Directors' Report Auditors? Report Statement of Comprehensive income Statement of Financial Position Statement of Movements in Equity Statement of Cash Flows Notes to the Financial Statements Moe Group Limited Index to the Financial Statements March 2015 Page 3 4-5 Directors' Report Auditors? Report Statement of Comprehensive income Statement of Financial Position Statement of Movements in Equity Statement of Cash Flows Notes to the Financial Statements Moe Group Limited Index to the Financial Statements March 2015 Page 3 4-5 Moe Group Limited Directors' Report 31 March 2015 The Board of Directors has pleasure in presenting the ?nancial statements and audit report for Moe Group Limited for the year ended 31 March 2015. The ?nancial statements presented are signed for and on behalf of the Board of Directors and were authorised for issue on 27 May 2015. Ashiey Waugh Chairman Moe Group Limited Directors' Report 31 March 2015 The Board of Directors has pleasure in presenting the ?nancial statements and audit report for Moe Group Limited for the year ended 31 March 2015. The ?nancial statements presented are signed for and on behalf of the Board of Directors and were authorised for issue on 27 May 2015. Ashiey Waugh Chairman Independent Auditors? Report to the shareholders of Moa Group Limited Report on the Financial Statements We have audited the Group ?nancial statements of Moa Group Limited (?the Company?) on pages 6 to 28, which comprise the statement of ?nancial position as at 31 March 2015, the statement of comprehensive income, the statement of movements in equity and the statement of cash ?ows for the year then ended, and the notes to the ?nancial statements that include a summary of signi?cant accounting policies and other explanatory information for the Group. The Group comprises the Company and the entities it controlled at 31 March 2015 or from time to time during the ?nancial year. Directors?Responsibi li ty for the Financial Statements The Directors are responsible for the preparation and fair presentation of these ?nancial statements in accordance with New Zealand Equivalents to International Financial Reporting Standards and International Financial Reporting Standards and for such internal controls as the Directors determine are necessary to enable the preparation of ?nancial statements that are free from material misstatement, whether due to fraud or error. Auditors?Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (New Zealand) and International Standards on Auditing. These standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the ?nancial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ?nancial statements. The procedures selected depend on the auditors? judgement, including the assessment of the risks of material misstatement of the ?nancial statements, whether due to fraud or error. In making those risk assessments, the auditors consider the internal controls relevant to the Company?s preparation and fair presentation of the ?nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company?s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. We are independent of the Group. Our ?rm carries out other services for the Group in the areas of agreed upon procedures. The provision of these other services has not impaired our independence. .- PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz Independent Auditors? Report to the shareholders of Moa Group Limited Report on the Financial Statements We have audited the Group ?nancial statements of Moa Group Limited (?the Company?) on pages 6 to 28, which comprise the statement of ?nancial position as at 31 March 2015, the statement of comprehensive income, the statement of movements in equity and the statement of cash ?ows for the year then ended, and the notes to the ?nancial statements that include a summary of signi?cant accounting policies and other explanatory information for the Group. The Group comprises the Company and the entities it controlled at 31 March 2015 or from time to time during the ?nancial year. Directors?Responsibi li ty for the Financial Statements The Directors are responsible for the preparation and fair presentation of these ?nancial statements in accordance with New Zealand Equivalents to International Financial Reporting Standards and International Financial Reporting Standards and for such internal controls as the Directors determine are necessary to enable the preparation of ?nancial statements that are free from material misstatement, whether due to fraud or error. Auditors?Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (New Zealand) and International Standards on Auditing. These standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the ?nancial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ?nancial statements. The procedures selected depend on the auditors? judgement, including the assessment of the risks of material misstatement of the ?nancial statements, whether due to fraud or error. In making those risk assessments, the auditors consider the internal controls relevant to the Company?s preparation and fair presentation of the ?nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company?s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. We are independent of the Group. Our ?rm carries out other services for the Group in the areas of agreed upon procedures. The provision of these other services has not impaired our independence. .- PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz Independent Auditors Report Moa Group Limited Opinion In our Opinion, the financial statements on pages 6 to 28 present fairly, in all material reSpects, the ?nancial position of the Group as at 31 March 2015, and its ?nancial performance and cash ?ows for the year then ended in accordance with New Zealand Equivalents to International Financial Reporting Standards and International Financial Reporting Standards. Restriction on Use of our Report This report is made solely to the Company?s shareholders, as a body, in accordance with the Companies Act 1993. Our audit work has been undertaken so that we might state those matters which we are required to state to them in an auditors? report and for no other purpose. To the fullest extent - itted by law, we do not accept or assume responsibility to anyone other than the Company and the Co any?s shareholders, as a body, for our audit work, for this report or for the opinions we have formed. Chartered Accountants Auckland 27 May 2015 Independent Auditors Report Moa Group Limited Opinion In our Opinion, the financial statements on pages 6 to 28 present fairly, in all material reSpects, the ?nancial position of the Group as at 31 March 2015, and its ?nancial performance and cash ?ows for the year then ended in accordance with New Zealand Equivalents to International Financial Reporting Standards and International Financial Reporting Standards. Restriction on Use of our Report This report is made solely to the Company?s shareholders, as a body, in accordance with the Companies Act 1993. Our audit work has been undertaken so that we might state those matters which we are required to state to them in an auditors? report and for no other purpose. To the fullest extent - itted by law, we do not accept or assume responsibility to anyone other than the Company and the Co any?s shareholders, as a body, for our audit work, for this report or for the opinions we have formed. Chartered Accountants Auckland 27 May 2015 Moe Group Limited Consolidated Statement of Comprehensive Income Notes Revenue 5 Cost of sales Gross pro?t Other gains/(losses) 6 Distribution expenses Administration expenses Sales and marketing expenses Payment under bank guarantee 7 Other expenses 8 Finance income and expenses 9 Total expenses 10 Loss before income tax income tax expense 11 Loss for the year Other comprehensive income Total comprehensive loss for the year Earnings per share Basic losses (cents per share) 22 Diluted losses (cents per share) 22 For the year ended 31 March 2015 2015 2614 $000 6066 5,659 4,597 (4,949) (3.605) 1,110 792 (7) (146) (1,473) (1,244) (1,652) (1.642) (3,220) (3.185) - (164) (308) (340) 165 332 (5,565) (5,453) (5,563) (5,617) (5,563) (6,617) (5,563) (5,617) (13.6) (16.5) (13.5) (18.6) Note: All toss and total comprehensive loss is attributable to the Parent Company shareholders and is from continuing operations. The above statement of comprehensive income should be read in coniunction with the accompanying notes. 6 Moe Group Limited Consolidated Statement of Comprehensive Income Notes Revenue 5 Cost of sales Gross pro?t Other gains/(losses) 6 Distribution expenses Administration expenses Sales and marketing expenses Payment under bank guarantee 7 Other expenses 8 Finance income and expenses 9 Total expenses 10 Loss before income tax income tax expense 11 Loss for the year Other comprehensive income Total comprehensive loss for the year Earnings per share Basic losses (cents per share) 22 Diluted losses (cents per share) 22 For the year ended 31 March 2015 2015 2614 $000 6066 5,659 4,597 (4,949) (3.605) 1,110 792 (7) (146) (1,473) (1,244) (1,652) (1.642) (3,220) (3.185) - (164) (308) (340) 165 332 (5,565) (5,453) (5,563) (5,617) (5,563) (6,617) (5,563) (5,617) (13.6) (16.5) (13.5) (18.6) Note: All toss and total comprehensive loss is attributable to the Parent Company shareholders and is from continuing operations. The above statement of comprehensive income should be read in coniunction with the accompanying notes. 6 Current assets Cash and cash equivalents Trade and other receivables Inventories Tax receivable Tote! current assets Non-current assets Piant and equipment Intangibles Deferred income tax asset Total non-current assets Tota! assets Liabilities Trade and other payables Total liabilities Net assets Equny Contributed equity Share entitlement reserve Accumulated losses Total equity Notes More Group Limited Consolidated Statement of Financial Position 2015 2014 $000 $000 3.757 4,073 1,758 1,789 1,553 1,838 - 3 7,068 7,788 2,784 2,585 548 504 3,332 3,069 10,400 1 0,887 1.575 2.089 1,575 2,039 8,825 8,828 22,008 16,440 25 129 (13,208) (7,741) 8,825 8,828 As at 31 March 2015 The above statement of ?nancial position should be read in conjunction with the accompanying notes. 