Annual Report
COOKS GLOBAL FOODS LIMITED
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C O O K S G L O B A L
F O O D S L I M I T E D
A N N U A L R E P O R T
3 1 M A R C H 2021
COOKS GLOBAL FOODS LIMITED
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Contents to Consolidated Financial Statements
Contents 1
Executive Chairman’s Report 2
Directors’ Report 13
Independent Auditors’ Report 14
Consolidated Statement of Profit or Loss and Other
Comprehensive Income 18
Consolidated Statement of Changes in Equity 19
Consolidated Statement of Financial Position 20
Consolidated Statement of Cash Flows 21
Statement of Accounting Policies 22
Notes to the Consolidated Financial Statements 22
Statutory Information and Corporate Governance 63
Company Directory 75
COOKS GLOBAL FOODS LIMITED
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Positive trends offset by Covid-19 impact
SUMMARY
• Covid-19 impact on trading was significant in all markets during the year and led to
delays in the store development and opening program.
• The Covid-19 impact in all markets applied throughout the year in line with respective
government-imposed measures. The revenue declines were somewhat offset by various
levels of government support packages that somewhat mitigated the full impact.
• A number of store openings and other development activities were delayed due to the
various government restrictions and other Covid-19 impacts.
• Trading was positive in periods when the stores were able to trade and a number of
stores were able to adapt and revise their model to the new operating procedures but
this was not possible for other stores that due to their location or licencing were not able
to operate effectively.
• The acquisition of the fast-growing Triple Two Coffee business in June 2020 has added
scale to the core UK market and placed CGF as the #4 Coffee focused chain in UK as
measured by total store numbers.
• Cash flow from operating activities was positive $36,000 compared to prior year of
$193,000
• Total group revenue from continuing activities decreased by 59% to $1.714m.
• Net loss before tax from continuing operations was $2.618m which was improved
compared to the same period a year ago despite the significant reduction in revenue due
to Covid-19 restrictions, reflecting the benefits of prior restructuring and reduction of
costs and the resilience of the business model.
• Operating loss before depreciation, amortisation & finance charges was $908,000
compared to prior year profit of $480,000 and the operating loss from continuing
operations after tax decreases to $2.539m from loss of $3.590m last year.
• The delays in store openings and other non operational factors have resulted in revenue
of $4.991m being deferred until stores will open, which is expected over the next year.
Whilst the FY21 financial year was dominated by the Covid-19 pandemic it has shown the
strength of the business model and has demonstrated a resilient heartland in towns and
suburbs and with vehicle accessed locations outperforming the larger city centre outlets that
were affected by the combination of the working from home (WFH) phenomenon along with
the lack of tourists that impacted franchised stores in cities like Dublin, Windsor & Stratford
on Avon. Independent industry research from Allegra Research in the UK showed that the
Esquires UK brand outperformed the market in calendar year 2020 with sales down 29%
compared to the industry decline of 39%.
Executive Chairman’s Report
REPORT FOR THE 12 MONTHS TO 31 MARCH 2021
COOKS GLOBAL FOODS LIMITED
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The first half of the year saw strong lockdown for the April to June period in almost all
markets in which we operate globally followed by various levels of opening from July –
October period which was then followed by a second series of lockdowns that have
gradually reopened with the UK being open from June 2021 and Ireland from the end of July
2021.
Store sales for the period August – October Esquires UK sales were 16% up on the prior
year whilst in Ireland our store sales were down 14% of the prior year due to the significant
impact of lack of tourists and workers in the CBD in Dublin.
During the financial year the group opened twelve new stores in UK & Ireland and in Saudi
Arabia and nine outlets were closed during the year. With the addition of the Triple Two
stores the estate was 93 outlets at the end of March 2021.
COVID-19
The FY21 financial year and beyond have been significantly impacted by the Covid-19
pandemic. During the year there were times when there were no stores trading and other
times where stores were only able to trade under various levels of Government imposed
restrictions. Rules varied by country and the information below is showing the situation in
Esquires UK & Ireland and shows comparisons between 2021 & 2019. Given that Triple Two
was acquired in June 2020 comparative figures for the 2019 year are not available. The
information is presented to show the different stages of restriction under which the trading
was operating in 2021. There have been 3 different levels of restriction:
1. When takeout only was able to be conducted
2. When customers could dine outside as well as purchase takeout
3. When customers could dine inside under various restrictions relating to number of
people per table etc.
The graph below shows the actual system wide store sales comparison in both UK & Ireland
under these restrictions up to the 25
th
July 2021. Note that the Stage 3 relaxation as the
above only came into effect in Ireland on 26
th
July2021.
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COVID-19
The FY21 financial year and beyond have been significantly impacted by the Covid-19
pandemic. During the year there were times when there were no stores trading and other
times where stores were only able to trade under various levels of Government imposed
restrictions. Rules varied by country and the information below is showing the situation in
Esquires UK & Ireland and shows comparisons between 2021 & 2019. Given that Triple Two
was acquired in June 2020 comparative figures for the 2019 year are not available. The
information is presented to show the different stages of restriction under which the trading
was operating in 2021. There have been 3 different levels of restriction:
1. When takeout only was able to be conducted
2. When customers could dine outside as well as purchase takeout
3. When customers could dine inside under various restrictions relating to number of
people per table etc.
The graph below shows the actual system wide store sales comparison in both UK & Ireland
under these restrictions up to the 25
th
July 2021. Note that the Stage 3 relaxation as the
above only came into effect in Ireland on 26
th
July2021.
The trends are very similar between the two countries, and this provides confidence relating
to potential future trends as Ireland opens up.
These UK figures relate to overall sales, and we have observed transaction numbers being
slightly down on the 2019 numbers but the average transaction value (ATV) being up by
approximately 30% in the Indoor Dining stage. In the takeout only stage the ATV was 18%
up, under the Outdoor Dining stage the ATV was 27% up and in the Stage 3 – Indoor Dining
the ATV has averaged 35% up on 2019.
In Ireland the ATV was down 6% when the stores could only do takeout driven by lower food
sales than normal whereas under the Outdoor Dining stage the ATV was 116% of 2019. The
sales mix for the year to date to 25
th
July is 59% beverage sales & 41% food whereas the
Irish business normally trades at 45% Beverage & 55% Food. The changed mix is due to the
nature of the customer experience, and it is expected that the Stage 3 trading with Indoor
Dining will result in higher food sales more in line with historic trends.
During the Covid period the company has accelerated the development of digital tools such
as Click & Collect and added delivery in a number of stores. These trends were previously
45%
78%
120%
0%
20%
40%
60%
80%
100%
120%
140%
Take Out Only
Outdoor Dining
Indoor Dining
ECUK 2021 Sales Comparison v 2019 by stage of restriction
45.6%
78.2%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
Ireland same store sales v 2019
Takeout Only
Outdoor Dining
COOKS GLOBAL FOODS LIMITED
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being promoted but the pandemic has driven the change at a faster rate than we would have
normally seen.
Industry studies have shown consumer resilience and a desire amongst people to socialise
when they can both with friends, family and work colleagues. We believe that the franchise
model with local ownership in the communities provides a strong link to the consumers and
that the resilience shown to date during the pandemic should translate through to positive
trends going forward. Along with the strong growth in store numbers, the solid performance
of existing stores will combine to build a strong branded offering in the defined core markets.
BALANCE SHEET
Borrowings increased to $7.507m from $5.522m at the same time a year ago. These include
loans from entities associated with Executive Chairman Keith Jackson as well as certain
convertible loan notes. Cooks continues to pursue funding options to better reflect the
appropriate mix of equity and debt requirements for the business.
Lease receivables of $18.283m and right-of-use assets of $715,000 lease liabilities of
$19.080m have been recognised this year under IFRS 16 Accounting Standard for Finance
Leases & $5.196m of Current & $1.760m on Non-Current Liabilities was classified as
Deferred Revenue.
Loans of $1.8m will be converted to equity under a commitment from parties related to the
Chairman, Keith Jackson, this will be tabled for approval at the AGM prior to formal
implementation.
OPERATIONAL BUSINESS PERFORMANCE
THE UNITED KINGDOM
The United Kingdom entered lockdown from mid-March 2020 to early July 2020 and then
from mid October 2020 through to mid-2021. As a result, many of our franchised stores were
temporarily closed for considerable periods of time and others are operating as takeaway
only outlets only. Government support packages have assisted our franchisees in being able
to maintain their businesses through this period.
Limited income from franchise fees was received during the period as these relate directly to
store sales. Despite store growth being paused due to Covid, the group has continued to
build for the future.
Timing delays due to Covid uncertainties delayed the opening of numerous stores although
this activity has resumed in FY22.
Esquires UK store numbers increased to 45 at the end of March. During the year 7 stores
were opened and 6 were closed. Constant currency Esquires Coffee store sales for the year
were NZ$12.244m which was 58% of the $20.890m in the same period a year ago. For the
period August to October 2020 when all stores were open and trading as per “normal” the
sales for the Esquires UK system were 16% ahead of the same period for the prior year.
TRIPLE TWO COFFEE
The Triple Two network that was acquired in June 2020, opened 2 new stores in Manchester
& Lakeside in Essex during the financial year. Triple Two has opened eight new outlets in
April to July 2021 with another six in the pipeline to be opened later in 2021.
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Triple Two Coffee operating results are impacted by the deferral of income in accordance
with IFRS 15. This will be released to revenue as the stores open in the future.
UK SUMMARY
With 56 stores operating at the end of March the group are the 4
th
largest coffee focused
café chain in the UK after Costa, Starbucks & the Caffe Nero group based on Allegra
Research data as measured by store numbers. With an additional 9 outlets being opened
between April & July 2021 the UK outlet numbers to 68 at the end of July 2021 The growth
pathway remains positive and as the UK recovers from the Covid-19 impact we look forward
to seeing the pre-Covid momentum return and with the combined Esquires and Triple Two
brands we believe have a scalable business with critical mass and are well placed to deliver
strong and sustainable results.
IRELAND & EUROPE
The Esquires network in Ireland added a new outlet in December 2020 in the Ilac Shopping
Centre in Dublin which replaced the nearby Savoy outlet which was closed when the
landlord decided to upgrade the Savoy Movie theatre complex. The same franchisee
established the Ilac store which opened with many of the staff transferring to the new outlet.
Outlet numbers at the end of the year were 13 and there is an encouraging pipeline of new
stores in development for the balance of 2021 subject to the current program for the removal
of restrictions being implemented as per the current plan. The company plans to open six
new outlets in Ireland in FY22 and one will close as the lease is expiring.
Constant currency total store sales in Ireland were 41% of the FY20 year with the major
impact being in the central city locations, particularly Dublin. Retail Parks that are in smaller
& rural locations were 59% of prior year whilst Shopping Centres that were often closed due
to the restrictions were 29% of prior year.
The region posted an operating loss of $79,000 compared against an operating profit of
$128,000 in the same period a year ago.
The European business development has been delayed due to the Covid-19 impact and the
existing outlet in Porto in Portugal was significantly affected by Covid lockdowns during the
year.
GLOBAL
Cooks operating revenue in the segment was $153,000 compared to last year operating
revenue of $1.077m, with the fall relating to discontinued international product sales to the
Middle East. The global business posted an operating loss of $205,000 compared to an
operating profit of $617,000 in the same period a year ago.
SUPPLY
Revenue in the supply business decreased to $37,000 from the same period a year ago.
Crux Products recorded weaker sales, due largely to the timing of shipments and the
logistics challenges related to Covid factors that were experienced globally. Supply
operating profit was $25,000 compared to $120,000 at the same time a year ago.
COOKS GLOBAL FOODS LIMITED
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CORPORATE
Total Corporate expenses were $1.266m as compared to $2.021m last year last year due to
overall reduced expenses, particularly in relation to legal and consulting fees. This included
finance & foreign exchange translation costs were $425,000 compared to $761,000 last
year.
During the year the overall corporate costs were reduced due to the simplification of the
business and the sale of non-core business units. The benefits that will flow from the
restructuring are expected to continue to build in future years.
CHINA
CGF has held a minority interest in a Chinese joint venture for several years. The joint
venture company has been developing cafes, self-serve coffee machines and a coffee
roastery in Mainland China.
The joint venture partners have been called on to provide additional capital to fund growth
.and accordingly rather than allocating capital to the Chinese joint venture, CGF has decided
to withdraw from the joint venture and focus on core markets of UK & Europe. The franchise
agreement that was in place allowing the IP rights to the JV for use of the brand has been
revised to reflect the change in shareholding.
This has not had any impact on the financial statements of CGF for the current financial year
as the value of the joint venture interest was written off in FY20.
Debt re-financing
CGF entered new debt facilities of approximately $535,000 with Summit Capital Limited &
has now repaid all facilities with ANZ Bank.
SUMMARY
CGF had generated significant momentum in the second half of FY20 and this had
begun to show benefits in scale and profitability. The first stages of these benefits
were evidenced in the result for the FY20 year. Our permanent restructuring changes
completed during the last 12 months have significantly reduced the overhead costs of the
group and the group is positioned well for future profitability.
The Covid-19 pandemic has been unfortunate to say the least and at this time we cannot
accurately determine the full longer-term impact. We believe that the business model is
sound with the focus on clearly defined core business areas that we can scale up and we
are well placed to emerge from the outbreak with our ability to respond to local customer
preferences through the franchise network placing us well for the recovery.
The Scarborough Fair tea and Grounded coffee brands were determined to be non-core and
were sold with a sale agreement concluded in July 2020.
The major focus of the business is cafes in UK, Ireland and Europe plus providing support to
our master franchise partners in the Middle East, Pakistan and Indonesia.
TRIPLE TWO ACQUISITION
Cooks Global Foods acquired the fast-growing Triple Two Coffee café chain in June 2020.
Triple Two Coffee franchises 18 cafes in the UK and has been one of the most highly
recruited franchises in the UK since the start of 2019. Triple Two currently operate across
several regions in the UK, with the initial flagship store opening in Swindon in August 2016.
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They now have sites trading in major towns and cities across the UK, such as London,
Colchester, Oxford, Cheltenham, and Hove.
The images below show the staff at Triple Two Bristol on opening day.
BUSINESS PERFORMANCE BY MARKET
THE UNITED KINGDOM
UK store numbers increased to 56 at the end of March up from 44 at the same time a year
ago due to adding the Triple Two network. During the year 20 stores were opened and 8
closed. Constant currency coffee store sales for the year increased to $13.507m from
$20.890m in the same period a year ago.
The government support program to reduce VAT from 20% to 5% for the period August
2020 to September 2021 is assisting. The wage subsidy scheme in the UK continues to
operate and the company has taken advantage of this generous support. One of the major
challenges facing all employers at present is being able to attract new employees as many
of the normal staff have returned to their homelands on the Continent. This challenge is
being faced in numerous countries around the world at present and may result in some
reduction of trading hours as franchisees manage the challenge of lower available staff and
enthusiastic customers.
Esquires Addlestone, UK Esquires Caerphilly, UK
COOKS GLOBAL FOODS LIMITED
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The company has also had an active new store development plan in place which was
accelerating pre Covid and this is evidenced by 29% of sales in the last 4 month period to
July 2021 coming from new stores that were not open in 2019.
The Esquires Coffee UK business strategy is to establish regional franchise developers and
as part of this, it has restructured the regional franchise fee and royalty schedule to better
incentivise franchisees to grow the business. There are 3 regions currently sold and this
process has been put on hold during the pandemic given the uncertainties that existed. This
is now being re-established.
Continuing operations in the UK division demonstrate operating loss of $1.280m, with
discontinued operations representing operating losses of $127,000.
As the UK recovers from the Covid-19 impact we look forward to seeing the momentum
return and with the combined Esquires and Triple Two brands we believe we are well placed
to deliver strong and sustainable results.
IRELAND AND EUROPE
Constant currency total store sales in Ireland were 60% below of FY20 due to the effects of
the pandemic that meant that stores were closed for long periods of time and the Dublin
based stores in the CBD and Mall stores were particularly affected.
The graph below shows sales trends for the same stores to the end of July 2021 v 2019
when all stores were open. The trends are similar to the UK and the company is hopeful of a
strong recovery with indoor dining being allowed from the 26
th
July 2021 under strict
conditions. Ireland has a strong pipeline of new stores due to open in the remainder of FY22
and the plan is to have 18 stores open by March 2022.
The region posted an operating loss of $79,000 compared against an operating profit of
$128,000 in the same period a year ago, resulting from increased revenue in Ireland offset
against increased costs representing investment in the European region.
