
owing to a belief that director
appointments are of such significance
that they should be a direct responsibility
of the full Board. This matter is kept
under review.
INTERESTS REGISTER
The Company and each subsidiary of
the Company are required to maintain
an interests register in which particulars
of certain transactions and matters
involving the Directors must be recorded.
The interests registers for the Company
and its subsidiaries are available for
inspection at its registered office.
Details of all matters that have been
entered in the interests register of the
Company by individual Directors during
the year are outlined in the statutory
information section of these accounts,
and should be read in conjunction with
the individual Directors’ profiles.
The Board is the governing body of T&G Global Limited (the Company)
and its subsidiary companies (T&G).
62 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
T&G MANAGEMENT
STRUCTURE
T&G’s organisational structure is focused
on its four business divisions being
Apples, International Trading, T&G Fresh
and Other Business. These operations are
managed separately with direct reporting
to the CEO and to the Board which
exercises overall control.
RISK IDENTIFICATION
AND MANAGEMENT
T&G has adopted a system of internal
control, based on written procedures,
policies and guidelines. To reinforce this,
an internal audit function exists that
reports to the Board through the FRIC.
The Board acknowledges that it is
responsible for the overall internal
control framework. In discharging this
responsibility the Board has in place
a number of strategies designed to
safeguard T&G’s assets and interests and
to ensure the integrity of reporting.
Procedures are in place to identify
areas of significant business risk and to
remediate and effectively manage those
risks. As required, the Board obtains
advice from external advisors.
While the Board acknowledges that it
is responsible for the overall control
framework of T&G, it recognises that no
cost effective internal control system will
preclude all errors and irregularities.
DIRECTORS’ AND
OFFICERS’ INSURANCE
The Company has arranged directors’
and officers’ liability insurance
covering directors acting on behalf of
the Company. Cover is for damages,
judgements, fines, penalties, legal costs
awarded and defence costs arising from
wrongful acts committed while acting for
the Company.
The types of acts that are not covered are
dishonest, fraudulent and malicious acts
or omissions; wilful breach of statute,
regulations or duty to the Company;
improper use of information to the
detriment of the Company; and breach of
professional duty.
TAX STRATEGY AND
GOVERNANCE
T&G operates within a framework
of prudent and proactive tax risk
management.
T&G’s tax strategy is focused on
providing high quality management and
governance, which results in ensuring that
T&G pays the appropriate amount of tax
within each market that it operates.
T&G implements this strategy through the
tax risk management principles within its
Risk Management Framework.
In conducting its activities in New Zealand
and offshore, T&G ensures that it:
• Complies with all relevant tax legislation
in each tax jurisdiction in which it
operates;
• Meets all its tax obligations on time;
• Pays the correct amount of tax that is
due;
• Obtains expert advice as required
where complex international
transactions are involved.
The statutory corporate tax rate in New
Zealand is 28% and on average over
the five-year period (2016 to 2020),
T&G’s effective tax rate was 23%. T&G’s
average effective tax rate is lower than
the statutory corporate tax rate in New
Zealand due to the different corporate
tax rates applicable for T&G’s subsidiaries
operating in foreign jurisdictions, and
the impact of non-deductible and non-
taxable items.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 63
EXECUTIVE
LEADERSHIP TEAM
PETER LANDON-LANE
DIRECTOR INNOVATION &
TECHNICAL
As Director Innovation and Technical,
Peter leads T&G’s team responsible for
identifying and commercialising new plant
varieties and technologies. Peter joined
in April 2018 as Chief Operating Officer,
having previously been CEO of Plant &
Food Research for nine years. Peter has
significant international experience, having
led Fonterra businesses in Europe, Japan
and Taiwan. Earlier in his career he served
as New Zealand Trade Commissioner in
the Philippines and in China.
ANDREW KEANEY
MANAGING DIRECTOR T&G FRESH
As Managing Director T&G Fresh, Andrew
leads T&G Global’s domestic New Zealand
business. His team is responsible for
partnering with growers and customers
to produce, import and sell year-round
fresh, safe and sustainable produce to
New Zealand consumers. Andrew and his
T&G Fresh team also lead the diversified
export business, Pacific Islands Exports
and the Turners and Growers Fiji business.
He joined T&G in May 2014 and has
extensive experience in the industry,
having previously held senior roles with
Foodstuffs North Island, Freshmax and
Primor Produce.
HEATHER KEAN
DIRECTOR PEOPLE & CULTURE
Heather joined T&G as Director People
& Culture in June 2018, with overall
responsibility for shaping the change
programme to transform T&G into a high
performance organisation. Heather also
leads the Health & Safety function at T&G.
With over thirty years of HR experience,
she deeply understands the role of
organisational culture in driving business
success. Previously, Heather was Head of
HR with Goodman Fielder NZ, and before
that Director Global HR at Fonterra. She
was a founding partner of New Zealand
recruitment agency, Pohlen Kean.
BASTIAN VON STREIT
CHIEF FINANCIAL OFFICER
Bastian joined T&G as Chief Financial
Officer from his homeland Germany in
October 2018. He leads T&G’s global
finance team across 12 countries.
Previously, he was Head of Group
Accounting at parent company BayWa AG,
and Director of Finance and Accounting at
Willy Bogner GmbH & Co KGaA in Munich,
responsible for financial and group
accounting, credit control, taxes and
treasury. Bastian is a graduate of Ludwig
Maximilians University in Munich.
GARETH EDGECOMBE
CHIEF EXECUTIVE OFFICER
Gareth joined T&G as Chief Executive
Officer in July 2018. He has extensive
experience in business transformation,
building high performing teams and
developing brands across the Asia Pacific
region. Prior to joining T&G he was CEO of
Comfort Group, President of the Campbell
Soup Company for the Asia Pacific region,
and President of The Coca-Cola Company’s
South Pacific business. A former general
manager of Puhoi Valley Cheese, Gareth
has also served on the board of the
Australian Food and Grocery Council.
CRAIG BETTY
DIRECTOR OPERATIONS
Craig joined T&G as Director Operations
in October 2019. Based at our Hawke’s
Bay site at Whakatu, Craig is responsible
for leading T&G’s apple business,
including our growing, packing and
distribution operations. Prior to this, he
was Chief Operating Officer for Westland
Milk Products, and General Manager
Operations for Fonterra. Craig has
extensive operations and supply chain
management experience across a broad
range of industries, including agribusiness.
64 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
RACHEL STOTTER
DIRECTOR INTERNATIONAL SALES
As Director International Sales, Rachel
leads an international sales team who
sell apples, grapes, berries and a number
of other categories into more than 40
countries. She joined T&G in March 2019,
having previously been Head of Sales
and General Manager Dairy Category at
Goodman Fielder New Zealand. Prior to
that, Rachel held a number of sales and
transformation roles across a ten-year
period with Fonterra, including Director
New Zealand Ingredients and General
Manager Sales Excellence.
MONIQUE MALLON
DIRECTOR IT
Monique joined T&G in September 2018
and has more than 28 years’ experience in
IT and large-scale business transformation
programmes. Having spent nine years with
IBM as an Associate Partner and 14 years
working in lead roles with New Zealand
businesses, including General Manager
of Information Systems at Vodafone and
Head of IT for Fletcher Steel, Monique
understands the need to deliver value
through robust technology solutions
which enable businesses to achieve their
strategic objectives.
ADRIENNE SHARP
HEAD OF CORPORATE AFFAIRS
As Head of Corporate Affairs, Adrienne is
responsible for protecting and enhancing
T&G’s global reputation. She leads
internal and external communications,
government, industry and community
engagement, sustainability and brand
marketing. Adrienne joined T&G in January
2020, with over 20 years’ experience
in New Zealand, Australia and the UK.
Most recently she was General Manager
Innovation Communications and General
Manager News and Content at Fonterra,
and prior to that, Australian Managing
Director for the Baldwin Boyle Group.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 65
AUDITORS
Deloitte has continued to act as the principal auditor of T&G and
has undertaken the audit of the financial statements for the year
ended 31 December 2020.
DIRECTORS’ LOANS
No director is in receipt of any loans from T&G.
DIRECTORS’ REMUNERATION
The following persons held office as director during the year.
Remuneration paid or accrued included incentive payments,
vehicles, superannuation and other benefits, where applicable.
On top of fees, directors also receive an annual travel allowance
of $1,000.
12 MONTHS TO 31 DECEMBER 2020
DIRECTORS OF T&G$’000
Prof. K.J. Lutz45
C.A. Campbell (director fees)93
C.A. Campbell (Committee work)15
A. Helber36
R.J. Hewett (Director fees)93
R.J. Hewett (Committee work)15
R.T. Priske36
B.J. Mangold36
M.W. Liu (resigned on 24 June 2020)17
DIRECTORS AND OFFICERS COMPOSITION
At 31 December 2020 the gender composition of T&G’s directors
and officers was as follows:
MALEFEMALE
Directors51
Officers54
EMPLOYEE REMUNERATION
T&G paid remuneration including benefits in excess of
$100,000 to employees (other than directors) during the
12 months. The salary banding for the employees is disclosed
in the following table:
12 months to 31 December 2020
NUMBER OF EMPLOYEES
$’000 NZD EQUIVALENT20202019
100-1104345
110-1203633
120-1303122
130-1401722
140-1501819
150-1601617
160-1701910
170-18076
180-19069
190-200108
200-210104
210-22035
220-23072
230-24014
240-25031
250-26042
260-2703–
270-28013
280-29021
290-300–3
300-3102–
320-330–2
330-34011
340-35021
350-3601–
360-370–2
370-3801–
380-3901–
400-4101–
420-43022
440-45011
450-46011
460-47011
470-48012
480-4901–
570-5801–
1,260-1,2701–
1,300-1,399-1
Total255230
STATUTORY INFORMATION
The current year total remuneration spread takes into account
the impact of exchange rate movements on employees paid in
foreign currencies.
66 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
CEO REMUNERATION
The CEO remuneration consists of fixed
remuneration, short-term incentive and
long-term incentive.
Fixed remuneration
Mr Edgecombe received remuneration of
$1,074,271 during the 2020 Financial Year.
This amount includes employer kiwisaver
contributions, a vehicle allowance and a
short term incentive payment. His base
salary for 2020 was $914,940.
Short term incentive
Subject to the achievement of profitability
targets set by the Board at the start of
each year, Mr Edgecombe will be entitled
an annual bonus of up to 40% of base
salary.
This bonus can be over and underachieved
with a maximum payment of 150%.
Long term incentive (LTI)
Mr Edgecombe will be entitled to
participate in a LTI scheme set by the
Board, based on an earnings before
interest and tax growth plan. The
fulfilment of 100% of the goals under the
scheme will entitle Mr Edgecombe to a LTI
payment of 50% of his base salary.
From 2020, the LTI payment will partially
vest in year three (50%) and close out in
year five (50%). No bonus will be paid if
the achievement rate is less than 90% and
the maximum amount is capped at 150%.
DIRECTORS SHAREHOLDINGS
As at 31 December 2020, no current
directors or parties associated with
current directors held ordinary shares
(2019: nil).
There were no share transactions during
the year ended 31 December 2020 in
which directors held ‘relevant interests’.
INDEMNIFICATION AND
INSURANCE OF DIRECTORS
AND OFFICERS
The Company indemnifies all Directors
named in this report, and current and
former executive officers of T&G against
all liabilities (other than to the Company
or members of T&G) which arise out of
the performance of their normal duties
as Director or executive officer, unless the
liability relates to conduct involving lack of
good faith. To manage this risk, T&G has
indemnity insurance. The total cost of this
insurance including directors and officers
of offshore companies during the 12
months was $40,765 (2019: $38,500).
INFORMATION USED
BY DIRECTORS
No member of the Board of the Company,
or any subsidiary, issued a notice
requesting to use information received in
their capacity as director which would not
otherwise have been available to them.
INTERESTED TRANSACTIONS
No directors disclosed the existence of
any transactions with T&G during the 12
months in which they held an interest.
SUBSTANTIAL
SHAREHOLDERS
The following information is given
pursuant to Section 26 of the Security
Markets Act 1988.
The following parties are recorded by
the Company as at 28 January 2021
as substantial security holders in the
Company, and have declared the following
relevant interest in voting securities under
the Securities Markets Act 1988:
BayWa Aktiengesellschaft90,671,206
Wo Yang Limited24,496,386
The total number of voting securities
issued by the Company as at 28 January
2021 was 122,543,204.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 67
20 LARGEST SHAREHOLDERS
as at 28 January 2021
NAMEUNITS
% OF ISSUED
CAPITAL
BayWa Aktiengesellschaft 90,671,20673.99%
Wo Yang Limited 24,496,38619.99%
Bartel Holdings Limited 1,319,1541.08%
National Nominees New Zealand Limited 1,016,8300.83%
HSBC Nominees (New Zealand) Limited 400,6490.33%
R.J. Turner, C.E. Turner, Redoubt Trustees Limited & Evans Penell Trustees Limited 202,6890.17%
Tribal Nominees Limited 170,6610.14%
BNP Paribas Nominees (NZ) Limited 136,1650.11%
S.J. Turner, C.M. Turner & D.H. Turner 108,6960.09%
Tribal New Zealand Traders Limited 108,3740.09%
S.A. McCabe 105,2060.09%
L.R. Hotham101,4820.08%
A.E. Waite 100,8020.08%
FNZ Custodians Limited 100,4790.08%
TEA Custodians Limited Client Property Trust Account94,6560.08%
P.J.S. Rowland93,5070.08%
M.C. Goodson, D.D. Perron, Goodson & Perron Independent Trustee Limited 79,3390.06%
New Zealand Depository Nominee Limited 78,5050.06%
R.M. Scott 63,4940.05%
Penmaen Limited 60,0000.05%
Total119,508,28097.53%
68 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
SPREAD OF SECURITY HOLDERS
as at 28 January 2021
RANGE
TOTAL
HOLDERS
% OF TOTAL
HOLDERSUNITS
% OF ISSUED
CAPITAL
1 to 4997613.33%18,0300.01%
500 – 9997713.51%56,4310.05%
1,000 – 1,99911820.70%162,7950.13%
2,000 – 4,99911119.47%338,3810.28%
5,000 – 9,9997713.52%517,2660.42%
10,000 – 49,9998615.09%1,663,6121.36%
50,000 – 99,999111.93%747,9100.61%
100,000 – 499,999101.75%1,535,2031.25%
500,000 – 999,999––––
1,000,000 and above40.70%117,503,57695.89%
Total570100%122,543,204100%
DOMICILE OF SHAREHOLDERS
as at 28 January 2021
LOCATION
TOTAL
HOLDERS
% OF TOTAL
HOLDERSUNITS
New Zealand 54595.60%7,217,397
Australia 152.63%62,014
Hong Kong 30.53%24,502,941
Germany 20.35%90,703,154
Singapore 20.35%38,432
United Kingdom10.18%4,800
Malaysia 10.18%11,716
United States of America10.18%2,750
Total570100%122,543,204
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 69
INDEPENDENT
AUDITOR’S REPORT
TO THE SHAREHOLDERS OF T&G GLOBAL LIMITED
OpinionWe have audited the consolidated financial statements of T&G Global Limited and its subsidiaries (the
‘Group’), which comprise the consolidated balance sheet as at 31 December 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 76 to 134, present fairly,
in all material respects, the consolidated financial position of the Group as at 31 December 2020, and its
consolidated financial performance and its consolidated cash flows for the year then ended in accordance
with New Zealand Equivalents to International Financial Reporting Standards (‘NZ IFRS’) 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 the Auditor’s Responsibilities for the Audit of the Consolidated 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 Company 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 including the provision of audit related services and administration of
the corporate tax payer group of which the Group is a member, we have no relationship with or interests in
the Company or any of its subsidiaries. These services have not impaired our independence as auditor of the
Company and Group.
Audit materialityWe consider materiality primarily in terms of the magnitude of misstatement in the 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 (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.
We determined the materiality for the Group financial statements as a whole to be $7.0 million.
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 the consolidated financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
70 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
Key audit mattersHow our audit addressed the key audit matters
Biological asset valuations (Note 8)
The Group’s biological assets of $23.4 million (2019: $22.6
million) predominantly represent produce such as apples,
grapes, blueberries, citrus fruits and tomatoes, growing on
bearer plants (e.g. trees and vines) at balance date.
Biological assets are measured at fair value less estimated point-
of-sale costs. This is calculated by the Group using discounted
cash flow models.
The valuation of biological assets is a key audit matter due to
the subjective judgements and assumptions in the valuation
models, many of which are specific to the location of the asset
and therefore unobservable in the market. These unobservable
inputs and assumptions include the forecast production per
hectare per annum by weight, prices expected to be received,
costs expected to be incurred and a discount rate reflecting the
risks inherent in the crops.
The discount rate takes into account the risk of unknown
adverse events including natural events, the possible impact
of diseases and other adverse factors that may impact on the
quality, yield or price.
We held discussions with management to understand if there
were changes in market or environmental conditions, or other
risks inherent in the current crop valuations.
Our audit procedures were focused on the higher value
biological assets, or where in our professional judgement there
is a greater level of uncertainty associated with the cash flow
forecasts.
We engaged our internal valuation specialist to consider
whether the valuation methods applied were reasonable.
We compared the forecast production per hectare, forecast
prices, and forecast costs to the approved budgets for the
relevant fruit growing activities, and assessed the historical
accuracy of the Group’s forecasts.
With input from our internal valuation specialist we assessed
the discount rates assumed in the model and evaluated
changes from the prior year.
We also performed a sensitivity analysis to assess the impact
that a change in the discount rate would have on the valuation
of the biological assets.
We checked the mechanical accuracy of the discounted cash
flow models.
Property, plant & equipment valuations (Note 9)
Commercial and orchard land, improvements and buildings
(‘land and buildings’) of the Group amounting to $243.9
million (2019: $259.3 million) are measured at fair value less
accumulated depreciation and impairment losses at balance
date. Revaluations are performed with sufficient regularity to
ensure that the carrying amount does not differ materially from
the fair value.
As disclosed in Note 9, land and buildings were valued using a
combination of market comparison, income capitalisation and
depreciated replacement cost methodologies.
The valuation of land and buildings is a key audit matter
because changes to key assumptions used in the valuation
methods could have a material impact on the carrying amount
of land and buildings, with changes recognised in either other
comprehensive income or profit or loss, as appropriate.
Our procedures have focused on the appropriateness of
the valuation methodologies and the reasonableness of the
underlying inputs and assumptions.
We obtained an understanding of the Group’s process for
valuing the commercial land and buildings as at 31 December
2020.
We evaluated the independence and competence of the Group’s
external valuers engaged to perform the valuation of land and
buildings.
On a sample basis:
• We considered whether the underlying assumptions used by
the external valuers were consistent with our knowledge of
the properties in their specific locations; and
• We compared capitalisation rates used to market reports to
check that those rates were within reasonable range of those
market reports.
We also performed a sensitivity analysis to assess the
robustness of the methods used by the Group’s external valuers
on valuation of the land and buildings.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 71
Key audit mattersHow our audit addressed the key audit matters
Acquisition of Freshmax New Zealand (Note 11)
As disclosed in Note 11 T&G completed the acquisition of
Freshmax New Zealand’s domestic Fruit & Vegetable business
for $27.9 million on 30 April 2020.
On acquisition, the Group is required to identify the assets
and liabilities acquired in a business combination, including
intangible assets, and to measure them at fair value at the date
of acquisition. Goodwill arising is the excess of consideration
paid over the fair value of the assets and liabilities acquired. The
Group used discounted cash flow models to value the intangible
assets acquired. Management have identified intangible assets
of $6.8m and goodwill totalling $30.1m.
The Group allocated the goodwill to the T&G Fresh Markets
business unit as this is the business unit expected to benefit
from the synergies from the acquisition.
We have included the purchase price allocation as a key audit
matter because significant judgment and estimates are involved
in identifying and determining the fair value of the assets and
liabilities acquired and also the allocation of the goodwill.
In order to respond to the significant judgment involved in
identifying and valuing the intangible assets acquired we:
• Read the sales & purchase agreement to obtain an
understanding of the transaction and to evaluate whether
all identified assets and liabilities were recognised;
• Met with the Group to obtain an understanding of the
business process undertaken to identify and value the
assets acquired and liabilities assumed;
• Evaluated whether the identification, measurement and
recognition of the intangible assets are consistent with the
requirements of NZ IFRS 3 ‘Business Combinations’ and NZ
IAS 36 ‘Impairment of Assets’(‘NZ IAS 36’);
• Engaged our internal valuations specialist to challenge the
intangible assets identified, the valuation methodology
applied and the assumptions used in the intangible asset
valuations; and
• Challenged the Group’s approach to determining the
Cash Generating Units (‘CGUs’) that will benefit from the
acquisition and the basis for allocating goodwill across them
against the requirements of NZ IAS 36 ‘Impairment of Assets’
and our knowledge of the Group’s processes for monitoring
and reporting on their CGUs.
72 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
Other informationThe 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 useThis 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.
