annual 2020 report

In this special year in which we collectively celebrate Norco’s 125th anniversary, we would like to share w
congratulatory messages the Co-operative has received throughout this report.

Congratulations

12
YEARS
12
5
PRIME MINISTER
MESSAGE FROM THE PRIME MINISTER
125TH ANNIVERSARY OF NORCO CO-OPERATIVE
Congratulations to Norco for a tremendous 125 years of history. The Norco story is about giving back –
employees, to the community, and to Australia. Your success is part of our story, and we’re grateful for what

The dairy farmers of northern New South Wales and south-eastern Queensland have worked their herds for gene
core staple, as well as some of life’s simple pleasures.

The wonderful quality of your milk, cream, cheese and ice cream is part of our Australian fare.
In the face of the challenges of 2020, Norco has been true to the resilient spirit of its community. By committing t
provided jobs and income to Australians at a time when they need them most. I know you’ll keep delivering
have throughout your long history.

When you reassure your members and your customers that the work continues – on the land, in the dairies and in t
confidence in the road ahead. Your example is why we can lift our heads as Australians and know that the future i

Good on you, Norco, and thanks very much.

Happy 125th Anniversary!

The Hon Scott Morrison MP Prime Minister of Australia

August 2020
 CONTENTS
3 Corporate Profile 6 Facts At A Glance 8 Chairman’s Report
12 Chief Executive Officer’s Report 19 Directors’ Report
27 Auditor’s Independence Declaration 30 Corporate Governance Statement
37 Financial Statements 59 Independent Auditor’s Report
64 Corporate And Branch Directories

NORCO’S PURPOSE
Norco’s purpose is to build wealth, security and sustainability for our shareholders, business partners and employees. We achieve this by
- maintaining a diverse and strong range of businesses;
- being a competitive regional purchaser and supplier of milk; and
- creating integrated solutions for our partners.

NORCO’S VALUES
Norco applies a common set of values to everything it does. These values include:
RESPECT
- We respect our shareholders, employees, business partners and customers - We respect a diversity of views and opinions - We encourag
individuals and contributors to our organisation - We respect our heritage and legacy - We respect our natural environment.
RESPONSIBLE
- We are responsible for preserving the co-operative principles - We are responsible for our actions and our performance - We are respon
environment.
EFFICIENT
- We seek to add value in everything we do. INNOVATION
- We seek to consistently improve through innovation.
COMMUNITY
- We seek active involvement in our communities.
CORPORATE PROFILE
This time last year we reported that we were hoping for a more settled outlook for our dairy farming community and for the Co-operative. W
the script as all Australians would know.
Our Members / Milk Suppliers continued to be severely affected by the ongoing drought conditions during the first half of the financial year
effects of the drought even now. These conditions then fuelled a devastating bush fire season which created some very anxious and worrying
these fierce fires. In many areas, particularly coastal regions, the drought was broken and fire danger extinguished in early 2020 with signifi
some minor to moderate flooding in the Norco supply area.
Australians were then further tested by mid to late March 2020 with the very real threat of the global pandemic COVID-19 which has profou
and carry on business activities.
How has Norco responded to these challenges?
Norco continued to drive milk pricing for our Members / Milk Suppliers in the 2019/20 financial year with the average base milk price paid
of more than 10 cents per litre over the 2018/19 financial year. This significant increase was in recognition of the continuing difficult climati
costs for fodder and grain.
The onset of the bush fires thankfully did not impact too many Norco farms directly but there were consequences for our farmers and our
road closures meant that there were significant challenges in transporting milk from farm to factory and in many cases it was impossible
all our dairy farmers were paid at full rates for all milk produced, even if the milk was not able to be transported off farm.
The widespread threat posed by the bush fires ensured that the Leadership Team, led by Chief Executive Officer, Michael Hampson was pre
continuity plans and contingencies in the event of disruption to business, whether that was at a Foods’ factory, Norco Stockfeed Mill or a No
detailed look at the business, including reviewing supply chain interdependencies from the farm to consumers stood the business in good ste
further disrupted business (not that we necessarily envisaged a pandemic being the next issue to face the business at that time). However, the
undertaken that allowed the Co-operative to adapt quickly to the changing environment in both the Foods’ and Rural sectors, as witnessed by
changed consumer trends, allowed Norco to not only survive the challenge of COVID-19 but to take opportunities to service our markets an
ways that created some significant wins for the Co- operative. This, together with a strong desire to continue to drive business performance b
create operating efficiencies and reduce costs were realised, has resulted in strong business performance for the 2019/20 financial ye
We have pleasure in presenting to you the reports and financial statements for the Co-operative for the 2019/20 financial year, a year that ha
with the opportunity to improve our resilience and point of difference as a Co-operative.
Acknowledging Greg McNamara
After serving 24 years as a Director, Greg McNamara has recently announced his resignation from the Board of Directors effective 1 October 2020. G
Directors on 4 October 1996 as a Supplier Director from the Central Region.
Greg was then elected Chairman of the Co-operative on 15 November 1999 and served an initial term in that position until 27 August 2002. After a se
February 2003 that resulted in major changes to the makeup of the Board, Greg was again elected Chairman on 12 February 2003, a position he has h
year.
During his time as Chairman, Greg has presided over 18 annual general meetings, three special general meetings and many, many Board meetings. Th
only tell a very small part of Greg’s story as a Member, Milk Supplier, Director and Chairman of what is now Australia’s most significant dairy co- o
operatives in Australia.
It is not possible to even start to succinctly articulate Greg’s achievements as a Director and Chairman over these 24 years of total dedication to the C
that Greg’s passion and commitment to Norco and the northern dairy industry is second to none. He has worked tirelessly over these years to ensure t
South Wales and south-east Queensland have a home for their milk and that their processor has a significant point of difference. It is not an exaggerat
Greg always had for Norco and the personal sacrifices he made, Norco may not have survived the period leading up, and subsequent to deregulation o
Greg’s family has played a pivotal role in him being able to devote much of his time to Norco. Their support, particularly from partner Sue and son T
significant amounts of time and energy in the Norco business knowing the family dairy farm was in good hands.
Greg’s legacy as a Director and Chairman of Norco is that the Co-operative is in a much better position today than it was when he first came onto the
greatest care and diligence in undertaking his role as a custodian of the Co-operative’s substantial assets to ensure that Norco has a long and successfu
There is not much more that can be said to Greg other than a collective and heartfelt “THANK YOU” from all members, milk suppliers, staff, busines

from all members, milk su

business partners, c
FACTS AT A GLANCE $
2019/20
6
5. 4 m
$

TOTAL NET PROFIT

(before Significant Items)
8
3
2018/19 - $1.2m 2017/18 - $1.9m
m
2
0

860
1
T
8/
1
O
9
T
-
$
STAFF EMPLOYED A
0.
as at 30 June 2020 0
Norco Foods 613 L
m
Norco Rural 181
Norco Agribusiness 42 R 2
Corporate 24 E01
V
7/
1
E8
-
N $
U
0.
7
E
m