45.6%
78.2%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
Ireland same store sales v 2019
Takeout OnlyOutdoor Dining
COOKS GLOBAL FOODS LIMITED
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GLOBAL AND MIDDLE EAST
Cooks operating revenue in the combined segments fell from $1.299m to $175,000, with the
fall relating to decreased international product sales to the Middle East. The segments
posted an operating loss of $182,000 compared to an operating profit of $738,000 in the
same period a year ago.
SUPPLY AND CORPORATE
Revenue at the supply businesses decreased to $37,000 from the same period a year ago
at $278,000. The Crux supply business recorded weaker sales, and this was due largely to
the timing of shipments to and from its customers offshore.
Supply has operating profit of $25,000 compared to $120,000 profit at the same time a year
ago.
Corporate operating losses were $413,000, compared to the operating loss of $1.243m last
year due to overall reduced expenses, particularly in relation to legal and consulting fees.
BALANCE SHEET
Borrowings increased to $7.507m from $5.522m at the same time a year ago. These include
loans from entities associated with Executive Chairman Keith Jackson as well as certain
convertible loan notes. Cooks continues to pursue alternative funding options to better
reflect the appropriate mix of equity and debt requirements for the business.
Lease receivables of $18.283m and right-of-use assets of $715,000, lease liabilities of
$19.080m have been recognised this year, following the adoption of NZ IFRS 16 Leases
from 1 April 2019.
OUTLOOK
The timing of the Covid-19 pandemic has been unfortunate to say the least and at this time
we cannot accurately determine the ongoing impact. With the evidence of the strong
recovery that has been evident as markets open up we believe that the business model is
sound and resilient with the focus on clearly defined core markets that we can scale and we
are well placed to emerge from the pandemic with our ability to respond to local customer
preferences through the franchise network placing us well for the revival. The acquisition of
Triple Two Coffee will be positive in FY21 and beyond as this high growth business delivers
on its potential and adds a complimentary brand offering in our major market of UK.
Esquires Limerick, Ireland
Esquires Coffee, Portugal
COOKS GLOBAL FOODS LIMITED
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We remain focussed on safeguarding the business both growing the business in core
markets and reducing costs in order to endure these uncertain times and be able to take
opportunities that may present themselves in the months to come.
We would like to thank all shareholders, staff, franchisees, suppliers and our most
importantly our valued customers for their continued support through these unique times.
ESQUIRES OPERATING METRICS
12 MONTHS TO 31 MARCH 2021
TOTAL NETWORK
2021
2020
VARIANCE
Esquires Coffee Store sales
NZ $24,779,788
NZ $48,657,181
-49.07%
Transactions
2,104,494
4,633,645
-54.58%
Average transaction value
NZ $11.77
NZ $10.50
12.13%
Store Numbers
Mar-20
Stores
Opened
Stores
Closed
Mar-21
Esquires UK
44
7
6
45
Triple Two
0
13
2
11
Ireland
13
2
2
13
Europe
1
0
0
1
Asia
4
2
1
5
Middle East
18
2
2
18
Total
80
26
13
93
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GLOSSARY OF TERMS USED RELATING TO ESQUIRES OPERATING METRICS:
Constant Currency:
All references to sales and transaction values are constant currency. This means prior year
figures are converted at the same exchange rate as the current year to eliminate the effects
of foreign exchange rate fluctuations.
Network (Store) Sales:
Total store sales are the aggregate of sales of all Esquires & Triple Two branded coffee stores,
whether franchised or partially/fully owned, across the company’s global brand network.
Cooks derives income from its franchised stores from franchise related fees, primarily related
to these sales levels as well as store sales for those stores directly owned by the company,
except in China.
Total network store sales, therefore, have a correlation to the portion of revenue earned by
Cooks Global Foods relating to recurring franchise fees. However, total network sales are not
and should not be confused with the revenue of Cooks Global Foods which is reported in its
financial statements as the two do not directly correlate.
Transactions:
Transactions relate to the total individual transactions, which occur within Esquires & Triple
Two branded coffee stores, whether franchised or owned. A transaction is defined as a single
financial transaction for food, beverage or product that is processed through the point-of-sale
system within a coffee store.
Average Transaction Value:
Average transaction values are derived by dividing total Esquires & Triple Two coffee store
sales by total transactions recorded over the period.
Total (Store) Network:
All stores whether owned or franchised, which operate under a brand owned by companies
within the Cooks Global Foods.
COOKS GLOBAL FOODS LIMITED
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The directors of Cooks Global Foods Limited are pleased to present to shareholders the
Annual Report and consolidated financial statements for Cooks Global Foods Limited and its
controlled entities (together the “Group”) for the year ended 31 March 2021.
The directors are responsible for presenting consolidated financial statements in accordance
with New Zealand law and generally accepted accounting practice, which give a true and fair
view of the financial position of the Group as at 31 March 2021 and their financial performance
and cash flows for the year ended on that date.
The directors consider that the consolidated financial statements of the Group have been
prepared using appropriate accounting policies, consistently applied and supported by
reasonable judgements and estimates and that all relevant financial reporting and accounting
standards have been followed.
The directors believe that proper accounting records have been kept which enable, with
reasonable accuracy, the determination of the financial position of the Group and facilitate
compliance of the consolidated financial statements with the Financial Markets Conduct Act
2013.
The directors consider they have taken adequate steps to safeguard the assets of the Group
and to prevent and detect fraud and other irregularities.
The directors note that there were no material changes in the nature of the business
undertaken by the Company in the past year.
Going Concern
The directors consider that using the going concern assumption is appropriate having
reviewed cash flow projections of the Group which are based on several key assumptions
such as the outcome of current funding discussions.
Greater detail of the going concern assumptions and the cash generating initiatives currently
underway are detailed in Note 4 of the consolidated financial statements.
Donations & Audit Fees
The Group made no donations during the past year. Amounts paid to William Buck for audit
and other services are shown in Note 22 of the consolidated financial statements.
Other Statutory Information
Additional information required by the Companies Act 1993 is set out in the Regulatory
Disclosures and Shareholder Information sections.
The directors present the consolidated financial statements set out in pages 22 to 70, of Cooks
Global Foods Limited and its controlled entities for the period 1 April 2020 to 31 March 2021.
The Board of Directors of Cooks Global Foods Limited authorised these consolidated financial
statements for issue on 30 July 2021.
Directors’ Report
Cooks Global Foods Limited
Independent auditor’s report to the Shareholders
Report on the Audit of the Consolidated Financial
Statements
Opinion
We have audited the consolidated financial statements of Cooks Global Foods Limited and
its subsidiaries (the Group), which comprise the consolidated statement of financial
position as at 31 March 2021, and the consolidated statement of profit or loss and other
comprehensive income, consolidated statement of changes in equity and consolidated
statement of cash flows for the year then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies.
In our opinion the accompanying consolidated financial statements give a true and fair
view of the consolidated financial position of the Group as at 31 March 2021, and of its
consolidated financial performance and its consolidated cash flows for the year then
ended in accordance with New Zealand equivalents to International Financial Reporting
Standards (NZ IFRS) and International Financial Reporting Standards.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (New
Zealand) (ISAs (NZ)). Our responsibilities under those standards are further described in
the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
section of our report. We are independent of the Group in accordance with Professional
and Ethical Standard 1 (Revised) Code of Ethics for Assurance Practitioners issued by the
New Zealand Auditing and Assurance Standards Board and the International Ethics
Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the IESBA Code. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Other than in our capacity as auditor we have no relationship with, or interests in, Cooks
Global Foods Limited or any of its subsidiaries.
Material Uncertainty Related to Going Concern
We draw attention to Note 4 in the financial statements, which indicates that the Group
incurred a total comprehensive loss of $2,487,000 for the year ended 31 March 2021 and,
as of that date, the Group’s total liabilities exceeded its total assets (negative equity) by
$14,231,000
14
As stated in Note 4, these events or conditions, along with other matters as set forth in Note 30 in relation
to Events after the reporting period, indicate that a material uncertainty exists that may cast significant
doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this
matter
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in the
context of our audit of the consolidated financial statements, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
BUSINESS COMBINATION
Area of focus - Refer also to Note 31 How our audit addressed it
The Group acquired a significant subsidiary,
Triple Two, on 19 June 2020. This has resulted
in recognition of several significant balances in
the Statement of Financial Position on
acquisition:
• Intangible Asset of $4.9m
• Deferred Tax Liability of $1.4m
• Goodwill of $11.6m
• Contingent Consideration Liability of
$6.4m
Our audit procedures included:
— Analysed the Group’s Business Combination
accounting for compliance with NZ IFRS 3
— Engaged a expert third party to test the valuation of
the Intangible Asset
— Tested the calculations and key assumptions for
determing the Contingent consideration and the
accounting treatment
— Ensure appropriate disclosure has been included in
the financial statements
INTANGIBLE ASSETS
Area of focus - Refer also to Note 15 How our audit addressed it
The Group has significant intangible assets
relating to the Global franchise rights (excluding
a few countries) of Esquires Coffee. The Group
has assessed that the useful life of these
intangible assets to be indefinite.
The Group has significant intangible assets
relating to the franchise rights of Triple Two that
are amortised.
Our audit procedures included:
— Assessed the useful life of the assets
— Analysed the Group’s impairment assessment
— Performed stress testing of the key assumptions
— Obtained independent expert advice on the
Discount rates applied
— Ensure appropriate disclosure has been included in
the financial statements
15
REVENUE RECOGNITION
Area of focus - Refer also to Note 3.9 How our audit addressed it
The Group recognsies revenue in accordance
with NZ IFRS 15 Revenue Recognition.
The acquisition of Triple Two resulted in
additional services being provided by the Group
which required analysis to comply with NZ IFRS
15. This has resulted in a significant balance of
Deferred Revenue been recognised at 31
March 2021.
Our audit procedures included:
— Tested the impact of applying NZ IFRS 15 on the
Group’s various revenue streams
— Tested key transactions relating to revenue
recorded by the Group
— Tested key transactions to underlying supporting
documentation relating to deferred revenue
recorded by the Group at 31 March 2021
— Ensure appropriate disclosure has been included
in the financial statements
LEASES
Area of focus - Refer also to Notes 3.3 & 3.4 How our audit addressed it
The Group applies NZ IFRS 16 Leases, which
has a significant impact on the Group’s financial
statements.
Our audit procedures included:
— Reviewed the detailed analysis prepared by
independent accounting experts on the impact of
NZ IFRS 16 on the Group’s various leases
— Tested key transactions relating to leases of the
Group
— Tested for completeness
— Ensure appropriate disclosure has been included
in the financial statements
Information Other than the Consolidated Financial Statements and Auditor’s Report
Thereon
The directors are responsible for the other information in the Annual Report. The other information
comprises the 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 audit opinion or assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this
regard.
16
Directors’ Responsibilities
The directors are responsible on behalf of the entity for the preparation of consolidated financial statements
that give a true and fair view in accordance with New Zealand equivalents to International Financial
Reporting Standards, and for such internal control as the directors determine is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the consolidated financial statements, the directors are responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an
audit conducted in accordance with ISAs (NZ) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
A further description of our responsibilities for the audit of these financial statements is located at the
External Reporting Board (XRB) website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1/
This description forms part of our independent auditor’s report.
The engagement director on the audit resulting in this independent auditor’s report is Darren Wright.
Restriction on Distribution and Use
This report is made solely to the Company’s shareholders, as a body. Our audit work has been undertaken
so that we might state to the Company’s shareholders those matters which we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and the Company’s shareholders, as a body, for
our audit work, for this report or for the opinions we have formed.
William Buck Audit (NZ) Limited
Auckland
30 July 2021
17
COOKS GLOBAL FOODS LIMITED
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
For the year ended 31 March 2021
Page 18 of 75
This statement should be read in conjunction with the notes to the consolidated financial statements.
31 March
31 March
2021
2020
Notes
$'000
$'000
Continuing operations
Revenue
5
1,714
4,190
Other income
5
1,013
12
Raw materials and consumables used
(138)
(133)
Depreciation and amortisation
15,16,21
(819)
(702)
Impairment Loss
11
(48)
(229)
Net foreign exchange (losses)/gains
370
(69)
Employee costs
6
(2,260)
(1,806)
Other expenses
7
(1,560)
(1,485)
Operating profit/(loss)
(1,727)
(222)
Interest Income
1,147
1,055
Finance costs
8
(2,039)
(1,742)
Impairment of investment in associate
14.2
-
(2,520)
Share of net loss of associate accounted for using the equity method
14.2
-
(168)
Loss before income tax
(2,618)
(3,597)
Income tax (expense)/credit
9
80
7
Loss for the year from continuing operations
(2,539)
(3,590)
Net loss for the year from discontinued operations
13.1
(7)
(1,593)
Net loss for the year
(2,545)
(5,183)
Loss attributable to:
- Shareholders of the parent
(2,545)
(5,208)
- non-controlling interests
-
25
(2,545)
(5,183)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss
Change in foreign currency translation reserve
58
(99)
Other comprehensive income after tax
58
(99)
Total comprehensive loss for the year
(2,487)
(5,282)
Attributable to:
- Shareholders of the parent
(2,487)
(5,307)
- non-controlling interests
-
25
(2,487)
(5,282)
Total comprehensive loss for the year attributable to Shareholders
of the parent arises from:
- Continuing operations
(2,480)
(3,689)
- Discontinued operations
13.1
(7)
(1,593)
(2,487)
(5,282)
Loss per share:
Basic and diluted loss per share (New Zealand Cents) from continuing and
discontinued operations:
20.2
(0.42)
(1.06)
Basic and diluted loss per share (New Zealand Cents) from continuing
operations:
20.2
(0.42)
(0.73)
Basic and diluted loss per share (New Zealand Cents) from discontinued
operations:
20.2
-
(0.33)
COOKS GLOBAL FOODS LIMITED
Consolidated Statement of Changes in Equity
For the year ended 31 March 2021
Page 19 of 75
This statement should be read in conjunction with the notes to the consolidated financial statements.
Share Capital
Foreign
currency
translation
reserve
Share based
payment
reserve
Accumulated
LossesTotal
Non-
controlling
interestTotal Equity
Notes$'000$'000$'000$'000$'000$'000$'000
Balance at 1 April 201942,5172492,163(48,550)(3,621)(78)(3,699)
Comprehensive loss for the year
Loss for the year- - - (5,208)(5,208)25(5,183)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Change in foreign currency translation reserve-(99)--(99)-(99)
Total comprehensive income/(loss) for the year- (99)- (5,208)(5,307)25(5,282)
Transactions with owners of the Company
Ordinary shares to be issued20.13,032- - - 3,032- 3,032
Change in share based payment reserve--238-238-238
Total contributions by owners of the Company3,032- 238- 3,270- 3,270
Balance at 31 March 202045,5491502,401(53,758)(5,658)(53)(5,711)
Balance at 1 April 202045,5491502,401(53,758)(5,658)(53)(5,711)
Comprehensive loss for the year
Loss for the year---(2,545)(2,545)-(2,545)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Change in foreign currency translation reserve-58--58-58
Total comprehensive income/(loss) for the year-58-(2,545)(2,487)-(2,487)
Transactions with owners of the Company
Issue of ordinary shares20.16,671- - - 6,671- 6,671
Changed ownership interests of the parent and the NCI(53)(53)53-
Option to purchase own shares(194)(194)(194)
Total contributions by owners of the Company6,671- - (247)6,424536,477
Balance at 31 March 202152,2202082,401(56,550)(1,721)- (1,721)
Attributable to Equity holders of the Company
COOKS GLOBAL FOODS LIMITED
Consolidated Statement of Financial Position
As at 31 March 2021
Page 20 of 75
Director Director
The consolidated financial statements were approved for issue for and on behalf of the Board as at
30 July 2021.
This statement should be read in conjunction with the notes to the consolidated financial statements.