7 Current assets Cash and cash equivalents Trade and other receivables Inventories Tax receivable Tote! current assets Non-current assets Piant and equipment Intangibles Deferred income tax asset Total non-current assets Tota! assets Liabilities Trade and other payables Total liabilities Net assets Equny Contributed equity Share entitlement reserve Accumulated losses Total equity Notes More Group Limited Consolidated Statement of Financial Position 2015 2014 $000 $000 3.757 4,073 1,758 1,789 1,553 1,838 - 3 7,068 7,788 2,784 2,585 548 504 3,332 3,069 10,400 1 0,887 1.575 2.089 1,575 2,039 8,825 8,828 22,008 16,440 25 129 (13,208) (7,741) 8,825 8,828 As at 31 March 2015 The above statement of ?nancial position should be read in conjunction with the accompanying notes. 7 Opening balance as at 1 April 2013 Total comprehensive loss for the year Share based payments Redeemable shares vested issue of shares in lieu of directors' fees Closing balance as at 31 March 2014 Opening balance as at ?1 April 2014 Total comprehensive loss for the year Share based payments Redeemable shares cancelled Redeemable shares vested Net proceeds from placement and rights issue Issue of shares in lieu of directors? fees Closing balance as at 31 March 2015 Notes Nice Group Limited Statement of Movements in Equity For the year ended 31 March 2015 The above statement of movements in equity should be read in conjunction with the accompanying notes. 8 Share Accum- Share Total capital ulated entitlement equity losses reserve $000 $000 $000 $000 16,360 (1,924) 99 14,535 - (5,817) - (5,817) - 91 91 61 (61) - 19 - - 19 16,440 (T341) 129 8,828 16,440 (7,741) 129 8,828 (5,583) - (5,583(23) 5,520 - 5,520 23 - 23 22,006 (13,206) 25 3,825 Opening balance as at 1 April 2013 Total comprehensive loss for the year Share based payments Redeemable shares vested issue of shares in lieu of directors' fees Closing balance as at 31 March 2014 Opening balance as at ?1 April 2014 Total comprehensive loss for the year Share based payments Redeemable shares cancelled Redeemable shares vested Net proceeds from placement and rights issue Issue of shares in lieu of directors? fees Closing balance as at 31 March 2015 Notes Nice Group Limited Statement of Movements in Equity For the year ended 31 March 2015 The above statement of movements in equity should be read in conjunction with the accompanying notes. 8 Share Accum- Share Total capital ulated entitlement equity losses reserve $000 $000 $000 $000 16,360 (1,924) 99 14,535 - (5,817) - (5,817) - 91 91 61 (61) - 19 - - 19 16,440 (T341) 129 8,828 16,440 (7,741) 129 8,828 (5,583) - (5,583(23) 5,520 - 5,520 23 - 23 22,006 (13,206) 25 3,825 Moa Group Limited Consoiidated Statement of Cash Flows For the year ended 31 March 2015 Notes 2015 2014 $000 $000 Cash flows from operating activities Receipts from customers 8,824 5,252 Payments to suppliers and employees (14.199) (12,082) Interest received 93 335 interest paid - (3) Taxation paid 3 indirect taxation (paid)freceived (71) (65) Net cash ?ow from operating activities 21 (5,350) (6,583) Cash flows from investing activities Purchase of plant and equipment (474) (589) Purchase of intangibles (44) (261) Sate of piant and equipment 32 1 Net cash ?ow from investing activities (486) (849) Cash flows from financing activities Net proceeds from issue of shares 17 5,520 - Net cash flow from ?nancing activities 5,520 .. Net decrease in cash and cash equivalents (316) (7,412) Cash and cash equivalents at beginning of year 4,073 11,485 Cash and cash equivalents at end of year 3,757 4,073 The above statement of cash flows should be read in conjunction with the accompanying notes. 9 Moa Group Limited Consoiidated Statement of Cash Flows For the year ended 31 March 2015 Notes 2015 2014 $000 $000 Cash flows from operating activities Receipts from customers 8,824 5,252 Payments to suppliers and employees (14.199) (12,082) Interest received 93 335 interest paid - (3) Taxation paid 3 indirect taxation (paid)freceived (71) (65) Net cash ?ow from operating activities 21 (5,350) (6,583) Cash flows from investing activities Purchase of plant and equipment (474) (589) Purchase of intangibles (44) (261) Sate of piant and equipment 32 1 Net cash ?ow from investing activities (486) (849) Cash flows from financing activities Net proceeds from issue of shares 17 5,520 - Net cash flow from ?nancing activities 5,520 .. Net decrease in cash and cash equivalents (316) (7,412) Cash and cash equivalents at beginning of year 4,073 11,485 Cash and cash equivalents at end of year 3,757 4,073 The above statement of cash flows should be read in conjunction with the accompanying notes. 9 Moe Group Limited Notes to the Financial Statements 31 March 2015 1 General information Moa Group Limited ('the Company?) and its subsidiary (together 'the Group') operate in the beverage sector, brewing and distributing super premium craft beer and cider. The Group has operations in New Zealand and sells predominantly to New Zealand businesses with growing exports to Australia and the rest of the world. The Group is subject to the impacts of seasonality with the six month period September to March representing the high period of the year. The ?nancial statements cover full comparative trading years. The Company was incorporated in New Zealand on 27 August 2012 and acquired its subsidiary Moa Brewing Company Limited on 1 October 2012. The address of its registered of?ce is Level 1, Union Fish Co. Building, 118-118 Quay Street, Auckland 1010. The ?nancial statements have been approved for issue by the Board of Directors on 28 May 2015. 