1
2
0
1
8/
1
9
-

,
$
6
0
3
m
 includes permanent, part-time and casual staff

203 2
1
MEMBER FARMS
2018/19 - 194 2017/18 - 201

total member returns

TOTAL MEMBER SUPPLY T
4
total ave flnancial ave base step ave total dividend suppliers’ member year milk price
ups milk pay
patronage returns O
2018/19 60.14 - 60.14 0.19 0.76 61.09
2016/17 57.29 0.13 57.42 0.25 0.51 58.18 T
NORTHERN REGION CONTRACT PRICE A
total ave flnancial ave base step ave total dividend suppliers’ member year milk price ups milk pay
patronage returns
2018/19 60.30 - 60.30 0.20 0.75 61.25
L
2016/17 57.40 0.13 57.53 0.26 0.51 58.30 M
SOUTHERN REGION CONTRACT PRICE E
total ave
flnancial ave base step ave total dividend suppliers’ member year milk price ups M milk pay
patronage returns
2018/19 58.74
2016/17 56.34
- 58.74
0.13 56.47 0.17
0.13 0.89
0.47
59.76
57.11
B
*Dividend proposed for consideration at 2020 Annual General Meeting
E
R
S
’
M
I
L
K
I
N
T
A
K
E
Mi
2019/20 70.63 - 70.63 0.21* 0.76 71.60
2017/18 57.07 - 57.07 0.27 0.64 57.98
2015/16 57.30 - 57.30 0.24 0.52 58.06
2019/20 70.98 - 70.98 0.25* 0.82 72.05
2017/18 57.29 - 57.29 0.28 0.64 58.21
2015/16 57.28 - 57.28 0.24 0.55 58.07
2019/20 69.24 - 69.24 0.08* 0.55 69.87
2017/18 55.29 - 55.29 0.16 0.60 56.05
2015/16 57.52 - 57.52 0.16 0.35 58.03

CHAIRMAN’S REPORT
I report on behalf of the Board of Directors and as the recently elected Chairman of the Co-operative. After taking a leave of absence from the Board for health
announced that he was standing down as Chairman and would be retiring from the Board of Directors before ultimately deciding to resign from the Board, effec
on the Board with Greg for the last eight years, I would like to acknowledge Greg’s dedication and commitment to Norco during his time on the Board and we exte
future. In conjunction with my election as Chairman, Heath Hoffman has subsequently been elected to fill the role of Deputy Chairman and I congratulate Heath on
As reported last year, Michael Hampson was recruited into the Co-operative on 4 March 2019 as Chief Operating Officer. After a period of settling in and getting to
demonstrated to the Board that he had the necessary skills, knowledge and acumen to lead the business and was elevated to the position of Chief Executive Of
Michael’s appointment as Chief Executive Officer, Greg McNamara had been performing the role on an interim basis.
The year in review has been dominated by natural disasters including severe drought, bush fires that shocked the nation and even the threat of floods in p
However, we have also been witness to the onset of the COVID-19 pandemic that continues to have far-reaching social and economic effects on all Austra
Norco operates. We at Norco are therefore very fortunate that as an essential food manufacturer, rural reseller and stock feed manufacturer, the Co-operative has no
Members’ / Milk Suppliers’ returns and our business operations, but we have in fact improved our Members’ returns and the performance of the business. In these u
a 100% Australian farmer owned dairy co-operative is a proposition that certainly resonates with our customers and consumers alike and we appreciate the growing
in the market place we service as it continues to outperform competitors’ brands.
we would like to share with you some

RS
R
ATIVE
ory is about giving back – to your members and
and we’re grateful for what you do.

worked their herds for generations. You produce a

rt of our Australian fare.

community. By committing to business as usual, you’ve
now you’ll keep delivering on that promise, as you

he land, in the dairies and in the shops – you give us all

ns and know that the future is bright.
ent

nd employees. We achieve this by:

views and opinions - We encourage and support people to grow as
natural environment.

our performance - We are responsible for providing a safe work

OFILE
ommunity and for the Co-operative. Well, 2019/20 has not quite followed

ring the first half of the financial year, and some continue to battle the
eated some very anxious and worrying times for everyone in the path of
xtinguished in early 2020 with significant rain events which resulted in

andemic COVID-19 which has profoundly changed the way we now live

with the average base milk price paid being 70.63 cents per litre, an increase
ition of the continuing difficult climatic conditions and high dairy input

nsequences for our farmers and our processing facilities. Widespread

y and in many cases it was impossible to move the milk. Norco ensured that
ansported off farm.
ve Officer, Michael Hampson was prepared and could enact business
factory, Norco Stockfeed Mill or a Norco Rural Store. This close and
sumers stood the business in good stead for when COVID-19 took hold and
he business at that time). However, the business resilience work that was
ods’ and Rural sectors, as witnessed by the initial panicked spending and
pportunities to service our markets and customers in new and innovative
ntinue to drive business performance by ensuring internal projects that
formance for the 2019/20 financial year.
2019/20 financial year, a year that has tested us all but has also provided us
 Directors effective 1 October 2020. Greg was elected to the Board of

sition until 27 August 2002. After a series of special general meetings in

12 February 2003, a position he has held continuously until 30 July this

s and many, many Board meetings. These are impressive numbers but they
ustralia’s most significant dairy co- operative and one of the largest co-

e 24 years of total dedication to the Co-operative. What should be noted is

tirelessly over these years to ensure that dairy farmers in northern New
nt of difference. It is not an exaggeration to state that without the vision
g up, and subsequent to deregulation of the dairy industry.
rticularly from partner Sue and son Todd, has enabled Greg to spend
.
an it was when he first came onto the Board in 1996. He has acted with the
re that Norco has a long and successful future.
members, milk suppliers, staff, business partners, customers and consumers.