31 March31 March
20212020
Notes$'000$'000
Current Assets
Cash and cash equivalents10886255
Trade and other receivables114,615951
Lease receivables21.12,0851,670
Other current assets111,274661
Assets classified as held-for-sale1329422
Current Assets8,8883,959
Non-Current Assets
Property, plant and equipment 1678145
Right-of-use assets21.17152,468
Lease receivables21.116,19816,653
Goodwill15,3111,569-
Intangible assets157,4952,840
Other non-current financial assets1515
Non-current assets36,07122,121
Total Assets44,95926,080
Liabilities
Current Liabilities
Trade and other payables175,4013,996
Deferred Revenue185,196211
Lease liabilities21.11,9412,112
Contingent Consideration316,431-
Borrowings and other liabilities194,1503,431
Current liabilities23,1199,750
Non-Current Liabilities
Deferred Revenue181,7601,192
Lease liabilities21.117,13818,758
Deferred tax liabilities91,306-
Borrowings and other liabilities193,3572,091
Non-current liabilities23,56122,041
Total Liabilities46,68031,791
Net Assets/(Liabilities)(1,721)(5,711)
Equity
Share capital20.152,22045,549
Accumulated losses(56,550)(53,758)
Foreign currency translation reserve208150
Share based equity reserve20.32,4012,401
Equity attributable to owners of the parent(1,721)(5,658)
Non-controlling interests-(53)
Total equity(1,721)(5,711)
COOKS GLOBAL FOODS LIMITED
Consolidated Statement of Cash Flows
For the year ended 31 March 2021
Page 21 of 75
This statement should be read in conjunction with the notes to the consolidated financial statements.
31-Mar
31-Mar
2021
2020
Notes
$'000
$'000
Operating activities
Cash was provided from:
Receipts from customers
4,242
12,824
Cash was applied to:
Interest cost
(210)
(1,414)
Payments to suppliers & employees
(3,995)
(11,217)
Net cash provided from/(applied to) operating activities
23
36
193
Investing activities
Cash was provided from:
Disposal of discontinued operation, net of cash disposed of
158
-
Acquisition of subsidiary, net of cash acquired
451
-
Cash was applied to:
Purchase of property, plant and equipment
(103)
(80)
Acquisition of intangible assets
-
(8)
Net cash provided from/(applied to) investing activities
506
(88)
Financing activities
Cash was provided from:
Proceeds from borrowings
1,651
1,712
Cash was applied to:
Principal elements of lease payments
(736)
(1,855)
Repayment of borrowings
(846)
-
Net cash provided from/(applied to) financing activities
69
(143)
Net increase/(decrease) in cash and cash equivalents
held
611
(38)
Cash & cash equivalents at beginning of the year
255
302
Effect of exchange rate changes on foreign currency balances
19
(9)
Cash & cash equivalents at end of the year
10
886
255
Composition of cash and cash equivalents:
Bank balances
10
886
255
Overdraft balances
10
-
-
886
255
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 22 of 75
1. Nature of operations
Cooks Global Foods Limited (“CGF” or the “Company”) and its controlled entities (the “Group”)
principal activity is the food and beverage industry with the primary focus being on operating a
network of cafes internationally via franchised operations.
2. General information and statement of compliance
Cooks Global Foods Limited is the Group’s ultimate parent company, is incorporated and
domiciled in New Zealand and is listed on the Main board of the New Zealand stock exchange.
The address of its registered office and its principal place of business is 96 St Georges Bay
Road, Parnell, Auckland, 1052, New Zealand.
Cooks Global Foods Limited is a company registered under the Companies Act 1993 and is an
FMC reporting entity under Part 7 of the Financial Markets Conduct Act 2013. The consolidated
financial statements of the Group have been prepared in accordance with the requirements of
Part 7 of the Financial Markets Conduct Act 2013 and the NZX Market Listing Rules.
The consolidated financial statements comprise the Company, its controlled entities and its
associates (together the “Group”). See Note 14.1.
For the purposes of complying with NZ GAAP, the Group is a Tier 1 for-profit entity. The
Company’s consolidated financial statements comply with New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS). They comply with the International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB) and IFRIC interpretations.
The information in the consolidated financial statements is presented in New Zealand dollars
which is the functional currency of the ultimate parent company. Amounts in the consolidated
financial statements have been rounded off to the nearest thousand, or in certain cases, the
nearest dollar unless otherwise stated.
The consolidated financial statements for the year ended 31 March 2021 (“FY21”) were
approved and authorised for issue by the Board of Directors on 30 July 2021.
3. Summary of accounting policies
3.1. Going concern
The directors have prepared the consolidated financial statements on the going concern basis.
In doing so significant judgement has been applied. For further details of these assumptions
and other associated material uncertainties refer to Note 4.
3.2. Overall considerations
The principal accounting policies applied in the preparation of these financial statements are
set out in the accompanying notes where an accounting policy choice is provided by NZ IFRS,
is new or has changed, is specific to the Group’s operations or is significant or material.
These policies have been consistently applied to all the years presented, unless otherwise
stated.
The consolidated financial statements have been prepared using the historic cost basis with
the exception of financial assets and liabilities which are carried at fair value through the profit
or loss. The measurement bases are more fully described in the accounting policies below.
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 23 of 75
COVID-19-Related Rent Concessions (Amendments to NZ IFRS 16)
Effective 1 June 2020, NZ IFRS 16 was amended to provide a practical expedient for lessees
accounting for rent concessions that arise as a direct consequence of the COVID-19 pandemic
and satisfy the following criteria:
(a) The change in lease payments results in revised consideration for the lease that is
substantially the same as, or less than, the consideration for the lease immediately preceding
the change;
(b) The reduction is lease payments affects only payments originally due on or before 30 June
2022; and
(c) There are is no substantive change to other terms and conditions of the lease.
Rent concessions that satisfy these criteria may be accounted for in accordance with the
practical expedient, which means the lessee does not assess whether the rent concession
meets the definition of a lease modification. Lessees apply other requirements in NZ IFRS 16
in accounting for the concession.
The Group has elected to utilise the practical expedient for all rent concessions that meet the
criteria. The practical expedient has been applied retrospectively, meaning it has been applied
to all rent concessions that satisfy the criteria, which in the case of the Group, occurred from
March 2020 to March 2021.
Accounting for the rent concessions as lease modifications would have resulted in the Group
remeasuring the lease liability to reflect the revised consideration using a revised discount rate,
with the effect of the change in the lease liability recorded against the right-of-use asset. By
applying the practical expedient, the Group is not required to determine a revised discount rate
and the effect of the change in the lease liability is reflected in profit or loss in the period in
which the event or condition that triggers the rent concession occurs.
The effect of applying the practical expedient is disclosed in Note 21 for Leases.
3.3. Changes in accounting policies
The accounting policies applied are consistent with those of the annual financial statements
for the year ended 31 March 2020.
3.4. Basis of consolidation
The Group consolidated financial statements consolidate those of the parent company and all
its controlled entities as of 31 March 2021. The Group controls an entity if it is exposed, or has
rights, to variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity.
All transactions and balances between Group companies are eliminated on consolidation,
including unrealised gains and losses on transactions between Group companies. Where
unrealised losses on intra-group asset sales are reversed on consolidation, the underlying
asset is also tested for impairment from a Group perspective. Amounts reported in the
consolidated financial statements of controlled entities have been adjusted where necessary
to ensure consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of controlled entities acquired or disposed of
during the year are recognised from the effective date of acquisition, or up to the effective date
of disposal, as applicable.
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 24 of 75
3.5. Investments in associates
Associates are those entities over which the Group has significant influence but not control or
joint control. This is generally the case where the group holds between 20% and 50% of the
voting rights. Investments in associates are accounted for using the equity method of
accounting, after initially being recognised at cost.
Under the equity method of accounting, the investments are initially recognised at cost and
adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses of
the investee in profit or loss, and the Group’s share of movements in other comprehensive
income of the investee in other comprehensive income. Dividends received or receivable from
associates are recognised as a reduction in the carrying amount of the investment.
When the Group’s share of losses in an equity-accounted investment equals or exceeds its
interest in the entity, including any other unsecured long-term receivables, the Group does not
recognise further losses, unless it has incurred obligations or made payments on behalf of the
other entity.
Unrealised gains on transactions between the Group and its associates are eliminated to the
extent of the Group’s interest in these entities. Unrealised losses are also eliminated unless
the transaction provides evidence of an impairment of the asset transferred. Accounting
policies of equity accounted investees have been changed where necessary to ensure
consistency with the policies adopted by the Group.
3.6. Foreign currency translation
Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency of the respective
Group entity, using the exchange rates prevailing at the dates of the transactions (spot
exchange rate). Foreign exchange gains and losses resulting from the settlement of such
transactions and from the remeasurement of monetary items at year end exchange rates are
recognised in profit or loss.
Non-monetary items are not retranslated at year-end and are measured at historical cost
(translated using the exchange rates at the date of the transaction).
Foreign operations
In the Group’s consolidated financial statements, all assets, liabilities and transactions of
Group entities with a functional currency other than the NZD are translated into NZD upon
consolidation. The functional currencies of the entities in the Group have remained
unchanged during the reporting period.
On consolidation, assets and liabilities have been translated into NZD at the closing rate at the
reporting date. Goodwill and fair value adjustments arising on the acquisition of a foreign entity
have been treated as assets and liabilities of the foreign entity and translated into NZD at the
closing rate. Income and expenses have been translated into NZD at the average rate (the use
of average rates is appropriate only if rates do not fluctuate significantly) over the reporting
period. Exchange differences are charged/credited to other comprehensive income and
recognised in the currency translation reserve in equity. On disposal of a foreign operation the
cumulative translation differences recognised in equity are reclassified to profit or loss and
recognised as part of the gain or loss on disposal.
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 25 of 75
3.7. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the
amount of GST incurred is not recoverable from the IRD. In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the Statement of Financial Position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis and, except for the
GST components of investing and financing activities, are disclosed as operating cash flows.
3.8. Revenue
Revenue arises mainly from the franchise rights and royalty arrangements that it has in place
with franchise holders. The Group now also earns additional revenue from franchisees in the
establishment of their stores.
Under NZ IFRS 15, revenue from Contracts with Customers, revenue is recognised either at a
point in time or over time, or when (or as) the Group satisfies performance obligations by
transferring the promised goods or services to its customers.
The transaction price for a contract excludes any amounts collected on behalf of third parties.
The Group recognises contract liabilities for consideration received in respect of unsatisfied
performance obligations and reports these amounts as deferred revenue in the statement of
financial position.
Royalty income from Franchise or Master Franchise Agreements (MFAs)
The Group recognises royalty revenue derived from its Franchises and MFAs at a point in time,
based on sales by Franchisees that are reported back to Company on a monthly basis for sales
that occurred in that month.
Incentives from Suppliers
The Group recognises incentives from suppliers derived from its Franchises at a point in time,
based on purchases by Franchisees that are reported back to Company on a monthly basis for
purchases that occurred in that month.
Franchise fees
The Group recognises revenue derived from its Country & Regional franchise operations on a
straight-line basis over a period of time that the franchise agreement is in place, which is
generally 10 years. This is the period of time over which the performance obligation is
satisfied. Payment is received upfront upon signing the franchise contract.
The transaction price includes a variable price consideration for the possible transfer of
franchise rights. This is unknown until and if the transaction is completed. Given the high
uncertainty of this transfer, the transaction price for franchise contract is not adjusted for these
transferred franchise rights.
The Group recognises revenue derived from the Franchise Agreements entered by Triple Two
Coffee at the point in time as opposed to over a period of time. The Group has considered, on
a balance of facts, there is only one performance obligation for the contracts entered by Triple
Two. The transaction price is the Franchisee Fee charged in these contracts, which includes
three levels: 1) standard franchise licence; 2) franchise licence with variable management
services, such as site location or store design; 3) franchise licence with fitout as a ‘turn-key’
operation. The Group has identified three points in time for these three levels of fees to be
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 26 of 75
recognised as revenue, respectively, being 1) when franchisee staff are trained; 2) when
additional management services are provided; 3) when stores open. Payment is due to be
received upfront upon signing the Franchise Agreements. Please refer to Note 31 for further
details of the analysis of the revenue recognition for Triple Two Coffee.
Grant Income
The accounting policy adopted is to recognise the grant income in the period to which the
underlying furloughed staff costs relate to. The amount of the grant income (ie. subsidy) is
based on the difference between the actual hours a staff worked compared to their contracted
hours for a certain period. Therefore, within the period of claim, it is deemed that the conditions
have been met to make a claim for that payroll accounting period.
Other revenue
Other revenue includes services to independent franchisees or other third parties received by
the Group. Other revenues are recognised when reliable estimates of the amounts due to the
Group are deemed to be highly probable.
Significant financing components
Using the practical expedient in NZ IFRS 15, the Group does not adjust the promised amount
of consideration for the effects of a significant financing component if it expects, at contract
inception, the period between the transfer of the promised good or service to the customer and
when the customer pays for that good or service will be one year or less.
3.9. Business Combinations and Goodwill
The Group applies the acquisition method in accounting for business combinations under IFRS
3.
The consideration transferred by the Group to obtain control of a subsidiary is calculated as
the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the
equity interests issued by the Group, which includes the fair value of any asset or liability arising
from a contingent consideration arrangement.
Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business
combination at their acquisition-date fair values.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as
the excess of the sum of
a) fair value of consideration transferred,
b) the recognised amount of any non-controlling interest in the acquiree and
c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-
date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the
sum calculated above, the excess amount (ie gain on a bargain purchase) is recognised in
profit or loss immediately.
Please refer to Note 31 for further details on the Goodwill recognised in the acquisition of Triple
Two Coffee.
3.10. Income taxes
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 27 of 75
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not
recognised in other comprehensive income or directly in equity.
Current income tax assets and/or liabilities comprise those obligations to or claims from Tax
authorities relating to the current or prior reporting periods, that are unpaid at the reporting date.
Current tax is payable on taxable profit, which differs from profit or loss in the consolidated
financial statements. Calculation of current tax is based on tax rates and tax laws that have
been enacted or substantively enacted by the end of the reporting period.
Deferred income taxes are calculated using the liability method on temporary differences
between the carrying amounts of assets and liabilities and their tax bases. However, deferred
tax is not provided on the initial recognition of an asset or liability unless the related transaction
is a business combination or affects tax or accounting profit. Deferred tax on temporary
differences associated with investments in controlled entities is not provided if reversal of these
temporary differences can be controlled by the Group and it is probable that reversal will not
occur in the foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are
expected to apply to their respective period of realisation, provided they are enacted or
substantively enacted by the end of the reporting period.
Deferred tax assets are recognised to the extent that it is probable that they will be able to be
utilised against future taxable income, based on the Group’s forecast of future operating results
which is adjusted for significant non-taxable income and expenses and specific limits to the use
of any unused tax loss or credit. Deferred tax liabilities are always provided for in full.
Deferred tax assets and liabilities are offset only when the Group has a right and intention to
set off current tax assets and liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as a component of tax income or
expense in profit or loss, except where they relate to items that are recognised in other
comprehensive income or directly in equity, in which case the related deferred tax is also
recognised in other comprehensive income or equity, respectively.
3.11. Employment benefits
Defined contribution plans
The Group pays fixed contributions into independent entities in relation to several state plans
and insurance for individual employees. The Group has no legal or constructive obligations to
pay contributions in addition to its fixed contributions, which are recognised as an expense in
the period that relevant employee services are received.
Short-term employee benefits
Short-term employee benefits, including annual leave entitlement, are current liabilities
included in employee benefits, measured at the undiscounted amount that the Group expects
to pay as a result of the unused entitlement.
3.12. Impairment testing of other intangible assets, property, plant and equipment and
investments in associates
For impairment assessment purposes, assets are grouped at the lowest levels for which there
are largely independent cash inflows (cash-generating units). As a result, some assets are
tested individually for impairment and some are tested at cash-generating unit level. All other
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 28 of 75
individual assets or cash-generating units are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s or cash-generating unit's
carrying amount exceeds its recoverable amount, which is the higher of fair value less costs to
sell and value-in-use. Any reversal of an impairment loss will be limited to what the carrying
amount would have been, net of depreciation or amortisation, if no impairment had taken place.
To determine the value-in-use, management estimates expected future cash flows from each
cash-generating unit and determines a suitable interest rate in order to calculate the present
value of those cash flows. The data used for impairment testing procedures are directly linked
to the Group’s latest approved budget, adjusted as necessary to exclude the effects of future
reorganisations and asset enhancements. Discount factors are determined individually for each
cash-generating unit and reflect management’s assessment of respective risk profiles, such as
market and asset-specific risks factors.
Impairment losses for cash-generating units is charged pro rata to the other assets in the cash-
generating unit. All assets are subsequently reassessed for indications that an impairment loss
previously recognised may no longer exist. An impairment charge is reversed if the cash-
generating unit’s recoverable amount exceeds its carrying amount.
3.13. Financial instruments
A financial instrument is recognised when the Group becomes a party to the contractual
provisions of the instrument. Financial assets are derecognised when the Group’s contractual
rights to the cash flows from the financial assets expire or when the Group transfers the
financial asset to another party without retaining control or substantially all risks and rewards
of the asset. Regular way purchases and sales of financial assets are accounted for at trade
date, i.e. the date that the Group commits itself to purchase or sell the asset. Financial liabilities
are derecognised when the Group’s obligations specified in the contract expire or are
discharged or cancelled.