Andrew Dick, Partner
for Deloitte Limited
Auckland, New Zealand
1 March 2021
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 73
74 | T&G GLOBAL LIMITED ANNUAL REPORT 202074 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 75
CONTENTS
INCOME STATEMENT 76
STATEMENT OF COMPREHENSIVE INCOME 77
STATEMENT OF CHANGES IN EQUITY 78
BALANCE SHEET 79
STATEMENT OF CASH FLOWS 80
NOTES TO THE FINANCIAL STATEMENTS 82
GENERAL INFORMATION
1Basis of preparation82
2New accounting standards, amendments and interpretations84
FINANCIAL PERFORMANCE
3Segment information85
4Revenue from contracts with customers87
5Other income89
6Other expenses90
7Taxation92
OPERATING ASSETS
8Biological assets94
9Property, plant and equipment97
10Intangible assets102
FUNDING
11Business combination104
12Leases106
13Loans and borrowings109
14Net financing expenses110
15Capital and reserves110
16Earnings per share111
17Dividends111
18Reconciliation of liabilities arising from financing activities112
WORKING CAPITAL
19Trade and other receivables113
20Inventories116
21Trade and other payables116
GROUP STRUCTURE
22Investments in subsidiaries117
23Acquisition of non-controlling interest share in subsidiary120
24Investments in joint ventures120
25Investments in associates121
OTHER DISCLOSURES
26Investment property123
27Related party transactions124
28Financial risk management125
29Derivative financial instruments132
30Contingencies133
31Commitments133
32Events occuring after the balance date134
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 75
76 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
FOR THE YEAR ENDED 31 DECEMBER 2020
INCOME STATEMENT
NOTES
2020
$’000
2019
$’000
Revenue4
1,412,5901,216,409
Other operating income5
10,01914,299
Purchases, raw materials and consumables used
(1,086,876)(931,807)
Employee benefits expenses6
(177,458)(155,347)
Depreciation and amortisation expenses6
(45,879)(37,753)
Other operating expenses6
(80,020)(89,300)
Operating profit
32,37616,501
Financing income14
1,334748
Financing expenses14
(14,108)(14,084)
Share of profit from joint ventures24
6514
Share of profit from associates25
2,3573,302
Other income5
- 3,830
Profit before income tax
22,02410,311
Income tax expense 7
(5,434)(3,700)
Profit after income tax
16,5906,611
Attributable to:
Equity holders of the Parent
11,056901
Non-controlling interests
5,5345,710
Profit for the year
16,5906,611
Earnings per share (in cents)
Basic and diluted earnings16
9.00.7
The accompanying notes form an integral part of these financial statements.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 77
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTES
2020
$’000
2019
$’000
Profit for the year
16,5906,611
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss:
Gain on revaluation of property, plant and equipment:
Held by subsidiaries of the Group15
38,58257,481
Deferred tax effect on revaluation of property, plant and equipment15
(2,976)(10,505)
Deferred tax effect on sale of property, plant and equipment15
(61)6,988
35,54553,964
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
(3,861)(328)
Cash flow hedges:
Fair value gain / (loss), net of tax
14,420(4,854)
Reclassification of net change in fair value to profit or loss
(4,178)11,057
6,381
5,875
Other comprehensive income for the year
41,926
59,839
Total comprehensive income for the year
58,516
66,450
Total comprehensive income for the year is attributable to:
Equity holders of the Parent
53,563
60,407
Non-controlling interests
4,953
6,043
58,516
66,450
The accompanying notes form an integral part of these financial statements.
78 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
STATEMENT OF CHANGES IN EQUITY
NOTES
Share
capital
$’000
Revaluation
and other
reserves
$’000
Retained
earnings
$’000
Total
$’000
Non-
controlling
interests
$’000
Total
equity
$’000
2020
Balance at 1 January 2020
176,357111,623172,726460,70613,697474,403
Profit for the year
- -11,05611,0565,53416,590
Other comprehensive income / (expense)
Revaluation of property, plant and
equipment
15 -38,582 -38,582 -38,582
Deferred tax effect on revaluation of
property, plant and equipment
15 -(2,976) -(2,976) -(2,976)
Deferred tax effect on sale of property, plant
and equipment
15 -(61) -(61) -(61)
Exchange differences on translation of
foreign operations
15 -(3,288) -(3,288)(573)(3,861)
Movement in cash flow hedge reserve
15 -10,250 -10,250(8)10,242
Total other comprehensive income /
(expense)
-42,507 -42,507(581)41,926
Transactions with owners
Dividends
17 - -(7,353)(7,353)(5,441)(12,794)
Acquisition of non-controlling interest's
share in subsidiary
23 - -(309)(309)(62)(371)
Total transactions with owners
- -(7,662)(7,662)(5,503)(13,165)
Transfer from asset revaluation reserve due
to asset disposal
15 -(40,841)40,841 - - -
Balance at 31 December 2020
176,357113,289216,961506,60713,147519,754
2019
Balance at 1 January 2019
176,357 109,330 114,612 400,299 13,321 413,620
Profit for the year
- - 901 901 5,710 6,611
Other comprehensive income / (expense)
Revaluation of property, plant and
equipment
- 57,481 - 57,481 - 57,481
Deferred tax effect on revaluation of
property, plant and equipment
15 - (10,505) - (10,505) - (10,505)
Deferred tax effect on sale of property,
plant and equipment
- 6,988 - 6,988 - 6,988
Exchange differences on translation of
foreign operations
- (648) - (648) 320 (328)
Movement in cash flow hedge reserve
15 - 6,190 - 6,190 13 6,203
Total other comprehensive income
- 59,506 - 59,506 333 59,839
Transactions with owners
Dividends
17 - - - -(5,667)(5,667)
Total transactions with owners
- - - -(5,667)(5,667)
Transfer from asset revaluation reserve due
to asset disposal
15 -(57,213)57,213 - - -
Balance at 31 December 2019
176,357111,623172,726460,70613,697474,403
The accompanying notes form an integral part of these financial statements.
FOR THE YEAR ENDED 31 DECEMBER 2020
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 79
BALANCE SHEET
NOTES
2020
$’000
2019
$’000
Current assets
Cash and cash equivalents44,664
36,208
Trade and other receivables
19
184,948
188,574
Inventories
20
39,666
28,316
Taxation receivable9,942
11,842
Derivative financial instruments
29
14,832
3,929
Biological assets
8
23,449
22,633
Total current assets
317,500
291,502
Non-current assets
Trade and other receivables
19
17,087
21,575
Derivative financial instruments
29
6,561
4,035
Deferred tax assets
7
1,166
1,804
Investments in unlisted entities87
93
Property, plant and equipment
9
392,700
386,079
Right-of-use assets
12
119,198
60,066
Investment property
26
13,500
15,000
Intangible assets
10
77,842
38,576
Investments in joint ventures
24
3,347
4,006
Investments in associates
25
31,753
31,496
Total non-current assets
663,242
562,730
Total assets
980,742
854,232
Current liabilities
Trade and other payables
21
179,098
174,744
Loans and borrowings
13
24,729
6,557
Lease liabilities
12
21,282
13,547
Taxation payable1,861
2,025
Derivative financial instruments
29
1,547
1,680
Total current liabilities
228,517
198,553
Non-current liabilities
Trade and other payables
21
1,320
42
Loans and borrowings
13
76,400
84,895
Lease liabilities
12
102,457
48,016
Derivative financial instruments
29
5,623
5,617
Deferred tax liabilities
7
46,671
42,706
Total non-current liabilities
232,471
181,276
Total liabilities
460,988
379,829
Equity
Share capital
15
176,357
176,357
Revaluation and other reserves
15
113,289
111,623
Retained earnings216,961
172,726
Total equity attributable to equity holders of the Parent
506,607
460,706
Non-controlling interests
13,147
13,697
Total equity
519,754
474,403
Total liabilities and equity980,742854,232
Approved for and on behalf of the Board
Prof. K.J. Lutz C.A. Campbell
Director (Chairman) Director (Chair of Finance, Risk and Investment Committee)
1 March 2021 1 March 2021
The accompanying notes form an integral part of these financial statements.
AS AT 31 DECEMBER 2020
80 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
STATEMENT OF CASH FLOWS
NOTES
2020
$’000
2019
$’000
Cash flows from operating activities
Cash was provided from:
Cash receipts from customers1,442,418 1,220,136
Other71 406
Cash was disbursed to:
Payments to suppliers and employees
(1,374,939)
(1,152,104)
Interest paid
(10,997)
(10,959)
Income taxes paid
(272)
(6,470)
Net cash inflow from operating activities56,281 51,009
Cash flows from investing activities
Cash was provided from:
Dividends received from joint ventures and associates2,4307,617
External loan repayments from suppliers, customers, associates and joint
ventures
2,808
-
Sale of other property, plant and equipment
60562
Cash acquired with business
605
-
Sale of Nayland Road site
1250,514
-
Sale of coolstore and packhouse -9,918
Sale of kiwifruit post-harvest and orchard assets -9,774
Sale of Mt. Wellington site -65,000
Cash was disbursed to:
Purchase of property, plant and equipment9(41,193)(36,422)
Purchase of intangible assets10(5,584)(3,106)
Purchase of Freshmax NZ Limited
11(27,904)
-
Purchase of non-controlling interest's share in subsidiary
23(371)
-
Loans to suppliers, customers, associates and joint ventures(449)(15,657)
Net cash (outflow) / inflow from investing activities
(18,539)
37,186
Cash flows from financing activities
Cash was provided from:
Net proceeds from short-term borrowings22,6001,364
Proceeds from long-term borrowings48,953 -
Loans from related party -5,000
Cash was disbursed to:
Dividends paid to non-controlling interests17(5,441)(5,667)
Dividends paid to Parent's shareholders17(7,353) -
Repayment of long-term borrowings(56,512)(65,094)
Repayment of related party loan
(5,270)
-
Repayment of lease liabilities(21,658)(21,242)
Bank facility fees and transaction fees(3,311)(3,303)
Net cash outflow from financing activities18(27,992)(88,942)
Net increase / (decrease) in cash and cash equivalents9,750(747)
Foreign currency translation adjustment(1,294)177
Cash and cash equivalents at the beginning of the year36,20836,778
Cash and cash equivalents at the end of the year
44,664
36,208
The accompanying notes form an integral part of these financial statements.
FOR THE YEAR ENDED 31 DECEMBER 2020
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 81
STATEMENT OF CASH FLOWS (CONTINUED)
RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH FLOW FROM OPERATING ACTIVITIES
NOTES
2020
$’000
2019
$’000
Profit for the year
16,5906,611
Adjusted for non-cash items:
Amortisation expense6
2,672
1,470
Depreciation expense6
43,207
36,283
Movement in deferred tax7
882
(3,951)
Movement in expected credit loss allowance1,837293
Share of profit of joint ventures24
(65)
(14)
Share of profit of associates25
(2,357)
(3,302)
Other movements
(1,422)
3,106
44,75433,885
Adjusted for investing and financing activities:
Bank facility and line fees
3,311
3,303
Gain on sale of kiwifruit post-harvest and orchard assets5
-
(3,137)
Gain on sale and leaseback of cool store5
-
(693)
Net gain from reversal of previous property, plant and equipment
revaluation changes through profit and loss
5
(13)(4,419)
Loss on disposal of other property, plant and equipment6
2,8382,327
Fair value adjustment of investment property26
1,500
316
Impairment of loans to associates
921
791
8,557(1,512)
Impact of changes in working capital items net of effects of non-cash
items, and investing and financing activities
Decrease / (increase) in debtors and prepayments
6,278
(35,915)
(Increase) / decrease in biological assets
(816)
5,552
(Decrease) / increase in creditors and provisions(9,468)49,012
Increase in inventories
(11,350)
(3,801)
Decrease / (increase) in net taxation receivable
1,736
(2,823)
Total(13,620)12,025
Net cash inflow from operating activities56,28151,009
The accompanying notes form an integral part of these financial statements.
82 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
GENERAL INFORMATION
This section describes the principles and general accounting
policies used in the preparation of the financial statements.
Accounting policies that relate to specific line items on the income
statement and balance sheet are described in their respective
notes.
1. BASIS OF PREPARATION
REPORTING ENTITY AND STATUTORY BASE
T&G Global Limited (the Parent) and its subsidiary companies (the
Group), are recognised as one of New Zealand’s leading grower,
distributor, marketer and exporter of premium fresh produce. Key
categories for the Group include apples, grapes, berries, citrus
(lemons, mandarins and navel oranges) and tomatoes.
These consolidated financial statements presented are for the
Group which comprises the Parent and its subsidiaries, joint
ventures and associates as at 31 December 2020.
The Parent is registered in New Zealand under the Companies Act
1993 and is a FMC Reporting Entity under the Financial Market
Conducts Act 2013, and the Financial Reporting Act 2013.
The Parent is a limited liability company incorporated and
domiciled in New Zealand and is listed on the New Zealand Stock
Exchange. The address of its registered office is 1 Clemow Drive,
Mount Wellington, Auckland.
BayWa Aktiengesellschaft (the Ultimate Parent) is the ultimate
parent of the Group and is based in Munich, Germany.
STATEMENT OF COMPLIANCE
These consolidated financial statements have been prepared in
accordance with New Zealand Generally Accepted Accounting
Practice (NZ GAAP). They comply with New Zealand equivalents
to International Financial Reporting Standards (NZ IFRS) and
other applicable New Zealand Financial Reporting Standards
as appropriate for profit-oriented entities, and International
Financial Reporting Standards (IFRS). These consolidated financial
statements are prepared in accordance with the requirements of
the Financial Markets Conduct Act 2013.
These consolidated financial statements are expressed in New
Zealand dollars which is the presentation currency of the Group.
All financial information has been rounded to the nearest
thousand ($'000) unless otherwise stated.
MEASUREMENT BASIS
The measurement basis adopted in the preparation of these
consolidated financial statements is historical cost except for
certain assets and liabilities, identified in specific accounting
policies, which are stated at fair value.
BASIS OF CONSOLIDATION
In preparing these consolidated financial statements, subsidiaries
are fully consolidated from the date on which the Group gains
control until the date on which control ceases. All intercompany
transactions, balances, income and expenses between the Group’s
companies are eliminated.
Accounting policies of subsidiaries, joint ventures and associates
have been aligned where necessary to ensure consistency with
policies adopted by the Group.
The Group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition of
a subsidiary is the fair value of the assets transferred, the liabilities
incurred to the former owners of the acquiree and the equity
interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement.
Identifiable assets acquired, and liabilities and contingent liabilities
assumed in a business combination are measured initially at fair
value at the acquisition date. The Group recognises any non-
controlling interest in the acquiree on an acquisition-by-acquisition
basis, either at fair value or at the non-controlling interest’s
proportionate share of the recognised amounts of the acquiree’s
identifiable assets.
Acquisition related costs are expensed as incurred. If the business
combination is achieved in stages, the acquisition date fair value
of the Group's previously held equity interest in the acquiree is
initially remeasured at fair value at the acquisition date through
profit or loss.
Goodwill is initially measured as the excess of the aggregate of the
consideration transferred and the amount of any non-controlling
interest and fair value of the Group's previously held interest
(if any) over the net identifiable assets acquired and liabilities
assumed. If this consideration is lower than the fair value of the
net assets of the subsidiary acquired, the difference is recognised
in profit or loss.
BASIS OF ACCOUNTING
Significant accounting policies are set out within the notes to
which those policies are applicable and are designated with a
symbol. All other significant accounting policies are set out on the
following page.
FOREIGN CURRENCY TRANSLATION
The assets and liabilities of the Group’s subsidiaries that do not
have New Zealand dollars as their functional currency are translated
to New Zealand dollars at foreign exchange rates ruling at balance
sheet date. The revenues and expenses of these foreign operations
are translated to New Zealand dollars at rates approximating the
foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from the translation of foreign
operations are recognised in other comprehensive income and
accumulated in the foreign currency translation reserve.
Non-monetary assets and liabilities that are measured at historical
cost in a foreign currency are translated using the exchange rate
on the date of the transaction. Non-monetary assets and liabilities
denominated in foreign currencies that are stated at fair value are
translated to New Zealand dollars at the foreign exchange rate on
the dates that the fair value was determined.
FAIR VALUE ESTIMATION
Where fair value measurement has been applied, a symbol
designates the paragraph describing the valuation method used.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 83
1. BASIS OF PREPARATION (continued)
FAIR VALUE ESTIMATION (CONTINUED)
The Group uses various valuation methods to determine the fair
value of certain assets and liabilities. The inputs to the valuation
methods used to measure fair value are categorised into three
levels:
• Level 1: Quoted prices (unadjusted) in active markets for
identical assets or liabilities.
• Level 2: Inputs other than quoted prices included within level 1
that are observable for the asset or liability, either directly (that
is, as prices) or indirectly (that is, derived from prices).
• Level 3: Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs).
GOODS AND SERVICES TAX (GST)
The income statement, statement of comprehensive income
and statement of cash flows have been presented with all items
exclusive of GST. All items in the balance sheet are stated net
of GST, except for receivables and payables, which include GST
invoiced.
CRITICAL ACCOUNTING ESTIMATES AND
JUDGMENTS
The Group makes estimates and judgments concerning the future.
The resulting accounting estimates may, by definition, not equal
the related actual results. The estimates and judgments that have
a potential risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are discussed within the notes to which those judgments are
applicable and are designated with a
symbol.
Area of estimate
and judgement
Note
Fair value of biological assetsNote 8 Biological assets
Valuation of property, plant
and equipment
Note 9 Property, plant
and equipment
Carrying value of intangible
assets
Note 10 Intangible assets
Fair value of acquired assets and
liabilities
Note 11 Business
combination
Calculation of lease liabilitiesNote 12 Leases
Valuation of investment
property
Note 26 Investment
property
COVID-19 PANDEMIC
On 11 March 2020 the World Health Organisation declared
a global pandemic as a result of the outbreak and spread of
COVID-19.
To combat the spread of the virus in New Zealand, the New
Zealand Government moved the country into a full lockdown of
non-essential services from Wednesday 25 March 2020 – Monday
27 April 2020 which impacted the operations of the Group.
As the rate of virus spread in New Zealand slowed, lockdown
measures eased between Tuesday 28 April 2020 and Tuesday 12
May 2020 allowing for more activity to resume. Social distancing
measures continued easing until Tuesday 9 June when normal
activity resumed.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Auckland re-entered into partial lockdown between Wednesday
12 August 2020 to Sunday 30 August 2020, while the rest of the
country remained at normal operational activity.
These lockdowns have not significantly impacted the Group's
operations.
The Group operates and trades internationally through its
overseas subsidiaries. While the response to the COVID-19
pandemic differed from country to country, the Group did
not experience significant downturns in trading in its foreign
operations with trading remaining strong in Asia, Europe and
North America.
The Group has assessed the impact of COVID-19 on items on the
balance sheet, specifically considering the carrying value of items
held at fair value, or where management judgement is applied
in the valuation of an asset or liability. This assessment is based
on information available at the time of preparing these financial
statements.
TRADE RECEIVABLES
The Group did not see a significant increase in local customer
default during the lockdown or post-lockdown period to 31
December 2020. There were also no significant increases in
instances of customer default in the Group’s international
customer base during this time. Because of this, there were
no material changes in the inputs used in the recalculation of
the Group’s allowance for expected credit losses, namely the
Probability of Default and the Loss Given Default.
The recalculation showed no additional allowances for expected
credit losses were required at 31 December 2020 and the carrying
value of trade receivables is assessed as appropriate.
The Group continues to monitor customer activity and any
changes that may affect the allowance for expected credit losses
and the carrying value of trade receivables.
INVENTORY
The Group noted no significant impact on ageing of inventory or
inventory written off during the lockdown period. There has been
a normal turnaround of produce in the domestic market, and
produce is still able to be moved internationally despite logistical
challenges. Once fruit is in-market internationally, the Group’s
current experience is that produce can still be moved given the
demand for fresh produce and sale of produce internationally is
occurring.
The carrying value of inventories at 31 December 2020 is assessed
as appropriate.
CARRYING VALUE OF COMMERCIAL LAND
AND BUILDINGS, AND ORCHARD LAND AND
IMPROVEMENTS, AND INVESTMENT PROPERTY
The Group holds these assets at fair value with valuations
provided by independent valuers.
84 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1. BASIS OF PREPARATION (continued)
CARRYING VALUE OF COMMERCIAL LAND
AND BUILDINGS, AND ORCHARD LAND AND
IMPROVEMENTS, AND INVESTMENT PROPERTY
(CONTINUED)
In assessing the carrying value of property, the most recent
valuations carried out during the 2020 financial year has not
uncovered any indicators of impairment at 31 December 2020
and the carrying value of commercial land and buildings, orchard
land and improvements, and investment property is assessed as
appropriate at balance date.
The Group continues to monitor market trends on an ongoing
basis and any impact these may have on the carrying value of
these assets.
CARRYING VALUE OF BIOLOGICAL ASSETS
The carrying value of biological assets at 31 December 2020
represents initial growing costs incurred to grow the upcoming
season’s apple crop, and the fair value of citrus and tomatoes. The
fair values of citrus and tomatoes are based on expected volume
yields and forecasted market prices based on current market
evidence at 31 December 2020.
The valuation of apples relies on unobservable inputs such as
Export Prices per Tray Carton Equivalent (TCE), volumes of TCE’s
per hectare, and a risk adjusted discount rate. Assessments on
the carrying value of the Group's apple crop has not indicated
COVID-19 to have negatively impacted these inputs at 31
December 2020. Because of this, the carrying value of these assets
is considered appropriate at 31 December 2020.
GOODWILL
The carrying value of goodwill was assessed to consider the
impacts of COVID-19. This was done using discounted cash flow
(DCF) models as described in Note 10. Assumptions used in the
DCF model reflected forecasted impacts of COVID-19 on the
profitability of the Group’s cash-generating units to which goodwill
is allocated.