rom all members, milk suppliers, staff,

business partners, customers and
consumers.
absence from the Board for health reasons, Greg McNamara recently
ing to resign from the Board, effective 1 October 2020. Having served
ng his time on the Board and we extend our best wishes to Greg for the
Chairman and I congratulate Heath on his appointment.
er a period of settling in and getting to know the business, Michael quickly
to the position of Chief Executive Officer on 3 October 2019. Prior to

tion and even the threat of floods in part of our supply area.
and economic effects on all Australians and the markets in which
manufacturer, the Co-operative has not only been able to sustain our
performance of the business. In these uncertain and challenging times, being
s alike and we appreciate the growing support our brand continues to have
Business overview 2019/20
It is very pleasing to report to you that the Co-operative has achieved a 13.2 percent
increase in total revenue to reach
$683 million with a net profit (before significant items) of $5.4 million which compares
very favourably with the equivalent 2018/19 result of a net profit (before significant
items) of $1.2 million. This result was achieved after increasing the base farm gate milk
price paid to our Members / Milk Suppliers during the financial year by $17.1 million in
an effort to address the severe increases in production costs experienced on farm. During
the year the Co-operative’s debt position continued to improve with a reduction of $8
million resulting in a comfortable level of headroom over banking covenants.
The financial performance for the 2019/20 year has been very pleasing given the
challenging environment experienced as a consequence of continued drought and now
COVID-19. A major contributor to the improvement in the financial results has been
the continued support from our customers for the Norco brand. In the aftermath of
the devastating fires experienced in early 2020, we saw an example of the
importance of the strong relationship Norco has with our customers and the
importance of the Norco brand when the Coles Chief Executive Officer, Steven Cain,
whilst visiting the Mid North Coast to survey the impact of the fires, extended an
invitation to meet with Michael Hampson and myself at one of the Coles stores. The visit
provided a unique opportunity for us to walk around the supermarket with the Coles
executive discussing the dairy cabinet, consumer support of the 100% Australian farmer
owned Norco brand and opportunities to expand the ranging of Norco products within
the Coles’ network. The store visit was followed by a visit to one of our Member’s farms,
which further reinforced the values of the Co-operative and the unique offering of the
Norco brand.
During the year, the brand has continued to gain the support of the major retailers
with improved ranging in Coles, Woolworths and Aldi, in addition to a large number
of new independent retailers and route trade customers responding to the growing
consumer support for the 100% Australian farmer owned proposition.
The Norco Rural / Agri business has continued its strong performance again in
2019/20 through further sales growth in the rural stores network and record volumes
achieved in the feed mills and grain trade divisions.
A significant contributor to the improved financial result has been the continued focus on the
delivery of the strategic plan set by the Board. Actions from the strategic plan such as achieving
operational efficiencies through the implementation of the continuous improvement program,
growing the geographical reach and profile of the brand, moving milk into high returning categories,
creating value in everything we do, improving safety and implementing positive change across the
business, have all played a part in achieving the improved result.
A Year of Change
During the course of the year, the Board of Directors and the Senior Executive Team have
remained focussed on progressing the strategic plan and implementing change within the business.
Change has become a new and consistent theme within the business and we have seen change occur
in many forms under the leadership of Michael Hampson, including the recruitment of a number of
new senior members of staff with new skill sets who have been welcomed into the business and the
implementation of several new initiatives and ways of thinking about how we do things and how we
create value in everything we do such as the activity projects in Foods.
A major catalyst for change has been how we cope with the changing working environment and a
significantly changing market place as a result of the COVID-19 pandemic. As the pandemic unfolded,
the development and implementation of a comprehensive crisis management plan became the
major focus of the Board, the Senior Executive Team and the Leadership Team. Specialist consultants
from Ernest & Young were engaged to assist with the development of the crisis management
strategy, which centred on identifying areas of risk and mitigation strategies to ensure the impacts
on the business operations were kept to a minimum whilst always ensuring the safety of our
employees was maintained as a priority.
One of the major mitigation measures employed to ensure that the continuity of business was
maintained during the pandemic has been that large numbers of our staff were required to work
remotely from their homes by connecting electronically to Norco’s IT system. Social distancing and
hygiene requirements have meant change had to occur at all sites with new work practices
being developed
and implemented. The way in which the Board and the management team
communicate also required a major change. As the pandemic unfolded, the Board
moved from holding monthly face-to-face meetings to meeting bi-weekly electronically
with more regular meetings with the senior executive occurring on a weekly basis.
Safety continues to be of paramount importance to both the Board and the management
team, the COVID-19 pandemic has required a heightened level of awareness and a
renewed focus on safety within the business.
Members
Norco’s Members / Milk Suppliers continued to endure some of the harshest weather
conditions on record, in particular during the first half of 2019/20. This was on top of
the ever increasing costs of doing business on farm and the highly inflated grain
and fodder prices which we hope will ease somewhat with the new season crop to be
harvested in the near future. Unfortunately the northern dairy industry has lost many good
dairy farmers as a result of the prolonged period of drought including some who
supplied the Co-operative. On behalf of the Board, I wish to thank all our Members /
Milk Suppliers, both current and now retired for their extraordinary efforts in supplying
milk under such difficult conditions.
Norco’s milk pricing in the 2019/20 financial year did however allow Norco to attract and
recruit many new Member farms in South East Queensland and Northern New South
Wales which have helped to replace the volume lost from farm retirements and to
ensure that Norco is able to continue to service our increasing customer base with fresh
milk. Sales of Norco branded milk continues to grow significantly as does the reach of our
brand and we have welcomed 32 new farms to the Co-operative. From an RD&E
perspective we are excited that Tocal Agricultural College transferred their milk supply to
Norco during the year and this now means the Norco milk supply area is bookended by
two very prestigious institutions supplying milk to the Co-operative, being the
University of QLD Gatton Campus and Tocal Agricultural College. We look forward to
continuing to strengthen our partnerships with these two institutions for the benefit of
our Members / Milk Suppliers and the broader industry.
The Co-operative has continued to receive outstanding support from Members
with 100 percent of Member farms signing the new code compliant Milk Supply
Agreements as
CHIEF EXECUTIVE OFFICER’S
REPORT
I feel quite privileged to present my first report to Members as Chief Executive Officer of Norco Co-operative Limited, in our 125th year. Norco has a long hist
supporting farmers across a significant geographical footprint and holding an important role in the industry as Australia’s largest dairy farmer owned co-opera
The events that occurred in the 2019/20 financial year provided us all with many challenges. Together, we successfully fought off the crippling drought and the wid
farming regions. We then welcomed the rains that had been scarce from our country for so long, only to see these rains turn into floods. As we pulled through the fl
into our lives. Our country’s leaders put in place measures to control the spread of the virus in our communities, however our markets then became disrupted.
2019/20 has been a year like no other. However, there have been some quite significant wins that our Co-operative has delivered, which attests to the act
put in place across the business in May 2019. Through the help and support of our customers and consumers, made possible through the relationships held and the m
to increase the base farm gate milk price we paid to our Members during the financial year by $17.1 million. In addition to this, we have increased the operatin
$1.2 million to $5.4 million, an increase of $4.2 million.
In this challenging year, our change process and realignment under a focused activity management program, has seen the Norco management team increase
$21.3 million, a record year on year increase in Member value.
Operating Result
For the 2019/20 financial year, we have recorded an operating profit before significant items of $5.4 million, being an increase of $4.2 million over last year. Wh
is that each of the business units of Norco improved their financial performance over the last financial year, with
a result of the introduction of the Dairy Industry Mandatory Code with the majority of
Members electing to enter into a new contract term or increase the length of their
previous contract.
Director elections
Directors Elke Watson (Northern Region) and Greg Billing (Southern Region) completed
their respective three year terms as supplier Directors in 2019. Member nominations
were received for both regions and a ballot was conducted resulting in Matthew Trace
(Northern Region) and Heath Cook (Southern Region) being elected to the Board. I would
like to take this opportunity to thank both Elke and Greg for the contribution they made during
their time as Directors.
On behalf of the Board of Directors, I would like to thank everyone associated with the
Co-operative for your collective strength, resilience and support in what has been an
extraordinary year for many reasons as outlined in my report. Our Members / Milk Suppliers,
senior executives, management and staff, business partners, customers and consumers have all
played very important roles in ensuring that Norco has not only continued to grow but
additionally, a very strong platform has been established during the year for the future ahead. I
personally would like to thank the Board and Management Team for their contributions and
support throughout the year and I look forward to the 2020/21 year with enthusiasm as
Chairman of “Our Norco”.
MICHAEL JEFFERY
Chairman
Board of Directors
IVE OFFICER’S