Financial assets
Following NZ IFRS 9 treatment, the Group classifies its financial assets as those to be
measured at amortised cost (loans, trade receivables and lease receivables), and those to be
measured at fair value either through OCI or through profit or loss.
Financial assets that are stated at amortised cost are reviewed individually at balance date. In
relation to the impairment of financial assets, NZ IFRS 9 requires an expected credit loss model
(‘ECL’). The expected credit loss model requires the Group to account for expected credit
losses and changes in those expected credit losses at each reporting date to reflect changes
in credit risk since initial recognition of the financial assets i.e. a credit event does not have to
have occurred before credit losses are recognised. The Group has adopted the simplified
method for its ECL calculations. Refer to Note 28.2 Credit Risk.
Non-derivative financial instruments
Non-derivative financial instruments comprise trade receivables and other debtors, which are
initially recognised at fair value plus transaction costs and subsequently measured at
amortised cost, cash and cash equivalents, loans and borrowings (initially recognised at
fair value plus transaction costs and subsequently measured at amortised cost), and creditors
and accruals which are initially recognised at fair value and subsequently measured at
amortised cost.
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 29 of 75
Interest income and expense
Interest income and expenses are reported on an accrual basis using the effective interest
method.
3.14. Intangible assets
Recognition of intangible assets
Acquired intangible assets
Trademarks, global IP rights and rights acquired in a business combination that qualify for
separate recognition are initially recognised as intangible assets at their fair values.
Subsequent measurement
Intangible assets not of an indefinite life are accounted for using the cost model whereby
capitalised costs are amortised on a straight-line basis over their estimated useful lives, as
these assets are considered finite. Residual values and useful lives are reviewed at each
reporting date. In addition, they are subject to impairment testing as described in Note 3.12. As
of 31 March 2021 the remaining useful life for Trademark available is 7 years and the useful
life for Franchise System is 13 years.
Amortisation has been included within depreciation and amortisation.
Intangible assets (Global IP rights) of an indefinite life are tested for impairment annually by
comparing their carrying amount with their recoverable amount. An estimate of an assets
recoverable amount made in a preceding period may be used in the impairment test for that
asset in the current period provided certain criteria are met.
When an intangible asset is disposed of, the gain or loss on disposal is determined as the
difference between the proceeds and the carrying amount of the asset and is recognised in
profit or loss within other income or other expenses.
3.15. Property, plant and equipment
Property, plant and equipment (comprising fittings and furniture, plant and equipment and
motor vehicles) are initially recognised at acquisition cost or manufacturing cost, including any
costs directly attributable to bringing the assets to the location and condition necessary for them
to be capable of operating in the manner intended by the Group’s management.
Property, plant and equipment are subsequently measured using the cost model: cost less
subsequent depreciation and impairment losses.
Depreciation is recognised on a straight-line basis to write down the cost less estimated
residual value of property, plant and equipment. The following useful lives are applied:
• Computer equipment: 2 - 5 years
• Furniture and fittings: 3 - 12 years
• Plant and equipment: 3 - 12 years
• Motor vehicles: 5 - 8 years.
Material residual value estimates and estimates of useful life are updated as required, but at
least annually.
Gains or losses arising on the disposal of plant and equipment are determined as the difference
between the disposal proceeds and the carrying amount of the assets and are recognised in
profit or loss within other income or other expenses.
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 30 of 75
3.16. Non-current assets (or disposal groups) held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount
will be recovered principally through a sale transaction rather than through continuing use and
a sale is considered highly probable. They are measured at the lower of their carrying amount
and fair value less costs to sell, except for assets such as deferred tax assets, assets arising
from employee benefits, financial assets and investment property that are carried at fair value
and contractual rights under insurance contracts, which are specifically exempt from this
requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or
disposal group) to fair value less costs to sell. A gain is recognised for any subsequent
increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any
cumulative impairment loss previously recognised. A gain or loss not previously recognised by
the date of the sale of the non-current asset (or disposal group) is recognised at the date of
derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or
amortised while they are classified as held for sale. Interest and other expenses attributable to
the liabilities of a disposal group classified as held for sale continue to be recognised
Non-current assets classified as held for sale and the assets of a disposal group classified as
held for sale are presented separately from the other assets in the balance sheet. The liabilities
of a disposal group classified as held for sale are presented separately from other liabilities in
the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is classified
as held for sale and that represents a separate major line of business or geographical area of
operations, is part of a single co-ordinated plan to dispose of such a line of business or area of
operations, or is a subsidiary acquired exclusively with a view to resale. The results of
discontinued operations are presented separately in the statement of profit or loss.
3.17. Equity, reserves and dividend payments
Share capital represents the consideration received for shares that have been issued. Any
transaction costs associated with the issuing of shares are deducted from share capital, net of
any related income tax benefits.
Other components of equity include the following:
• Foreign currency translation reserve – comprises foreign currency translation differences
arising on the translation of consolidated financial statements of the Group's foreign entities
into NZD (see Note 3.6),
• Share based payment reserve,
• Accumulated losses include all current and prior period results,
• Non-controlling interests.
Dividend distributions payable to equity shareholders are included in other liabilities when the
dividends have been approved in a general meeting prior to the reporting date.
All transactions with owners of the parent are recorded separately within equity.
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 31 of 75
3.18. Significant management judgement in applying accounting policies and
estimation uncertainty
When preparing the consolidated financial statements, management undertakes a number of
judgements, estimates and assumptions about the recognition and measurement of assets,
liabilities, income and expenses as follows:
Intangible assets
Intangible assets are recognised on business combinations if they are separable from the
acquired entity or give rise to other contractual/legal rights under IFRS3. The amounts of
intangibles are estimated by using appropriate valuation techniques. The useful economic life
of externally acquired intangible assets are initially recognised at cost and subsequently
amortised on a straight-line basis over their useful economic lives.
Please refer to note 31 for the intangible assets recognised from the acquisition of Triple Two
Coffee.
Contingent consideration
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to
pay contingent consideration that meets the definition of a financial instrument is classified as
equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other
contingent consideration is remeasured at fair value at each reporting date and subsequent
changes in the fair value of the contingent consideration are recognised in profit or loss.
The Group has measured its contingent consideration in relation to the earn-out provision for Triple
Two Coffee acquisition based on the budgeted EBITDA for the calendar years from 2020 to 2022
as approved by the management.
Please refer to Note 31 for the contingent consideration recognised from the acquisition of Triple
Two Coffee.
Impairment on Goodwill
The Group is required to test, at least on an annual basis, whether goodwill has suffered any
impairment. Impairment loss incurred when the carrying amount of the goodwill more than its
recoverable amount. The Group has determined the recoverable amount based on its value in
use, being the budgeted cashflow at the Cash Generating Unit (CGU) level. The Group has
determined the Goodwill at the CGU level, being the Triple Two Coffee Group as this is the
smallest identifiable group of assets that generates cash inflows that are largely independent
of the IP rights of the franchise system of Triple Two Coffee.
Please refer to Note 15 for further disclosure of the impairment on Goodwill.
Going concern
The considered view of the Board of Directors of the Company is that, after making enquiries,
we have a reasonable expectation that Cooks Global Foods Limited (the Company) and Group
have access to adequate resources to continue operations for the foreseeable future. For this
reason, the Board of Directors considers the adoption of the going concern assumption in
preparing the consolidated financial statements for the year ended 31 March 2021 to be
appropriate. (See Note 4).
Deferred Costs
The Group estimates the amount of direct labour costs pertaining to pre-opened franchises and
in accordance with IFRS 15.
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 32 of 75
Leases
Extension and termination options
Extension and termination options are included in a number of leases across the Group.
These terms are used to maximise operational flexibility in terms of managing contracts. The
majority of extension and termination options held are exercisable only by the Group and not
by the respective lessor.
Critical judgements in determining the lease term
In determining the lease term, management considers all facts and circumstances that create
an economic incentive to exercise an extension option, or not exercise a termination option.
Extension options (or periods after termination options) are only included in the lease term if
the lease is reasonably certain to be extended (or not terminated).
The assessment is reviewed if a significant event or a significant change in circumstances
occurs which affects this assessment and that is within the control of the lessee.
Incremental borrowing rates
Lease liabilities are measured by discounting the lease payments using the interest rate
implicit in the lease. If that rate cannot be readily determined, which is generally the case for
leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary to obtain an asset of
similar value to the right-of-use asset in a similar economic environment with similar terms,
security and conditions.
To determine the incremental borrowing rate, the Group:
• Uses a build-up approach that starts with a risk-free interest rate, adjusted for the credit risk
spread of the lessee. The credit risk spread is determined by reference to recent third-party
financing received by the individual lessee, or indicative quotes obtained from the lessee’s
primary lender.
• Make adjustments specific to the lease, e.g. term, security, country and currency.
Impairment testing of intangible assets
In assessing impairment, management estimates the recoverable amount of each asset or
cash-generating unit based on various valuation models as deemed appropriate. Estimation
uncertainty relates to assumptions and judgements used as disclosed in Note 15.
Carrying value of receivables
The allowance for expected credit losses assessment requires a degree of estimation and
judgement. It is based on the lifetime expected credit loss, grouped based on days overdue
and makes assumptions to allocate an overall expected credit loss rate for each group. In
making this judgement, the Group evaluates amongst other factors whether there is objective
evidence of significant financial difficulty of individual customers or customer groups, whether
there has been breach of contract such as default in payment terms, whether it has become
probable that the customer or other party will enter into bankruptcy or other financial
reorganisation, the disappearance of an active market for that customer because of financial
difficulties, and national or local economic conditions that could impact on the customer (see
Notes 11 and 28.2). Apart from historical collection rates, the Group also evaluates forward-
looking information that is available. The allowance for expected credit losses, as disclosed in
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 33 of 75
Note 28.2, is calculated based on the information available at the time of preparation. The
actual credit losses in future years may be higher or lower.
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognised is based on an assessment of the
probability of the Group’s future taxable income against which the deferred tax assets can be
utilised. In addition, significant judgement is required in assessing the impact of any legal or
economic limits or uncertainties in various tax jurisdictions (See Note 9).
4. Going Concern
The Group reported a loss for continuing operation of $2,539,000 (2020: $3,590,000) and
operating cash inflows of $36,000 (2020: inflows of $193,000) for the year ended 31 March
2021.
As at 31 March 2021 the Group has reported Net Liability of $1,721,000 (2020 Net Liabilities of
$5,711,000) and current liabilities exceed current assets by an amount of $14,231,000 (2020:
$5,791,000).
Included in current liabilities is $5,196,000 of Deferred Revenue. The deferred revenue is a non-
cash item and will be recognised in revenue as the Group’s franchisees open stores or when
the services are provided. Also included in current liabilities is $6,431,000 of Contingent
Consideration. It is the intention of the Directors that the contingent consideration will be settled
by the issuance of shares in the Company.
The ability of the Group to pay its debts as they fall due and to realise their assets and extinguish
their liabilities in the normal course of business at the amounts stated in the consolidated
financial statements and to continue trading has been considered by the Directors in the
adoption of the going concern assumption during the preparation of these financial statements.
The Directors forecast that the Group can manage its cash flow requirements at levels
appropriate to meet its cash commitments for the foreseeable future being a period of at least
12 months from the date of authorisation of these consolidated financial statements. In reaching
this conclusion, the Directors have considered the achievability of the plans and assumptions
underlying those forecasts. The key assumptions include:
• Opening multiple new stores in the United Kingdom in FY22, with seven sites already
opened in the first quarter
• High vaccination levels in the UK and Ireland have increased, and government restrictions
are expected to ease, which will lead to increased economic activity.
• The Group has a strong Cash position of $886,000 as at 31 March 2021
• The Budget for the FY22 presents a positive cash inflow of $3.36m.
• Group’s ability to successfully conclude present discussions regarding the roll-over of
existing debt
• Group’s ability to raise debt or equity funds as part of an overall strategy to re-gear the
balance sheet as part of the overall restructuring plan that is in progress.
The ability of related parties of Keith Jackson to continue to provide funding as required,
and market conditions which the Group operates in, including impacts of Covid-19.
The Directors have reasonable expectation that the Group has sufficient headroom in its cash
resources and shareholder support to allow the Group to continue to operate for the foreseeable
future or alternatively it can manage its working capital requirements to create additional
required headroom.
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 34 of 75
Any significant departure from the above assumptions may cast significant doubt over the ability
to continue as a going concern for the foreseeable future.
Whilst the Directors acknowledge that there are capital raising, credit, exchange and liquidity
risks in the global economic market in which the Group operates, they are confident that
additional capital or funding will be sourced by the Group. In particular, the Directors received a
confirmation from related parties of Keith Jackson, that they will continue to financially support
the Group for the foreseeable future. They note the Group has a track record of obtaining
financial support from cornerstone investors and related parties and, where necessary,
negotiating the deferment of debt repayments.
The Directors are also confident that operating cash flows will continue to improve as a result
of the recovery from the various government imposed restrictions related to Covid-19,
restructuring activities that have been undertaken, most recently with the sale of the
Scarborough Fair business in NZ plus the disposal of assets held for sale in the UK, along with
reductions in corporate office costs, the acquisition of Triple Two in the United Kingdom, to
reduce the extent of cash outflow and improve profitability.
The Directors continue to consider other opportunities to further improve the Group’s cash
position which include discussing collaborations with partners overseas, negotiations with
potential strategic equity partners, investigating new facility lines, ongoing discussions in the UK
and Ireland relating to potential acquisitions, rationalising the business wherever possible to
concentrate on core business activity and greater focus on improving existing core business
activities.
After considering all available information, the Directors have concluded that there are
reasonable grounds to believe that the forecasts and plans are achievable, the Group will be
able to pay its debts as and when they become due and payable, there is sufficient headroom
in available cash resources, and the basis of preparation of the financial report on a going
concern basis is appropriate.
Should the Group be unable to continue as a going concern it may be required to realise its
assets and discharge its liabilities other than in the normal course of business and at amounts
different to those stated in the consolidated financial statements. The consolidated financial
statements do not include any adjustments relating to the recoverability and classification of
asset carrying amounts or the amount of liabilities that might result should the Group be unable
to continue as a going concern and meets its debts as and when they fall due.
5. Revenue
The Group’s revenue is analysed as follows for each major category:
Continuing OperationsDiscontinued Operations
31-Mar31-Mar31-Mar31-Mar
2021202020212020
$'000$'000$'000$'000
Royalties7362,4001-
Incentives from Suppliers489959--
Franchise fees307466--
32372782,941
Other trading revenue150328735-
Group revenue 1,714 4,190 1,014 2,941
Sale of Beverage
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 35 of 75
Included in franchise fees is the amortisation of deferred revenue related to the sale of
country and regional franchises and store franchises.During the 31 March 2021 year, the
Group’s franchisees opened 26 new stores (2020:12).
Grant income
Included in other income of $1.1m, there is grant income of $809,000 relating to the wage
subsidy the Governments due to Covid-19 pandemic in the United Kingdom, Ireland and New
Zealand.