2 Summary of significant accounting policies The principal accounting policies adopted in the preparation of the ?nancial statements are set out below. These policies have been consistently applied throughout the periods presented unless otherwise stated. Basis of preparation The consolidated financial statements of the Group have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand (NZ GAAP). The Group is a for?pro?t entity for the purposes of compiying with N2 GAAP. The consolidated ?nancial statements comply with New Zealand equivalents to international Financial Reporting Standards (NZ and other New Zealand accounting standards and authoritative notices that are applicable to entities that apply NZ The consolidated ?nancial statements also comply with international Financial Reporting Standards. The ?nancial statements have been prepared on a going concern basis. Moa Group 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 ?nancial statements of the Group have been prepared in accordance with the requirements, Part 7 of the Financial Markets Conduct Act 2013 and the NZX Main Board Listing Rules. in accordance with the Financial Markets Conduct Act 2013, because group ?nancial statements are prepared and presented for Moa Group Limited and its subsidiary, separate ?nancial statements for Moa Group Limited are no longer required to be prepared and presented. The information is presented in thousands of New Zealand dollars. The ?nancial statements have been prepared under the historical cost convention. The preparation of ?nancial statements in accordance with N2 IFRS requires the use of certain critical accounting estimates. it also requires management to exercise its judgement in applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4. Expenses in the Statement of Comprehensive income have been realigned from the presentation in the ?nancial statements for the year ended 31 March 2014. The expenses {or both the 2014 and 2015 years in these ?nancial statements have been presented on this new basis. This realignment has been done to better represent the nature of the costs. in particular, some personnel costs, previously classi?ed as Administration expenses (2014: $1,808,000). have been reclassi?ed to Sales and marketing expenses where applicable. Cellar door expenses (2014: $73,000), are also now included as part of Sales and marketing expenses. The costs related to the Group?s resource consent application were included in the property, plant and equipment in the ?nancial statements for the year ended 31 March 2014. These costs have now been reclassi?ed to be intangible assets in both years presented. The Group has adopted all new and amended NZ standards and interpretations effective for periods after 1 April 2014 in preparing these ?nancial statements, including: NZ 21: Levies; and NZ IAS 32: Offsetting ?nancial assets and ?nancial liabilities. None of them have a signi?cant impact on the ?nancial statements. Principles of consolidation The ?nancial statements incorporate the assets and liabilities of Nice Group Limited and its 100% owned subsidiary Moa Brewing Company Limited (together the ?Group') as at 31 March 2015 and the trading results for the year then ended. 10 Moe Group Limited Notes to the Financial Statements 31 March 2015 1 General information Moa Group Limited ('the Company?) and its subsidiary (together 'the Group') operate in the beverage sector, brewing and distributing super premium craft beer and cider. The Group has operations in New Zealand and sells predominantly to New Zealand businesses with growing exports to Australia and the rest of the world. The Group is subject to the impacts of seasonality with the six month period September to March representing the high period of the year. The ?nancial statements cover full comparative trading years. The Company was incorporated in New Zealand on 27 August 2012 and acquired its subsidiary Moa Brewing Company Limited on 1 October 2012. The address of its registered of?ce is Level 1, Union Fish Co. Building, 118-118 Quay Street, Auckland 1010. The ?nancial statements have been approved for issue by the Board of Directors on 28 May 2015. 2 Summary of significant accounting policies The principal accounting policies adopted in the preparation of the ?nancial statements are set out below. These policies have been consistently applied throughout the periods presented unless otherwise stated. Basis of preparation The consolidated financial statements of the Group have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand (NZ GAAP). The Group is a for?pro?t entity for the purposes of compiying with N2 GAAP. The consolidated ?nancial statements comply with New Zealand equivalents to international Financial Reporting Standards (NZ and other New Zealand accounting standards and authoritative notices that are applicable to entities that apply NZ The consolidated ?nancial statements also comply with international Financial Reporting Standards. The ?nancial statements have been prepared on a going concern basis. Moa Group 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 ?nancial statements of the Group have been prepared in accordance with the requirements, Part 7 of the Financial