cer of Norco Co-operative Limited, in our 125th year. Norco has a long history that we should remain proud of,
ortant role in the industry as Australia’s largest dairy farmer owned co-operative.
llenges. Together, we successfully fought off the crippling drought and the widespread fires in many of our dairy
for so long, only to see these rains turn into floods. As we pulled through the floods, COVID-19 came very quickly
e virus in our communities, however our markets then became disrupted.
significant wins that our Co-operative has delivered, which attests to the activity management program that was
ustomers and consumers, made possible through the relationships held and the messaging of our brand, we were able
l year by $17.1 million. In addition to this, we have increased the operating profit before significant items from

ity management program, has seen the Norco management team increase the value created for Members by

nt items of $5.4 million, being an increase of $4.2 million over last year. What is pleasing to see in this result,
ce over the last financial year, with
the combined Dairy business improving their contribution by over 100 percent.
A special mention needs to be made to our team members within our Agri business,
whom delivered record volumes of formulated feeds, hay and grain to a wide range of
customers, including many of our Members during the drought. The team work that
was displayed and the willingness to assist our customers and the Norco business was
excellent, all during an incredibly stressful time for all participants in the supply chain.
Brand Performance
The Norco brand accounted for $154.7 million in milk sales during the 2019/20 year,
representing an overall growth rate of 15.9 percent. This is a pleasing result, as it enabled
Norco to support Members through the drought and also provided an excellent outlet for
our Members’ milk.
Within the retail channel, the Norco brand enjoyed value growth of 39.3 percent, the
highest of all major brands, where the total milk category only grew by 10.4 percent,
due to increased retail pricing. Our volume growth was 28.4 percent within a total milk
category that grew by only 1 percent - Norco’s growth represented circa 75 percent
of the national growth in retail milk sales – an exceptional result considering we are only
ranged in NSW and QLD, and not all stores in these states.
Consumers are buying into the Norco 100% Farmer Owned proposition, and the results
are showing us this. Our retail partners are assisting with providing us further
ranging opportunities to enable us to reach a wider group of consumers, and
we look towards the future confident that our unique selling point will hold us in good
stead.
Sales Performance
2019/20 saw our total sales exceed $683 million, representing growth of 13.3 percent,
with all of our business segments delivering growth on the prior year.
The stock feed and grain trading business, fuelled by significant drought
demand and increased commodity prices, grew by $34.4 million or 32.9 percent over
last year. This increased level of sales is a credit to our teams in this area of our
business, as volume records were regularly set and then broken as the growth tested the
capacity of our plant, process and, at times, our people.
Notwithstanding the market disruption that was caused by the COVID-19 restrictions, our branded
milk business grew by
$21.1 million, reflecting the additional volumes we have sold to consumers that prefer purchasing a milk
brand owned by famers, and the additional value we were able to take from the market as we increased
prices to support Members through the drought.
Norco, as recognised by other industry participants, took a leading position with regard to the
value of dairy products in the market place, and the value of milk at the farm gate. This has created
value in the market that we have been able to share with our Members via improved milk prices, and a
broader benefit to the industry as a whole.
Our ice cream business sales grew by $14.7 million, or 13.6 percent, as more customers gained an
appreciation for the higher end quality products in Norco’s portfolio of capabilities. Our services are
coming under significant demand in the ice cream category, the model of combining quality
products with an organisation that is easy to deal with, resonates well with our contract manufacturing
customer base.
Milk Supply
Due to the harsh drought that we continued to experience during the year, we acknowledge both the
significant financial and non-financial pressures that our Members endured to supply us milk during
the last year.
Norco collected 214.4 million litres of milk from our Members, an increase of 19.9 million litres from
the prior financial year. On a like for like farms basis, our total supply for the year was down
1.1 percent, with the largest reductions from the South East Queensland, Taree/Hunter and Kempsey
collection regions.
Norco welcomed 32 new farms into the membership of our Co-operative as we secured our milk
supply for our growing branded business. This recruitment ensured that we maintained supply of
high quality fresh milk to our broad customer base across retail, route and industrial channels.
Across our milk pool, our average farm gate milk price increased to 70.63 cents per litre in 2019/20,
inclusive of retail levies. This was an improvement of over 10 cents per litre over 2018/19, which
delivered critical cash flow to members to assist with the ever increasing demands of fodder procurement
during the drought.
Debt Performance
Over the course of the financial year, Norco’s net debt reduced by $8.0 million to
$28.9 million, whilst still investing
$9.2 million in capital improvement projects for the year and increasing the milk price by
$17.1 million.
Norco is well in compliance with the covenants of our bankers, Rabobank, and recently
renewed our funding facilities, which incorporated an increase in our facilities to provide
us flexibility to make investments where we see strong value to be created for the Co-
operative and our Members.
Safety
At Norco, we have an absolute commitment to improve the work health and safety
outcomes of our people.
Norco commenced the IPaM project at our Labrador facility and the P2
program in NSW, which are both State Government assisted behavioural based safety
improvement programs. These programs will assist Norco and our people in the delivering
of safe working practices, and importantly, highlight and remove at risk behaviour that
may occur within the workplace.
These programs, whilst in their infancy, are being well supported and resourced by the
business, and well received by our team members. Our safety journey is an important one,
and that is top of mind for all managers within the Leadership Team.
Norco has also invested heavily in Chain of Responsibility leadership, creating a new
department and engaging experts to help us ensure we are operating our logistics
operations within a best practice framework for the safety of our people and the wider
community. We expect that these initiatives will roll out within the next financial
year, including the implementation of new technologies to improve safety of the
transport fleet at Norco.
Acknowledgement
2019/20 has been a year of significant change. We have made a number of structural
realignments within the business to improve the communication, collaboration and
cohesion within the business. These changes have shown to be quite effective and have
driven the significantly improved financial performance of the Co-operative and the
farm gate milk payout to a new record level.
It is an honour to congratulate Norco Co-operative Limited on its 125th anniversary of continuous operations in
Australia this year. This is a fantastic and rare achievement
for which everyone associated with Norco, past and present, should be proud. Norco is a recognised Australian owned and run dairy
business supporting Aussie farmers throughout northern New South Wales and south-east Queensland. Its dairy exports overseas have
grown from strength to strength. As Minister for Trade, Tourism and Investment, I am proud to see Aussie businesses such as Norco
develop such strong trading relationships around the world, growing and promoting Australia’s exports of premium agricultural goods
and introducing consumers to new and different Australian dairy products. Through connecting Aussie milk and ice-cream producers to
global consumers, Norco has demonstrated its enduring resilience despite the significant challenges posed by the COVID-19 pandemic
and tough ongoing seasonal conditions.
Contribution from Senator the Hon Simon Birmingham – Minister for Trade, Tourism and Investment, and Deputy Leader of the
Government in the Senate