6. Employee costs
Expenses recognised for employee costs are analysed below:
7. Other expenses
Expenses recognised as other costs are analysed below:
Continuing Operations
Discontinued Operations
31-Mar
31-Mar
31-Mar
31-Mar
2021
2020
2021
2020
$'000
$'000
$'000
$'000
Wages, salaries
2,007
1,365
371
1,171
Defined contribution funds
45
54
4
-
Other staff costs
208
387
22
-
2,260
1,806
397
1,171
Continuing Operations
Discontinued Operations
31-Mar
31-Mar
31-Mar
31-Mar
2021
2020
2021
2020
$'000
$'000
$'000
$'000
Administration and other costs
354
150
506
424
Directors fees
80
80
-
3
Selling and distribution costs
-
3
-
-
Management fees
100
180
-
-
Marketing costs
299
481
-
185
Professional and consulting services
539
257
73
26
Travel costs
189
334
-
1
1,560
1,485
579
639
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 36 of 75
8. Finance costs
Finance costs for the reporting periods consist of the following:
9. Income Tax and Deferred Tax
The major components of tax expense and the reconciliation of the expected tax expense
/credit based on the domestic effective tax rate of Cooks Global Foods Limited at 28% and the
reported tax expense/credit in profit or loss are as follows:
Continuing Operations
Discontinued Operations
31-Mar
31-Mar
31-Mar
31-Mar
2021
2020
2021
2020
$'000
$'000
$'000
$'000
Finance charges
15
16
1
134
Interest expense on leases
1,250
1,192
-
-
Interest on loans
774
534
-
-
2,039
1,742
1
134
31-Mar31-Mar
20212020
$'000$'000
Loss before tax from continuing operations(2,618)(3,597)
Loss before tax from discontinuing operations(7)(1,593)
(2,625)(5,190)
Domestic tax rate for Cooks Global Foods Limited28%28%
Expected tax expense (income)(735)(1,453)
Adjustment for tax-rate differences in foreign
jurisdictions183149
Adjustment for non-deductible expenses:
Relating to amortisation of intangible assets23
Relating to loss from discontinued operations and write-
down of investment in Associate
-
677
Other non-deductible expenses990
Actual tax expense (income)(541)(534)
Tax expense (income) comprises:
Current tax expense (income)(541)(534)
Deferred tax expense (income):
- Origination and reversal of temporary differences(7)(34)
- Temporary difference relating to amortisation of
intellectual property on acquisition
(80)
-
- Tax losses adjustment to prior period(355)-
- Tax Losses not recognised927766
- Unrecognised Tax Losses(24)(205)
Income tax expense (income)(80)(7)
Income tax expense (income) is attributable to:
Loss from continuing operations(80)(7)
Loss from discontinued operations- -
(80)(7)
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 37 of 75
The Group has computed tax losses within each jurisdiction since acquisition as follows:
At 31 March 2021, the Group has deferred tax liabilities relating to acquired Franchise System
in the UK amounting to $1.31m. The deferred tax liabilities are not expected to crystallise within
the next 12 months.
10. Cash and cash equivalents
Cash and cash equivalents consist of the following:
There are no restrictions on the cash and cash equivalents.
The Group had nil overdraft banking facilities as at 31 March 2021 (2020: $NIL).
11. Trade and other receivables and other current assets
Trade and other receivables are initially recognised at the fair value of the amounts to be
received, plus transaction costs (if any).
The Group has recognised expected credit losses in the Statement of Profit or Loss and Other
Comprehensive Income by applying the simplified impairment approach, whereby upon initial
measurement of the trade receivables, the Group considers all credit losses that are expected
to occur during the lifetime of the receivable. The Group has reviewed the historical ageing
analysis of gross trade receivables and considered forward looking macro-economic factors,
by geographic region, to determine the expected credit loss rate. This rate is applied to
outstanding gross trade receivables as at 31 March 2021 to calculate the allowance for
expected credit losses.
(a) Trade and other receivables consist of the following:
31-Mar
31-Mar
2021
2020
$'000
$'000
New Zealand
8,746
7,118
United Kingdom
9,911
8,384
Ireland
1,130
984
Canada
162
161
Australia
328
320
20,276
16,967
31-Mar
31-Mar
2021
2020
$'000
$'000
Cash at bank and in hand:
NZD
1
49
EUR
85
43
GBP
800
161
Other
-
2
Cash and cash equivalents
886
255
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 38 of 75
(b) As at 31 March the ageing of trade receivables is as follows:
Included in trade receivable of $4.9m, $1.3m relates to rent receivable.
(c) Other current assets consist of the following:
Deferred Costs represent the project costs capitalised for the revenue haven’t derived for
Triple Two Coffee. This includes direct related materials and external costs, and direct labour.
Please refer to Note 12.
12. Deferred Costs
Triple Two under their contract of services with their franchisees have staff working on
specific projects and contracts to expand their brand through these franchisees. The
performance obligation (under IFRS 15) is attributed to the opening of a store and/or specific
obligations if shopfit income is not stipulated. The deferred costs are from the specific staff
who work to complete these performance obligations or contribute their time to the specific
contracts.
Under this methodology, wage costs of personnel directly related to the services (and for
valuation purposes their salary) has been capitalised in line with store openings and contracts
entered in to with various franchisees and has been recorded as deferred costs in the
Balance Sheet. This includes staffs and project management, property design and training.
31-Mar
31-Mar
2021
2020
$'000
$'000
Trade and other receivables
Trade receivables
4,883
1,171
Less: provision for expected credit losses
(268)
(220)
4,615
951
Movements in provision
Opening Balance
(220)
(317)
Bad Debts write-off
25
121
Provision for expected credit losses
(73)
(24)
Closing Balance
(268)
(220)
31-Mar
31-Mar
2021
2020
$'000
$'000
Trade receivables
Current
702
552
31 to 60 days
763
52
61 to 90 days
454
-
> 90 days
2,964
567
4,883
1,171
31-Mar
31-Mar
2021
2020
$'000
$'000
Prepayments
112
407
Deferred Costs
1,131
-
Other short-term assets
31
254
Other current assets
1,274
661
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 39 of 75
Key assumptions:
• Staff time spent working with specific contracts: 80%
• Furloughed staff was discounted for the time they were on leave – this is to partly
offset the government grant received on behalf of furloughed staff
13. Assets and liabilities classified as held-for-sale and discontinued operations
The Group had previously classified certain operations as discontinued. During the year ended
31 March 2021, the Group has:
• Sold Scarborough Fair Limited in NZ
• Closed Scarborough Fair Foods Pty Limited in Australia
• Closed café stores Durham and Putney (UK)
At as 31 March 2021, the Group classified its UK retail operations as asset held for sale, which
comprised of all remaining corporate-held café stores located in the UK, being Lancaster and
Sunderland as being held for sale. These stores became corporate stores due to the
franchisees being unable to successfully operate the businesses and the concept has always
been to hold the stores for sale whilst improving the operational performance or reviewing the
store’s opportunities. The Group remains committed to its plan to sell these stores.
The Group classified its USA franchising & retail business as a discontinued operation for the
year ended 31 March 2021. The USA franchising & retail operation was an operating division
of Franchise Development Limited.
As at 31 March 2020, the Group classified its beverage supply business as a discontinued
operation. The associated assets and liabilities were consequently presented as held for sale
in the 2020 financial statements.
13.1. Financial performance and cash flow information
The financial performance and cash flow information presented are for the year ended 31
March 2021 and the year ended 31 March 2020.
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 40 of 75
14. Interests in other entities
14.1. Interests in material subsidiaries
14.2. Interest in associate
During the year, the Group divested its shares in SYI for nil consideration.
31-Mar
31-Mar
2021
2020
$'000
$'000
Results of discontinued operation
Revenue
732
2,941
Other income
380
-
Raw materials and consumables used
(145)
(1,614)
Depreciation and amortisation
-
(573)
Property related costs
-
(398)
Net foreign exchange (losses)/gains
4
(5)
Employee costs
(397)
(1,171)
Other expenses
(579)
(639)
Operating profit (loss)
(6)
(1,459)
Finance costs
(1)
(134)
Loss before income tax
(7)
(1,593)
Income tax (expense)/credit
-
-
Loss for the year from discontinued operation
(7)
(1,593)
Amounts included in accumulated OCI:
Foreign currency translation adjustments
-
(4)
Reserve of disposal group classified as held for sale
-
(4)
Cash flows used in discontinued operation
Net cash used in operating activities
158
(256)
Net cash used in investing activities
-
-
Net cash used in financing activities
-
(364)
Net cash flows for the year
158
(620)
Country
Principal activity
2021
2020
Bishops Café Limited
England
100
100
Food and beverage
Esquires Coffee UK Limited
England
100
100
Food and beverage
Esquires Real Estate (UK) Limited
England
100
100
Store Lease Holding
Esquires Coffee Houses Ireland Limited
Ireland
100
100
Food and beverage
Esquires Coffee Houses Europe Limited
Ireland
100
100
Master Franchisor - Holding Master Franchise Agreement
Triple Two Holdings Limited
UK
100
-
Holding company
Triple Two Coffee Franchise Limited
UK
100
-
Master Franchisor - Holding Master Franchise Agreement
TTC Contractors Limited
UK
100
-
Fit Out and Construction
Triple Two Coffee Property Limited
UK
100
-
Property Search and Management
Triple Two Coffee London Limited
UK
100
-
Regional Franchisor
% Holding
Name of entity
Place of
business/country
of incorporation
Nature of
relationship
Measurement
method
2021202020212020
%%$'000$'000
Shanghai Yinshi Food
and Beverage
Management Company
Limited ("SYI")
China0.00%21.00%AssociateEquity method--
% of ownership
interestCarrying amount
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 41 of 75
15. Intangible Assets
The Group acquired trademarks, Global Intellectual Property rights (“Global IP Rights”) and
Goodwill through business acquisitions. During 2021 the Group acquired Triple Two Franchise
System in the UK. Please refer to Note 31.
Management assessed the recoverable amounts of the Group’s Global IP Rights asset using
‘value in use’ calculations to assess for any impairment.
Global IP rights were tested for impairment using discounted cash flow projections based on
management approved forecasts for a 2-year period.
Key assumptions in the models were:
• FY22 reflects the partial recovery to pre-Covid levels in UK and Ireland markets with
the key assumption being that there will be no more long term lockdowns that will impact
on the ability of the franchise store network to operate in a normal manner.
• FY23 +40% year on year revenue growth that relates to FY23 being a full year of
“normal trading” in core markets and the benefits of the new store acquisition program
with the store numbers in UK & Ireland at the end of FY23 forecast to be 122 compared
to 96 at the end of FY22;
• Long term growth rate of 1.5% per annum from FY23 onwards;
• exchange rates of 0.56 (NZD/EURO) and 0.50 (NZD/GBP); and
• a discount rate of 13% per annum.
Based on this work the recoverable amount for Global IP rights was assessed by management
to be above its existing carrying value with no impairment required.
Trademarks
Global IP
Rights
Franchise
Rights
Total
$'000
$'000
$'000
Cost
Balance at 1 April 2019
86
3,243
-
3,329
Additions
6
2
-
8
Balance at 31 March 2020
92
3,245
-
3,337
Balance at 1 April 2020
92
3,245
-
3,337
Additions
1
-
4,950
4,951
Balance at 31 March 2021
93
3,245
4,950
8,288
Accumulated amortisation
Balance at 1 April 2019
(53)
(434)
-
(487)
Amortisation charge for the year
(10)
-
-
(10)
Balance at 31 March 2020
(63)
(434)
-
(497)
Balance at 1 April 2020
(63)
(434)
-
(497)
Amortisation charge for the year
(10)
-
(286)
(296)
Balance at 31 March 2021
(73)
(434)
(286)
(793)
Carrying amounts
At 31 March 2020
29
2,811
-
2,840
At 31 March 2021
20
2,811
4,664
7,495
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 42 of 75
Goodwill:
The Group has recorded Goodwill in the business combination of Triple Two Coffee on 19 June
2020. Refer to Note 31. The Group is required to test, on an annual basis, whether goodwill
has suffered any impairment.
The carrying amount of Goodwill is allocated to Triple Two Coffee as the separate cash
generated unit (CGU). Recoverable amount of is determined based on the “value in use”
calculations for Triple Two Coffee. The use of this method requires the estimation of future
cash flows for projected 2 years and the determination of a discount rate in order to calculate
the present value of the cash flows.
The key assumptions in the models were:
• Long term growth rate of 3.0% per annum from FY23 onwards;
• exchange rates of 0.50 (NZD/GBP); and
• a post-tax discount rate of 14% per annum.
If any of the following changes were made to the above key assumptions the carrying amount and
the recoverable amount would be equal.
Current Revised
Long-term growth rate 3.0% 1.5%
Exchange rate NZD/ GBP 0.50 0.56
Post-tax discount rate 14.0% 15.3%
Based on this work the recoverable amount for Goodwill was assessed by management to be
above its existing carrying value with no impairment required.
Goodwill
$'000
Cost
Balance at 1 April 2019
-
Additions
-
Balance at 31 March 2020
-
Balance at 1 April 2020
-
Additions
11,569
Balance at 31 March 2021
11,569
Carrying amounts
At 31 March 2020
-
At 31 March 2021
11,569
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 43 of 75
16. Property, plant and equipment
17. Trade and other payables
Trade and other payables recognised are all short-term and consist of the following:
The carrying value of trade and other payables classified as financial liabilities measured at
amortised cost approximates fair value. Refer to Note 28.1 on foreign currency risk.
Included in the trade payable of $3.04m is the $1.3m relates to rent payable to the landlords,
which is recoverable from the franchisees (refer Note 11b)
Furniture &
Fittings
Plant &
Equipment
Computer
Equipment
Motor Vehicles
Total
$'000
$'000
$'000
$'000
$'000
Cost
Balance at 1 April 2019
261
845
306
4
1,416
Additions
19
34
27
-
80
Assets classified as held for sale and other disposals
(124)
(692)
(17)
(4)
(837)
Balance at 31 March 2020
156
187
316
-
659
Balance at 1 April 2020
156
187
316
-
659
Additions
7
36
47
14
104
Disposals
(126)
(198)
(322)
-
(646)
Assets classified as held for sale
(29)
-
(29)
Balance at 31 March 2021
8
26
40
14
88
Accumulated depreciation
Balance at 1 April 2019
(211)
(184)
(234)
-
(629)
Depreciation
(8)
(136)
(43)
-
(187)
Assets classified as held for sale and other disposals
81
208
13
-
302
Balance at 31 March 2020
(138)
(112)
(264)
-
(514)
Balance at 1 April 2020
(138)
(112)
(264)
-
(514)
Depreciation
(25)
(22)
(33)
(1)
(81)
Disposals
573
11
-
-
584
Balance at 31 March 2021
410
(123)
(297)
(1)
(10)
Carrying amounts
At 31 March 2020
18
75
52
-
145
At 31 March 2021
418
(97)
(256)
13
78
31-Mar
31-Mar
2021
2020
Trade and other payables
$'000
$'000
- Trade payables
3,042
2,194
- Related party payables
556
457
- Other payables
1,803
1,345
5,401
3,996
Trade payables
Within Terms
638
1,084
Overdue
2,404
1,109
3,042
2,194
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 44 of 75
18. Deferred revenue
Below is the breakdown of the current and non-current deferred revenue as presented in
the Balance Sheet.
Segment Triple Two UK
Franchising
Global
Franchising &
Design
Total
NZD’000 NZD’000 NZD’000 NZD’000
Opening balance
as of 1 April
2020
Nil
1,116
287
1,403
Additions during
the year
4,220
Nil
Nil
4,220
Additions from
business
acquisition
1,749
Nil
Nil
1,749
Recognised as
revenue during
the year
(162)
(195)
(59)
(416)
Closing
balance as of
31 March 2021
5,807
921
228
6,956
- Current
- Non Current
4,991
816
147
774
58
170
5,196
1,760
Timing of recognition as revenue in Profit & Loss
Please refer Note 3.8 Revenue for the explanation regarding the timing of the revenue
recognition. For Triple Two, $1.45m has been recognised as revenue post 31 March 2021
and as of reporting date.
19. Borrowings and other liabilities
* Further information relating to related party loans and other related party liabilities are
set out in Note 24.
Fair value
The fair value of current borrowings approximates to the carrying amount and the impact of
discounting is not significant.
Current
Non-Current
Current
Non-Current
2021
2021
2020
2020
$'000
$'000
$'000
$'000
Finance Loans
2,629
458
2,608
-
Related Party Loans*
879
2,889
821
2,073
Hire Purchase
-
10
2
18
Payable for acquistion of subsidary*
642
-
-
-
4,150
3,357
3,431
2,091
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 45 of 75
20. Equity
20.1. Share Capital
The share capital of Cooks Global Foods Limited consists of issued ordinary shares, each
share representing one vote at the company’s shareholder meetings. All shares are equally
eligible to receive dividends and the repayment of capital. The shares have no par value.
At 31 March 2021, there was no ordinary share capital unpaid (2020: nil).
During the year ended 31 March 2021, the company issued 101,853,883 new shares (2020:
36,470,701) and no shares were cancelled (2020: nil).
Total of 101,53,883 ordinary shares were issued at issue price of $0.06550 with effect 19
th
June 2020 for acquisition of Triple Two Coffee.
20.2. Loss per share
The calculation of basic and diluted loss per share for the year ended 31 March 2021 was
based on the weighted average number of ordinary shares on issue. The calculation of diluted
earnings per share for the year ended 31 March 2021 was based on the weighted average
number of ordinary shares.