The calculations at 31 December 2020 supported the carrying
value of goodwill. The Group continues to monitor market
conditions on an ongoing basis and any impact these may have on
the carrying value of goodwill.
INVESTMENTS IN ASSOCIATES AND JOINT
VENTURES
Carrying values of the Group’s material investments in associates
and joint ventures were assessed to consider the impact of
COVID-19 on these investees. In the year ended 31 December
2020, most investees have returned positive share of income to
the Group, and reviews of forecasted profitability have indicated
no significant downturns in trading that would give rise to
indicators of impairment.
The carrying value of material investments in associates and joint
ventures is assessed as appropriate at 31 December 2020.
BORROWINGS
The Group’s seasonal and term debt facilities are subject to a number
of externally imposed bank financial covenants. These covenants
are calculated monthly and reported to the banks on a monthly and
quarterly basis. As an essential service provider, the Group traded
during the lockdown period and generated the required cashflow and
earnings to meet its covenants at 31 December 2020.
The Group’s seasonal facilities have been repaid before the end of the
financial year, and the Group’s classification of its term borrowings as
non-current liabilities is appropriate at 31 December 2020.
2. NEW ACCOUNTING STANDARDS, AMENDMENTS AND
INTERPRETATIONS
NEW STANDARDS, AMENDMENTS AND
INTERPRETATIONS ADOPTED IN THE CURRENT
YEAR
Amendment to NZ IAS 1 Presentation of Financial
Statements (NZ IAS 1)
NZ IAS 1 prescribes the basis for the presentation of general
purpose financial statements to ensure the comparability of financial
information. The amendments to this standard are effective for
annual periods beginning on or after 1 January 2020 with the purpose
to clarify the existing NZ IAS 1 disclosure requirements relating to
materiality and structure of the notes to the financial statements.
Consequential amendments have been made to NZ IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors, NZ IAS 10 Events
after the Reporting Period and NZ IAS 37 Provisions, Contingent Liabilities
and Contingent Assets to clarify the definition of material.
Information is material if omitting, misstating or obscuring it could
reasonably be expected to influence decisions that the primary users
of general purpose financial statements make on the basis of those
financial statements. Materiality depends on the nature or magnitude
of information, or both, either individually or in combination with
other information.
For the structure of the notes to the financial statements,
the amendments clarify that it should be presented in a
systematic manner by taking into consideration the effect on the
understandability and comparability of financial statements.
The Group early adopted the amendments prospectively in the
2019 financial year. In terms of materiality, the disclosure of the
information in financial statements for the Group has not changed
as a result of the adoption of these amendments to the standards.
Notes to the financial statements have been grouped under the
following categories:
• Financial performance• Working capital
• Operating assets• Group structure
• Funding• Other disclosures
Other standards, amendments and interpretations
There are other standards, amendments and interpretations which
have been approved but are not yet effective. The Group expects
to adopt other standards when they become mandatory. None
are expected to materially impact the Group's financial statements
although may result in change in disclosure.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 85
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
3. SEGMENT INFORMATION
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-makers. The
chief operating decision-makers have been identified as the Chief Executive Officer, the Chief Financial Officer and the Business Leads of
the Group.
The chief operating decision-makers assess the performance of the operating segments based on operating profit, which reflects earnings
before financing income and expenses, share of profit from joint ventures and associates, other income, other expenses and income
tax expense. Inter-segment pricing is determined on an arm’s length basis and segment results include items directly attributable to a
segment.
No single external customer’s revenue accounts for 10% or more of the Group’s revenue.
OPERATING SEGMENTS
The Group comprises the following main operating segments:
OPERATING SEGMENTSIGNIFICANT OPERATIONS
ApplesGrowing, packing, cool storing, selling and marketing of apples worldwide.
International Trading
International trading activities other than apples. Major markets are Asia, Australia and the Americas.
Product is sourced from New Zealand, Australia, North America, South America and Europe.
T&G Fresh
Growing, trading and transport activities within New Zealand and exports to the Pacific. This
incorporates the New Zealand wholesale markets, the newly acquired Freshmax New Zealand Limited
business, and the tomato and citrus growing operations.
OtherIncludes property and corporate costs.
In line with the Group’s strategy to focus on its core business, Processed Foods is no longer considered a main operating segment for the
Group in 2020. Results from the business units that previously formed this segment have been included in the International Trading and
Other operating segment in the current year. There have been other changes made to the composition of business segments to reflect
the Group’s internal reporting. Prior year segment results have been re-presented to ensure consistency with the current year.
Segment information provided to the chief operating decision-makers for the reportable segments is shown in the following tables:
FINANCIAL PERFORMANCE
This section explains the performance of the Group and details the contributions made by the Group’s operating segments. It also
describes how the Group earns its revenue and addresses other areas that impact on profitability such as other income, other
expenses, and taxation.
Apples
$'000
International
Trading
$'000
T&G Fresh
$'000
Other
$'000
Total
$'000
2020
Total segment revenue
947,338
199,392
370,546930
1,518,206
Inter-segment revenue
(72,111)
(20,676)
(12,829) - (105,616)
Revenue from external customers
875,227
178,716
357,7179301,412,590
Purchases, raw materials and consumables used(695,568)(168,679)(222,564)(65)(1,086,876)
Depreciation and amortisation expenses(20,170)(776)(22,433)(2,500)(45,879)
Net other operating expenses(107,382)(6,935)(94,316)(38,826)(247,459)
Segment operating profit / (loss)52,1072,32618,404(40,461)32,376
Financing income1,334
Financing expense(14,108)
Share of profit from joint ventures65
Share of profit from associates2,357
Profit before income tax
22,024
86 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
3. SEGMENT INFORMATION (CONTINUED)
Apples
$'000
International
Trading
$'000
T&G Fresh
$'000
Other
$'000
Total
$'000
2019 (restated)
Total segment revenue742,583232,179288,9121501,263,824
Inter-segment revenue(35,576)(5,643)(6,196) - (47,415)
Revenue from external customers707,007226,536282,7161501,216,409
Purchases, raw materials and consumables used(558,497)(205,160)(168,142)(8)(931,807)
Depreciation and amortisation expenses(17,875)(840)(16,765)(2,273)(37,753)
Net other operating expenses(97,161)(19,677)(78,802)(34,708)(230,348)
Segment operating profit / (loss)33,47485919,007
(36,839)16,501
Financing income
748
Financing expense
(14,084)
Share of profit from joint ventures
14
Share of profit from associates
3,302
Other income
3,830
Profit before income tax
10,311
The Group is domiciled in New Zealand. The total revenues from external customers in New Zealand and other regions are:
2020
$'000
2019
$'000
New Zealand331,894245,437
Australia and Pacific Islands101,310118,587
Asia355,898386,995
Americas87,64984,760
Europe
535,839380,630
Total
1,412,5901,216,409
The total non-current assets other than trade and other receivables, derivative financial instruments, deferred tax assets and investment
in unlisted entities located in New Zealand and other countries are:
2020
$'000
2019
$'000
New Zealand
583,730481,560
Other
54,61053,663
Total
638,340535,223
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 87
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Apples
$'000
International
Trading
$'000
T&G Fresh
$'000
Other
$'000
Total
$'000
2020
Nature of revenue
Sale of produce
813,072173,136287,198 -1,273,406
Commissions
20,9152,46521,294 -44,674
Services
32,8403,11549,22593086,110
Royalties
8,400 - - -8,400
Revenue from external customers
875,227178,716357,7179301,412,590
Timing of revenue recognition
At a point in time
Sale of produce
813,072173,136287,198 -1,273,406
Commissions
20,9152,46521,294 -44,674
Services
23,3353,11549,21093076,590
Royalties
8,400 - - -8,400
865,722178,716357,7029301,403,070
Over time
Services
9,505 -15 -9,520
9,505 -15 -9,520
Revenue from external customers
875,227178,716357,7179301,412,590
The Group records revenue from the following sources:
Sale of produce
Revenue from the sale of produce is recognised either on dispatch or when the produce has reached its destination,
depending on the terms and agreements with customers and when there is supporting evidence that control and ownership
of the produce has transferred to the customer.
Commissions
The Group acts as an agent in certain revenue generating transactions where it facilitates the sale of produce into markets
and customers. Commission revenue is recognised in these instances when there is supporting evidence that control and
ownership of goods have transferred to the end-customer.
Services
The Group derives the majority of its service revenue through the provision of cool storage and packing services during the
growing and selling seasons. Revenue from the provision of services is recognised simultaneously as the services are being
performed over the length of the contract or at a point-in-time depending on the specifics of the contract.
Royalties
The Group recognises revenue from royalties when actual sales of the Group’s licenced apple varieties occur.
Principal and agency arrangements
The Group holds arrangements in which it acts as the principal and other arrangements in which it acts as the agent. The
following factors have been used by the Group in distinguishing whether it acts as the principal or the agent in specific
arrangements:
• Primary responsibility for fulfilling the promise to provide the goods or services to the end-customer.
• Inventory risk before goods are transferred to the end-customer.
• The discretion to establish the price of goods and services above.
4. REVENUE FROM CONTRACTS WITH CUSTOMERS
88 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
4. REVENUE FROM CONTRACTS WITH CUSTOMERS (CONTINUED)
(1)
Prior year segment results have been re-presented to ensure consistency in the composition of business segments to reflect the Group's internal
reporting. Refer to Note 3.
Apples
$'000
International
Trading
$'000
T&G Fresh
$'000
Other
$'000
Total
$'000
2019 (restated)
(1)
Nature of revenue
Sale of produce
650,756223,005224,414 -1,098,175
Commissions
17,4782,53721,462 -41,477
Services
30,84599436,61815068,607
Royalties
7,928 -222 -8,150
Revenue from external customers
707,007226,536282,7161501,216,409
Timing of revenue recognition
At a point in time
Sale of produce
650,756223,005224,414 -1,098,175
Commissions
17,4782,53721,462 -41,477
Services
22,89799436,60515060,646
Royalties
7,928 -222 -8,150
699,059226,536282,7031501,208,448
Over time
Services
7,948 -13 -7,961
7,948 -13 -7,961
Revenue from external customers
707,007226,536282,7161501,216,409
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 89
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Other income consists of the following non-operating activities:
2020
$'000
2019
$'000
Gain on sale of kiwifruit post-harvest and orchard assets - 3,137
Gain on sale and leaseback of cool stores - 693
Total-3,830
5. OTHER INCOME
OTHER INCOME
The Group recognised income from other operating and non-operating activities during the year.
Other operating income consists of the following:
NOTES
2020
$'000
2019
$'000
Net exchange gains580 -
Net gain from changes in fair value of biological assets85,6986,439
Net gain from reversal of previous property, plant and equipment
revaluation changes through profit and loss
134,419
Rent - others2,0951,451
Rent from subleases1,1201,457
Other513533
Total10,01914,299
Net exchange gains do not include a net realised foreign exchange gain of $2.3 million (2019: $12.8 million) recognised as part of
revenue and purchase, raw materials and consumables used. The total impact of exchange differences in the current financial year
was a net gain of $2.9 million (2019: $5.1 million).
90 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES
2020
$'000
2019
$'000
Depreciation of property, plant and equipment
9
20,79020,409
Depreciation of right-of-use assets
12
22,41715,874
Amortisation
10
2,6721,470
45,87937,753
Other operating expenses
Other operating expenses includes the following:
NOTES
2020
$'000
2019
$'000
Directors' remuneration
27
386386
Fleet costs10,13511,515
Net exchange losses - 7,657
Net loss on disposal of property, plant and equipment2,8382,327
Professional fees13,64313,196
Promotion costs8,0149,437
Rental and property related costs15,35413,592
Repairs and maintenance10,7599,405
Research and development2,0471,624
Travel and accommodation2,1094,747
EMPLOYEE BENEFITS EXPENSES
Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement
as incurred.
Short-term employee benefits
Employee entitlements to salaries and wages and annual leave, to be settled within twelve months of the reporting
date, represent present obligations resulting from employees’ services provided up to the reporting date, calculated at
undiscounted amounts based on remuneration rates that the Group expects to pay.
During the year, contributions of $4.1 million were made by the Group towards employees’ superannuation schemes (2019: $3.9 million).
AUDIT FEES
Audit fees of the Group and related services from the Group’s auditors consist of the following:
2020
$’000
2019
$’000
Deloitte Limited and affiliated firms
Audit of the financial statements
613676
Audit related services
99
Other services
2039
Other auditors
Audit services provided
612412
Other services
134100
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
6. OTHER EXPENSEs
DEPRECIATION AND AMORTISATION EXPENSES
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 91
6. OTHER EXPENSES (CONTINUED)
AUDIT FEES (CONTINUED)
Services performed by Deloitte Limited in 2020 comprise the following:
• Audit of statutory financial statements for the Group and individual subsidiary companies, including offshore subsidiaries with local
statutory audit requirements where Deloitte Limited, or a member of its network, is the auditor.
• Audit related services including procedures relating to the interim financial statements.
• Review of solvency return for a captive insurance subsidiary.
• Other services including whistleblower hotline services and administration of the corporate tax payer group.
During the year, subsidiaries of the Group engaged other auditors to perform audit services and the fees paid were as follows:
2020
$’000
2019
$’000
BDO for Delica (Shanghai) Fruit Trading Company Limited1013
Burgess Hodgson LLP for Worldwide Fruit Limited10389
HLB Mann Judd for Delica Australia Pty Limited, Delica Domestic Pty Limited, T&G
Vizzarri Farms Pty Limited
17861
Hutchinson and Bloodgood LLP for Delica North America, Inc.110137
Moss Adams LLP for ENZAFRUIT Products Inc.7686
JPAC for T&G South East Asia Limited13526
Total
612412
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
92 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
Income tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the relevant taxation
authorities based on the current period’s taxable income and any adjustments in respect of previous years.
Deferred tax
Deferred tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes.
Income tax is recognised in the income statement apart from when it relates to items recognised directly in other
comprehensive income or equity, in which case it is recognised in other comprehensive income or equity.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
7. TAXATION
(A) TAXATION ON PROFIT BEFORE INCOME TAX
2020
$’000
2019
$’000
Current tax expense
(4,552)(7,651)
Deferred tax (expense) / credit
(882)3,951
Total
(5,434)(3,700)
(B) RECONCILIATION OF PRIMA FACIE TAXATION AND TAX EXPENSE
The taxation expense that would arise at the standard rate of corporation tax in New Zealand is reconciled to the tax expense as follows:
2020
$’000
2019
$’000
Profit before income tax
22,024
10,311
Prima facie taxation at 28% (2019: 28%)
(6,167)
(2,887)
(Add) / deduct tax effect of:
Non-deductible items
(1,778)
(2,812)
Effect of tax rates in non New Zealand jurisdictions
1,533
883
Tax on share of joint ventures' and associates' profits
551
683
Recognition of losses previously not recognised
-
203
Deferred tax assets not recognised
(1,308)
(861)
Reinstatement of tax base on depreciable buildings in New Zealand1,173-
Adjustments in respect of prior periods
276
(48)
Unutilised foreign tax credits not available for future periods
(99)
(1,078)
Non-taxable items
247
2,217
Other
138
-
Total
(5,434)
(3,700)
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 93
7. TAXATION (CONTINUED)
(C) DEFERRED TAXATION
Balance of temporary differences
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Property,
plant and
equipment
$'000
Intangible
assets
$'000
Biological
assets
$'000
Provisions
and
accruals
$'000
Unrelieved
trading
losses
$'000
Other
$'000
Total
$'000
2019
Balance as at 1 January(44,533)(1,701)(7,892)1,36510,5543,222(38,985)
Recognised in income statement prior
year
4,434(341)(393)482870(3,859)1,193
Recognised in income statement1,597391,605957(1,422)(18)2,758
Recognised in equity(3,517) - - 84(2,501)58(5,876)
Foreign exchange movements(13)(12) - (3)3518
Balance as at 31 December
(42,032)(2,015)(6,680)2,8857,536(596)(40,902)
2020
Balance as at 1 January
(42,032)(2,015)(6,680)2,8857,536(596)
(40,902)
Additions through business acquisition177(1,879) - 332 - - (1,370)
Recognised in income statement prior
year
(84)
- 24(165)(960) -
(1,185)
Recognised in income statement
5,124
150(393)1,548(5,889)(237)303
Recognised in equity
(3,037)
- - - - 499(2,538)
Recognised in equity prior year
-
- - - - 278278
Foreign exchange movements16(16) - (6)(85) - (91)
Balance as at 31 December
(39,836)(3,760)(7,049)4,594602(56)
(45,505)
Net deferred tax balance of $45.5 million (2019: $40.9 million) is represented by deferred tax assets of $1.2 million (2019: $1.8 million)
and deferred tax liabilities of $46.7 million (2019: $42.7 million).
Expected settlement
2020
$’000
2019
$’000
Deferred tax (liabilities) / assets expected to be settled within 12 months(2,318)3,741
Deferred tax liabilities expected to be settled in more than 12 months(43,187)(44,643)
Total(45,505)(40,902)
(D) IMPUTATION CREDITS
The Group had a negative imputation credit account balance of $2.3 million as at 31 December 2020 (2019: $0.6 million positive balance)
and the Group will be making a voluntary payment before 31 March 2021 to ensure the balance is in credit at that time.
94 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
OPERATING ASSETS
This section describes the assets used to operate the business and generate revenue for the Group. Operating assets include biological
assets, property, plant and equipment, and intangible assets.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
8. BIOLOGICAL ASSETS
Biological assets consists of unharvested fruit growing on bearer plants, and are stated at fair value based on their present
location and condition less estimated point-of-sale costs. Any gain or loss from changes in the fair value of biological assets is
recognised in the income statement.
Point-of-sale costs include all other costs that would be necessary to sell the assets.
The fair value of the Group's apples, grapes, berries, citrus fruit and tomatoes are determined by management using a
discounted cash flow approach.
Costs are based on current average costs and referenced back to industry standard costs. The costs are variable depending on
the location, planting and the variety of the biological asset. A suitable discount rate has been determined in order to calculate
the present value of those cash flows. The fair value of biological assets at or before the point of harvest is based on the value of
the estimated market price of the estimated volumes produced, net of harvesting and growing costs. Changes in the estimates
and assumptions supporting the valuations could have a material impact on the carrying value of biological assets and reported
profit.
The following significant assumptions and considerations have been taken into account in determining the fair value of the
Group’s biological assets:
• Forecasts for the following year based on management’s view of projected cash flows, including sales and margins,
adjusted for inflation, location and variety of crops.
• The Group has unhedged projected cash flows from sales in foreign currencies. These have been translated to the Group’s
functional currency at average exchange rates sourced from financial institutions based on forecasted sales profiles.
• Discount rates to adjust for risks inherent to the crop, including natural events, disease or any other adverse factors that
may impact the quality, yield or price.
• Any significant changes to management of the crop in the current and following year.
Valuation Process
Within the Group’s finance team are individuals who work closely with the Group’s key biological asset categories during the
year. These finance team members are also responsible for performing valuations of the Group’s biological assets for financial
reporting purposes.
Discussions of valuation processes and results are held between the Chief Financial Officer and the finance team at least once
every six-months in line with the Group’s reporting requirements.
The main level 3 inputs used by the Group are derived and evaluated as follows:
• Production yields, including tray carton equivalents per hectare and tonnes per hectare, are determined based on historical
production trends for each orchard and forecasted expected yields based on the underlying age and health of the
orchards.
• Annual gate prices represent management’s assessment of expected future returns for the biological assets based on
historical trends, current market pricing, and known market factors at balance date.
• Discount rates are determined by reference to historical trends and loss events, and an assessment of the time value of
money and any risks specific for the current crop being valued.
The fair value of biological assets and the level 3 inputs to the fair value model are analysed at the end of each reporting period
as part of the half-yearly discussion held with the Chief Financial Officer.
As part of the analysis the level 3 inputs are reviewed and assessed for reasonableness with reference to current market
conditions. The calculated fair value of biological assets is also reviewed to determine if it is a fair reflection of management’s
expected returns for each crop type.
The cash outflows used in the fair value calculation include notional cash flows for land and bearer plants owned by the Group.
They are based on market rent payable for orchards of similar size.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 95
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
8. BIOLOGICAL ASSETS (CONTINUED)
Apples
$'000
Tomatoes
$'000
Citrus
$'000
Grapes
$'000
Blueberries
$'000
Total
$'000
2019
Balance at 1 January
23,873 2,180 1,733 - 399 28,185
Capitalised costs
28,505 1,655 5,661 7,313 902 44,036
Change in fair value less costs to sell
3,196 3,555 (59) - (253) 6,439
Decrease due to harvest
(37,214)(5,536)(5,358)(6,702)(1,217)(56,027)
Balance at 31 December 18,360 1,854 1,977 611 (169) 22,633
2020
Balance at 1 January 18,360 1,854 1,977 611 (169) 22,633
Capitalised costs 31,267 - 5,982 692 1,796 39,737
Change in fair value less costs to sell 2,077 3,327 272 - 22 5,698
Decrease due to harvest(31,860)(3,708)(6,497)(1,303)(1,251)(44,619)
Balance at 31 December
19,844 1,473 1,734 - 398 23,449
96 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
8. BIOLOGICAL ASSETS (CONTINUED)
FAIR VALUE MEASUREMENT
Techniques applied by the Group which are used to value biological assets are considered to be level 3 in the fair value
hierarchy. Inputs are not based on observable market data (that is, unobservable inputs). There have been no transfers between
levels during the year.