I congratulate Norco on their proud 125 years as a prominent part of the Australian Dairy industry.
Norco has strived to and become a major and respected player in the Australian dairy industry. Despite the challenges 125 years bring
through droughts, floods and fires, Norco has always remained committed to its founding values - delivering for our local communities
and farmers.
Contribution from the Hon Melinda Pavey MP – State Minister for Water, Property and Housing
It is a

privilege
to offer my heartfelt congratulations to Norco Co-
operative for its growth and great success over 125
years: to its farmer owners and shareholders and it’s
loyal, hardworking staff across two states.
As a regional co-operative it has grown from a small
local organization to one recognized across Australia.
This has been achieved despite major changes in the
dairy industry, deregulation of the national market
milk industry and a contracting dairy farmer base
across Australia.
May Norco continue to grow and prosper for many
years to come.
Contribution from Mr Alan Hoskins – past Norco
General Manager
Well done to Norco on meeting the
significant milestone
of 125 years of continuous operations.
Norco is so vital to the Australian dairy industry,
particularly across Northern New South Wales and South
Eastern Queensland, and its brands have made an enormous
contribution to driving the strong reputation that the
Australian dairy industry is world- renowned.
As Australia’s largest remaining dairy co- operative, Norco
has demonstrated the power of what can be done when dairy
farmers partner together to create a better future for their
families.
Contribution from Dr David Nation – Managing Director of
Dairy Australia

16
125 YRS
This would not have been possible without the dedication and commitment of the management
team and all 860 members of the wider team at Norco. I would like to acknowledge their
significant contribution in making such an improvement to the financial outcomes and
collaboration across the business, they have done an exceptional job.
Lastly, I would like to share my appreciation of the support that the Board has provided me
and I am looking forward to the year ahead under the leadership of the Chair, Michael
Jeffery. Being able to work with this Board that is very invested in improving the business and
outcomes for our Members is motivating, and provides the management team with the
necessary support to continue the growth and change in our business.
MICHAEL HAMPSON
Chief Executive Officer
d on its 125th anniversary of continuous operations in

rco is a recognised Australian owned and run dairy

outh-east Queensland. Its dairy exports overseas have
I am proud to see Aussie businesses such as Norco
ng Australia’s exports of premium agricultural goods
gh connecting Aussie milk and ice-cream producers to
nificant challenges posed by the COVID-19 pandemic

urism and Investment, and Deputy Leader of the

t part of the Australian Dairy industry.

airy industry. Despite the challenges 125 years bring
ounding values - delivering for our local communities

rty and Housing

YRS
It is often written that Norco’s

history, from its

very humble beginnings in 1895, is the history of the
North Coast region of NSW. With the early settlers of
this region coming together to form a
Co-operative which was to become a significant
influence in the Australian dairy industry, and that
also saw the introduction of new and improved
farming systems. This led to major increases in
agricultural productivity in this region.
I acknowledge all those who believed in, and
contributed to Norco and its very strong and proud
history of 125 years in this region.
Contribution from Mr John Seccombe – Chairman of
the Northern Co-operative Meat Company and
Cooperatives Alliance
Norco has a proud
place in Northern NSW, as does the
Westpac Rescue Helicopter.
Our first Northern service mission was in December
1982 and in March 2020 we marked 10,000 missions
on the North Coast.
Since 1985, Norco has been a part of each mission,
with sponsorship support and other initiatives.
Norco’s support has been integral to changing
thousands of lives and I’d like to thank and
congratulate Norco on this milestone.
Contribution from Mr Richard Jones OAM – Chief
Executive Officer – Westpac Rescue Helicopter
Norco Co-operative Limited celebrating 125 years
of continuous operations is a fantastic milestone. It is the best example of the important role co-operatives play in
supporting regional communities and their economies. This was most evident during the recent difficult year with most
people battling drought, fires, floods and now a pandemic. Congratulations on a most wonderful effort!
Contribution from the Hon Mick Veitch MLC – Shadow Minister for Industry and Trade, Shadow Minister for Rural
Roads, Shadow Minister for Rural Affairs, and Shadow Minister for Western NSW
Looking back over the 125 years of Norco’s History there were many successful and disappointing times. I am
reminded of this present year Norco has just gone through. Now Australia’s largest and most successful dairy co-
operative yet still battling with drought, fires, floods and Coronavirus all in one year. Yet Norco has survived and
prospered thanks to its dedicated Suppliers and Staff.