Markets Conduct Act 2013 and the NZX Main Board Listing Rules. in accordance with the Financial Markets Conduct Act 2013, because group ?nancial statements are prepared and presented for Moa Group Limited and its subsidiary, separate ?nancial statements for Moa Group Limited are no longer required to be prepared and presented. The information is presented in thousands of New Zealand dollars. The ?nancial statements have been prepared under the historical cost convention. The preparation of ?nancial statements in accordance with N2 IFRS requires the use of certain critical accounting estimates. it also requires management to exercise its judgement in applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4. Expenses in the Statement of Comprehensive income have been realigned from the presentation in the ?nancial statements for the year ended 31 March 2014. The expenses {or both the 2014 and 2015 years in these ?nancial statements have been presented on this new basis. This realignment has been done to better represent the nature of the costs. in particular, some personnel costs, previously classi?ed as Administration expenses (2014: $1,808,000). have been reclassi?ed to Sales and marketing expenses where applicable. Cellar door expenses (2014: $73,000), are also now included as part of Sales and marketing expenses. The costs related to the Group?s resource consent application were included in the property, plant and equipment in the ?nancial statements for the year ended 31 March 2014. These costs have now been reclassi?ed to be intangible assets in both years presented. The Group has adopted all new and amended NZ standards and interpretations effective for periods after 1 April 2014 in preparing these ?nancial statements, including: NZ 21: Levies; and NZ IAS 32: Offsetting ?nancial assets and ?nancial liabilities. None of them have a signi?cant impact on the ?nancial statements. Principles of consolidation The ?nancial statements incorporate the assets and liabilities of Nice Group Limited and its 100% owned subsidiary Moa Brewing Company Limited (together the ?Group') as at 31 March 2015 and the trading results for the year then ended. 10 Erica Group Limited Notes to the Financial Statements 31 March 2015 Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsoiidated from the date that control ceases. The ?nancial statements of subsidiaries are included in the consolidated ?nancial statements from the date that control commences until the date that control ceases. The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of the subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquires and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. identi?able assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition related costs are expensed as incurred. lntercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of the subsidiary and the parent have been applied consistently. Foreign currency translation Functional and presentation currency Items included in the ?nancial statements are measured using the currency of the primary economic environment in which the entity operates. 'the functional currency'. The ?nancial statements are presented in New Zealand dollars, which is the functional currency of both Moe Group Limited and its subsidiary. (fr) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss component of the statement of comprehensive income. Revenue recognition Revenue is measured at the fair value of the consideration received or receivable for the sale of goods and services, stated net of Goods and Services Tax, Excise Tax, rebates, returns and discounts. Revenue is recognised when the amount of revenue can be reliably measured. when it is probable that future economic bene?ts will flow to the entity, when the products have been delivered to the customer and possession taken, and of the related receivables is reasonably assured. interest income Interest income is recognised on a time-proportion basis using the effective interest method. income tax The income tax expense or revenue for the year is the total of the current year?s taxable income based on the national income tax rate adjusted for any prior years' under or over provisions, plus or minus movements in the deferred tax balance except where the movement in deferred tax is attributable to a movement in reserves. The current income tax charge is calculated on the basis of tax laws enacted or substantially enacted at balance date. Movements in deferred tax are attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements and any unused tax losses or credits. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or loss or taxable pro?t or loss. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only to the extent that it is probable that future taxable amounts wiil be available to utilise those temporary differences and losses. Erica Group Limited Notes to the Financial Statements 31 March 2015 Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsoiidated from the date that control ceases. The ?nancial statements of subsidiaries are included in the consolidated ?nancial statements from the date that control commences until the date that control ceases. The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of the subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquires and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. identi?able assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition related costs are expensed as incurred. lntercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of the subsidiary and the parent have been applied consistently. Foreign currency translation Functional and presentation currency Items included in the ?nancial statements are measured using the currency of the primary economic environment in which the entity operates. 