The unobservable inputs used by the Group to fair value its biological assets are detailed below:
PRODUCE
UNOBSERVABLE INPUTS
RANGE OF UNOBSERVABLE INPUTS
20202019
Apples
Tray carton equivalent (TCE) per hectare per annum
Weighted average TCE per hectare per annum
Export prices per export TCE
Weighted average export prices per export TCE per annum
Risk-adjusted discount rate
1,170 to 5,500
2,335
$10 to $71
$35.39
35%
1,400 to 6,500
3,366
$10 to $70
$35.19
25%
Tomatoes
Tonnes per hectare per annum
Weighted average tonnes per hectare per annum
Annual price per kilogram (kg) per season
Weighted average price per kg per season
Risk-adjusted discount rate
159 to 582
435
$1.34 to $18.98
$3.53
25%
171 to 628
431
$1.49 to $18.78
$3.60
25%
Citrus
Tonnes per hectare per annum
Weighted average tonnes per hectare per annum
Annual gate price per tonne per season
Weighted average gate price per tonne per season
Risk-adjusted discount rate
36
36
$750 to $2,570
$2,139
14%
29
29
$950 to $2,670
$1,888
14%
Blueberries
Tonnes per hectare per annum
Weighted average tonnes per hectare per annum
Annual gate price per kg per season
Weighted average gate price per kg per season
Risk-adjusted discount rate
6.3
6.3
$8.50 to $18.50
$17.67
18%
6.5
6.5
$8.50 to $16.92
$16.50
18%
As the yield per hectare and gate price or export price per TCE increases, the fair value of biological assets increases. As the discount rate
used increases, the fair value of biological asset decreases.
For the Group’s apples crop, an increase of 5% in the discount rate would decrease the crop’s fair value by $0.4 million. A decrease of 5%
in the discount rate would increase the fair value of crop by $0.5 million.
For the Group’s tomatoes, citrus, and blueberry crops, an increase or decrease of 5% in the discount rate would not have a material
impact on the fair value of the crop.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 97
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
8. BIOLOGICAL ASSETS (CONTINUED)
RISK
Being involved in agricultural activity, the Group is exposed to financial risks arising from adverse climatic or natural events. Financial
risk also arises through adverse changes in market prices or volumes harvested, and adverse movements in foreign exchange rates.
Price risk is minimised by close monitoring of commodity prices and factors that influence those commodity prices. The Group also
takes reasonable measures to ensure that harvests are not affected by climatic and natural events, disease, or any other factors that
may negatively impact on the quality and yield of crop. Foreign currency risk is mitigated by using derivative instruments such as
foreign currency hedging contracts to hedge foreign currency exposure.
ACTIVITY ON PRODUCTIVE OWNED AND LEASED LAND
The productive owned and leased land growing different types of biological assets and by agricultural product types are detailed in the
table below:
HECTARES
PRODUCTION UNITS
2020201920202019Unit Measure
Apples
7397791,603,1471,622,308
TCE
Tomatoes
282812,372,77112,248,314
kg
Citrus
901013,223,0012,644,000
kg
Grapes
115130340,000270,414
kg
Blueberries
111169,71173,182
kg
9. PROPERTY, PLANT AND EQUIPMENT
Commercial land and improvements, orchard land and improvements, and buildings are stated at their fair value less
accumulated depreciation and impairment losses. All other items of property, plant and equipment are stated at their cost
less accumulated depreciation and impairment losses.
Revaluations
The Group’s policy is to revalue commercial land and improvements, orchard land and improvements, and buildings every
three years with valuations being performed by independent registered valuers based on the price that would be received to
sell the asset in an orderly transaction between market participants under current market conditions. Valuation assessments
are performed earlier than every three years if market evidence suggests that property values have moved materially since
the time of the last valuation assessment.
All property valuers used are members of the New Zealand Institute of Valuers, with the exception of the valuers appointed
in Belgium, Peru and the United Kingdom who have the appropriate expertise as required in those jurisdictions.
The revaluations are conducted on a systematic basis across the Group so that the asset revaluations are performed with
sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined
using fair value at balance date. Where valuations are not obtained for land and improvements, and buildings, the carrying
values of these assets are reassessed for any material change.
Any increase in value that offsets a previous decrease in value of the same asset is charged to the income statement.
Any other increase is recognised directly in other comprehensive income and accumulated in the asset revaluation reserve.
Any decrease in value that offsets a previous increase in value of the same asset is charged against the asset revaluation
reserve. Any other decrease in value is charged to the income statement.
98 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
9. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Depreciation
Depreciation of property, plant and equipment, other than commercial and orchard land which is not depreciated, is calculated
on a straight-line basis so as to expense the cost of the assets, or the revalued amounts, to their expected residual values over
their useful lives as follows:
• Commercial land improvements 15 to 50 years
• Orchard land improvements 15 to 50 years
• Buildings 15 to 50 years
• Bearer plants 7 to 40 years
• Glasshouses 33 years
• Motor vehicles 5 to 7 years
• Plant and equipment and hire containers 3 to 15 years
Impairment
Items of property, plant and equipment are assessed for indicators of impairment at each reporting date. Impairment losses
are recognised in profit or loss in the period in which they arise.
Commercial
land and
improvements
$'000
Orchard
land and
improvements
$'000
Buildings
$'000
Bearer
plants
$'000
Glasshouses
$'000
Motor
vehicles
$'000
Plant and
equipment
and hire
containers
$'000
Work in
progress
$'000
Total
$'000
At 1 January 2019
Cost or valuation
69,39166,999156,56534,15127,8546,613153,03128,751543,355
Accumulated depreciation and
impairment
(1,768)(1,439)(12,846)(6,649)(11,788)(4,367)(107,952) - (146,809)
Net carrying amounts
67,62365,560143,71927,50216,0662,24645,07928,751396,546
Year ended 31 December 2019
Opening net carrying amounts
67,62365,560143,71927,50216,0662,24645,07928,751396,546
Additions
5021408355,253614324,25424,94536,422
Reclassifications
596 - 1,483170 - - 4,273(6,522) -
Depreciation
(1,376)(669)(5,915)(1,597)(1,105)(595)(9,152) - (20,409)
Disposals
(41,259)(3,901)(29,925)(2,484) - (124)(3,349)(7,380)(88,422)
Revaluations
18,50318,50211,913 - - - - 24649,164
Depreciation write back on
revaluations
2,3938259,369 - - - - - 12,587
Foreign exchange movements
6435250(376) - 3860120191
Closing net carrying amounts
47,04680,492131,72928,46815,0221,99741,16540,160386,079
At 31 December 2019
Cost or valuation
47,39481,705140,88336,54727,9156,487140,57640,160521,667
Accumulated depreciation
and impairment
(348)(1,213)(9,154)(8,079)(12,893)(4,490)(99,411) - (135,588)
Net carrying amounts
47,04680,492131,72928,46815,0221,99741,16540,160386,079
Year ended 31 December 2020
Opening net carrying amounts
47,04680,492131,72928,46815,0221,99741,16540,160386,079
Additions
2431591,039178452,0589,75127,72041,193
Additions through business
acquistion
- - 1,063 - - 22,3101043,479
Reclassifications
1,1331,1361,73013,951 - 135,009(22,972)-
Depreciation
(1,211)(759)(6,540)(1,644)(962)(647)(9,027) - (20,790)
Disposals
(16,695)(756)(33,699)(1,122) - (131)(1,227)(992)(54,622)
Revaluations
12,193 - 12,426 - - - - 10824,727
Depreciation write back on
revaluations
869 - 13,296 - - - - - 14,165
Foreign exchange movements
(69)(375)(530)(849) - 92749(1,531)
Closing net carrying amounts
43,50979,897120,51438,98214,1053,30148,25544,137392,700
At 31 December 2020
Cost or valuation
43,87681,828125,24849,27527,9607,552151,19544,137531,071
Accumulated depreciation
and impairment
(367)(1,931)(4,734)(10,293)(13,855)(4,251)(102,940) - (138,371)
Net carrying amounts
43,50979,897120,51438,98214,1053,30148,25544,137392,700
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 99
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
REVALUATIONS
The methods and valuation techniques used for assessing the current market value of commercial land and improvements,
orchard land and improvements, buildings, and investment property by external valuers are disclosed on the following page.
Changes in the estimates and assumptions underlying the valuation approaches could have a material effect on the carrying
amounts of the properties, with changes in value reflected either in other comprehensive income or through the income
statement as appropriate in accordance with the Group’s accounting policy.
The following table presents the valuers and valuation techniques of the most recent valuation of the Group's commercial land and
improvements, buildings, and investment property carried out between October to December 2020. Overall uplift from the revaluation
of property amount to $38.9 million. Refer to Note 26 for the result of the revaluation of investment property.
PROPERTYVALUER
Depreciation replacement cost / discounted cash flow / income capitalisation approach
29 Stuart Road, PukekoheTelfer Young
5125 Roxburgh-Ettrick Road, Ettrick, RoxburghTelfer Young
490 Nayland Road, Nelson
Telfer Young
Depreciation replacement cost / market comparison approach
153 Harrisville Road, Tuakau, WaikatoTelfer Young
292 Harrisville Road, Tuakau, Waikato Telfer Young
133 Lynd Road, Ohaupo, WaipaTelfer Young
3057 Broadlands Road, Broadlands, RotoruaTelfer Young
655 Main Road, Riwaka, MotuekaTelfer Young
Depreciation replacement cost / market comparison approach / income capitalisation
approach
241 Evenden Road, Twyford, HastingsLogan Stone
22-32 Whakatu Road, Whakatu, HastingsLogan Stone
2 Anderson Road, Whakatu, HastingsLogan Stone
Income capitalisation approach / market comparison approach
20 Mihaere Drive, Roslyn, Palmerston NorthTelfer Young
Market comparison approach
37 Goodall Road, Riwaka, MotuekaTelfer Young
3800 Sint-Truiden, BelgiumVangronsveld & Vranken
Apple Way, Pinchbeck, Spalding, United KingdomJones Lang LaSalle
9. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
100 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PRINCIPAL VALUATION APPROACH AND DESCRIPTION OF APPROACH
RELATIONSHIPS OF UNOBSERVABLE INPUTS TO
FAIR VALUE
Depreciation replacement cost approach
This approach involves assessing the replacement cost of building and site
improvements, adjusting this cost for depreciation and any obsolescence
and the market value of land.
The higher the replacement cost after adjustments,
the higher the fair value.
Discounted cash flow approach
This approach is based on the future projection of rental income cash flows
discounted back to their present value, with inputs which include:
• Discount rates with a range from 8.5% to 9.5% The higher the discount rate, the lower the fair value.
• Terminal yield rates with a range from 7.75% to 10.5%
The higher the terminal yield rate, the lower the fair
value.
• Investment horizon of 10 years
The longer the investment horizon, the higher the fair
value.
• Rental growth estimated at between 0.1% to 9.3% per annum.
The higher the rental growth rate, the higher the fair
value.
Income capitalisation approach
This approach capitalises the actual contract and / or potential income at
an appropriate market derived rate of return. Capitalisation rates applied
range from 6.5% to 9.3%.
The higher the capitalisation rate, the lower the fair
value.
Market comparison approach
This approach analyses comparable sales evidence to a sale price per
square metre of floor area and makes adjustment to these rates to reflect
differences in the location, size and quality of the buildings, together with
an adjustment for any market movement since the sales occurred.
The higher the sale price per square metre after
adjustments, the higher the fair value.
The following table presents the valuers and valuation techniques of the most recent valuation of the Group’s orchard land and
improvements, carried out in 2019 between October and December.
PROPERTYVALUER
Depreciation replacement cost / market comparison approach
Kerikeri orchards, KerikeriLogan Stone
Apollo orchards, Heretaunga Plains, Hawke's BayLogan Stone
2 Anderson Road, WhakatuLogan Stone
66 Trotter Road, Twyford, HastingsLogan Stone
Ormond Road, Twyford, HastingsLogan Stone
Raupare Road, Twyford, HastingsLogan Stone
Tambo Grande District, Sullana Province, Piura, PeruInvalsa
657 Main Road, Riwaka, MotuekaLogan Stone
99 Swamp Road, Riwaka, MotuekaLogan Stone
83 Swamp Road, Riwaka, MotuekaLogan Stone
101 Motueka River West Bank Road, Brooklyn, MotuekaLogan Stone
The principal valuation approaches used by the valuers during their valuations of commercial land and improvements, orchard land and
improvements, and buildings, and the impact of a change in a significant unobservable valuation input are described below.
9. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 101
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
9. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
LAND AND BUILDINGS AT HISTORICAL COST
If land and buildings were carried under the cost model, their carrying amounts would be as follows:
2020
$’000
2019
$’000
Commercial land and improvements
Cost 20,81420,995
Accumulated depreciation and impairment(5,599)(6,541)
Net carrying amount
15,21514,454
Orchard land and improvements
Cost 63,93963,068
Accumulated depreciation and impairment(21,087)(20,368)
Net carrying amount
42,85242,700
Buildings
Cost 95,034111,421
Accumulated depreciation and impairment(34,350)(38,071)
Net carrying amount
60,68473,350
FAIR VALUE MEASUREMENT
Techniques applied by the Group which are used to value certain classes of property, plant and equipment are considered to
be level 3 in the fair value hierarchy. Inputs are not based on observable market data (that is, unobservable inputs). There have
been no transfers between levels during the year.
The following values represent fair value at the time of valuation, plus additions and less disposals and accumulated depreciation,
since the date of valuations. Management have assessed that these values represent fair value.
2020
$’000
2019
$’000
Commercial land and improvements
43,50947,046
Orchard land and improvements
79,89780,492
Buildings
120,514131,729
Total
243,920259,267
102 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
10. INTANGIBLE ASSETS
Intangible assets, except for goodwill acquired by the Group, are stated at cost less accumulated amortisation and impairment
losses.
Software, licences and capitalised costs of developing systems are recorded as intangible assets, unless they are directly related
to a specific item of hardware and recorded as property, plant and equipment, and are amortised over a period of 3 to 8 years.
Acquired brands are amortised over their anticipated useful lives of 10 to 25 years where they have a finite life.
Goodwill is recorded at cost less any accumulated impairment losses. Goodwill and any other intangible assets with indefinite
useful lives are tested for impairment at each balance date.
Goodwill
$’000
Software
$’000
Plant variety
rights
$’000
Other
intangibles
$’000
Total
$’000
At 1 January 2019
Cost20,81622,6014,63710,06758,121
Accumulated amortisation - (16,489)(3,678)(1,357)(21,524)
Net carrying amounts20,8166,1129598,71036,597
Year ended 31 December 2019
Opening carrying amounts20,8166,1129598,71036,597
Additions - 3,0132913,106
Amortisation - (1,051)(6)(413)(1,470)
Disposals - (50) - (5)(55)
Foreign exchange movements3247 - 67398
Net carrying amounts21,1408,0319558,45038,576
At 31 December 2019
Cost21,14025,5714,6389,63060,979
Accumulated amortisation - (17,540)(3,683)(1,180)(22,403)
Net carrying amounts21,1408,0319558,45038,576
Year ended 31 December 2020
Opening carrying amounts21,1408,0319558,45038,576
Additions - 4,5256783815,584
Additions through business acquisition30,05747 - 6,71236,816
Reclassifications - 61 - (61) -
Amortisation - (1,315)(53)(1,304)(2,672)
Disposals - (458)(139) - (597)
Foreign exchange movements(225)401(9)(32)135
Net carrying amounts50,97211,2921,43214,14677,842
At 31 December 2020
Cost50,97229,8521,60922,787105,220
Accumulated amortisation
- (18,560)(177)(8,641)(27,378)
Net carrying amounts
50,97211,2921,43214,14677,842
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 103
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
10. INTANGIBLE ASSETS (CONTINUED)
IMPAIRMENT TESTS FOR GOODWILL
The discount rate used for the purposes of goodwill impairment testing is based on a calculated weighted average cost of capital
adjusted for risks specific to the cash-generating units. The weighted average cost of capital is based on the cost of debt and cost
of equity weighted accordingly between the relative percentages of debt and equity. The cost of debt is the actual cost of debt
and the cost of equity is calculated using the capital asset pricing model.
Goodwill held by the Group relates to acquisitions of Status Produce Limited, the Delica Group (including cash-generating units of Delica
Limited, Delica Australia Pty Limited and T&G Vizzarri Farms Pty Limited), Worldwide Fruit Limited and Freshmax New Zealand Limited.
During the year the Group reorganised its reporting structure in a way that changed the composition of the Delica Limited cash-
generating unit. Goodwill that was previously allocated to the Delica Limited cash-generating unit has been reallocated to the T&G
Covered Crops cash-generating unit and the ENZAFruit New Zealand Limited cash-generating unit. That Status Produce Limited cash-
generating unit was amalgamated into the T&G Fresh business and is represented in the T&G Fresh - Covered Crops cash-generating unit.
GOODWILL
2020
$’000
2019
$’000
Delica Limited-2,104
ENZAFruit New Zealand Limited1,395-
Delica Australia Pty Limited3,3123,223
T&G Fresh - Covered Crops8,6997,989
T&G Fresh - Markets
30,057
-
T&G Vizzarri Farms Pty Limited1,6201,576
Worldwide Fruit Limited
5,889
6,248
Total
50,972
21,140
The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations
require the use of estimates as to future profitability of the relevant cash-generating units to which goodwill has been allocated
and the choice of a suitable discount rate in order to calculate the present value of those cash flows.
The key assumptions used for the value-in-use calculations are as follows:
EBIT growth rateDiscount rateTerminal growth rate
202020192020201920202019
Cash-generating units
Delica Limited
-
2.00%
-11.00%-
2.00%
ENZAFruit New Zealand Limited
1.50%
-
9.50%-1.50%
-
Delica Australia Pty Limited
1.50%
2.00%
9.50%11.00%1.50%
2.00%
T&G Fresh - Covered Crops
1.50%
2.00%
9.50%11.00%1.50%
2.00%
T&G Fresh - Markets
1.50%
-
9.50%-1.50%
-
T&G Vizzarri Farms Pty Limited
1.50%
2.00%
9.50%11.00%1.50%
2.00%
Worldwide Fruit Limited
1.50%
2.00%
11.90%13.00%1.50%
2.00%
The calculations support the carrying amount of recorded goodwill. Management believes that any reasonable change in the key
assumptions used in the calculations would not cause the carrying amount to exceed its recoverable amount.
104 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
11. BUSINESS COMBINATION
SUMMARY OF ACQUISITION
The carrying values of assets and liabilities have been assessed by management as being fair value at acquisition date.
Management judgement is applied in determining the Cash Generating Unit that will benefit from the acquisition and the basis
for allocating goodwill. The fair value of intangible assets acquired have been determined by management using a discounted
cash flow approach with the following assumptions:
• Contract length and associated renewals
• Long-term growth rate
• Future profitability, forecasted revenue growth and expected cost base
• Suitable discount rate to calculate present vaue of cash flows
On 17 December 2019, the Group announced the acquisition of 100% of the share capital of Freshmax New Zealand Limited (Freshmax
NZ), subject to a number of conditions. These conditions were satisfied on 2 April 2020 with the acquisition being approved by the New
Zealand Commerce Commission on the same date. The Group completed the acquisition on 30 April 2020.
Freshmax NZ consists of three market sites and distribution services throughout New Zealand. A large proportion of Freshmax NZ's
business is the sale of fresh produce and provision of distribution services to its customers which is complementary to the Group's T&G
Fresh business.
Freshmax NZ was acquired to grow the Group's domestic fresh produce business and supply chain. The acquisition will bring enhanced
trading and strong ongoing supply relationships in key categories.
The acquisition qualifies as a business combination as defined in NZ IFRS 3.
Freshmax NZ contributed $72.2 million to revenue and $3.3 million to the Group’s profit for the period between the date of acquisition
and the reporting date.
If the acquisition of Freshmax NZ had been completed on the first day of the financial year, the Group’s revenue for the year would have
been $1.5 billion and profit after income taxwould have been $18.6 million.
Goodwill of $30.1 million arose from the acquisition of Freshmax NZ because the purchase price included amounts relating to its future
profitability expectations, forecast revenue growth, future market development, and synergies with existing Group operations. These
benefits are not recognised separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets.
None of the goodwill is expected to be deductible for income tax purposes. Goodwill is allocated to the T&G Fresh - Markets business unit
(refer to Note 10).
The gross value of trade and other receivables acquired is $5.2 million which also represents the fair value of trade and other receivables.
At acquisition date, it is estimated that all amounts are collectable. The fair value of other identifiable assets and liabilities is assessed as
their carrying value at 30 April 2020.
Acquistion related costs of $0.9 million have been excluded from the consideration transferred and recognised in 'Other operating
expenses' in the income statement for the year ended 31 December 2020.