They are, and always will be, Norco’s purpose and strength. Amazing! Congratulations Norco.
Contribution from Mr Warren Noble – past Norco Chairman and Director
DIRECTORS’ REPORT
The Directors present their report together with the financial reports for Norco Co-operative Limited (‘the Co-operative’) for the year ended 30 June 2020
The Board of Directors currently comprises six supplier Directors (non-executive) and there are currently no Independent Directors elected to the Board.
As part of the standard agenda items for each Board meeting, time is always allocated to strategic discussions which allows the Directors and Chief Execu
discuss emerging opportunities and trends as well as future challenges. The Directors have a shared desire to ensure Norco’s strategic business objectives
the best interests of the Members as a whole.
The Board and management continued to spend a significant amount of time in the last financial year formulating strategies to assist Members who contin
conditions on their farms, in particular during the first half of the 2019/20 financial year. This strategic focus, in addition to management undertaking activ
business performance led to significantly higher milk prices being paid to Members in 2019/20 as detailed earlier in this Annual Report. The onset of COV
ensured that the Board and management maintained a sharp focus on business performance and strategic resilience business planning to guide the business
pandemic emergency.
During the year, the Chairman invited members of the management team to Board meetings to provide in depth information regarding various aspects of t
monthly business updates. Marketing, brand plans and campaign updates were presented by Mr B Menzies (General Manager Marketing and Brands) duri
business unit and the Rural / Agri business unit. Mr G Vaughan (Health and Safety Manager) provided information regarding Norco’s Work Health and Sa
Callow (Milk Supply Manager) provided updates regarding matters relevant to Norco’s milk suppliers.
The Directors also continue to be committed to their ongoing professional development and during the year have had the opportunity to attend, and represe
conferences as can be seen from their profiles. This has been somewhat disrupted with the onset of COVID-19 from March 2020 onwards, however Direc
on-line conferencing facilities as a means of participating in industry events.
The Co-operative maintains Australian Institute of Company Directors (AICD) membership for all Directors on an annual basis and is supportive of Direc
educational courses and attendance at functions as well as industry events. Directors are constantly on a path of learning as the Co-operative has a diversif
improving the knowledge and skills base in the Boardroom assists to ensure that the Directors are able to govern the Co-operative in the most effective ma
information, tools and resources available to them to ensure they fully inform themselves of important and emerging issues.
COVID-19 played a disruptive role in relation to Norco’s most recently elected Directors attending the AICD Company Directors’ Course (residential). It
complete this course within the first year of their appointment as supplier Directors. Both Mr HS Cook and Mr MT Trace were enrolled into the Company
24 August 2020 but only Mr Trace was able to attend and complete the residential course as he is a QLD resident. Being a resident of NSW, Mr Cook was
QLD border closure, however he will attend a NSW-based course 12 to 16 October 2020.
17
T
ative’) for the year ended 30 June 2020 and the Auditors’ report.
endent Directors elected to the Board.
h allows the Directors and Chief Executive Officer to look forward and
e Norco’s strategic business objectives are met while at all times, acting in

strategies to assist Members who continued to deal with severe drought

dition to management undertaking activities and initiatives to strengthen
n this Annual Report. The onset of COVID-19 during late March 2020 also
business planning to guide the business through this unprecedented

ormation regarding various aspects of the business in addition to usual

al Manager Marketing and Brands) during the year for both the Norco Foods’
n regarding Norco’s Work Health and Safety (WHS) performance and Dr M

ad the opportunity to attend, and represent Norco, at a range of industry

m March 2020 onwards, however Directors have adapted well to the use of

annual basis and is supportive of Directors participating in AICD

rning as the Co-operative has a diversified business model. Continually
e Co-operative in the most effective manner possible, using all relevant
ng issues.
pany Directors’ Course (residential). It is a requirement that Directors
Trace were enrolled into the Company Directors’ Course in QLD from 17 to
Being a resident of NSW, Mr Cook was unable to attend due to the NSW-
 DIRECTORS
Michael C Jeffery – Chairman
All of the six non- Michael Jeffery has been a Director of Norco Co-operative Limited for eight years, having been executive supplier first elected to the Board on
and is from the Southern Region. Michael is Directors listed below Chairman of the Board of Directors, having been elected to the role on 30 July 2020. Michael are Active Me
member of both the Member Services Committee and Human Resources Committee and under the Rules of the was the Chairman of the Audit and Risk Management Com
until being Co-operative and have appointed Chairman of the Board.
a direct interest in their
Michael is a member of the Australian Institute of Company Directors and the Governance dairy farms that supply Institute of Australia. Michael ha
Finance for Directors course, the AICD milk produce to the Company Directors Course and holds an Advanced Diploma in Agriculture.
Co-operative.
During the year, Michael attended the Dairy Research Foundation Symposium in Bega during
July 2019 with Heath Hoffman and in August 2019 Michael was a speaker and a member of the processor panel at the NSW Dairy Industry Forum held at Parliament Hou
represented Norco at the China International Import Expo in Shanghai during November 2019 and in March 2020 joined an Ernst & Young webinar titled “Managing Wor
(COVID-19)”. Michael has represented Norco at numerous industry meetings relating to the impacts of COVID-19 during the year and was appointed to the NSW Dairy I
in January 2020.

Heath B J Hoffman – Deputy Chairman

Heath Hoffman has been a Director of Norco Co-operative Limited for six years, having been first elected to the Board on
12 November 2014 and is a supplier Director from the Northern Region. Heath was recently elected as Deputy Chairman
of the Board of Directors and he is the Chairperson of the Audit and Risk Management Committee.
Heath is a member of the Australian Institute of Company Directors.
During the year, Heath attended the Dairy Research Foundation Symposium in July 2019 with Michael Jeffery.
He also attended the Australian Dairy Conference in Melbourne with Heath Cook and Matthew Trace in February 2020.
having been executive supplier first elected to the Board on 14 November 2012
ving been elected to the role on 30 July 2020. Michael are Active Members is a
was the Chairman of the Audit and Risk Management Committee during the year

nance dairy farms that supply Institute of Australia. Michael has completed the AICD
vanced Diploma in Agriculture.
ga during
anel at the NSW Dairy Industry Forum held at Parliament House Sydney. Michael
2020 joined an Ernst & Young webinar titled “Managing Working Capital in a Crisis
VID-19 during the year and was appointed to the NSW Dairy Industry Advisory Panel