'the functional currency'. The ?nancial statements are presented in New Zealand dollars, which is the functional currency of both Moe Group Limited and its subsidiary. (fr) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss component of the statement of comprehensive income. Revenue recognition Revenue is measured at the fair value of the consideration received or receivable for the sale of goods and services, stated net of Goods and Services Tax, Excise Tax, rebates, returns and discounts. Revenue is recognised when the amount of revenue can be reliably measured. when it is probable that future economic bene?ts will flow to the entity, when the products have been delivered to the customer and possession taken, and of the related receivables is reasonably assured. interest income Interest income is recognised on a time-proportion basis using the effective interest method. income tax The income tax expense or revenue for the year is the total of the current year?s taxable income based on the national income tax rate adjusted for any prior years' under or over provisions, plus or minus movements in the deferred tax balance except where the movement in deferred tax is attributable to a movement in reserves. The current income tax charge is calculated on the basis of tax laws enacted or substantially enacted at balance date. Movements in deferred tax are attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements and any unused tax losses or credits. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or loss or taxable pro?t or loss. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only to the extent that it is probable that future taxable amounts wiil be available to utilise those temporary differences and losses. Moe Group Limited Notes to the Financiai Statements 31 March 2015 Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. The income tax expense or credit attributable to amounts recognised in other comprehensive income is also recognised in other comprehensive income. Current and deferred tax assets and liabilities of individual entities are reported separateiy in the consolidated ?nancial statements unless the entities have a legally enforceable right to make or receive a single net payment of tax and the entities intend to make or receive such a net payment or to recover the current tax asset or settle the current tax liability simultaneously. (9) Goods and services tax (GST) The statement of comprehensive income has been prepared so that all components are stated exclusive of GST. All items in the statement of?nanciai position are stated net of GST, with the exception of receivables and payables. which include GST invoiced. All items in the statement of cash ?ows are also stated net of GST. Excise tax Ali amounts in the statement of comprehensive income are shown exclusive of excise tax. The excise tax component of sates is included in receipts from customers in the statement of cash flows. and the excise tax payments are included in payments to suppliers and employees. Leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classi?ed as operating leases. Payments made under operating teases (net of any incentives received from the lessor) are charged to the pro?t or loss component of the statement of comprehensive income on a straight-line basis over the term of the lease. Financial instruments Financial instruments comprise cash and cash equivalents, trade and other receivables and trade and other payabies. Financial assets and ?nancial liabilities are recognised in the Group's statement of ?nancial position when the Group becomes a party to the contractual provisions of the instrument. Cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits heid at call with ?nancial institutions and other short term highly iiquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insigni?cant risk of changes in value. (1) Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost. less provision for doubtiui debts. Trade receivables are due for settlement between 30-90 days from invoice date. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful receivables is established when there is objective evidence, such as default or delinquency in payment, that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the assets carrying amount and the present vaiue of estimated future cash flows. discounted at the effective interest rate. The movement in the amount of the provision is recognised in the pro?t or loss component of the statement of comprehensive income. The carrying amount of the asset is reduced through the use of a provision account and the amount of the loss is recognised in the pro?t or loss component of the statement of comprehensive income within expenses?. When a trade receivable is uncoliectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written oil are credited against ?administration expenses' in the statement of comprehensive income. Financial assets The Group classifies its financial assets as loans and receivables. The classi?cation depends on the purpose for which the ?nanciai assets were acquired. The Group determines the classi?cation of its ?nancial assets at initial recognition and re-evaluates this designation at each reporting date. Loans and receivables are non?derivative ?nancial assets with ?xed or determinable payments that are not quoted in an active market. They arise when the Group provides money. goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those 12 Moe Group Limited Notes to the Financiai Statements 31 March 2015 Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. The income tax expense or credit attributable to amounts recognised in other comprehensive income is also recognised in other comprehensive income. Current and deferred tax assets and liabilities of individual entities are reported separateiy in the consolidated ?nancial statements unless the entities have a legally enforceable right to make or receive a single net payment of tax and the entities intend to make or receive such a net payment or to recover the current tax asset or settle the current tax liability simultaneously. (9) Goods and services tax (GST) The statement of comprehensive income has been prepared so that all components are stated exclusive of GST. All items in the statement of?nanciai position are stated net of GST, with the exception of receivables and payables. which include GST invoiced. All items in the statement of cash ?ows are also stated net of GST. Excise tax Ali amounts in the statement of comprehensive income are shown exclusive of excise tax. The excise tax component of sates is included in receipts from customers in the statement of cash flows. and the excise tax payments are included in payments to suppliers and employees. Leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classi?ed as operating leases. Payments made under operating teases (net of any incentives received from the lessor) are charged to the pro?t or loss component of the statement of comprehensive income on a straight-line basis over the term of the lease. Financial instruments Financial instruments comprise cash and cash equivalents, trade and other receivables and trade and other payabies. Financial assets and ?nancial liabilities are recognised in the Group's statement of ?nancial position when the Group becomes a party to the contractual provisions of the instrument. Cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits heid at call with ?nancial institutions and other short term highly iiquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insigni?cant risk of changes in value. (1) Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost. less provision for doubtiui debts. Trade receivables are due for settlement between 30-90 days from invoice date. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful receivables is established when there is objective evidence, such as default or delinquency in payment, that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the assets carrying amount and the present vaiue of estimated future cash flows. discounted at the effective interest rate. The movement in the amount of the provision is recognised in the pro?t or loss component of the statement of comprehensive income. The carrying amount of the asset is reduced through the use of a provision account and the amount of the loss is recognised in the pro?t or loss component of the statement of comprehensive income within expenses?. When a trade receivable is uncoliectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written oil are credited against ?administration expenses' in the statement of comprehensive income. Financial assets The Group classifies its financial assets as loans and receivables. The classi?cation depends on the purpose for which the ?nanciai assets were acquired. The Group determines the classi?cation of its ?nancial assets at initial recognition and re-evaluates this designation at each reporting date. Loans and receivables are non?derivative ?nancial assets with ?xed or determinable payments that are not quoted in an active market. They arise when the Group provides money. goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those 12 Moe Group Limited Notes to the Financial Statements 31 March 2015 with maturities greater than 12 months after the statement of ?nancial position date which are classi?ed as non-current assets. The Group's loans and receivables comprise 'trade and other receivables' and 'cash and cash equivalents' in the statement offinancial position. Purchases and sales of ?nancial assets are recognised on transaction date, being the date on which the Group commits to purchase or sell the asset. Loans and receivables are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method. Fair value estimate The carrying value of cash and cash equivalents, receivables and payables are assumed to approximate their fair values due to the short-term maturity of these investments. Financial liabilities