FUNDING
This section focuses on how the Group funds its operations and manages its capital structure.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 105
30 Apr 2020
$'000
Current assets
Cash and cash equivalents
605
Trade and other receivables
5,204
Inventories
1,506
Derivatives financial instruments
14
Total current assets
7,329
Non-current assets
Deferred tax assets
509
Property, plant and equipment
3,479
Right-of-use assets
20,987
Intangible assets
6,759
Total non-current assets
31,734
Current liabilities
Trade and other payables
(16,724)
Employee entitlements
(1,084)
Lease liabilities
(3,137)
Total current liabilities
(20,945)
Non-current liabilities
Employee entitlements
(3)
Lease liabilities
(18,389)
Deferred tax liabilities
(1,879)
Total non-current liabilities
(20,271)
Total identifiable net assets
(2,153)
Goodwill on acquisition
30,057
Total consideration
27,904
Total consideration is comprised of:
Cash paid
27,904
Total consideration transferred
27,904
PURCHASE CONSIDERATION - CASH OUTFLOW
30 Apr 2020
$'000
Net cash outflow arising on acquisition
Cash consideration
30,000
Less: Working capital adjustment
(2,096)
Total consideration transferred
27,904
Less: Cash and cash equivalent balances acquired
(605)
Net outflow of cash from investing activities
27,299
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
11. BUSINESS COMBINATION (Continued)
Below is an analysis of the identifiable assets acquired and liabilities assumed at the acquisition date.
106 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
12. LEASES
The Group as a lessee
The Group leases certain property, plant and equipment. The Group recognises a right-of-use asset and a corresponding lease
liability with respect to all lease arrangements in which it is the lessee, except for short-term leases and leases of low-value
assets where the Group recognises the lease payments as an other operating expense on a straight-line basis over the term of
the lease.
Right-of-use (ROU) assets
ROU assets comprise of the initial measurement of the corresponding lease liability, lease payments made at or before the
commencement date and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and
impairment losses.
Wherever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located
or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and
measured under NZ IAS 37 Provisions, Contingent Liabilities and Contingent Asset. The costs are included in the related ROU asset,
unless those costs are incurred to produce inventories.
ROU assets are depreciated over the shorter period of lease term and useful life of the underlying asset. The estimated
useful lives of ROU assets are determined on the same basis as similar owned assets within property, plant and equipment.
Depreciation starts at the commencement date of the lease.
The Group applies NZ IAS 36 Impairment of Assets to determine whether a ROU asset is impaired and accounts for any identified
loss under the same policy adopted for property, plant and equipment.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and ROU asset.
The related payments are recognised as an expense in the period in which the event or condition that triggers those payments
occurs and are included in other operating expenses in the income statement.
Lease liabilities
Lease liabilities are initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental
borrowing rate (IBR).
Lease payments included in the measurement of the lease liability comprise:
• Fixed lease payments, less any lease incentives;
• Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement
date;
• The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
• Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
Lease liabilities are presented as a separate line in the balance sheet and are subsequently measured by increasing the carrying
amount to reflect interest on the lease (using the effective interest method) and reducing the carrying amount to reflect the
lease payments made.
The Group remeasures the lease liability if:
• The lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease
liability is remeasured by discounting the revised lease payments using a revised discount rate;
• Lease payments change due to changes in an index or rate, in which case the lease liability is remeasured by discounting the
revised lease payments using the initial discount rate; or
• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability
is remeasured by discounting the revised lease payments using a revised discount rate.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 107
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
12. LEASES (CONTINUED)
Key judgement areas include:
• The discount rates applied; and
• The assessment of whether options to extend or terminate a lease will be exercised.
Discount rates used include the Group's incremental borrowing rates (IBR). The Group's IBR is the average of the borrowing
rates obtained from financial institutions as if the Group had purchased the leased asset, with the term of the borrowing similar
to the lease term. The weighted average rate applied for each leased asset class are:
• Property 5.22%
• Glasshouses 5.22%
• Orchard land 5.22%
• Motor vehicles 6.01%
• Plant and equipment 6.18%
The assessment of whether a lease contract will be extended or terminated at the end of the lease contract is dependent on
the asset class and type. For property leases, this will be determined by the Group's intention to exercise a contractual right
of renewal at the end of the initial lease term. For motor vehicles, an extension of two months has been applied to all vehicles
expiring in the current financial year as this is the average time taken to either return the vehicle to the lessor, or to extend the
lease contract.
The Group has applied the following practical expedients when entering into a new lease:
• The use of a single discount rate to a portfolio of leases with similar characteristics;
• Not recognising ROU assets and liabilities for leases with a term of less than 12 months;
• Not recognising ROU assets and liabilities if the underlying leased asset is considered a low-value asset; and
For short-term leases (lease term of 12 months or less) and leases of low-value assets, the Group has opted to recognise a
lease expense on a straight-line bases as permitted by NZ IFRS 16. This expense is presented within other operating expenses
in the income statement.
RIGHT-OF-USE ASSETS
Orchard
land
$'000
Property
$'000
Glasshouses
$'000
Motor
vehicles
$'000
Plant and
equipment
$'000
Total
$'000
2019
As at 1 January 2019
15,976 22,448 3,507 14,923 1,60658,460
Additions1,033 9,022 1,071 7,107 2,22720,460
Terminations (net)
(89)(2,618)(2)(326) - (3,035)
Depreciation expense
(1,975)(4,525)(914)(7,896)(564)(15,874)
Foreign exchange movements
- 13 - 301255
As at 31 December 2019
14,94524,3403,66213,8383,28160,066
2020
As at 1 January 2020
14,945 24,340 3,662 13,838 3,28160,066
Additions
5,83139,601 - 14,0881,14160,661
Additions through business
acquisition
- 19,738 - 1,249 - 20,987
Terminations (net)
- - - (29) - (29)
Depreciation expense
(1,905)(10,257)(1,049)(8,303)(903)(22,417)
Foreign exchange movements
- (26) - (40)(4)(70)
As at 31 December 2020
18,87173,3962,61320,8033,515119,198
108 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
12. LEASES (Continued)
LEASE LIABILITIES - MATURITY ANALYSIS
2020
$’000
2019
$’000
Lease liabilities
Less than one year
21,28213,547
Between one and five years
47,63528,463
More than five years
54,82219,553
Total lease payable
123,73961,563
Current
21,28213,547
Non-current
102,45748,016
The Group leases various items of property, plant and equipment under non-cancellable operating leases expiring within 3 months to
26 years. The leases have varying terms and with no renewal option to purchase in respect of the leased operating plant and equipment
in the financial year ended 31 December 2020.
SALE AND LEASEBACK
On 23 December 2020, the Group completed a transaction to sell and leaseback its post-harvest operations, packhouse, and coolstores
at 484 Nayland Road, Nelson. The site was sold for $50.5 million to Property Income Fund Limited, a fund established by Willis Bond, and
the sale continues the Group's strategy of releasing capital for reinvestment in business growth.
The Nayland Road site has an initial lease term of 15 years with two further rights of renewal, the first right for a period of 7 years and
the second right for a period of 5 years. The Group has recognised a right-of-use asset from the leaseback of the Nayland Road site
based on a 15 year lease term, representing the initial assessment that the site will be occupied for a period of 15 years.
Total right-of-use asset additions recognised from the leaseback of the property amounted to $28.3 million. Proceeds from the sale
of the site and associated lease payments are included in the statement of cash flows. No gain on sale was recognised in the income
statement as the uplift from the sale and leaseback transaction was recognised directly in retained earnings.
AMOUNTS RECOGNISED IN THE INCOME STATEMENT
NOTES
2020
$’000
2019
$’000
Expenses
Depreciation of right-of-use assets622,41715,874
Interest on lease liabilities5,1813,190
Short-term leases
3,2384,067
Leases of low-value assets
594592
The total cash outflow for leases in 2020 was $21.7 million (2019: $21.2 million).
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 109
SECURITY AND BANK FACILITIES
As at 31 December 2020 the Group had a term debt facility from the Bank of New Zealand, HSBC, Rabobank and Westpac amounting
to $140.0 million (2019: $160.0 million), subject to certain cancellation obligations in respect of proceeds from recent asset sales. The
seasonal facility is renewed annually and is not drawn as at 31 December 2020. $22.7 million of the money market facility was drawn as
at 31 December 2020. These facilities are secured by a guarantee from the Ultimate Parent for no consideration.
The banking facilities for the 2021 year are as follows:
Amount
$’000Expiry date
Banking facilities in New Zealand
Term debt facility
140,000
27 Feb 2023
Seasonal facility
90,000
30 Nov 2021
Money market facility
40,000
27 Feb 2023
Overdraft facility
3,000
Uncommited
Banking facilities in the United Kingdom
Term debt facility
2,442
31 Mar 2022
Term debt facility
4,187
28 Jul 2025
Banking facilities in Australia
Overdraft facility
3,319
Uncommited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
INTEREST RATES
As at 31 December 2020 the weighted average interest rate on the secured and unsecured borrowings is 1.8% (2019: 2.8%), fixed for
periods up to 3 months.
2020
$’000
2019
$’000
Secured and unsecured borrowings repayment schedule
Within one year24,7296,557
Between one and two years76,40084,895
Total101,12991,452
13. LOANS AND BORROWINGS
Borrowings are recognised initially at fair value less directly attributable transaction costs. Subsequent to initial recognition,
borrowings are stated at amortised cost using the effective interest method.
2020
$’000
2019
$’000
Current
Secured borrowings 24,729 1,364
Loans from related party - 5,193
Total 24,729 6,557
Non-current
Secured borrowings 76,400 84,895
Total 76,400 84,895
110 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
15. CAPITAL AND RESERVES
SHARE CAPITAL
2020
shares
2019
shares
2020
$'000
2019
$'000
Balance at 31 December122,543,204122,543,204176,357176,357
All ordinary shares on issue are fully paid and have no par value. All ordinary shares rank equally with one vote attached to each fully
paid ordinary share. There are no other classes of shares issued and no ordinary shares were issued during the year.
REVALUATION AND OTHER RESERVES
2020
$’000
2019
$’000
Asset revaluation reserve
Balance at 1 January
115,519118,768
Gain on revaluation of property, plant and equipment
38,58257,481
Deferred tax effect on revaluation of property, plant and equipment
(2,976)(10,505)
Transfer to retained earnings due to sale of property, plant and equipment
(40,841)(57,213)
Deferred tax effect on sale of property, plant and equipment
(61)6,988
Balance at 31 December
110,223115,519
Foreign currency translation reserve
Balance at 1 January
(4,118)
(3,470)
Exchange differences on translation of foreign operations
(3,288)
(648)
Balance at 31 December
(7,406)
(4,118)
14. NET FINANCING EXPENSES
2020
$’000
2019
$’000
Finance income
Interest income1,334748
Total1,334748
Finance expenses
Interest expense on borrowings(8,836)(10,950)
Effective interest on long-term receivables(108)(117)
Interest expense on lease liabilities(5,181)(3,190)
Capitalised interest315581
Bank fees(298)(408)
Total(14,108)(14,084)
Net financing expenses(12,774)(13,336)
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 111
15. CAPITAL AND RESERVES (CONTINUED)
REVALUATION AND OTHER RESERVES (CONTINUED)
2020
$’000
2019
$’000
Cash flow hedge reserve
Balance at 1 January
222(5,968)
Movements in fair value
17,447(2,492)
Reclassification of net change in fair value
(4,170)11,044
Taxation on reserve movements
(3,027)(2,362)
Balance at 31 December
10,472222
Total
113,289111,623
RESERVEPARTICULARS OF RESERVE
Asset revaluation reserve
The revaluation reserve relates to commercial land and
improvements, orchard land and improvements, and buildings.
Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign
exchange differences arising from the translation of the financial
statements of foreign operations into New Zealand dollars.
Cash flow hedge reserve
The cash flow hedge reserve accounts for the fair value movements
of hedging instruments designated as cash flow hedges.
16. EARNINGS PER SHARE
The earnings used to calculate basic and diluted earnings per share is net profit after tax attributable to equity holders of the Parent of
$11.1 million (2019: $0.9 million).
The weighted average number of shares used to calculate basic and diluted earnings per share is 122,543,204 shares (2019: 122,543,204
shares).
The basic and diluted earnings per share is 9.0 cents (2019: 0.7 cents).
17. DIVIDENDS
2020
$’000
2019
$’000
2020
Cents per
share
2019
Cents per
share
Ordinary shares
Interim dividend7,353 - 6-
Dividends to non-controlling interests in Group subsidiaries5,4415,667 - -
Total12,7945,667
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
112 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
18. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
The below table details changes in the Group’s liabilities from financing activities, including both cash and non-cash changes.
Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group’s
statement of cash flows from financing activities.
NOTES
Balance at 1
January 2019
$'000
Non-cash
changes
(1)
$'000
Recognised
on acquisition
$'000
Non-
financing
cash flows
$'000
Financing
cash flows
(2)
$'000
Balance at
31 December
2019
$'000
Borrowings
Secured borrowings13149,91178 - - (63,730)86,259
Loans from related parties12 - 193 - - 5,0005,193
Lease liabilities1234882,457 - - (21,242)61,563
Total
150,25982,728 - - (79,972)153,015
Other current liabilities
Deferred payments21 - - - - - -
Deferred payments to related
parties
21554(410) - - - 144
Total
554(410) - - - 144
Total liabilities arising from
financing activities
150,81382,318 - - (79,972)153,159
NOTES
Balance at 1
January 2020
$'000
Non-cash
changes
(1)
$'000
Recognised
on acquistion
$'000
Non-
financing
cash flows
$'000
Financing
cash flows
(2)
$'000
Balance at
31 December
2020
$'000
Borrowings
Secured borrowings1386,259(171) - - 15,041101,129
Loans from related parties135,19377 - - (5,270) -
Lease liabilities1261,56362,30821,526 - (21,658)123,739
Total153,01562,21421,526 - (11,887)224,868
Other current liabilities
Deferred payments21 - 202 - - - 202
Deferred payments to related
parties
211442,055 - - - 2,199
Total1442,257 - - - 2,401
Total liabilities arising from
financing activities
153,15964,47121,526 - (11,887)227,269
(1)
Non-cash changes within lease liabilities in 2020 relate to new leases entered into during the financial year, interest, lease modifications
and reassessments of lease terms. Non-cash changes in 2019 includes those relating to the adoption of NZ IFRS 16 and the non-cash
changes previously described.
(2)
Financing cash flows are made up of the net cash inflow / (outflow) from financing activities in the statement of cash flows with the
exception of dividends paid, and bank facility fees and transaction fees, which do not result in liabilities on the balance sheet.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 113
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
WORKING CAPITAL
This section reviews the level of working capital the Group generates through its operating activities. The working capital items described
below include trade and other receivables, inventories, and trade and other payables.
19. TRADE AND OTHER RECEIVABLES
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest
method, less any expected credit loss allowance.
The following categories of trade and other receivables are subject to the expected credit loss model:
• Trade receivables
• Loan receivables
• Related party receivables
• Receivables from joint ventures and associates
• Receivables from the Ultimate Parent and associates of the Ultimate Parent
The Group applies the simplified approach to measuring expected credit losses which uses a lifetime expected credit loss
allowance for all the above receivables as they all display the same risk profile. Related party receivables are mainly trade in
nature and are on terms consistent with external customers.
The measurement of expected credit losses is a function of the probability of default, loss given default and the estimated
exposure at default. The Group considers an event of default as occurring when information obtained (internally and
externally) indicates a debtor (this includes trade receivables, loan receivables, and receivables from related parties) is unlikely
to pay its creditors including the Group. The assessment of the probability of default and loss given default is based on
historical data adjusted by forward looking information relating to the debtor and general economic conditions of the debtors.
As for the estimated exposure at default, this is represented by the assets’ gross carrying amount at the reporting date.
NOTES
2020
$’000
2019
$’000
Current
Gross trade receivables156,937144,800
Less: expected credit loss allowance(1,439)(997)
Prepayments15,11114,063
GST and other taxes11,1548,452
Receivables from joint ventures
24
- 288
Receivables from associates
25
5391,448
Receivables from related parties
27
- 16,635
Receivables from Ultimate Parent
27
- 654
Receivables from Ultimate Parent's associate
27
27-
Other receivables2,6193,231
Total
184,948188,574
114 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
19. TRADE AND OTHER RECEIVABLES (CONTINUED)
NOTES
2020
$’000
2019
$’000
Non-current
Trade receivables 4,8836,779
Prepayments575600
Receivables from associates25 - 150
Other receivables11,62914,046
Total17,08721,575
Total trade and other receivables202,035210,149
Included in ‘Other Receivables’ is a loan receivable from a growing partner of $13.1 million (2019: $13.7 million) and interest charged
of $0.6 million for the year. The loan is expected to fund joint activities in new growing ventures between the Group and the growing
partner, and repayment of the loan is expected within 4 years.
Analysis of receivables
Gross receivablesImpaired receivables
2020
$’000
2019
$’000
2020
$’000
2019
$’000
Not past due164,361146,464
-
-
Past due 1-30 days28,37340,646
-
-
Past due 31-60 days5,34014,296
1
1
Past due 61-90 days1,4532,828
24
21
Past due over 90 days3,9476,9121,414975
Total203,474211,1461,439997
Although the Group has a number of receivables aged more than 30 days past due, the risk of financial loss is mitigated as the Group has
a policy of only dealing with creditworthy customers. Credit worthiness and customer limits are determined by reference to credit ratings
and country ratings provided the Group’s credit insurer. The Group’s exposure and the credit ratings of its customers are continuously
monitored.
All trade and other receivables are individually reviewed regularly for impairment as part of normal operating procedures and provided
for where appropriate.
2020
$’000
2019
$’000
Analysis of movements in the expected credit loss allowance
Balance at 1 January997772
Net remeasurement of expected credit loss allowance140156
Change in expected credit loss allowance due to new trade and other receivables1,697137
Amount written off during the year (1,395)(68)
Balance at 31 December1,439997
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 115
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
19. TRADE AND OTHER RECEIVABLES (CONTINUED)
The Group has numerous credit terms for various customers. These credit terms vary depending on the services provided and the
customer relationship. A receivable is considered impaired if there has been any indications of significant financial difficulties for the
customer or default or late payments more than 90 days overdue unless there are prior arrangements.
The Group makes advances to customers, suppliers, joint ventures and associates. All advances are within the agreed credit periods. The
Group’s policy requires security to be taken for advances to third parties. This security ranges from charges over property and assets to
personal guarantees. The Group does not hold any collateral over these balances.
Included in the provision for expected credit loss allowance are individually impaired receivables amounting to $1.1 million (2019: $0.5
million) for certain balances being past due. The remaining loss allowance balance represents the expected amount of default from
customers as well as advances made to customers, suppliers, joint ventures and associates over their lifetime based on historical trends
of defaults from customers.
The following table details the risk profile of amounts due from customers based on the Group’s provision matrix. As the Group’s
historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for
expected credit loss allowance based on past due status is not further distinguished between the Group’s different customer base.
Trade receivables - days past due
Not past due
$'000
Past due
1-30 days
$'000
Past due
31-60 days
$'000
Past due
61-90 days
$'000
Past due
over 90 days
$'000
Total
$'000
At 31 December 2020
Expected credit loss rate
0.00%0.00%0.03%2.77%11.45%2.85%
Loss given default rate
60%60%60%60%60%60%
Estimated total gross carrying
amount at default
164,361 28,373 5,340 1,453 3,947 203,474
Lifetime ECL
- - 1 24 271 296
At 31 December 2019
Expected credit loss rate0.00%0.00%0.01%1.24%10.48%2.35%
Loss given default rate60%60%60%60%60%60%
Estimated total gross carrying
amount at default
146,464 40,646 14,296 2,828 6,912 211,146
Lifetime ECL - - 1 21 434 456
116 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
20. INVENTORIES
Inventories are stated at the lower of cost (first in, first out basis) or net realisable value. Net realisable value is the estimated
selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
2020
$’000
2019
$’000
Finished and semi-finished goods32,56422,657
Consumables (including packaging)7,1025,659
Balance at 31 December39,66628,316
The cost of inventories recognised as an expense and included in ‘Purchases, raw materials and consumables used’ in the income
statement for the year ended 31 December 2020 amounted to $1,004.1 million (2019: $847.3 million).
21. TRADE AND OTHER PAYABLES
Trade and other payables are initially recognised at fair value and then subsequently measured at amortised cost.
NOTES
2020
$’000
2019
$’000
Current
Trade payables73,703103,895
Employee entitlements14,90811,736
Accrued expenses53,23237,053
Payables to associates2518,32019,447
Payables to related party2717,7681,938
Payables to Ultimate Parent's subsidiary2743531
Deferred payments66-
Deferred payments to related parties271,058144
Total179,098174,744
Non-current
Employee entitlements4342
Deferred payments136-
Deferred payments to related parties271,141-
Total1,32042
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 117
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
GROUP STRUCTURE
This section provides information on the Group’s structure and the subsidiaries, joint ventures, and associates included in the consolidated
financial statements.