Heath S Cook - Director

Heath Cook was elected to the Board of Directors on 27 November 2019
and is a supplier Director from the Southern Region. Heath is a member
of both the Audit and Risk Management Committee and the Human
Resources Committee.
Heath is an affiliate member of the Australian Institute of Company
Directors.
Since joining the Board, Heath has undertaken induction activities and
site visits and has also attended the Australian Dairy Conference in Melbourne
with Heath Hoffman and Matthew Trace in February 2020. As reported
earlier Heath was enrolled into the AICD Company Directors’ Course
(residential) in QLD from 17 to 24 August 2020 but due to Heath being a
resident of NSW, he was unable to attend due to the NSW-QLD border
closure, however he will attend a NSW-based course 12 to 16 October 2020.
Gregory J McNamara – Director
Greg McNamara has been a Director of Norco Co-
operative Limited for 24 years and is from the Central
Region.
Greg is a member of the Australian Institute of
Company Directors.
During the year Greg attended the Australian Dairy
Products Federation dinner and discussion regarding
the Australian Dairy Plan. Later in July 2019 Greg
attended the Australian Dairy Plan National
Workshop. Greg was a presenter at the DIAA
Conference in Brisbane and was a speaker as part of
the dairy panel at the ICA Pacific Research Conference
at the University of Newcastle in December 2019.
Greg stood down from the role of Chairman of the
Board on 30 July 2020 and has now resigned from the
Board of Directors effective 1 October 2020.
Leigh Shearman - Director
Leigh Shearman has been a Director of Norco Co-
operative Limited for eight years having been first
elected to the Board on 14 November 2012 and is from
the Central Region. Leigh is Chairperson of both the
Member Services Committee and the Human Resources
Committee.
Leigh is a member of the Australian Institute of
Company Directors.
Leigh has continued with her speaking roles during the
year, attending and speaking to groups such as
Probus in the local heartland areas of Norco. The
people in these groups are great supporters of the
Norco brand and Leigh enjoys sharing Norco’s story
with an enthusiastic and appreciative audience.
Matthew T Trace – Director
Matthew Trace was elected to the Board of Directors on 27
November 2019 and is a supplier Director from the Northern
Region. Matthew is a member of the Audit and Risk
Management Committee.
Matthew is a member of the Australian Institute of Company
Directors.
Since joining the Board, Matthew has undertaken induction
activities and site visits and has also attended the Australian Dairy
Conference in Melbourne with Heath Hoffman and Heath
Cook in February 2020. As reported earlier Matthew
recently attended the AICD Company Directors’ Course
(residential) in QLD from 17 to 24 August 2020.
 External consultants and professional advice
The Board continues to engage the professional services of a number of external
consultants and advisors that specialise in the areas of governance, operational
performance, legal, human resources and corporate management. During the
year consultants have attended Board meetings as invitees to provide additional
skill sets to Board discussions and specific advice when required.
DIRECTOR ELECTIONS – 2019/20
In accordance with the annual rotation of Directors, the Directors due to
retire at the 2019 Annual General Meeting were Mrs E Watson (Northern
Region) and Mr GJ Billing (Southern Region). Mrs E Watson, being eligible,
offered herself for re-election however Mr GJ Billing did not seek re-election.
Member nominations were also received from Mr MT Trace (Northern Region)
and from Mr HS Cook and Mrs SE McGinn OAM (Southern Region) and
accordingly a postal ballot was held for both the Northern and Southern Regions
resulting in Mr MT Trace (Northern Region) and Mr HS Cook (Southern
Region) being elected for three year terms effective from the 2019 Annual
General Meeting on 27 November 2019.
The positions of Chairman and Deputy Chairman are voted on annually by the
Directors following the Annual General Meeting.
Directors’ Meetings
The number of Board meetings (and meetings of the Audit and Risk
Management Committee) and number of meetings attended by each of the
Directors of the Co-operative during the financial year are:
A Reflects the number of meetings held during the time the Director held office
during the year
B Number of meetings attended

Audit and Risk

Directors’ Management Committee
Meetings Meetings

A B A B
MC Jeffery 18 18 12 12
HBJ Hoffman 18 18 12 11
HS Cook 14 14 - -
GJ McNamara 18 17 - -
L Shearman 18 18 - -
MT Trace 14 14 8 8
GJ Billing 4 4 - -
E Watson 4 4 4 4
As a result of COVID-19 and the need to adhere to social distancing practices in the workplace, from
late-March 2020 the Directors commenced holding meetings using on-line conferencing facilities
(rather than face to face) which has proven very successful. A programme of more frequent on- line
meetings were scheduled in the April to June 2020 period to not only conduct the Board’s usual
business but for the Board to receive regular updates on the changing business environment brought about
by COVID-19 and the resilience planning activities to manage the business through this unprecedented
period. Similar to the Board meetings being held on-line from late-March 2020, meetings of the Audit and
Risk Management Committee were also held this way during the same time frame.
During the course of the 2019/20 financial year there were also 14 Directors’ meetings held by
teleconference (primarily in the period of the financial year prior to on-line conferencing facilities being
used). Teleconferences are organised to discuss and resolve specific issues that cannot be held over until the
next scheduled monthly meeting and generally the duration of such teleconferences is one hour or less.
CORPORATE INFORMATION
Corporate structure
Norco Co-operative Limited is a co-operative limited by shares which is incorporated and domiciled in
Australia.
Nature of operations and principal activities
The principal activities of the Co-operative during the financial year were the processing,
manufacture and sale of dairy products, the manufacture and sale of stockfeeds and rural retailing.
Employees
The Co-operative employed 563 full-time, 55 part-time permanent and 242 casual employees at
30 June 2020
(2019 541 full-time, 62 part-time permanent and 231 casual employees).
Results of operations
The net amount of the total comprehensive income for the financial year of the Co-operative after providing
for income tax was $4.8 million (2019: $41,000).
Derivatives and other financial instruments
The Co-operative’s activities expose it to changes in interest rates, foreign exchange rates and
commodity prices. It is also exposed to credit, liquidity and cash flow risks from its
operations. During the year, the Board has maintained policies and procedures in each
of these areas to manage these exposures. Management reports to the Board on a
monthly basis on the monitoring of and compliance with the policies in place.
Dividends
Dividends paid during the 2019/20 financial year totalled
$445,000 (being a dividend rate of 4.0% [four percent] on issued capital), declared
and approved by Members at the 2019 Annual General Meeting, which was held on
27 November 2019.
Operations review
The Directors’ have reviewed the Co-operative’s operations during the financial year
and the results of those operations, which are discussed in the Chairman’s Report for the
financial year ended 30 June 2020 (see page 8).
Events subsequent to balance date
During the interval between the end of the financial year and the date of this
report, there has not arisen any item, transaction or event of a material and unusual
nature which, in the opinion of the Directors, is likely to significantly affect the operations
of the Co-operative, the results of those operations or the state of affairs of the Co-
operative in subsequent financial years.
Future developments
In the opinion of the Directors, disclosure of information regarding the likely
developments in the operations of Norco in future financial years and the expected
results of those operations is likely to result in unreasonable prejudice to the Co-
operative. Accordingly, this information has not been disclosed in this report.
Indemnification and insurance of Directors and Officers
The Co-operative has entered into agreements to indemnify all Directors named at the
beginning of this report, former Directors and current and former Officers of the Co-
operative against all liabilities to persons (other than to the Co-operative or to a related
body corporate) which arise out of the performance of their normal duties as a Director
or Officer, unless the liability relates to conduct involving a lack of good faith.
The Co-operative has agreed to indemnify the Directors and Officers against all costs and
expenses incurred in defending an action that falls within the scope of the indemnity
and any resulting payments. The relevant insurances cover legal liabilities and associated
costs arising from the performance
Congratulations Norco!
Farmers, staff, management, directors – and our communities – can reflect on an outstanding record over 125 years. For Norco, c
not problems. Barriers have been demolished – fresh milk into China has shifted from pipedream to reality. As a strong regional
backing its heartland and delivering what its consumers want – which points to great times ahead.
While Norco’s celebrations may have been curtailed a little due to necessary restrictions, the Australian Government will continu
industries during this pandemic as we all look to a strong future for regional Australia.
Contribution from the Hon Michael McCormack MP – Deputy Prime Minister, Minister for Infrastructure, Transport and Region
National Party
Iconically Aussie, Norco has shown
that resilience runs deep in the veins of our farmers. Through world wars, depression, drought and disasters, generations of famil
famously healthy dairy produce. The Australian Government congratulates the Co-op’s significant 125-year contribution to its co
clean green food reputation. Agriculture will be at the heart of our COVID-19 recovery and innovative farmer-owned success sto
role.
Contribution from the Hon David Littleproud MP – Minister for Agriculture, Drought and Emergency Management and Deputy