The weighted average numbers of shares are calculated below:
Movements of share capital
31-Mar-21
31-Mar-20
Number of Shares issued:
No. of Shares
No. of Shares
Ordinary shares opening balance
525,979,949
489,509,248
Ordinary shares issued
101,853,882
36,470,701
Ordinary shares bought back on-market and cancelled
-
-
Total ordinary shares authorised at 31 March
627,833,831
525,979,949
Movements of share capital
31-Mar-21
31-Mar-20
Value of Shares issued:
$'000
$'000
Ordinary shares opening balance
45,549
42,517
Ordinary shares issued less share issue expenses
6,671
3,032
Ordinary shares bought back on-market and cancelled
-
-
Ordinary shares to be issued
-
-
Total ordinary shares authorised at period end
52,220
45,549
31-Mar-2131-Mar-20
Weighted average ordinary shares issued602,412,181489,509,248
Weighted average potentially dilutive options issued --
Basic and diluted loss per share (New Zealand Cents)
from continuing and discontinued operations:
(0.42)(1.06)
Basic and diluted loss per share (New Zealand Cents)
from continuing operations:
(0.42)(0.73)
Basic and diluted loss per share (New Zealand Cents)
from discontinued operations:
-(0.33)
Net tangible assets per share (New Zealand Cents)(3.45)(1.75)
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 46 of 75
20.3. Share based payment reserve
Movement in Share based payment reserve
31-Mar 31-Mar
2021 2020
$’000 $’000
Esquires Coffee Ireland Limited share-based payment
Opening balance
2,401 2,163
Amount expensed during current vesting period
- 238
Adjustment based on best available estimate
- -
Closing balance
2,401 2,401
• The Earn-Out relating to the acquisition of the Irish business (Esquires Coffee
Houses Ireland) in 2013 was fully vested at 31 March 2021.
• No earn-out payment has been made as at 31 March 2021.
• The earn-out payment will be settled by the issue of Cooks shares.
21. Leases
The Group leases stores and office premises from various third-party landlords and
subsequently re-lease them to the franchisees under the separate lease contracts. This
lease arrangement is limited to the franchises in the UK and Ireland only. Lease contracts
are typically made for fixed periods of 5 to 10 years but may have extension options. Lease
terms are negotiated on an individual basis and contain a wide range of different terms and
conditions. The lease agreements do not impose any covenants, but leased assets may not
be used as security for borrowing purposes.
Right-of-Use Assets
The right-of-use asset is initially measured at cost, and subsequently at cost less any
accumulated depreciation and impairment losses and adjusted for certain remeasurements
of the lease liability.
Costs included in the measurement of the right-of-use asset comprise the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date, less any lease
incentives received;
• any initial direct costs incurred by the lessee; and
• an estimate of the restoration costs to be incurred by the lessee, recognised and
measured applying NZ IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Weighted average number of shares
31-Mar-21
31-Mar-20
Number of Shares issued:
No. of Shares
No. of Shares
Ordinary shares opening balance
489,509,248
489,509,248
Ordinary shares issued
112,902,933
-
Ordinary shares bought back on-market and cancelled
-
-
Total ordinary shares authorised at 31 March
602,412,181
489,509,248
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 47 of 75
Depreciation is charged so as to write off the cost of assets, over the lease term using the
straight-line method.
Lease Liabilities
The lease liability is initially measured at the present value of the future lease payments over
the lease term that are not paid at the commencement date, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily determined, the lessee's incremental
borrowing rate, being the rate that the lessee would have to pay to borrow over a similar
term, and with a similar security, the funds necessary to obtain an asset of a similar value to
the right-of-use asset in a similar economic environment.
Generally, the Group uses the lessee's incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the following:
• fixed payments (including in-substance fixed payments), less any lease incentives
receivable;
• variable lease payment that are based on an index or a rate;
• amounts expected to be payable by the lessee under residual value guarantees;
• the exercise price of a purchase option if the lessee is reasonably certain to exercise that
option; and
• payments of penalties for terminating the lease, if the lease term reflects the lessee
exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate
cannot be determined, the lessee’s incremental borrowing rate is used, being the rate that
the lessee would have to pay to borrow the funds necessary to obtain an asset of similar
value in a similar economic environment with similar terms and conditions.
The lease liability is subsequently increased by the interest cost on the lease liability and
decreased by lease payments made. It is remeasured when there is a change in future lease
payments arising from:
• A change in an index or rate;
• A change in the estimate of the amount expected to be payable under a residual value
guarantee;
• Changes in the assessment of whether a purchase or extension option is reasonably
certain to be exercised or a termination option is reasonably certain not to be exercised;
or
• A lease modification that is not accounted for as a separate lease.
The Group has applied judgement to determine the lease term for some lease contracts in
which it is a lessee that include renewal options. The assessment of whether the Group is
reasonably certain to exercise such options impacts the lease term, which significantly
affects the amount of lease liabilities and right-of-use assets recognised.
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 48 of 75
As a result of the Covid-19 pandemic, the International Accounting Standards Board (IASB)
has introduced a narrow -scope amendments to IFRS16 to offer relief to lessees in
accounting for lease modifications that arise as a direct result of Covid-19. The practical
expedient applies only to rent concessions occurring as a direct consequence of the Covid-
19 pandemic and only if all of the following conditions are met:
a. The change in lease payments results in revised consideration for the lease that is
substantially the same as, or less than, the consideration for the lease immediately
preceding the change.
b. Any reduction in lease payments affects only payments originally due on or before 30
June 2022.
c. There is no substantive change to other terms and conditions of the lease.
The Group has elected to utilise the practical expedient for all rent concessions that arises
as a direct consequence of the COVID-19 pandemic. The impact of these reliefs is
summarised in Note 21.2.
Finance Lease Receivables
Where the sublease is classified as a finance lease, the Group recognises the assets held
under a finance lease in its statement of financial position and present them as a finance
lease receivable at an amount equal to the net investment in the lease.
The net investment in the lease is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the interest rate
implicit in the lease, or in the case of a sublease, if the interest rate implicit in the sublease
cannot be readily determined, the discount rate used for the head lease (adjusted for any
initial direct costs associated with the sublease).
Lease payments included in the measurement of net investment comprise the following:
• fixed payments (including in-substance fixed payments), less any lease incentives
payable;
• variable lease payment that are based on an index or a rate;
• any residual value guarantees provided to the lessor;
• the exercise price of a purchase option if the lessee is reasonably certain to exercise that
option; and
• payments of penalties for terminating the lease, if the lease term reflects the lessee
exercising that option.
The finance lease receivable is subsequently increased by the interest income on the
finance lease receivable and decreased by lease payment received. It is remeasured when
there is a lease modification that is not accounted for as a separate lease.
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 49 of 75
21.1. Amounts recognised in the Statement of Financial Position
The Statement of Financial Position shows the following amounts relating to leases:
Right-of-use assets
The right-of-use assets relate to the corporate-operated stores which are expected to be
franchised in the UK. In prior year the right-of-use assets also included the corporate office
however this was vacated in the current year and the lease was taken over by an unrelated
third party.
Lease liabilities
The finance lease payable to the landlords that are fall due at the end of reporting period are
$1.3m which is the same as the finance lease receivables and are recorded in the payable
(refer note 17).
Finance lease receivables
The average effective Incremental Borrowing Rate in 2021 is approximately 5.83% per annum.
31-Mar
31-Mar
2021
2020
$'000
$'000
Property
Cost
2,973
2,828
Less: Accumulated depreciation
(505)
-
Net book value as at 1 April 2020
2,468
2,828
Additions
18
-
Remeasurement of lease liability
(297)
-
Movement in FX
54
145
Depreciation expense
(442)
(505)
Disposal
(1,086)
-
Net book value as at 31 March
715
2,468
Cost
1,663
2,973
Less: Accumulated depreciation
(948)
(505)
Net book value as at 31 March
715
2,468
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 50 of 75
The finance lease receivables that are fall due at the end of reporting period are $1.3m which
are recorded in the receivable (refer to Note 11 b). The management has reviewed all the
leases from lease receivable from collectability point of view and no impairment is required.
During the financial year the rent written off by utilising the Covid-19 practical expedient for
rent concessions was $219,000. An additional $650,000 is expected to be provided in financial
year 2022.
Rent reduction as a result of lease modification was $63,000.
The rent relief is due to challenges faced by the tenants due to Covid19 lockdown. With the
high vaccination rate in the UK and EU and life is resuming to normality gradually, the
management is of the opinion that further impairment is not required.
.
21.2. Amounts recognised in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income
The Consolidated Statement of Profit or Loss and Other Comprehensive Income shows the
following amounts relating to leases:
The total cash outflow for leases to franchisee landlords in 2021 was $736,000 (2020 was
$3.05m).
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 51 of 75
21.3. Maturity analysis of lease payments
Lease liabilities as the lessee:
Finance lease arrangements as the lessor:
22. Fees paid to auditor
The Auditor of the Group for 31 March 2021 is William Buck. The auditor for UK firms is
Rouse Partners LLP.
31-Mar
31-Mar
2021
2020
$'000
$'000
Audit of financial statements
- Statutory Audit
83
90
- Overseas firms
64
28
Total fees paid to auditor
147
118
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 52 of 75
23. Reconciliation of cash flows from operating activities
24. Related party transactions
The Group’s related parties include the directors and senior management personnel of the
Group and any associated parties as described below.
Unless otherwise stated, none of the transactions incorporate special terms and conditions and
no guarantees were given or received.
Keith Jackson is a director of Cooks Investment Holdings Limited, Jackson & Associates
Limited, Ascension Capital and Weihai Station Limited and a trustee of Nikau Trust.
Mike Hutcheson is a director of Image Centre Limited and Lighthouse Ventures Holdings
Limited.
Peihuan Wang is a director of Jiajiayue Holding Group Limited and Weihai Station Limited.
Tony McVerry is a director of Esquires Coffee Houses Ireland Limited.
Aiden Keegan is a director of Esquires Coffee UK Limited.
Graham Hodgetts is a director of Triple Two Coffee Holdings Limited.
Sezan Walker is a director of Triple Two Coffee Holdings Limited.
David Hodgetts is a director of Triple Two Coffee Holdings Limited.
Alistair Tillen is a director of Triple Two Coffee Holdings Limited.
Number of shares held by directors and other related parties:
31-Mar
31-Mar
2021
2020
$'000
$'000
Loss after tax
(2,545)
(5,183)
Add non-cash items:
Depreciation and amortisation
819
760
Impairment loss
48
-
Net foreign exchange (losses)/gains
(370)
-
Share of losses of associate
-
168
Impairment of investment in associate
-
2,520
Add/(Less) movements in assets/liabilities:
Inventories
34
166
Trade and other receivables
(5,514)
(655)
Lease receivables
-
1,427
Other short-term assets
651
153
Trade payables
1,410
(7)
Contract liabilities
5,553
94
Other liabilities
(50)
750
Net cash flow applied to operating activities
36
193
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 53 of 75
24.1. Transactions with related parties
The following transactions occurred with related parties during the year:
The above values are exclusive of GST or VAT if any.
31-Mar
31-Mar
2021
2020
Jiajiayue Holding Group
148,203,944
148,203,944
Keith Jackson (including associated parties)
110,240,494
52,443,310
Yunnan Metropolitan Construction Investment Group Co Ltd
100,719,640
100,719,640
Graham Hodgetts
53,218,654
-
Alistair Tillen
20,065,215
-
David Hodgetts
12,120,612
-
Sezan Walker
12,069,685
-
Maretha McVerry
573,687
573,687
CGF Employee Share Trust
562,486
562,486
Lighthouse Ventures Holdings Limited
455,533
455,533
Mike Hutcheson
986,980
367,671
Aiden Keegan
212,488
212,488
31-Mar
31-Mar
2021
2020
$'000
$'000
Purchases of goods and services
Purchase of management services
100
180
Property rental agreement with related party
-
-
Purchase of other services
-
-
Interest paid to related parties
202
341
Other transactions
Related party receivables
-
-
Subscriptions for new ordinary shares
-
2,668
Funding loans advanced by related parties
717
1,792
Subscriptions for ordinary shares to be issued
-
-
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 54 of 75
24.2. Balances outstanding with related parties
The above values are inclusive of GST or VAT if any.
24.3. Transactions with directors and senior management personnel
Key management of the Group are the executive members of Cooks Global Foods Limited’s
Board of Directors and senior management. Directors and senior management personnel
payments (exclusive of GST if any) made during the year includes the following expenses:
31-Mar
31-Mar
2021
2020
$'000
$'000
Outstanding balances arising from purchases of
goods and services
Entities controlled by key management personnel
556
457
Loans to/from related parties
Loans to related parties
Beginning of the year
-
-
Loan reduction
-
-
End of period
-
-
Loans and other payables to related parties
Beginning of the year
2,894
2,621
Loans advanced
717
1,792
Reclassification from/(to) other liabilities
(80)
871
Other liability to related parties from business acquisitions
650
-
Satisfaction of related party receivables
-
(2,668)
Net foreign exchange effects
52
(50)
Interest charged
379
383
Interest paid
(202)
(55)
End of period
4,410
2,894
31-Mar
31-Mar
2021
2020
$'000
$'000
Directors fees
80
80
Salaries, wages and contractor payments
333
986
413
1,066
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 55 of 75
25. Segment reporting
The Group’s reportable segments are business units deriving Royalties and Product Sales to
Franchisees in geographical locations. The management identified Triple Two Coffee as a
sperate operating segment from the UK division due to its scale. The Supply segment
represents the supply of tea/coffee/beverages and fresh produce. The Corporate segment
represents head office operation for the Group.
The Triple Two segment represents nine months trading results from the acquisition date to 31
March 2021. The management considers the figures from 1 April 2020 up to acquisition date
as immaterial due to limited business activities in the UK resulted from the Covid-19 lockdown.
Please refer to Note 31 for more details on the acquisition of Triple Two Coffee.
The Group has also separated operating segments for the business activities intended to be
sold.
Segment information for the reporting period is as follows:
Continuing operations
31/03/2021
Global
franchising
& design
UK
franchising
Middle
East
franchising
& retail
Europe
franchising
& retail
SupplyCorporate Triple Two
Total
Global operational splits$'000$'000$'000$'000$'000$'000$'000$'000
Revenue1535592357737-3661,714
Other income(2)469-96-773731,013
Raw materials and consumables used-(1)-(7)--(130)(138)
Depreciation and amortisation(12)(470)-(5)-(45)(287)(819)
Net foreign exchange (losses)/gains20---(1)351-370
Employee costs(83)(768)-(409)(10)(178)(811)(2,260)
Other expenses(278)(192)-(305)(1)(569)(264)(1,608)
Operating (loss)/profit(205)(326)23(79)25(413)(753)(1,727)
Finance costs(2)(108)-(4)-(776)(1)(892)
Loss before income tax(207)(434)23(83)25(1,189)(755)(2,619)
Income tax (expense)/credit------8080
Loss for the year from continuing operations(207)(434)23(83)25(1,189)(675)(2,539)
Non-current assets
Intangible assets201,318-12-1,4814,6647,495
Property, plant and equipment 1--26-64578
Goodwill------11,56911,569
Discontinued operations
31/03/2021
UK retailSupply
Total
Global operational splits$'000$'000$'000
Revenue626106732
Other income28298380
Raw materials and consumables used(62)(83)(145)
Depreciation and amortisation---
Property related costs---
Net foreign exchange (losses)/gains-44
Employee costs(393)(4)(397)
Other expenses(579)-(579)
Operating (loss)/profit(127)121(6)
Finance costs0(1)(1)
Loss before income tax(127)120(7)
Income tax (expense)/credit---
Loss for the year from discontinued operations(127)120(7)
Non-current assets
Intangible assets---
Assets held for Sale29-29
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 56 of 75
Continuing operations
31 March 2020
Global
franchising &
design
UK
franchising
Middle East
franchising &
retail
Europe
franchising &
retail
Supply
Corporate
Total
Global operational splits
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Revenue
1,077
1,492
222
1,121
171
107
4,190
Other income
-
16
-
-
-
(4)
12
Raw materials and consumables used
(3)
(6)
-
(13)
(111)
-
(133)
Depreciation and amortisation
(14)
(83)
-
(6)
-
(84)
(187)
Property related costs
1
(55)
-
(26)
-
(46)
(126)
Net foreign exchange (losses)/gains
20
(1)
-
(2)
-
(86)
(69)
Employee costs
(112)
(731)
(128)
(468)
(7)
(360)
(1,806)
Other expenses
(352)
(597)
27
(478)
67
(770)
(2,103)
Operating (loss)/profit
617
35
121
128
120
(1,243)
(222)
Finance costs
(1)
(7)
(1)
(2)
(1)
(675)
(687)
Impairment of investment in associate
(2,520)
-
-
-
-
-
(2,520)
Share of net loss of associate accounted for using
the equity method
(168)
-
-
-
-
-
(168)
Loss before income tax
(2,072)
28
120
126
119
(1,918)
(3,597)
Income tax (expense)/credit
-
-
-
-
3
4
7
Loss for the year from continuing operations
(2,072)
28
120
126
122
(1,914)
(3,590)
Non-current assets
Intangible assets
47
845
-
467
-
1,481
2,840
Property, plant and equipment
15
72
-
25
9
24
145
Discontinued operations
31 March 2020
UK retail
USA
franchising &
retail
Supply
Total
Global operational splits
$'000
$'000
$'000
$'000
Revenue
1,899
-
1,042
2,941
Other income
-
-
-
-
Raw materials and consumables used
(605)
-
(1,009)
(1,614)
Depreciation and amortisation
(570)
-
(3)
(573)
Property related costs
(396)
-
(2)
(398)
Net foreign exchange (losses)/gains
-
-
(5)
(5)
Employee costs
(724)
(53)
(394)
(1,171)
Other expenses
(468)
(8)
(163)
(639)
Operating (loss)/profit
(864)
(61)
(534)
(1,459)
Finance costs
(132)
-
(2)
(134)
Impairment of investment in associate
-
-
-
-
Share of net loss of associate accounted for using
the equity method
-
-
-
-
Loss before income tax
(996)
(61)
(536)
(1,593)
Income tax (expense)/credit
-
-
-
-
Loss for the year from discontinued operations
(996)
(61)
(536)
(1,593)
Non-current assets
Intangible assets
-
-
-
-
Assets held for Sale
379
-
43
422
26. Contingencies
Contingent Liabilities
There are no contingent liabilities as at 31 March 2021 (2020: $nil).