22. INVESTMENTS IN SUBSIDIARIES
Significant subsidiaries of the Group are listed below:
NAME OF ENTITY
PLACE OF BUSINESS
AND COUNTRY OF
INCORPORATION
OWNERSHIP
INTEREST (%)
PRINCIPAL ACTIVITY
20202019
Delica LimitedNew Zealand100100Investmet company
Delica Australia Pty LimitedAustralia100100Fruit exporter
Delica Domestic Pty Limited
(1)
Australia10080Fruit and produce wholesale distributor
Delica North America, Inc.United States of America5050Fruit exporter
Delica (Shanghai) Fruit Trading Company
Limited
China100100In-market services and fruit importer
ENZAFRUIT New Zealand (CONTINENT)Belgium100100Apple marketing
ENZAFRUIT New Zealand International
Limited
New Zealand100100Apple sales and marketing
ENZAFRUIT Peru S.A.CPeru100100Horticulture operations
ENZAFRUIT Products Inc.United States of America100100Fruit variety development and propagation
Freshmax New Zealand Limited
(2)
New Zealand100 - Fresh produce wholesale distributor
Fruit Distributors LimitedNew Zealand100100Investment company
Fruitmark Pty LimitedAustralia100100Processed foods broking
Fruitmark USA Inc.United States of America100100Processed foods broking
Status Produce Favona Road LimitedNew Zealand100100Leased property holding
T&G CarSol Asia PTE. Limited
(3)
Singapore50 - In-market services and fruit importer
T&G Fresh Produce PTE Limited
(4)
Singapore100 - In-market services and fruit importer
T&G Fruitmark HK LimitedHong Kong100100Processed foods broking
T&G Global Vietnam Company Limited
(5)
Vietnam100 - In-market services and fruit importer
T&G Insurance LimitedNew Zealand100100Captive insurance provider
T&G Japan LimitedJapan100100In-market services and fruit importer
T&G Processed Foods LimitedNew Zealand100100Processed foods sales and marketing
T&G South East Asia LimitedThailand100100In-market services and fruit importer
T&G Vizzarri Farms Pty LimitedAustralia5050Fruit and produce wholesale distributor
Taipa Water Supply LimitedNew Zealand6565Water supply
Turners & Growers (Fiji) LimitedFiji7070Fresh produce importer
Turners & Growers Fresh LimitedNew Zealand100100
Fresh produce wholesale distributor and
horticulture operations
Turners & Growers New Zealand LimitedNew Zealand100100Shared services provider
Worldwide Fruit LimitedUnited Kingdom5050Apple importer and packing services
The balance date of all subsidiaries is 31 December.
(1)
On 30 April 2020, the Group acquired the remaining 20% of the issued shares of Delica Domestic Pty Limited. Refer to Note 23.
(2)
On 30 April 2020, the Group acquired 100% Freshmax New Zealand Limited. The entity is located in Auckland, New Zealand.
(3)
On 14 April 2020, T&G CarSol Asia PTE Limited was incorporated. The entity is located in Singapore.
(4)
On 2 March 2020, T&G Fresh Produce PTE Limited was incorporated. The entity is located in Singapore.
(5)
On 8 April 2020, T&G Global Vietnam Company Limited was incoporated. The entity is located in Vietnam.
118 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
22. INVESTMENTS IN SUBSIDIARIES (CONTINUED)
DETAILS OF NON-WHOLLY OWNED SUBSIDIARIES THAT HAVE MATERIAL
NON-CONTROLLING INTERESTS
The table below shows details of non-wholly owned subsidiaries of the Group that have material non-controlling interests:
NAME OF ENTITY
PLACE OF BUSINESS AND
COUNTRY OF
INCORPORATION
OWNERSHIP INTEREST HELD
BY NON-CONTROLLING
INTERESTS
20202019
Delica North America, Inc.United States of America50%50%
Worldwide Fruit LimitedUnited Kingdom50%50%
NAME OF ENTITY
PROFIT ALLOCATED TO
NON-CONTROLLING
INTERESTS
ACCUMULATED
NON-CONTROLLING
INTERESTS
2020
$’000
2019
$’000
2020
$’000
2019
$’000
Delica North America, Inc.1,120 1,599 3,6074,322
Worldwide Fruit Limited2,915 2,532 6,4086,950
Individually immaterial subsidiaries with non-controlling interests1,499 1,579 3,1322,425
5,534 5,710 13,147 13,697
Summarised financial information in respect of each of the Group’s subsidiaries that have material non-controlling interests is set out
below. The summarised financial information represents amounts before intragroup eliminations.
DELICA NORTH AMERICA, INC.
The terms of the shareholders' agreement of Delica North America, Inc. specify that the Group has the right to appoint 3 of the entity's 5
directors. The Group therefore has the ability to approve the annual business plan and annual budget, as well as dictate the direction of
other fundamental business matters of the entity.
This satisfies the criteria set out in NZ IFRS 10 Consolidated Financial Statements around achieving control over an entity and consequently,
Delica North America, Inc. is accounted for as a subsidiary by the Group.
2020
$’000
2019
$’000
Balance sheet
Current assets48,45651,209
Non-current assets106130
Current liabilities(41,510)(43,451)
Non-current liabilities(50)(73)
Equity attributable to owners of the Company(3,395)(3,493)
Non-controlling interests(3,607)(4,322)
Income statement
Revenue
117,082127,827
Expenses
(114,842)(124,629)
Profit for the year
2,2403,198
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 119
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
22. INVESTMENTS IN SUBSIDIARIES (CONTINUED)
DELICA NORTH AMERICA, INC. (CONTINUED)
2020
$’000
2019
$’000
Income statement (continued)
Profit attributable to owners of the Company1,1201,599
Profit attributable to non-controlling interests1,1201,599
Profit for the year2,2403,198
Dividends paid to non-controlling interests1,5241,240
Cashflows
Net cash (outflow) / inflow from operating activities(1,058)8,053
Net cash outflow from investing activities(3,344)(2,557)
Net cash outflow from financing activities(213)(140)
Total net cash (outflow) / inflow(4,615)5,356
WORLDWIDE FRUIT LIMITED
The shareholders' agreement specifies that the Group has the right to approve Worldwide Fruit Limited's annual business plan and
annual budget and the right to approve the apointment of the Chief Executive Officer.
This satisfies the criteria set out in NZ IFRS 10 Consolidated Financial Statements around achieving control over an entity and consequently,
Worldwide Fruit Limited is accounted for as a subsidiary by the Group.
2020
$’000
2019
$’000
Balance sheet
Current assets50,14038,265
Non-current assets19,61417,035
Current liabilities(48,792)(36,216)
Non-current liabilities(5,172)(3,063)
Equity attributable to owners of the company(9,207)(9,070)
Non-controlling interests(6,408)(6,951)
Income statement
Revenue409,160267,468
Expenses(403,330)(262,404)
Profit for the year5,8305,064
Profit attributable to owners of the Company2,9152,532
Profit attributable to non-controlling interests2,9152,532
Profit for the year5,8305,064
Dividends paid to non-controlling interests3,1902,486
Cashflows
Net cash inflow from operating activities10,7587,475
Net cash outflow from investing activities(11,115)(2,549)
Net cash inflow / (outflow) from financing activities2,202(4,012)
Total net cash inflow 1,845914
120 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
23. ACQUISITION OF NON-CONTROLLING INTEREST SHARE IN SUBSIDIARY
On 30 April 2020, the Group acquired the remaining 20% of the issued shares of Delica Domestic Pty Limited for a purchase price of $0.4
million.
On the date of acquisition, the carrying amount of the non-controlling interests in Delica Domestic Pty Limited was derecognised and a
decrease in equity attributable to owners of the Group of $0.3 million was recorded.
2020
$’000
Carrying amount of non-controlling interest acquired62
Consideration paid to non-controlling interest(371)
Deferred consideration (present value) -
Net effect in equity(309)
24. INVESTMENTS IN JOINT VENTURES
Under the equity method, an investment in a joint venture is initially recognised in the balance sheet at cost. The investment is
adjusted for the Group’s share of the profit or loss and other comprehensive income of the joint venture which is recognised
from the date that joint control begins, until the date that joint control ceases.
Investments in joint ventures are assessed for indicators of impairment at each reporting date.
Set out below are the joint ventures of the Group as at 31 December 2020. The joint ventures have share capital consisting solely of
ordinary shares, which are held directly by the Group.
The Group’s investments in joint ventures in 2020 and 2019 are:
NAME OF ENTITY
PLACE OF BUSINESS
AND COUNTRY OF
INCORPORATION
OWNERSHIP
INTEREST (%)
PRINCIPAL ACTIVITY
20202019
Growers Direct LimitedUnited Kingdom5050Apples importer
Wawata General Partner LimitedNew Zealand5050Horticulture operations
The balance date of all joint ventures is 31 December.
For the purposes of applying the equity method of accounting, management accounts of the companies for the year ended 31 December
2020 have been used. Differences in accounting policies between the Group and the joint ventures have been adjusted for.
None of the Group's joint ventures as at 31 December 2020 are considered to be material to the Group during the period.
The Group's share of profit and the carrying amounts of the Group's interest in all joint ventures are presented below:
2020
$’000
2019
$’000
Group's share of profit and comprehensive income of joint ventures6514
Carrying amount of the Group's interest in joint ventures3,3474,006
TRANSACTIONS WITH JOINT VENTURES OF THE GROUP
The Group has entered into the following transactions with its joint ventures during the year:
2020
$’000
2019
$’000
Sale of produce to joint ventures3,0332,555
Purchase of produce from joint ventures - -
Services provided to joint ventures1,046766
Services received from joint ventures - (9)
Current receivables owing from joint ventures - 288
Dividends from joint ventures received by the Group625500
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 121
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
25. INVESTMENTS IN ASSOCIATES
Under the equity method, an investment in an associate is initially recognised in the balance sheet at cost. The investment is
adjusted for the Group’s share of the profit or loss and other comprehensive income of the associate which is recognised from
the date that significant influence begins, until the date that significant influence ceases.
Investments in associates are assessed for indicators of impairment at each reporting date.
Set out on the following pages are the associates of the Group as at 31 December 2020. The associates have share capital consisting
solely of ordinary shares, which are held directly by the Group.
The Group’s investments in associates in 2020 and 2019 are:
NAME OF ENTITY
PLACE OF BUSINESS
AND COUNTRY OF
INCORPORATION
OWNERSHIP
INTEREST (%)
PRINCIPAL ACTIVITY
20202019
Allen Blair Properties LimitedNew Zealand
3333
Property investment
Grandview Brokerage LLCUnited States of America
3939
Investment company
Intelligent Fruit Vision LimitedUnited Kingdom
2424
Orchard technology development
Mystery Creek Asparagus Limited
(1)
New Zealand
-15
Horticulture operations
POP Worldwide Limited
(2)
United Kingdom
-24
Stonefruit importer
The Fruit Firm LimitedUnited Kingdom
2020
Stonefruit importer and packing
services
(1)
Mystery Creek Asparagus Limited was wound down in November 2020.
(2)
The Group disposed of shares in POP Worlwide Limited in March 2020.
Allen Blair Properties Limited and The Fruit Firm Limited have a balance date of 31 March. These were the reporting dates established
when these companies were incorporated and it is impractical for these companies to change their balance dates. The remaining
associates of the Group have a balance date of 31 December.
For the purposes of applying the equity method of accounting, management accounts of the companies for the period ended 31
December 2020 have been used. Differences in accounting policies between the Group and the associates have been adjusted for.
SUMMARISED FINANCIAL INFORMATION FOR MATERIAL ASSOCIATE
Set out below is the summarised financial information for Grandview Brokerage LLC, the associate considered to be material to the Group
for the period.
GRANDVIEW BROKERAGE LLC
2020
$’000
2019
$’000
Balance sheet
Current assets
143,851121,110
Non-current assets
32,97421,284
Current liabilities
(146,997)(113,681)
Non-current liabilities
(7,051)(14,620)
The above amounts of assets includes the following:
Cash and cash equivalents
12,2601,673
Income statement
Revenue
1,069,098945,878
Depreciation and amortisation expenses
(1,426)(862)
Interest expense
(1,182)(1,243)
Income tax expense
(1,099)(1,334)
Profit after tax and total comprehensive income
8,7823,168
122 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
25. INVESTMENTS IN ASSOCIATES (CONTINUED)
GRANDVIEW BROKERAGE LLC (CONTINUED)
2020
$’000
2019
$’000
Group's share of carrying amount
Carrying amount from Group's share in associate8,9725,551
Goodwill on acquisition25,02826,692
Other adjustments(3,233)(2,366)
Group's adjusted share of carrying amount in associate30,76729,877
Group's share of profit from continuing operations
Gain from Group's share in associate3,4591,248
Other adjustments(765)799
Group's adjusted share of profit from continuing operations in associate2,6942,047
Dividend received from associate1,8051,850
The Group’s share of profit and the carrying amounts of the Group’s interest in all associates are presented below:
2020
$’000
2019
$’000
Group's share of profit and comprehensive income of associates
Grandview Brokerage LLC2,6942,047
Other(337)1,255
Total2,3573,302
Carrying amount of the Group's interest in associates
Grandview Brokerage LLC30,76729,877
Other9861,619
Total31,75331,496
TRANSACTIONS WITH ASSOCIATES OF THE GROUP
The Group has entered into the following transactions with its associates during the year:
2020
$’000
2019
$’000
Sale of produce to associates33,91135,686
Purchase of produce from associates - (23)
Services received from associates(3,641)(1,420)
Current receivables owing from associates5391,448
Non-current receivables owing from associates - 150
Current payables owing to associates(18,320)(19,447)
Dividends received from associates1,9047,117
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 123
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
OTHER DISCLOSURES
This section presents disclosures required to provide readers with an understanding of the Group’s activities during the financial year.
26. INVESTMENT PROPERTY
Investment properties are properties held either to earn rental income, for capital appreciation or for both.
Investment properties are measured at fair value as determined by property valuers who are members of the New Zealand
Institute of Valuers. Revaluations are conducted annually.
The fair value is determined based on quoted market prices and is the estimated amount for which a property could be
exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper
marketing where the parties have each acted knowledgeably, prudently and without compulsion.
Transfers are made to investment properties when there is a change in use of the property. This may be evidenced by ending
owner occupation, commencement of an operating lease to another party or commencement of construction or development
for future use as investment property.
Investment properties are derecognised when they have been disposed of. Any gains or losses arising from a change in fair
value are recognised in the income statement.
Investment property comprises of the commercial property on 490 Nayland Road in Nelson which was previously an owner occupied
property. This property is now leased to external parties for the operation of a food ingredients and juicing business. Subsequent
renewals are negotiated with the lessee. No contingent rents are charged.
2020
$’000
2019
$'000
At fair value
Balance at 1 January
15,000
15,316
Net loss from fair value adjustment
(1,500)
(316)
Balance at 31 December
13,500
15,000
VALUATION APPROACH
The carrying amount of investment property is the fair value of the property as determined by a registered independent appraiser having
an appropriate recognised professional qualification and recent experience in the location and category of the property being valued.
The property was valued by Telfer Young in October 2020 (2019: Telfer Young) and the valuation was assessed as appropriate at 31
December 2020. The property was valued at the average of the depreciation replacement cost, discounted cash flow and income
capitalisation methods. Refer to Note 9 for details of the methods of valuation, key estimates and assumptions used.
The property is leased out under an operating lease. Rental income earned by the Group from its investment property amounted to
$0.2 million (2019: $0.3 million).
124 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
27. RELATED PARTY TRANSACTIONS
Transactions with the Group’s related parties comprise of sales and purchases of produce and services provided and received in the
ordinary course of business. Related party sales and purchases of produce are at amounts similar to those with third parties, and services
provided and received are agreed at negotiated amounts between the related parties.
TRANSACTIONS WITH JOINT VENTURES AND ASSOCIATES
The Group has related party transactions with its joint ventures and associates. The details of the transactions are contained in Notes 24
and 25 respectively.
TRANSACTIONS WITH THE ULTIMATE PARENT
The Group has related party transactions with the Ultimate Parent as follows:
2020
$’000
2019
$’000
Purchase of produce from Ultimate Parent - (87)
Services provided to the Ultimate Parent - 199
Interest on loan charged by the Ultimate Parent - (193)
Services received from the Ultimate Parent(915)(279)
Current receivables owing from the Ultimate Parent - 654
Undrawn term debt facility from the Ultimate Parent - 300
Drawn term debt facility from the Ultimate Parent-5,000
TRANSACTIONS WITH THE ULTIMATE PARENT’S SUBSIDIARIES AND ASSOCIATES
The Group has related party transactions with R.I. Solution GmbH and BayWa Obst GmbH & Co. KG, two wholly-owned subsidiaries of the
Ultimate Parent, and the transactions with these subsidiaries are detailed as follows:
2020
$’000
2019
$’000
Sale of produce to the Ultimate Parent's subsidiaries304
Purchase of produce from the Ultimate Parent's subsidiaries(287)(80)
Services received from the Ultimate Parent's subsidiaries(1,872)(1,540)
Current payables owing to the Ultimate Parent's subsidiaries(43)(531)
The Group also has related party transactions with Obst vom Bodensee Vertriebsgesellschaft mbH, an associate of the Ultimate Parent,
and the transactions with this associate are detailed as follows:
2020
$’000
2019
$’000
Sale of produce to the Ultimate Parent's associate1,889582
Services received from the Ultimate Parent's associate-(622)
Current receivables owing from Ultimate Parent's associate
27
-
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 125
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
27. RELATED PARTY TRANSACTIONS (CONTINUED)
TRANSACTIONS WITH RELATED PARTIES
The Group has related party transactions with M&G Vizzarri Farms and David Oppenheimer & Company I, L.L.C and the transactions
with the related parties are detailed as follows:
2020
$’000
2019
$’000
Sale of produce to related parties1,173931
Purchase of produce from related parties(24,815)(32,256)
Services provided to related parties- 8
Services received from related parties(769) -
Current receivables owing from related parties - 16,635
Current payables owing to related parties(17,768) (1,938)
All related party amounts outstanding are unsecured and will be settled in cash. No expense has been recognised in the current or
prior years for expected credit losses in respect of the amounts owed by related parties.
KEY MANAGEMENT PERSONNEL COMPENSATION
2020
$’000
2019
$’000
Short-term employee benefits4,8314,997
Long-term employee benefits44 -
Termination benefits134386
Directors' remuneration386386
Total5,3955,769
At 31 December 2020, the Group had outstanding deferred payments to key management personnel of $2.2 million relating to short-
term and long-term incentives (2019: $0.1 million). Refer to Note 21.
28. FINANCIAL RISK MANAGEMENT
The Group is subject to a number of financial risks which arise as a result of its activities, including importing, exporting and domestic
trading. Treasury activities are performed by a central treasury function and the use of derivative financial instruments is governed by
the Group’s policies approved by the Board. The Group does not engage in speculative transactions.
MARKET RISK
(i) Foreign exchange risk
The Group operates internationally and has exposure to foreign currency risk as a result of transactions denominated in foreign
currencies from normal trading activities. Major trading currencies include the Australian Dollar, United States Dollar, Euro, Japanese
Yen and British Pounds.
The Group’s foreign currency risk management policies are designed to protect the Group from exchange rate volatilities as they relate
to future foreign currency payments or foreign currency receipts, and the protection of profit margins at the time foreign currency
exposures are created or recognised.
To manage foreign currency risk, the Group utilises hedging instruments in the form of spot foreign exchange contracts, forward
foreign exchange contracts, and currency options. Any other financial instrument must be specifically approved by the Finance, Risk,
and Investment Committee on a case-by-case basis. Contracts are entered into within parameters determined by the Group’s Treasury
Policy and contracts generally do not exceed 2 years.
126 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
28. FINANCIAL RISK MANAGEMENT (CONTINUED)
MARKET RISK (CONTINUED)
(i) Foreign exchange risk (continued)
For hedges of highly probable forecast sales and purchases, as the critical terms of the hedge contracts and the corresponding hedged
items are the same the Group performs a qualitative assessment of hedge effectiveness. It is expected that the value of the contract and
the value of the corresponding hedged item will change in opposite directions in response to movements in underlying exchange rates.
The main source of hedge ineffectiveness in the Group’s hedging relationships are in the timing of cashflows, and differences in the timing
of implementation of hedge contracts.
The Group uses forward foreign exchange contracts and currency options to manage these exposures with the main exposure relating
to its Apples export business. As at 31 December 2020, the Group held foreign exchange contracts and currency options with a contract
value of $278.3 million (2019: $311.0 million).
The below tables highlight the foreign exchange cover in place, average exchange rates, notional foreign currency and New Zealand dollar
value of the contracts as at 31 December:
% of Forecast Exposure
20212022
ActualPolicyActualPolicy
USD61.79%31%-75%39.12%25%-50%
GBP50.61%31%-75%26.88%25%-50%
EUR53.46%31%-75%25.77%25%-50%
JPY46.08%31%-75%27.65%25%-50%
Average exchange rates
Notional value:
Foreign currency
Notional value:
Local currency
202020192020
$’000
2019
$’000
2020
$’000
2019
$’000
USD 0.65 0.66 133,492 142,908 205,251 215,309
GBP 0.51 0.51 11,100 14,650 21,858 28,853
EUR 0.56 0.56 21,904 29,950 39,165 47,999
JPY 68.55 69.71 548,075 554,244 7,995 7,951
Exchange rate sensitivity
Reasonable fluctuations in foreign exchange rates were determined based on a review of the last two years’ historical movements. A
movement of plus or minus 10% has therefore been applied to the exchange rates to demonstrate the sensitivity to foreign currency risk
of the Group.
The following sensitivity is based on the foreign currency risk exposures in existence at the balance date. The impact of a plus or
minus 10% foreign exchange movement on New Zealand dollars against all trading currencies, with all other variables held constant, is
illustrated below:
-10%+10%
2020
$’000
2019
$’000
2020
$’000
2019
$’000
Pre-tax (profit) / loss(1,272)
(720)
1,041
590
Equity
(25,310)
(29,788)
21,066
24,826
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 127
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
28. FINANCIAL RISK MANAGEMENT (CONTINUED)
MARKET RISK (CONTINUED)
(ii) Interest rate risk
The Group is exposed to interest rate risk as it borrows funds at both fixed and floating interest rates.