measured at amortised cost are fair valued using the contractual cash ?ows. The effects of discounting are generally insigni?cant. Inventories Raw materials. work in progress and ?nished goods are stated at the lower of cost and net realisable value. Cost comprises direct materials and where appropriate, either a contract manufacturing charge, or direct labour and an appropriate preportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. (53) Plant and equipment All plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset?s carrying amount or recognised as a separate asset. as appropriate, only when it is probable that future economic benefits associated with the item will ?ow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial year in which they are incurred. Depreciation is calculated using the straight-line method to expense the cost of the assets over their useful lives. The rates are as follows: Plant and equipment 5.0% 50.0% Leasehold improvements 10.0% Furniture and of?ce equipment 20.0% - 33.3% Cellar door equipment 10.0% - 33.3% Marketing and trade equipment 10.0% - 33.3% The assets' residual values and useful lives are reviewed, and adjusted if at each statement of ?nancial position date. An asset's carrying amount is written down immediately to its recoverable amount if the asset?s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the pro?t or loss component of the statement of comprehensive income. Impairment of non-?nancial assets Assets that are subject to amortisation are reviewed for impalnnent 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 carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment. assets are grouped at the lowest levels for which there are separately identi?able cash flows (cash generating units). Trade and other payables Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 and 60 days of recognition. 13 Moe Group Limited Notes to the Financial Statements 31 March 2015 with maturities greater than 12 months after the statement of ?nancial position date which are classi?ed as non-current assets. The Group's loans and receivables comprise 'trade and other receivables' and 'cash and cash equivalents' in the statement offinancial position. Purchases and sales of ?nancial assets are recognised on transaction date, being the date on which the Group commits to purchase or sell the asset. Loans and receivables are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method. Fair value estimate The carrying value of cash and cash equivalents, receivables and payables are assumed to approximate their fair values due to the short-term maturity of these investments. Financial liabilities measured at amortised cost are fair valued using the contractual cash ?ows. The effects of discounting are generally insigni?cant. Inventories Raw materials. work in progress and ?nished goods are stated at the lower of cost and net realisable value. Cost comprises direct materials and where appropriate, either a contract manufacturing charge, or direct labour and an appropriate preportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. (53) Plant and equipment All plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset?s carrying amount or recognised as a separate asset. as appropriate, only when it is probable that future economic benefits associated with the item will ?ow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial year in which they are incurred. Depreciation is calculated using the straight-line method to expense the cost of the assets over their useful lives. The rates are as follows: Plant and equipment 5.0% 50.0% Leasehold improvements 10.0% Furniture and of?ce equipment 20.0% - 33.3% Cellar door equipment 10.0% - 33.3% Marketing and trade equipment 10.0% - 33.3% The assets' residual values and useful lives are reviewed, and adjusted if at each statement of ?nancial position date. An asset's carrying amount is written down immediately to its recoverable amount if the asset?s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the pro?t or loss component of the statement of comprehensive income. Impairment of non-?nancial assets Assets that are subject to amortisation are reviewed for impalnnent 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 carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment. assets are grouped at the lowest levels for which there are separately identi?able cash flows (cash generating units). Trade and other payables Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 and 60 days of recognition. 13 Moe Group Limited Notes to the Financial Statements 31 March 2015 (3) Employee bene?ts Liabilities for wages and salaries, including non-monetary bene?ts, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in other payables of respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non?accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable. Share based payments The fair value of director and senior employee share schemes, under which the Group receivas services from directors and employees as consideration for equity instruments in the Group, is recognised as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, including any equity market performance conditions and excluding the impact of any service and non~mari