27. Capital commitments
There were no capital commitments as at 31 March 2021 (2020: $nil).
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 57 of 75
28. Financial risk management
Due to the broad range of the Group’s activities, there is exposure to a variety of financial risks:
• Market risk (including currency risk and interest rate risk);
• Credit risk; and
• Liquidity risk
The Group’s risk management programme focuses on minimising the potential adverse effects
of these risks. The Group’s business is primarily denominated in foreign currencies. The Group
holds New Zealand dollars and other currencies to settle transactions in the normal course of
business.
28.1. Market risk
Foreign Currency Risk
The Group operates internationally and is exposed to foreign currency risk arising from various
currency exposures. Although the NZD remains the main currency for corporate funding and
Group reporting, the transactions denominated in NZD is diminishing as the growth in the
overseas market outweighs the growth in the New Zealand market, especially with the
purchase of Triple Two business in the UK. As disclosed in Note 25 Segment Reporting, the
revenue generated from the Corporate segment which is denominated in NZD is only $77,000
or 3% of the total group revenue of $2.7 million. This indicates that the Group’s exposure to
foreign currency risk has increased considerably.
A significant amount of the Group’s transactions are carried out other than in New Zealand
Dollars. The Group has debt denominated in foreign currency which is not hedged. Exposures
to currency exchange rates arise from the Group’s overseas company holdings (Ireland and
United Kingdom), and foreign currency denominated income for New Zealand domiciled
companies (royalties, store openings, design and other franchise fees, product sales). These
are primarily denominated in European currency (EURO) and Pound Sterling (GBP).
As disclosed in note 25 Segmental Reporting, global franchising and design, UK franchising,
Triple Two, Middle East franchising and Europe franchising are all primarily transacted in
foreign currency.
The management has performed a sensitivity analysis for a potential foreign currency risk
faced by the group. Based on the current year results, in the event that the NZD weakens
against GBP and GBP/NZD exchange rate decreases by 5%, the impact on the group result
is the loss will be increased by $58,000. If the GBP/NZD exchange rate increase by 5%, the
group loss will be reduced by $52,000.
In the event that the NZD weakens against Euro and EURO/NZD exchange rate decreases
by 5%, the impact on the group result is the loss will be increased by $4,000. If the
EURO/NZD exchange rate increase by 5%, the group loss will be reduced by $4,000.
28.2. Credit Risk
Credit risk is managed on a Group basis. The Group generally trades with customers and
banking counterparties who are well established. Receivables balances are managed by and
reported regularly to senior management according to the Company’s credit management
policies and procedures. The amount outstanding at reporting date represents the maximum
exposure to credit risk.
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 58 of 75
Trade receivables
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which
uses a lifetime expected loss allowance for all trade receivables.
To measure the expected credit losses, trade receivables have been grouped based on the
days past due.
The expected loss rates are based on the payment profiles of sales over a period of 24 months
before 31 March 2021 and the corresponding historical credit losses experienced within this
period. The historical loss rates are adjusted to reflect current and forward-looking information
on macroeconomic factors affecting the ability of the customers to settle the receivables. The
Group has evaluated available forward-looking information and has concluded that there is no
indication that historical loss rates should be adjusted. However, the management has decided
to make an additional provision for expected credit losses of $48,000 for Bahrain and Kuwait
royalties. The provision for impairment of other receivables has increased from $220,000 in
2020 to $268,000 in 2021 as shown on Note 11 (a).
Lease receivables
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which
uses a lifetime expected loss allowance for all lease receivables.
To measure the expected credit losses, lease receivables have been grouped based on shared
credit risk characteristics.
The expected loss rates are based on the historical credit losses experienced for each credit
risk group within a period of 24 months before 31 March 2021. The historical loss rates are
adjusted to reflect current and forward-looking information on macroeconomic factors affecting
the ability of the customers to settle the receivables. The Group has evaluated available
forward-looking information and has concluded that there is no indication that historical loss
rates should be adjusted.
28.3. Liquidity Risk
The Group maintains regular forecasts of liquidity based on expected cash flows. The table
below analyses the Group’s financial liabilities into relevant groups based on the remaining
period at the reporting date to the end of the contractual date. The amounts disclosed are the
contractual undiscounted cash flows.
At 31 March 2021
Less than
1 year
Between
1 and
5 years
Over
5
years
Carrying
Amount
$'000$'000$'000$'000
Trade payables2,392--2,392
Related party payables556--556
Other payables 1,803--1,803
Short term finance loans3,292468-3,739
Related party loans8792,889-3,768
Lease Liabilities3,06612,18610,50019,079
11,98815,54310,50031,337
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 59 of 75
For further details in relation to the liquidity risk refer to Note 4.
28.4. Capital risk management
The Group’s objectives when managing capital is to safeguard the Group’s ability to continue
as a going concern in order to provide returns to shareholders and benefits to other
stakeholders and to maintain an optimal capital structure. The Group currently monitors capital
based on cash requirements and, in order to maintain or adjust the capital structure, generally
issues new shares to investors through share issues. The Group and the Company have not
been subject to any externally imposed capital requirements during the period.
The Group is currently in need of additional capital injections to be able to execute its strategy,
for further details of this refer to Note 4.
29. Financial instruments by category
31-Mar31-Mar
20212020
$'000$'000
Financial assets at amortised cost
Cash and cash equivalents886255
Trade and other receivables4,6151,171
Lease receivables18,28318,323
23,78419,749
Financial liabilities at amortised cost
Trade payables3,0422,194
Borrowings and other liabilities7,5075,522
Lease liability19,07920,870
Related party payables556457
30,18329,043
Finacial liabilities at fair value through profit or loss
Contingent consideration6,431-
6,431-
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 60 of 75
30. Fair value measurement
The table below analyses financial instruments carried at fair value, by valuation method.
The different levels have been defined as follows:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level
1).
• 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 2).
• Inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs) (Level 3).
31. Business Combination
TRIPLE TWO ACQUISITION
On 19
th
June 2020, CGF acquired 100% of the issued shares in Triple Two Coffee Holdings
Limited for the consideration of 102 million CGF shares. The sale and purchase agreement
contains an earn out provision whereby the vendors can increase their consideration when
results in any of the calendar years of 2020 to 2022 are in excess of the performance in the
base year which was 2019. Further details are discussed in section (ii) below.
Triple Two Coffee currently franchises 18 cafes in the UK as at the end of July 2021 and has
been one of the more highly recruited franchises in the UK since the start of 2019. Triple Two
currently operate across a number of regions in the UK, with the initial flagship store opening
in Swindon in August 2016. They now have several sites trading in major towns, cities and
shopping centres across the UK including in London, Colchester, Oxford, Cheltenham,
Cirencester and Hove. The acquisition will increase the group’s market share and provide
economies of scale.
(i) Purchase consideration and fair value of net assets acquired is as follows:
Purchase consideration NZD ‘000
Shares issued (Note 20.1) 6,671
Cash paid 118
Liability at 31 March 2021 (Note 19) 642
Contingent Consideration 6,431
Total purchase consideration 13,862
Level 1
Level 2
Level 3
Total
At 31 March 2021
$'000
$'000
$'000
$'000
-
Assets per the statement of financial position
-
-
-
-
Liabilities per the statement of financial position
Contingent Consideration
-
6,431
6,431
-
-
-
-
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 61 of 75
The initial purchase price was settled by an issue of 101,853,883 shares, the payment
of $118,000 and a final amount payable of $642,000.
The fair values of the assets and liabilities of Triple Two Coffee Holdings at the date of
acquisition are as follows:
NZD’000
Cash and cash equivalents 569
Property, plant and equipment 282
Other assets 221
Receivables 600
Payables (714)
Other payables (224)
Deferred Revenue (1,749)
Borrowings (256)
Net identifiable assets acquired (1,271)
Add: intangible assets 4,950
Less: deferred tax liability (1,386)
Add: goodwill 11,569
Total purchase price 13,862
The fair value of intangible assets with the IP rights of the franchise system has been
determined at the acquisition date. None of the goodwill and intangible assets are
expected to be deductible for tax purposes.
The Group expects to recover the full amount of the Receivables of $600,000 as at 31
March 2021.
(ii) Contingent consideration
There is an earn out provision whereby Triple Two can increase their consideration by
improving on the performance in the base year which was calendar year 2019 and in
any calendar year from 2020 to 2022.
The estimated total consideration of $6.43m is based on the forecasted results
budgeted EBITDA from the calendar years 2021 and 2022.
(iii) Acquisition-related costs
Acquisition-related costs of $31,000 were included in administrative expenses in the
statement of profit or loss in the year ended 31 March 2021.
(iv) Deferred Revenue
The management of Triple Two has applied the five-step revenue model under NZ
IFRS 15, Revenue from Contracts with Customers to determine when to recognise the
revenue generated from the franchise agreements signed with the franchisees and at
what amount.
Based on the management assessment, it is concluded that the franchise agreements
only consist of one Performance Obligation and that obligation is satisfied at a point of
time when the promised services are transferred to the franchisees.
COOKS GLOBAL FOODS LIMITED
Notes to the Consolidated Financial Statements
Page 62 of 75
32. Post-reporting date events
There is no post-reporting date event to be disclosed.
COOKS GLOBAL FOODS LIMITED
Page 63 of 75
STATUTORY INFORMATION AND CORPORATE GOVERNANCE
Directors Relevant Interests in Company Securities as at 31 March 2021
Substantial Security Holder Shares Held
Graeme Keith Jackson, Patricia Frances Jackson
& Philip Mack Picot
106,609,689
Mike Hutcheson 986,980
Total Number of Shares Held: 107,596,669
Director Dealings in Company Securities
There have been the following transactions in respect of Cooks Global Foods Limited (CGF or
Company) securities by directors of the Company (Directors) in the 12 months ending 31 March
2021:
Director Dealings
Mr. Graeme Keith Jackson
Mr. Graeme Keith Jackson is the beneficial holder
of 12,877,811 ordinary shares in the Company
currently held by Graeme Keith Jackson, Patricia
Frances Jackson & Philip Mack Picot.
Interests Register
CGF has D&O insurance which ensures that generally, Directors and officers will incur no monetary
loss as a result of actions undertaken by them. CGF has entered an indemnity in favour of its
Directors for the purposes of Section 162 of the Companies Act 1993.
Use of Company Information
The Board received no notices from Directors wishing to use Company information received in
their capacity as Directors which would not have been ordinarily available.
COOKS GLOBAL FOODS LIMITED
Page 64 of 75
Other Director Interests
Other directorship held during the financial year ended 31 March 2021 held by CGF Directors:
Graeme Keith Jackson
Arana Holdings Limited
Ascension Capital Limited
Esquires Middle East & Africa IP Holdings Limited
CFG Employee Share Trust Limited Esquires Northern Cyprus Limited
Weihai Station Limited Esquires NZ Franchise Holdings Limited
Cooks Investment Holdings Limited Esquires Office Limited
Cooks Supply Limited Esquires Oman Limited
Crux Products Limited Esquires Pakistan Limited
Dairy Farm Investments (Ruawhata) Limited Esquires Port Denarau Marina Limited
Esquires Asia Limited Esquires Portugal Limited
Esquires Bahrain Limited Esquires Qatar Limited
Esquires Canada IP Limited Esquires Romania Limited
Esquires China Limited Esquires Saudi Arabia Limited
Esquires Coffee China Limited Esquires Supply No 2 Limited
Esquires Coffee India Limited Esquires Turkey Limited
Esquires Coffee Malaysia IP Holdings Limited Esquires U.A.E. Limited
Esquires Coffee Supply Limited Esquires UK 1 Limited
Esquires Egypt Limited Franchise Development Limited
Esquires EP & Bahrain Limited Franchise Holdings NZ Limited
Esquires Fiji Limited Franchise Management NZ Limited
Esquires Global IP Holdings Limited Jackson & Associates Limited
Esquires India Limited LSD Global Limited
Esquires Indonesia Limited Nikau Trust
Esquires Iraq IP Holdings Limited Resnik Corporation Limited
Esquires Jordan Limited Scarborough Fair Limited
Esquires Kuwait Limited
Esquires Malaysia Limited
Michael George Rae Hutcheson
2 Life Limited
Lighthouse Ventures Limited
Eschool Holdings Limited Lonely Cow Wines Holdings Limited
Eschool Limited AUT Ventures
Eunoia Holdings Limited Raye Blumenthal Freedman Trust
Hotfoot Retail Services Limited Scarborough Fair Limited
Ice Capital Partners Limited Tangible Media Limited
Image Centre Holdings Limited The Lighthouse Ideas Company Limited
Image Centre Publishing Limited Tradewinds Investment Trust
Auckland University of Technology
Vodafone Events Centre
COOKS GLOBAL FOODS LIMITED
Page 65 of 75
Paul Valentine Mark Elliott
Agribusiness Investments NZ Limited Elliott Capital Advisors Limited
Agribusiness Solutions NZ Limited Parawai Point Trustees Limited
Ignite Finance Limited Time Capital NZ Limited
Ignite Solutions Limited Ignite Nominees Limited
Peihuan Wang
Shanghai Shiban Supply Chain Co. Ltd Spar China Group LTD.
Jiajiayue Group Limited. (China) Weihai Station Limited
Jiajiayue Holding Group Limited (CHINA)
Alex Qiang Kui
Caiyun International Investment Limited
Australia YMCI Pty Limited
Top Spring International Holding Limited
Spread of Quoted Security Holders as at 31 March 2021:
RANGE
SHAREHOLDERS SHARES
NUMBER % NUMBER %
1-1,000 266 42.36 264,611 0.04
1,001-5,000 74 11.78 209,158 0.03
5,001-10,000 19 3.03 146,261 0.02
10,001-50,000 114 18.15 3,232,358 0.51
50,001-100,000 27 4.30 1,943,688 0.31
100,001 and over 128 20.38 622,037,755 99.09
TOTAL 628 100.00 627,833,831 100.00
COOKS GLOBAL FOODS LIMITED
Page 66 of 75
20 Largest Holdings of Equity Securities
As at 31 March 2021:
SUBSTANTIAL PRODUCT HOLDERS
The following information is provided in compliance with section 293 of the Financial Markets
Conduct Act 2013 and is stated as at 31 March 2021. The total number of voting financial products
of Cooks Global Foods Limited at that date was 627,833,831 and ordinary shares are the only such
product on issue.