Interest rate risk is identified by forecasting cash flow requirements, short-term through to long-term. Short-term seasonal funding
is provided by a syndicate of four banks. These funding arrangements are negotiated at the start of each season, on behalf of apple
growers who bear the interest cost.
The Group has floating rate borrowings used to fund ongoing activities which are repriced on roll-over dates.
As at 31 December 2020, $73.0 million of interest bearing loans are subject to interest rate repricing within the next 15 months
(2019: $83.1 million).
The table below highlights the weighted average interest rate and the currency profile of interest bearing loans and borrowings:
20202019
Weighted average
interest rate
Loans and
borrowings
$’000
Weighted average
interest rate
Loans and
borrowings
$’000
Australian dollars- - - -
British pounds
2% 5,429
3%3,159
New Zealand dollars
2%
95,700 3%88,293
United States dollars-
-
- -
Total101,12991,452
Interest rate derivatives
The Group’s treasury policy allows up to 100% (2019: 100%) of forecasted core debt to be fixed via interest rate derivatives to protect the
Group from exposure to fluctuations in interest rates. Accordingly, the Group has entered into interest rate swap contracts under which
it is obliged to receive interest at variable rates and to pay interest at fixed rates.
Swaps currently in place cover approximately 93.8% (2019: 75%) of the forecasted core debt. The fixed interest rates average 3.4% (2019:
3.6%). The variable rates are set at the bank bill rate 90 day settlement rate, which at balance date was 0.3% (2019: 1.1%). The contracts
require settlement of net interest receivable or payable each 90 days as appropriate, and are settled on a net basis. As at 31 December
2020, the Group held swaps with a contract value of $95.0 million (2019: $105.0 million).
Hedge effectiveness is tested by matching critical terms for prospective testing and cumulative dollar offset for retrospective tests. The
potential sources of hedge ineffectiveness are timing of cashflows, and differences in timing of implementation of the hedge contract.
Interest rate sensitivity
At 31 December 2020, $73.0 million (2019: $83.1 million) of loans are at fixed rates for defined periods of up to 3 months, after which
interest rates will be reset. Additionally, the Group has overnight deposits that are subject to fluctuations of interest rates. If the Group’s
loan and deposit balances at 31 December had remained the same throughout the year and interest rates moved by 1% then the impact
would be a $0.5 million gain or loss on pre-tax profits (2019: $0.8 million).
A 1% sensitivity has been used as this is what management estimates is a likely range within which interest rate movement for the year.
(iii) Price / commodity risk
The Group does not trade in commodity instruments and therefore is not exposed to commodity price risk.
128 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
28. FINANCIAL RISK MANAGEMENT (CONTINUED)
CREDIT RISK
In the normal course of business, the Group is exposed to counterparty credit risks. The maximum exposure to credit risk at 31
December 2020 is equal to the carrying value for cash and cash equivalents, trade and other receivables, derivative financial instruments
and a guarantee claimable of $24.2 million in the event the guarantee in Note 30 is called. Credit risk is managed by restricting the
amount of cash and derivative financial instruments which can be placed with any one institution and these institutions are all New
Zealand registered banks with at least a Standard & Poor’s rating of A. The financial condition and credit evaluation of trade and loan
receivables, receivables from joint ventures, associates and related parties are continuously considered.
Due to the nature and dispersion of the Group’s customers and growers, the Group’s concentration of credit risk is not considered
significant.
LIQUIDITY RISK
The Group manages liquidity risk by continuously monitoring cash flows and forecasts and matching maturity profiles of financial assets
and liabilities. The Group also maintains adequate headroom on its loan facilities.
Policies are established to ensure all obligations are met within a timely and cost effective manner.
The following table analyses the Group’s financial liabilities into relevant contractual maturity groupings based on the remaining period
at the balance date to the contractual maturity date. For the purpose of this table, it is assumed that year end interest rates applicable
to the term loan will apply through to expiry of the term loan facility, even though the Group has the option to repay the loan prior to its
expiry date. For cash flow hedges, the impact on the profit and loss is expected to occur at the same time as the cash flows occur.
The amounts disclosed for financial guarantees are the maximum amounts the Group could be forced to settle under the arrangement
for the full guaranteed amount if that amount is claimed by the counterparty to the guarantee.
The amounts disclosed below are contractual undiscounted cash flows at balance date:
Carrying
amount
$’000
Less than
six months
$’000
Between
six months
and one
year
$’000
Between
one and
two years
$’000
Between
two and
five years
$’000
Over five
years
$’000
Total
$’000
2020
Borrowings
101,129
24,4251,70581,678
- -
107,808
Trade and other payables
(excluding employee entitlements)
165,467
164,190 - 1,277 - - 165,467
Derivative financial instruments -
cash flow hedges:
7,040 - - - - -
-
Inflows
- (8,964)(604)(493) - -
(10,061)
Outflows
- 10,1911,6011,8261,086 -
14,704
Derivative financial instruments -
fair value through profit or loss:
130
- - - - - -
Inflows
-
(2,984)(394) - - - (3,378)
Outflows
-
3,129403 - - - 3,532
Lease liabilities
123,73915,85815,15222,78544,05373,226
171,074
Financial guarantees
24,200
24,200 - - - - 24,200
Total421,705
230,04517,863107,07345,13973,226473,346
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 129
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
28. FINANCIAL RISK MANAGEMENT (CONTINUED)
LIQUIDITY RISK (CONTINUED)
Carrying
amount
$’000
Less than
six months
$’000
Between
six months
and one
year
$’000
Between
one and
two years
$’000
Between
two and
five years
$’000
Over five
years
$’000
Total
$’000
2019
Borrowings
91,4526,2831,084 89,636 - - 97,003
Trade and other payables
(excluding employee entitlements)
163,008163,008 - - - - 163,008
Derivative financial instruments -
cash flow hedges:
7,261 - - - - - -
Inflows
- (17,012)(54,287)(8,030) - - (79,329)
Outflows
- 18,40556,3549,9612,744 - 87,464
Derivative financial instruments -
fair value through profit or loss:
36 - - - - - -
Inflows
- (2,924) - - - - (2,924)
Outflows
- 2,968 - - - - 2,968
Lease liabilities
61,5638,5088,47214,93220,62026,45478,986
Financial guarantees
25,80325,803 - - - - 25,803
Total349,123205,03911,623106,49923,36426,454372,979
CAPITAL RISK MANAGEMENT
The main objective of capital risk management is to ensure the Group operates as a going concern, meeting debts as they fall due,
maintaining the best possible capital structure and reducing the cost of capital. Group capital consists of share capital, other reserves
and retained earnings. To maintain or alter the capital structure the Group has the ability to review the size of dividends paid to
shareholders, return capital or issue new shares, reduce or increase debt, or sell assets.
There are a number of externally imposed bank financial covenants required as part of seasonal and term debt facilities. These
covenants are calculated monthly and reported to the banks on a monthly and quarterly basis.
The key covenants are as follows:
FINANCIAL COVENANTSREQUIREMENT IMPOSED
Contingent liabilities
Contingent liabilities of the Group shall not at any time exceed 6% (2019: 6%) of total tangible
assets of the Group.
Debt to debt and equity
The debt to debt and equity percentage shall not exceed the specified percentage as at the end of
each month. This percentage ranges from 45% to 55% (2019: 45% to 55%).
Tangible net worthThe tangible net worth of the Group shall not be less than $270.0 million (2019: $270.0 million).
Seasonal facility stock and
debtors
Seasonal facility stock and debtors of the Group shall at all times be equal to or exceed the
specified ratio as at the end of each month. This ratio ranges from 1.1:1 to 1.25:1 (2019: 1.1:1 to
1.25:1).
Total net worth of Ultimate
Parent
The total net worth of the Ultimate Parent shall not at any time be less than EUR 800 million (2019:
EUR 750 million).
In addition, the Group also makes the following undertakings:
• At all times, the tangible assets of the Group entities that form part of the guaranteeing group shall not be less than 90% (2019: 90%)
of the total tangible assets of the whole Group.
• At all times, the total earnings before interest and tax (EBIT as defined within the banking agreement) of the Group entities that form
part of the guaranteeing group shall not be less than 75% for the year (2019: not less than 75% for the year) of the total EBIT of the
Group.
The Group complied with all financial covenants during the year.
130 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
28. FINANCIAL RISK MANAGEMENT (CONTINUED)
SEASONALITY
Due to the seasonal nature of the business the risk profile at 31 December is not representative of all risks faced during the year.
Seasonality causes large fluctuations in the size of borrowings and debtors.
FINANCIAL INSTRUMENTS BY CATEGORY
The classification of the Group’s financial assets and liabilities depends on the purpose for which the assets were acquired or
liabilities were incurred. Management determines the classification of its financial assets and liabilities at initial recognition and
re-evaluates this designation at every balance date.
Financial assets and financial liabilities classed as measured at amortised cost are carried at amortised cost less any
impairment. Financial assets measured at amortised costs includes cash and cash equivalents which comprises cash balances
and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management
are included in current liabilities in the balance sheet and as a financial liability measured at amortised cost, unless there is a
right of offset, and included as a component of cash and cash equivalents in the statement of cash flows.
Financial assets and liabilities carried at fair value through profit or loss are initially recognised at fair value. Realised and
unrealised gains arising from changes in fair value are included in the income statement.
Financial assets and financial liabilities classed as derivatives for hedging are recognised at fair value. The Group recognises
the effective portion of changes in the fair value of derivative financial instruments that qualify as cash flow hedges in other
comprehensive income. Gains or losses relating to the ineffective portion of a cash flow hedge are recognised in the income
statement. Amounts taken to equity are transferred to the income statement when the hedged transaction affects the income
statement.
Investments in unlisted entities are carried at fair value and classified as fair value through other comprehensive income
as they are not held for trading. Unrealised gains and losses arising from changes in fair value are recognised in other
comprehensive income, except for dividends from those investments which are recognised in profit or loss. When investments
in unlisted entities are sold, the accumulated fair value adjustments are recycled directly through retained earnings.
Measured at
amortised cost
$'000
Fair value
through
profit or loss
(mandatory)
$'000
Derivatives for
hedging
$'000
Equity
instrument
designated
at fair value
through OCI
$'000
Total
$'000
2020
Cash and cash equivalents
44,664 - - - 44,664
Trade and other receivables (excluding
prepayments and taxes)
175,195 - - - 175,195
Investment in unlisted entities
- - - 8787
Derivative financial instruments
- 1,38820,005 - 21,393
Total
219,8591,38820,00587241,339
2019
Cash and cash equivalents
36,208 - - - 36,208
Trade and other receivables (excluding
prepayments and taxes)
187,034 - - - 187,034
Investment in unlisted entities -
-
- 9393
Derivative financial instruments -
635
7,329 - 7,964
Total223,242
635
7,32993231,299
Financial assets
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 131
Measured at
amortised cost
$'000
Fair value
through profit
or loss (held
for trading)
$'000
Derivatives for
hedging
$'000
Total
$'000
2020
Borrowings
101,129 -
- 101,129
Trade and other payables (excluding employee
entitlements)
165,467 -
- 165,467
Lease liabilities123,739 - - 123,739
Derivative financial instruments
- 1307,0407,170
Total
390,3351307,040397,505
2019
Borrowings91,452 - - 91,452
Trade and other payables (excluding employee
entitlements)
163,008 - - 163,008
Lease liabilities61,563 - - 61,563
Derivative financial instruments - 367,2617,297
Total316,023367,261323,320
Financial liabilities
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
28. FINANCIAL RISK MANAGEMENT (CONTINUED)
FINANCIAL INSTRUMENTS BY CATEGORY (CONTINUED)
FAIR VALUE MEASUREMENT
Techniques applied by the Group which use methods and assumptions to estimate the fair value of financial assets and
liabilities are considered to be level 2 in the fair value hierarchy.
The fair value of derivative instruments designated in a hedging relationship is determined using the following valuation
techniques:
• Foreign currency forward exchange contracts have been fair valued using quoted forward exchange rates and discounted
using yield curves from quoted interest rates that match the maturity dates of the contracts.
• Foreign currency option contracts have been fair valued using observable option volatilities, and quoted forward exchange
and interest rates that match the maturity dates of the contracts.
• Interest rate swaps are fair valued by discounting the future interest and principal cash flows using current market interest
rates that match the maturity dates of the contracts These valuation techniques maximise the use of observable market
data where it is available and rely as little as possible on entity-specific estimates.
Inputs other than quoted prices included within level 1 of the fair value hierarchy are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices). There have been no transfers between levels during
the year.
The estimated fair values of all of the Group’s other financial assets and liabilities approximate their carrying values.
132 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
29. DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments are used to hedge exchange rate and interest rate risks. The Group does not hold or
issue derivative financial instruments for trading purposes. Derivative financial instruments are recognised at fair value.
Any resulting gains or losses are recognised in the income statement unless the derivative financial instrument has been
designated into a hedge relationship that qualifies for hedge accounting.
Cash flow hedges
Cash flow hedges are currently applied to forecast transactions that are subject to foreign currency fluctuations and future
interest cash flow on loans. The Group recognises the effective portion of changes in the fair value of derivative financial
instruments that qualify as cash flow hedges in other comprehensive income. These accumulate as a separate component of
equity in the cash flow hedge reserve.
Gains or losses relating to the ineffective portion of a cash flow hedge are recognised in the income statement in other
operating expenses. Amounts taken to equity are transferred to the income statement when the hedged transaction affects
the income statement in revenue and cost of goods sold.
2020
$’000
2019
$’000
Current assets
Cash flow hedges
Forward foreign exchange contracts13,0182,680
Foreign currency options1,423614
Fair value through profit or loss (held for trading)
Forward foreign exchange contracts391635
Total14,8323,929
Non-current assets
Cash flow hedges
Forward foreign exchange contracts5,3053,441
Foreign currency options259594
Fair value through profit or loss (held for trading)
Forward foreign exchange contracts
997
-
Total6,5614,035
Current liabilities
Cash flow hedges
Forward foreign exchange contracts3921,274
Foreign currency options535183
Interest rate swaps490187
Fair value through profit or loss (held for trading)
Forward foreign exchange contracts13036
Total1,5471,680
Non-current liabilities
Cash flow hedges
Forward foreign exchange contracts1119
Foreign currency options -24
Interest rate swaps5,6225,474
Total5,6235,617
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 133
30. CONTINGENCIES
The Group has the following guarantees:
2020
$’000
2019
$’000
Bonds and sundry facilities7575
Guarantees of bank facilities for associated companies24,12525,728
Total24,20025,803
31. COMMITMENTS
CAPITAL COMMITMENTS
As at 31 December, the Group is committed to the following capital expenditure:
2020
$’000
2019
$’000
Property, plant and equipment12,08512,274
Intangible assets445300
Total12,53012,574
NON-CANCELLABLE OPERATING LEASE RECEIVABLES
The Group as a lessor
Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is
classfied as a finance lease. All other leases are classified as operating leases.
Rental income (net of any incentives given to lessees) is recognised on a straight-line basis over the term of the relevant lease.
All properties leased to third parties under operating leases are included in the 'Buildings' category within ‘Property, plant
and equipment’ on the balance sheet. They are depreciated over their expected useful lives on a basis consistent with similar
property, plant and equipment.
Amounts due from lessees under finance leases are recognised as receivables at the amount of the Group's net investment
in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the
Group's net investment outstanding in respect of the leases.
Operating lease receivables
Future minimum rentals receivable under non-cancellable operating leaes as at 31 December are as follows:
2020
$’000
2019
$’000
Within one year1,3441,573
One to two years968905
Two to five years1,691730
Later than five years270-
Total4,2733,208
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
134 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
32. EVENTS OCCURING AFTER THE BALANCE DATE
There are no material events that occurred after the balance date that would require adjustment or disclosure in these accounts.s
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 135
FIVE YEAR FINANCIAL REVIEW
20202019201820172016
Statistics
Number of ordinary shares on issue
122,543,204122,543,204
122,543,204122,543,204122,543,204
Earnings per share - cents
9.00.7
4.630.225.1
Net tangible assets per security
$3.61$3.56
$3.08$3.17$2.62
Percentage of equity holders funds to total assets
53%56%
55%53%53%
Ratio of current assets to current liabilities
1.391.47
1.741.631.81
Ratio of debt to equity
(1)
0.890.80
0.810.880.88
Dividends
Cents per share on paid up capital
6 -
12
(2)
66
Total dividend paid
$7,352,592 -
$14,707,592$7,352,592$7,188,199
2020
$’000
2019
$’000
2018
$’000
2017
$’000
2016
$’000
Revenue
Continuing activities
1,412,5901,216,409
1,188,2031,068,145871,771
Profit
Pre-tax profit
22,02410,311
13,24241,95442,095
Net profit after tax
16,5906,611
10,39440,24632,436
Funds employed
Paid up capital
176,357176,357
176,357176,357176,357
Retained earnings and reserves
330,250284,349
223,942237,417168,082
Non-controlling interests
13,14713,697
13,32111,8192,383
Non-current liabilities
232,471181,276
192,854217,164194,853
Current liabilities
228,517198,553
147,207155,959108,911
980,742854,232
753,681798,716650,586
Assets
Property, plant and equipment
392,700386,079
396,546450,981393,974
Other non-current assets
270,542176,651
103,50393,25460,008
Current assets
317,500291,502
253,632254,481196,604
980,742854,232
753,681798,716650,586
(1)
Debt includes trade payables.
(2)
An interim dividend and final dividend were paid out at 6 cents each in 2018.
136 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
APPENDICES
APPENDICES
APPENDIX 1
GROWERS
We engage with our growers
throughout the year, led by our Apples
Supply team and our T&G Fresh
Procurement and Engagement team,
supported by regular orchard
visits for technical and quality
service support, regular meetings,
calls and updates.
EMPLOYEES
Throughout the year, we continually engage
with our people through everyday interactions,
regular team meetings, Connection Meter
surveys, business updates, strategy roadshows,
as well as regular engagement with unions.
Led by our People & Culture
team, Labour Managers and business
leads, we also engage with our
seasonal workforce.
SUPPLIERS
Led by our Procurement and
Property team, we engage
with our suppliers on an
ongoing basis.
INVESTORS &
ADVISORS
We regularly engage with our
shareholders and the wider
financial community through
formal reporting and meetings.
IWI
Around Aotearoa New Zealand, we
engage with iwi as growers, partners,
community members and as kaitiaki.
CUSTOMERS & CONSUMERS
We engage with our customers on an
ongoing basis through our International Sales
and T&G Fresh account management teams.
This engagement provides us with insights on
their consumers, and in addition we engage
directly with consumers through our social
media channels and consumer research.
GOVERNMENT
Through our Corporate Affairs
team and business units,
we engage with central and
regional governments.
GROWING
HEALTHIER
FUTURES
RESPONDING TO WHAT’S IMPORTANT
Critical to the long-term success of our business, is identifying, understanding and closely managing what matters most to us
and our key stakeholders.
During 2020, we engaged with a range of internal and external stakeholders representing the interests of our people,
growers and customers to identify and assess relevant issues that could affect our business.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 137
REPORTING WHAT MATTERS
T&G measures its strategic performance
against four metrics, two of which are:
Partner of Choice and Best Place to Work.
This year, we focused our stakeholder
engagement on these two metrics to
provide us with robust baselines which
will inform our strategic decision making
and actions.
GROWERS
Pivotal to our long-term success is
our relationship with independent
apple growers across the Hawke’s Bay,
Gisborne, Nelson and Otago. To help us
understand our growers’ alignment with
our apple strategy, the value they place
on supporting services, and any potential
risks and opportunities, an independent
review was commissioned with 32 of
our larger volume growers of Envy™,
JAZZ™ and Royal Gala. The top three
areas identified for further improvement
were: financial returns; the desire for
new varieties to be launched; and
communications and relationships. Like
our growers, we believe these areas to
be critically important to ensure mutually
beneficial, sustainable businesses.
A detailed action plan has been developed
to be implemented over the next one
to two years to address these areas.
See pages 21-23 for some of the steps
we’re taking.
CUSTOMERS
To support our shift to become
more customer-centric, in late 2020
an independent Customer Value
Management survey was conducted to
understand customers’ value drivers.
Sixty-one customers across a range
of importers, receivers, distributors,
retailers and wholesalers, as well as
produce categories, participated. Two
thirds rated T&G as ‘best in class’, with
strengths in customer relationships
and image and reputation, while areas
identified for further improvement
were product performance, operational
performance, and price and costs. We
agree with our customers in the mutual
value that can be delivered in these
areas, because by building stronger
brands and providing greater consistency
in quality, better returns can flow to
customers and ourselves. In 2021, we
will work through these findings and take
steps to improve performance.
EMPLOYEES
Early in 2020, as COVID-19 began to
challenge our people and their families,
and also impact our business, we
chose to replace our planned in-depth
culture survey with Human Synergistics’
Connection Meter. This bi-monthly
survey measures connection, including
the wellbeing of our people, their
stress levels, productivity and quality
of leadership. Commencing in May,
we discovered 74% of our people felt
connected. Through the year it rose
to a high of 77%, before finishing in
November at 75% (3% above the global
benchmark). See pages 32-35 for how
we’re responding to these findings.
A representative group from across our
business was engaged to help refine our
Kaitiakitanga sustainability framework.
Through a series of workshops, they
helped identify and refine topics of
materiality, which were then combined
with the findings from our 2019 external
materiality assessment to form a new
Kaitiakitanga framework, with targets set
for 2022, 2025 and 2030. See pages 36-59
for how we’re responding to these insights.
138 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
GRI StandardDescriptionReferencePage
General Standard disclosures
102-1Name of the organisationT&G Global Limited–
102-2Activities, brands, products and
services
How we create value18-19
102-3Location of headquarters1 Clemow Drive, Mt Wellington, Auckland 1060, New Zealand–
102-4Location of operationsOur footprint15-17
102-5Ownership and legal formNew Zealand limited liability company
Listed on the New Zealand Stock Exchange
–
102-6Markets servedOur footprint15-17
102-7Scale of the organisationOur footprint15-17
102-8Information on employees and
other workers
Appendices: Employee and workforce data142-144
102-9Supply chainOur business
How we create value
Our strategy
14
18-19
20-30
102-10Significant changes to the
organisation and its supply chain
Chairman’s review
CEO’s review
Our strategy
4-5
6-7
20-30
102-11Precautionary principle or
approach
T&G applies a precautionary approach through our
sustainability strategy (Kaitiakitanga), and we continue
to seek to improve our capability in doing this
–
102-12External initiativesAbout this report
Kaitiakitanga
2
36-59
102-13Membership of associationsAppendices: Associations and memberships145-146
102-14Statement from senior decision-
maker
CEO’s review6-7
102-16Values, principles, standards and
norms of behaviour
Our business
High-performance culture
14
32-35
102-18Governance structureCorporate governance62-63
102-40Stakeholder groupsAppendices: Responding to what’s important137-138
102-41Collective bargaining agreements3.44% of the workforce is covered by collective agreements–
102-42Identifying and selecting
stakeholders
Appendices: Responding to what’s important
Kaitiakitanga – Refining our approach
137-138
36-37
102-43Approach to stakeholder
engagement
Appendices: Responding to what’s important137-138
102-44Key topics and concerns raisedKaitiakitanga – Refining our approach36-37
102-45Entities included in the
consolidated financial statements
About this report2
102-46Defining reporting content and
topic boundaries
About this report
Appendices: Responding to what’s important
Kaitiakitanga
2
137-138
36-59
GRI INDEX
APPENDIX 2
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 139
GRI StandardDescriptionReferencePage
102-47List of material topicsKaitiakitanga – Refining our approach36-37
102-48Restatements of information2020 is T&G Global’s first GRI report–
102-49Changes in reportingAbout this report2
102-50Reporting period1 January 2020 to 31 December 2020–
102-51Date of most recent reportThis is T&G Global’s first GRI report–
102-52Reporting cycleAnnual–
102-53Contact point for questions
regarding the report
Chief Financial Officer, 1 Clemow Drive, Mt Wellington,
Auckland 1060, New Zealand
–
102-54Claims of reporting in accordance
with the GRI Standards
About this report2
102-55GRI content index139-141
102-56External assuranceNone – refer to: About this report2
Topic specific disclosures
Water
103-1Disclosure on management
approach
Lower impact, smarter growing52-53
Emissions
103-1Disclosure on management
approach
Climate action46-49
305-1Direct (Scope 1) GHG emissions Climate action46-49
305-2Energy indirect (Scope 2) GHG
emissions
Climate action46-49
305-3Other indirect (Scope 3) GHG
emissions
Climate action
T&G is working to expand the scope and quality of its Scope 3
emissions data, and expect to report Scope 3 emissions from
2021
46-49
Waste
103-1Disclosure on management
approach
Closing the loop50-51
Food safety
103-1Disclosure on management
approach
Safe food55
416-2Incidents of non-compliance
concerning the health & safety of
products and services
No incidents of non-compliance occurred in 2020-
Training and education
103-1Disclosure on management
approach
Our business
High-performance culture
Our people
14
32-35
38-43
Occupational health and safety
103-1Disclosure on management
approach
Protect and grow40-41
140 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
GRI SCOPE, METHODOLOGIES AND LIMITATIONS
SCOPE
T&G Global has reported management
approaches for key material topics, but
due to limitations in accessing data, we
have not reported all specific disclosure
requirements. Work is being undertaken
to continue to improve our ability to
report on the full scope of specific
disclosure topics that are material to
T&G Global.
ENERGY AND GHG EMISSIONS
METHODOLOGIES AND BASELINE
BASELINE
The baseline year for reporting energy
and emissions targets is 2017 (unless
stated otherwise), this aligns to parent
company BayWa and the baseline year
used for their sustainability reporting.
Historical data was sourced based on
previous sustainability reporting and
directly from suppliers. This information
has been collated into the BraveGen
Sustainability Reporting software.
METHODOLOGIES
Site information on use of resources is
captured in the BraveGen Sustainability
Reporting software. The data is sourced
from suppliers, invoices and calculated
estimates from sites (when accurate/
actual usage data is not available).
Relevant emissions factors are captured
within the software and calculates the
CO
2
emissions based on usage and
emissions factor.
Fuel data from some international
offices is not included as the data has
not been captured and usage would be
minimal due to the type and scale of the
operations.
As part of the BayWa Group, T&G Global
follow the GHG Protocol’s Market-based
approach to emissions reporting. In
2017, our baseline year, T&G’s New
Zealand sites purchased electricity
from a provider with 100% renewable
electricity and hence T&G New Zealand
purchased 100% renewable electricity in
2017, and New Zealand’s electricity did
not contribute to our Scope 2 emissions.
This approach was valid as Meridian
did not sell renewable certificates or
alike until 2020. Meridian’s renewable
electricity product became available in
2020, and T&G has purchased renewable
electricity certificates equivalent to its full
year electricity consumption of 43,888
mWh in New Zealand to ensure our
zero-emission electricity remains valid. As
such, the renewable electricity certificates
purchased for our New Zealand sites
have not been included in our 2020
carbon emissions reduction. Electricity
consumption reported for our New
Zealand sites has been provided directly
from our provider Meridian. Many of our
international sites, which only have small
office facilities, have no means to capture
electricity usage as it’s included as part of
lease agreements, therefore the usage has
been estimated for these sites based on
headcount using the calculation of 1,480
kWh per person per year. Electricity used
from home offices has not been included.
We receive energy data in different
measures and convert all reported
measures to kWh using the following
conversion rates as supplied and used
by BayWa.
RESOURCE
ORIGINAL
DATA METRIC
CONVERSION
RATE TO kWh
Diesel Litres9.917
Petrol Litres8.428
Heating OilLitres10
LPG Kilograms12.78
EMISSIONS FACTORS
Emission factors were sourced based on
geographic region from multiple sources
listed below:
https://www.mfe.govt.nz/publications/
climate-change/measuring-emissions-
2020-quick-guide
GWP source is United Nations
Intergovernmental Panel on Climate
Change (IPCC) IPCC AR5
Greenhouse gas reporting: conversion
factors 2020 - GOV.UK (www.gov.uk)
Where relevant emissions factors cannot
be sourced from the above, the BayWa
Corporate Sustainability Team has
provided the relevant details from VDA
(German Association of the Automotive
Industry: https://www.vda.de/en).
WATER METHODOLOGIES
Due to limitations in data, water,
which is a material topic, has not been
reported in full in accordance with the
GRI requirements. Consumption data is
more readily available than discharge
information however this is still limited.
Our data capture for the water indicator
is limited by the sources and timing
availability of the information. Hawke’s
Bay regional data availability is sourced
directly from the Hawke’s Bay Regional
Council portal, providing real time access
to the information for orchard use. Other
regions rely on individual readings or
provision of reports compiled annually.
For these regions, data is received mid-
year, meaning a full year of data was not
available at the time of publishing this
report. International office sites are also
limited due to inclusion in leases and no
data being provided.
MISSING OR DELAYED DATA
All attempts have been made to capture
data from source, but estimates have
been used where possible when the
data is not available, and usage can be
calculated (refer to Scope 2 electricity).
The estimated values or missing data will
be replaced with actual usage if the data
subsequently becomes available and the
data will be updated in future reporting.
We aim to build on our data capability
to be able to add additional topics and
information in future reports.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 141
APPENDIX 3
Total New Zealand employees by employment contract (permanent and temporary)
12 months average
PermanentTemporaryGrand total
Male7496741,423
Female435404839
Grand total1,1841,0782,262
Total number of New Zealand employees by employment contract
12 months average
PermanentTemporaryGrand total
Auckland562167729
Christchurch79483
Dunedin12719
Gisborne213
Hamilton381048
Hastings241592833
Kerikeri3389122
Nelson57172229
New Plymouth11011
Palmerston North601070
Taupō342054
Tauranga27532
Wellington26026
Whangārei213
Grand total1,1841,0782,262
Total number of New Zealand employees by employment type
12 months average
Full timePart time
Male1,36459
Female77861
Grand total2,142120
EMPLOYEE AND WORKFORCE DATA
The following tables provide additional information, context and detail to the main body of the 2020 Annual Report as required by the
GRI Standards.
Employee and workforce information has been calculated using data averaged over the required reporting period shown in each table.
The data has been rounded.
142 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
MaleFemaleGrand total
Auckland7954133
January7655131
February7643119
March7643119
April8050130
May9750147
June9363156
July6549114
August5944103
September7253125
October8164145
November8660146
December9168159
MaleFemaleGrand total
Hamilton505
January505
February606
March808
April505
May505
June505
July505
August505
September505
October505
November505
December516
MaleFemaleGrand total
Dunedin527
January314
February415
March10212
April12214
May11213
June9211
July527
August426
September426
October123
November022
December033
MaleFemaleGrand total
Hastings358225583
January290108398
February363150513
March582342924
April606361967
May559318877
June517298815
July351238589
August189152341
September188148336
October163140303
November209169378
December283270553
Average seasonal employee monthly headcount movement, by New Zealand region
EMPLOYEE AND WORKFORCE DATA
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 143
MaleFemaleGrand total
Kerikeri523385
January551166
February6795162
March6179140
April4179120
May494392
June482977
July711990
August67168
September53053
October45045
November402262
December262248
MaleFemaleGrand total
Taupō5611
January3912
February4812
March4711
April415
May14014
June14014
July000
August112
September347
October31013
November21113
December31114
MaleFemaleGrand total
Nelson12149170
January74983
February8120101
March13260192
April18375258
May15375228
June14680226
July13573208
August13163194
September11743160
October11837155
November9634130
December8325108
Average seasonal employee monthly headcount movement, by New Zealand region
T&G’s full-time temporary workforce can fluctuate due
to seasonal demand, this information has been captured
separately, please refer to the monthly movement in 2020
for the workforce group. Due to COVID-19-related border
closures, some of our seasonal workforce on RSE visas were
unable to return home to their Pacific nations, therefore,
unlike previous years, we did not see a significant reduction
in numbers during the off-season.
Employment data is reported on full-time equivalent (FTE). The
data is sourced from the SAP HCM system and is limited to New
Zealand based employees. Union information was sourced from
DataPay. Due to data limitations, T&G Global is unable to publish
detailed employee and workforce data for our international
sites. The data has been compiled based on the actual employee
headcount data.
144 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
OrganisationFunctionOur role
New Zealand
Business Leaders’ Health & Safety
Forum
Coalition of business and government leaders, improving performance
of workplace health and safety in New Zealand
Member
Citrus New ZealandIncorporated society representing New Zealand citrus growersBoard member
Diversity Works New ZealandProfessional body providing guidance for workplace diversity and
inclusion
Member
Employers & Manufacturers
Association
Professional body providing guidance to employers on employee
relations in New Zealand
Member
Governance New ZealandProfessional body, providing leadership in governance, compliance and
risk management
Member
Horticulture New ZealandIndustry peak body advocating and representing the interest of
New Zealand’s vegetable growers
Member
Human Resources Institute of
New Zealand
Professional body providing services and support for people who work
in HR in New Zealand
Member
Institute of Directors New ZealandProfessional body providing guidance to New Zealand directors Member
National Road Carriers IncRoad transport association providing advocacy, representation and
business support for New Zealand’s road transport industry
Member
New Zealand Apples & Pears Inc.Representative organisation for New Zealand’s pipfruit industry Board member
New Zealand AvocadoIndustry peak body representing New Zealand’s avocado growersMember
The New Zealand Council of
Cargo Owners
Professional body representing the shipping supply chain interests of
New Zealand’s largest exporters and importers
Chairman
New Zealand Horticulture Export
Authority
A statutory authority working to promote the effective export
marketing of horticultural products
Committee
member
New Zealand Institute of Safety
Management
Professional association for New Zealand health and safety
practitioners
Member
Onions New ZealandIndustry peak body representing growers and exporters of onions in
New Zealand
Member
Plant Germplasm Import CouncilCoalition of plant germplasm import industry groups and the Ministry
of Primary Industries, focused on improving New Zealand’s germplasm
import programme
Member
Plant Market Access CouncilIncorporated society providing leadership on plant industry market
access
Member
Potatoes New ZealandIndustry peak body representing interests of New Zealand’s potato
industry
Member
ASSOCIATIONS AND MEMBERSHIPS
Detailed below are the industry associations which we’re a member of.
APPENDIX 4
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 145
OrganisationFunctionOur role
Pukekohe Vegetable Growers
Association
Charitable organisation representing vegetable growing businesses in
the Pukekohe region
Executive
Committee
Member
Road Transport Forum New
Zealand
Professional body promoting and advancing the interests of the road
transport industry
Member
Strawberry Growers of New
Zealand
Industry peak body representing the interest of New Zealand’s
strawberry growers
Member
Tomatoes New ZealandIndustry peak body representing New Zealand’s tomato growers Board member
United Fresh New Zealand Professional body providing services and representation to the
New Zealand fresh produce industry
Board member
Vegetables New Zealand Inc.Represents the interests of growers of all fresh vegetable cropsMember
International
Freshfel EuropeForum for the European fresh fruit and vegetable chain, representing
its members at EU and international level to ensure a diverse,
sustainable, and robust EU fruit and vegetable sector
Member
Fresh Trade BelgiumAssociation representing importers, exporters and wholesalers, fresh
cut companies and logistic service providers active in the fruit and
vegetable business in Belgium
Member
Produce Marketing AssociationGlobal fresh produce trade associationMember
United Fresh Produce AssociationProfessional body providing guidance and advocacy to the
United States produce industry
Member
Washington State Tree Fruit
Association
Professional body providing advocating and supporting the Washington
State tree fruit industry
Member
Washington Apple Education
Foundation
Charitable organisation with a desire to advance Washington’s tree fruit
industry’s charitable work
Member
146 | T&G GLOBAL LIMITED ANNUAL REPORT 2020
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 147
DIRECTORY
DIRECTORS
Prof. K.J.Lutz
Chairman and Non-independent Director
C.A. Campbell
Independent Director
A. Helber
Non-independent Director
R.J. Hewett
Independent Director
B.J. Mangold
Non-independent Director
R.T. Priske
Non-independent Director
REGISTERED OFFICE
1 Clemow Drive
Mt Wellington, Auckland 1060
New Zealand
REGISTERED OFFICE CONTACT DETAILS
PO Box 290
Shortland Street
Auckland 1140, New Zealand
Telephone: (09) 573 8700
Website: www.tandg.global
Email: info@tandg.global
AUDITORS
Deloitte Limited
PRINCIPAL BANKERS
Bank of New Zealand
HSBC
Rabobank
Westpac New Zealand
PRINCIPAL SOLICITORS
Russell McVeagh
SHARE REGISTRY
Computershare Investor Services Limited
Level 2, 159 Hurstmere Road
Takapuna, Auckland 0622
New Zealand
SHARE REGISTRY CONTACT DETAILS
Private Bag 92119
Victoria Street West
Auckland 1142, New Zealand
Investor enquiries: (09) 488 8700
Website: www.computershare.co.nz
Email: enquiry@computershare.co.nz
Printed on Recycled paper produced of 100% recovered fibre.
T&G GLOBAL LIMITED ANNUAL REPORT 2020 | 149
G ROWING HEALTHIER
FUTURES
THROUG H
FRESH FRUIT
&
V EGETA BLES
1 CLEMOW DR, MT WELLINGTON, AUCKLAND 1060
TEL: +64 9 573 8700
INFO@TANDG.GLOBAL
---
Template
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Updated as at 17 October 2019
Results for announcement to the market
Name of issuer T&G Global Limited and subsidiary companies
Reporting Period 12 months to 31 December 2020
Previous Reporting Period 12 months to 31 December 2019
Currency New Zealand Dollar
Amount (000s) Percentage change
Revenue from continuing
operations
$1,412,590 16%
Total Revenue $1,412,590 16%
Net profit/(loss) from
continuing operations
$11,056 1,127%
Total net profit/(loss) $11,056 1,127%
Interim/Final Dividend
Amount per Quoted Equity
Security
No final dividend proposed
Imputed amount per Quoted
Equity Security
Not applicable
Record Date Not applicable
Dividend Payment Date Not applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$3.61 $3.56
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to the financial commentary and audited financial
statements attached as part of this announcement.
Authority for this announcement
Name of person
authorised
to make this announcement
Doug Bygrave
Contact person for this
announcement
Doug Bygrave
Contact phone number +64 9 573 8899
Contact email address Doug.Bygrave@tandg.global
Date of release through MAP
01/03/2021
Audited financial statements accompany this announcement.
---
1 March 2021
T&G reports its 2020 Annual Results
At a glance
• Revenue: $1.4 billion, up from $1.2 billion
• Operating profit: $32.4 million, up from $16.5 million
• Net profit before tax: $22.0 million, up from $10.3 million
• Net profit after tax: $16.6 million, up from $6.6 million
• Net assets: $520 million, up from $474 million
T&G Global today announced its financial results for the year ending 31 December 2020, which
show the Group delivered strong growth in a year of uncertainty.
Chief Executive Gareth Edgecombe says the results are a credit to the team’s hard work and the
ongoing transformation to improve T&G’s underlying performance.
“It’s been a year of extraordinary challenges, with the COVID-19 pandemic creating uncertainty
and volatility around the world. International lockdowns and changes to operating procedures
affected the day-to-day running of our business, with other setbacks such as the closure of some
international wholesale markets and complexities around the import and export of produce,
providing other challenges for T&G. Despite this, our team showed a huge amount of resilience
and adaptability, uniting under difficult and uncertain circumstances. The result is testament to their
hard work.
“The results also follow a concerted transformation over the past few years to become customer-
led, deliver value from our intellectual property and build a high-performance culture. While we still
have a way to go, our strong underlying results demonstrate our strategy and performance is
delivering,” says Gareth.
T&G’s apples business had an outstanding year, improving its operating profit by 56 percent, from
$33.5 million in FY19 to $52.1 million in FY20. A 23 percent increase in the sales of T&G’s New
Zealand Envy™ apples saw the crop sell out prior to the arrival of northern hemisphere fruit,
thanks to strong consumer demand. A sustained focus on harnessing the best genetics, building
premium brands, delivering strong sales momentum in Asia and continually optimising its supply
chain, all contributed to the strong result.
The acquisition and integration of Freshmax New Zealand’s fresh produce division in April 2020
saw the creation of T&G Fresh, with the strengths and cultures of both businesses combining to
deliver a revenue increase of $75.0 million, to $357.7 million in 2020. The company is committed to
playing a leadership role in creating a strong, sustainable, customer-led sector in Aotearoa.
Furthermore, to help fund further growth initiatives, including investment back into the T&G
business, the company closed the year out strongly with the sale and leaseback of its Nayland
Road post-harvest facility in Nelson for $50.5 million.
T&G Global Chairman Prof. Klaus Josef Lutz says despite the pervasive challenges faced this
year, the company successfully built on the foundations laid over the last two years to deliver a
strong profit result.
“In the context of so much uncertainty, and the impact of various one-off and climate-related
factors, it is very pleasing to see a substantial improvement in T&G’s underlying financial
performance,” says Prof. Lutz.
“It shows the business has the resilience, systems, strategy and people to be able to respond to
challenges, and that we are well positioned to build on this solid momentum in 2021.”
Gareth says as well as further strengthening T&G’s overall strategy, the company has also reset its
sustainability framework - Kaitiakitanga. “Kaitiakitanga is integral to how we do business, ensuring
we balance the needs of our people, place and produce, alongside all economic decisions,” he
says.
“Despite a challenging year, the care our people showed for each other and their focus on
delivering excellent customer service so we could continue to provide top quality, fresh produce to
people all over the world, was fantastic to see, and this strong financial result is a credit to them.
“As a business we’ve sharpened our global strategy and we’re clear on where we need to focus
moving forward. With our key focuses on growing great brands, winning in key global markets, and
leading Aotearoa’s fresh produce future, we’re going in to 2021 and beyond with real momentum
and determination,” says Gareth.
ENDS
For further information, please contact:
Adrienne Sharp
Head of Corporate Affairs
Ph +64 (0)27 801 5534
adrienne.sharp@tandg.global
About T&G Global. Our story began over 122 years ago as Turners and Growers, and today T&G Global
helps grow healthier futures for people around the world through fresh fruit and vegetables. Located in 13
countries, our team of 2,500 people both grow and partner with over 1,200 growers to market, sell and
distribute nutritious fresh produce to customers and consumers in over 60 countries. As Kaitiaki, we do this
guided by Kaitiakitanga. For us, this means we treat the land, people, produce, resources and community
with the greatest of respect and care, as guardians of their future.
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.