Holder Name
Number Ordinary
Shares held
Disclosure date
Michael George Rae Hutcheson
and Michelle Marie Hutcheson
986,980 20 May 2019
Graeme Keith Jackson & Patricia
Frances Jackson & Phillip Mack
Picot
106,609,689
31 July 2020
Rank
Investor Name
Total Units
% Issued
Capital
1
Jiajiayue Holding Group
148,203,944
23.61%
2
Graeme Keith Jackson &
106,609,689
16.98%
3
Yunnan Health AND Tourism
100,719,640
16.04%
4
Graham Hodgetts
53,218,654
8.48%
5
Adg Investments Limited
42,199,758
6.72%
6
Alistair Tillen
20,065,215
3.20%
7
Suhua He
13,915,182
2.22%
8
David Hodgetts
12,120,612
1.93%
9
Sezan Walker
12,069,685
1.92%
10
PKB Trustees Limited
8,520,519
1.36%
11
New Zealand Central Securities
7,186,465
1.14%
12
Shuxin Zhang
6,529,904
1.04%
13
Graham Maxwell Drury &
6,451,135
1.03%
14
Peter James Kirton
5,005,723
0.80%
15
Anne Margaret Mervis
4,521,477
0.72%
16
Emma Jane Waite
3,275,333
0.52%
17
Real Action Group Limited
3,251,334
0.52%
18
Lewis Andrew Deeks & Wendy May
2,960,000
0.47%
19
Neil Robert Butler & Kim Maree
2,500,000
0.40%
20
Tasman Capital Limited
2,362,780
0.38%
561,687,049
89.46%
COOKS GLOBAL FOODS LIMITED
Page 67 of 75
EMPLOYEE REMUNERATION
During the accounting period, the following number of CGF’s employees/independent contractors
(not being a director) received remuneration and other benefits in that person’s capacity as
employee/independent contractor of CGF, the value of which exceeded $100,000 per annum:
Remuneration ranges
For CGF Group:
Number of
employees
2021
Number of
employees
2020
100,000 – 109,999 - -
110,000 – 119,999 1 1
130,000 – 139,999 1 1
140,000 – 149,999 - -
160,000 – 169,999 - -
170,000 – 179,999 1 1
180,000 – 189,999 1 1
190,000 – 199,999 - -
200,000 – 209,999 1 1
DIRECTOR REMUNERATION AND OTHER BENEFITS
During the accounting period, the Directors of the Company received the following remuneration:
Name
Directors’
Fees
Executive
Salary
Share based
payments
Mike Hutcheson
39,600 - -
Graeme Keith Jackson -
100,000 -
Paul Elliott
40,000 - -
Peihuan Wang
- - -
Alex Qiang Kui
- - -
Donations
No donations were made in the 12-month financial period ended 31 March 2021
COOKS GLOBAL FOODS LIMITED
Page 68 of 75
Cooks Global Foods Limited (CGF) believes in the benefit of good corporate governance and the
value it provides for shareholders and other stakeholders. CGF is committed to ensuring that the
company meets best practice corporate governance principles, to the extent that it is appropriate
for the nature of CGF’s operations.
The board of CGF is responsible for establishing and implementing the company’s corporate
governance frameworks, and is committed to fulfilling this role in accordance with best practice
having regard to applicable laws, the NZX Corporate Governance Code and the Financial Markets
Authority Corporate Governance – Principles and Guidelines.
As at 31 March 2020, CGF has implemented policies and processes to establish, shape and
maintain appropriate governance standards and behaviours throughout CGF that aligns with the
NZX Corporate Governance Code 2017 (Code). CGF’s approach to applying the
recommendations outlined in the Code is set out below. This statement is set out in the order of
the principles detailed in the Code and explains how CGF is applying the Code’s
recommendations. CGF is in compliance with the Code, with the exception of recommendations
2.8 and 6.1 for the reasons explained below.
Principle 1 – Code of ethical behaviour
“Directors should set high standards of ethical behaviour, model this behaviour and hold
management accountable for these standards being followed throughout the organisation.”
Code of Ethics
The Board Charter, Code of Ethics and Code of Conduct establish the standards of ethical
behaviour expected of Directors and staff. The Board expects Directors, management and staff to
personally subscribe to these values and use them as a guide to make decisions. The Audit and
Risk Committee has responsibility for monitoring compliance with internal processes, including
compliance with the Code of Ethics.
Directors are expected to ensure the potential for conflicts of interests is minimised by restricting
involvement in other businesses or in private capacities that could lead to a conflict. In considering
matters affecting the Company, Directors are required to disclose any actual or potential conflicts.
Where a conflict or potential conflict is disclosed, the Director takes no further part in receipt of
information or participation in discussions on that matter. The Board maintains an interests’ register
and it is reviewed at each board meeting.
Should any member of staff have concerns regarding practices that may conflict with the Code of
Conduct they are able to raise the matter with the Chair, as appropriate, on a confidential basis.
Directors would raise any concerns regarding compliance with the Code of Ethics with the Chair.
The Chair of the Board and the Chair of the Audit and Risk Committee note there have been no
financial matters raised in this respect in the 2020 financial year.
CORPORATE GOVERNANCE STATEMENT
COOKS GLOBAL FOODS LIMITED
Page 69 of 75
Financial Product Trading
Directors, officers, employees and contractors are restricted in their trading of Cooks Global Foods
securities and must comply with the Financial Products Trading Policy and Guidelines which is
available on the Website.
Principle 2 – Board composition and performance
“To ensure an effective board, there should be a balance of independence, skills,
knowledge, experience and perspectives.”
Board Charter
The Board of Directors of the Company is elected by the shareholders to supervise the
management of the Company. The Board establishes the Company's objectives, overall policy
framework within which the business of the Company is conducted and confirms strategies for
achieving these objectives. The Board also monitors performance and ensures that procedures
are in place to provide effective internal financial control.
The Board is responsible for guiding the corporate strategy and direction of the Company and has
overall responsibility for decision making. The Board has delegated responsibility for implementing
the Board’s strategy and for managing the operations of the Company to the Chairman.
CGF’s board operates under a written charter which defines the respective functions and
responsibilities of the board, focusing on the values, principles and practices that provide the
corporate governance framework. The charter complies with the relevant recommendations in the
Code and is reviewed annually.
The board uses committees to address certain matters that require detailed consideration. The
board retains ultimate responsibility for the function of its committees and determines their
responsibilities.
Nomination and appointment of directors
In accordance with CGF’s constitution and NZX Listing Rules, the directors are required to retire
by rotation and may offer themselves for re-election by shareholders each year. Procedures for the
appointment and removal of directors are also governed by the Board Charter. CGF does not
maintain a separate nomination committee, given the current size and nature of CGF’s business,
director nominations and appointments are the responsibility of the full board.
Written Agreements with directors
CGF intends to enter written agreements with any newly appointed directors establishing the terms
of their appointment.
Director Information and Independence
The Board currently comprises of five Directors including the Chairman & Chief Executive Officer,
Keith Jackson. The Board met twice during the year on a formal basis. The Audit and Finance
Committee meetings are held outside these meetings on a regular basis as required.
The board takes into account guidance provided under the NZX Listing Rules in determining the
independence of directors. Director independence is considered annually. Directors are required
to inform the board as soon as practicable if they think their status as an independent director has
(or may have) changed.
The directors that the board considers are independent and information in respect of directors’
ownership interests is contained in this annual report.
COOKS GLOBAL FOODS LIMITED
Page 70 of 75
Diversity
Cooks recognises the wide-ranging benefits that diversity brings to an organisation and its
workplaces. Cooks’ endeavours to ensure diversity at all levels of the organisation to ensure a
balance of skills and perspectives are available in the service of our shareholders and customers.
To this end, the Board is committed to fostering a culture that embraces diversity.
The Board also has the responsibility of monitoring and promoting the diversity of staff and
associated corporate culture, including requiring that recruitment and selection processes at all
levels are appropriately structured so that a diverse range of candidates are considered and to
avoid conscious and unconscious biases that might discriminate against certain candidates.
The gender balance of the Group’s Directors, officers and all employees were as follows:
As at 31 March 2020 As at 31 March 2021
Directors Officers Employees Directors Officers Employees
Female - - 26 - - 13
Male 5 1 16 5 1 13
Total 5 1 42 5 1 26
Director Training
All directors are responsible for ensuring they remain current in understanding their duties as
directors. Where necessary, CGF will support directors to help develop and maintain directors’
skills and knowledge relevant to performing their role.
Separation of the Chair and Managing Director
Due to the size and nature of CGF and its cash flow requirements CGF does not comply with 2.8
of the Code, the chair of the board and managing director are not separate people.
Principle 3 – Board Committees
“The board should use committees where this will enhance its effectiveness in key areas,
while still retaining board responsibility.”
Given the small scale of the company and board, the board currently has one standing committees,
the Audit and Risk. This committee operates under a specific charter which is approved by the
Board and will be reviewed annually. Any recommendations made by these committees are
recommendations to the board.
COOKS GLOBAL FOODS LIMITED
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Directors
Name Status Current/Resigned
Sub-committee
membership
Attendance*
Keith Jackson Chairman & CEO Executive Appointed 18/8/08 Audit & Finance 5
Paul Elliott Non-Executive Independent Appointed 30/5/19 Audit & Finance 5
Mike Hutcheson Non-Executive Independent Appointed 3/10/13 Audit & Finance 5
Peihuan Wang Non-Executive Independent Appointed 29/4/16 - 2
Alex Qiang Kui Non-Executive Independent Appointed 27/2/19 - - 2
Audit and Risk Committee
The Audit and Risk Committee Charter sets out the objectives of the Audit and Risk Committee
which are to provide assistance to the board in fulfilling its responsibilities in relation to the
company’s financial reporting, internal controls structure, risk management systems and the
external audit function.
The audit committee currently comprises Keith Jackson and Paul Elliott and Mike Hutcheson. Paul
Elliott and Mike Hutcheson are considered Independent Directors for the purposes of NZX Listing
Rule 2.1.1. All members of the Audit and Risk Committee have appropriate financial experience
and an understanding of the industry in which CGF operates.
The Audit and Risk Committee focusses on audit and risk management and specifically addresses
responsibilities relative to financial reporting and regulatory compliance. The Audit and Risk
Committee is accountable for ensuring the performance and independence of the external auditor,
including that CGF provides for 5-yearly rotation of either the external auditor or the lead audit
partner.
The committee provides a forum for the effective communication between the board and external
auditors. The responsibilities of the committee include:
• reviewing the appointment of the external auditor, the annual audit plan, and addressing any
recommendations from the audit;
• reviewing any financial information to be issued to the public; and
• ensuring that appropriate financial systems and internal controls are in place.
The Audit and Risk Committee may have in attendance the Managing Director and/or others
including the external auditor as required from time to time.
Takeover Response Protocol
The board has protocols in place that set out the procedure to be followed if there is a takeover
offer for CGF. This procedure is set out in the board charter.
COOKS GLOBAL FOODS LIMITED
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Principle 4 – Reporting and Disclosure
“The board should demand integrity in financial and non-financial reporting, and in the
timeliness and balance of corporate disclosures.”
Continuous Disclosure
The board focusses on providing accurate, adequate and timely information both to existing
shareholders and the market generally. This enables all investors to make informed decisions
about CGF.
CGF, as a company listed on the NZX Main Board, has an obligation to comply with the disclosure
requirements under the NZX Listing Rules, and the Financial Markets Conduct Act 2013. CGF has
a Continuous Disclosure Policy designed to ensure this occurs. CGF recognises that these
requirements aim to provide equal access for all investors or potential investors to material price-
sensitive information concerning issuers or their financial products. This in turn promotes
confidence in the market. The Continuous Disclosure Policy outlines the obligations for CGF in
satisfying the disclosure requirements. CGF’s Disclosure Officer (currently the Chair) is
responsible for ensuring compliance with the NZX continuous disclosure requirements and
overseeing and co-ordinating disclosure to the exchange.
Financial Reporting
The Board monitors:
• available cash in the Company to ensure there are sufficient funds available to satisfy debts as
they fall due; and
• the continued support of the Company’s principal creditors, to ensure their continued support of
the Company and continued intention to not call up amounts owing to them.
The Board is committed to keeping the market and its shareholders informed of all material
information relating to the Company through meeting the obligations imposed under the Listing
Rules and relevant legislation such as the Financial Markets Conduct Act 2013.
CGF seeks to make disclosures in a timely and balanced way to ensure transparency in the market
and equality of information for investors. The Company also recognises the benefits of providing
other releases that broaden the market’s knowledge of the Company’s business and financial
performance and seeks, where appropriate, to use communications that achieve this objective.
The website is a key channel for the distribution of Cooks’ information and is updated after
documents are disclosed on the NZX.
The Chair of the Board and the CEO are responsible for the day to day management of ensuring
these obligations are met. The Board will review compliance with the continuous disclosure
obligations at every board meeting.
Cooks was referred by NZX to the NZ Markets Disciplinary Tribunal (Tribunal) and in a
determination dated 4 February 2020, the Tribunal found that Cooks Global Foods Limited (CGF)
breached NZX Listing Rule 3.6.1 by filing its 2019 Annual Report 5 business days late. The Tribunal
ordered that CGF pay a financial penalty of $35,000, pay the costs of NZX and the Tribunal, and
be publicly censured.
Principle 5 – Remuneration
“The remuneration of directors and executives should be transparent, fair and reasonable.”
Directors’ Remuneration
The Remuneration Committee makes recommendations to the board on remuneration matters in
keeping with the Remuneration Policy which outlines the key principles that influence CGF’s
COOKS GLOBAL FOODS LIMITED
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remuneration practices. The committee is also responsible for making recommendations to the
board on the remuneration of the Chair. Directors’ fees are determined by the board on the
recommendation of the committee within the aggregate director remuneration pool approved by
shareholders.
Details of remuneration paid to directors are disclosed in the latest annual report.
Principle 6 –Risk Management
“Directors should have a sound understanding of the material risks faced by the issuer and
how to manage them. The Board should regularly verify that the issuer has appropriate
processes that identify and manage potential and material risks.”
The board considers its material risks are any decision to realise or make new investments and to
carefully manage cash flow. The Managing Director reports regularly to the full board on these key
risks, and operating expenses are kept to a bare minimum.
Key risk management tools used by CGF include the Audit and Risk Committee function and
outsourcing certain functions to service providers (such as legal and audit). CGF also maintains
insurance policies that is considers adequate to meet insurable risks. The board of CGF will
continue to regularly consider any potential risks and its risk management processes and adapt
these should the nature and size of the business change in the future. While CGF is comfortable
this approach to risk is sufficient, it does not comply with recommendation 6.1 of the Code as it
does not have a formal risk management framework.
Health and Safety
The board does not consider it necessary to maintain a specific health and safety committee. The
full board of CGF recognise the importance of health and safety considerations, and will continue
to assess any risks, management and performance in this regard in the future.
Principle 7 – Auditors
“The board should ensure the quality and independence of the external audit process.”
The Audit and Risk Committee makes recommendations to the board on the appointment of the
external auditor as set out in Audit and Risk Committee Charter. The committee also monitors the
independence and effectiveness of the external auditor and reviews and approves any non-audit
services performed by the external auditor.
Principle 8 – Shareholder rights and relations
“The board should respect the rights of shareholders and foster constructive relationships
with shareholders that encourage them to engage with the issuer.”
Information for Shareholders
The Company aims to ensure that shareholders are informed of all major developments affecting
the Company affairs. Information is communicated to shareholders in the Annual Report, Interim
Report, and regular NZX announcements, including major share transactions, acquisitions, store
expansion and new franchises and any personnel changes of significance.
The company website provides an overview of the business and information about CGF. This
information includes details of investments, latest news, investor information, key corporate
governance information, and copies of significant NZX announcements. The website also provides
profiles of the directors and the senior executive team. Copies of previous annual reports, financial
statements, and results presentations are available on the website.
Shareholders have the right to vote on major decisions of the company in accordance with
requirements set out in the Companies Act 1993 and the NZX Listing Rules.
COOKS GLOBAL FOODS LIMITED
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Communicating with Shareholders
CGF endeavours to communicate regularly with its shareholders through its market updates and
other investor communications. The company receives questions from time to time from
shareholders, and has processes in place to ensure shareholder communications are responded
to in a timely and accurate manner. CGF’s website sets out appropriate contact details for
communications from shareholders, including the phone number and email address of the Chair,
Keith Jackson. CGF provides the opportunity for shareholders to receive and send
communications by post or electronically.
CGF sends the annual shareholders notice of meeting and publishes it on the company website
as soon as possible and at least 28 days before the meeting each year.
COOKS GLOBAL FOODS LIMITED
Page 75 of 75
Directory
Company number: 2089337
Year of incorporation: 2008
Registered office: Level 1, 96 St Georges Bay Road,
Parnell,
Auckland, 1052
Nature of business: Food & beverage industry
Directors:
Graeme Keith Jackson
Michael George Rae Hutcheson
Peihuan Wang
Paul Valentine Mark Elliott
Alex Qiang Kui
Solicitors: Duncan Cotterill
Wellington
Bankers: ANZ Bank, Auckland
Auditors: William Buck Audit (NZ) Limited
Share registry: Link Market Services Limited
Auckland
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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