Thank you and congratulations Norco on 125 years of

continuous service to our community. This is a remarkable milestone, unmatched by few in any industry.
Your 125th year has been extraordinary. Our farmers have been on the frontline through drought, fires, flooding and a pandemic
community and keep milk products on our shelves – we thank you for your unwavering dedication.
Thank you to all our farmers and processors, and to everyone who buys Norco products, for supporting our local farmer owned c
Contribution from the Hon Kevin Hogan MP – Assistant Minister to the Deputy Prime Minister, Federal Member for Page
of their duties as Directors and Officers and compensation for loss or injury sustained in the
course of such duties.
Indemnification of Auditors
To the extent permitted by law, the Co-operative has agreed to indemnify its Auditors, Ernst &
Young Australia, as part of the terms of its audit engagement agreement against claims by
third parties arising from the audit (for an unspecified amount). No payment has been
made to indemnify Ernst & Young during or since the financial year.
Options over unissued shares
Options over unissued shares have not been granted to any person or Director since the end of
the previous financial year to date of this report.
Directors’ benefits
Since the end of the previous financial year, except as declared below, no Director of the Co-
operative has received or become entitled to receive any benefit (other than a benefit included
in the aggregate amount of emoluments received or due and receivable by Directors shown in
the financial statements or the fixed salary of a full time employee of the Co-operative or of a
related corporation) by reason of a contract made by the Co-operative or a related corporation
with the Director or with a firm of which the Director is a member, or with a company in
which the Director has a substantial financial interest, except for that benefit which
may be deemed to accrue to those Directors in their capacity as dairy farmers in the supply
of milk to the Co-operative in the ordinary course of business.
Directors’ declarations of interest
On 30 January 2020 Mr MC Jeffery advised that he has been appointed as a panel member
on the NSW Dairy Industry Advisory Panel. On 15 July 2020 Mr Jeffery advised that as a
panel member of the NSW Dairy Industry Advisory Panel, he had an involvement in high level
preliminary discussions regarding the H4 RD&E Dairy Project proposal. This is a
collaborative co-investment project to de-risk the NSW dairy industry for sustainable future
growth and which Norco has provided indicative funding support towards. Mr Jeffery has
declared his interest in accordance with Section 208 of the Co-operatives National Law (NSW)
and, in addition, excluded himself from any discussions or decisions relating to this entity
and project.
On 27 November 2019 Mr HS Cook advised that he is a member of the NSW Farmers’
Association Dairy Committee and is the Regional Chairperson of Subtropical Dairy
Programme Ltd.
 ies – can reflect on an outstanding record over 125 years. For Norco, change has meant opportunities,
into China has shifted from pipedream to reality. As a strong regional 100% Aussie company, Norco is
ant – which points to great times ahead.
e due to necessary restrictions, the Australian Government will continue to back communities and
uture for regional Australia.
puty Prime Minister, Minister for Infrastructure, Transport and Regional Development and Leader of the
as shown
gh world wars, depression, drought and disasters, generations of families have come to trust Norco’s
ent congratulates the Co-op’s significant 125-year contribution to its communities and our worldwide
t of our COVID-19 recovery and innovative farmer-owned success stories like Norco will play a critical

er for Agriculture, Drought and Emergency Management and Deputy Leader of the National Party

o on 125 years of
milestone, unmatched by few in any industry.
been on the frontline through drought, fires, flooding and a pandemic. You have continued to serve our
ank you for your unwavering dedication.
one who buys Norco products, for supporting our local farmer owned co-operative. Norco – an icon.
Minister to the Deputy Prime Minister, Federal Member for Page
Mr Cook has declared his interest in accordance with Section 208 of the Co-operatives
National Law (NSW) and, in addition, excluded himself from any discussions or
decisions relating to these entities.
On 26 September 2019 Mr GJ McNamara advised that he has been selected as a team
member of the Australian Dairy Plan Joint Transition Team (JTT). Mr McNamara has
declared his interests in accordance with Section 208 of the Co-operatives National Law
(NSW) and, in addition, excludes himself from any discussions or decisions relating to
this entity.
On 30 July 2020 as Chairperson of Dairy Industry Group (DIG), Ms L Shearman
advised that DIG has an interest in the H4 RD&E Dairy Project (mentioned above), with
DIG providing an in-kind contribution to the project. Ms Shearman has declared her
interest in accordance with Section 208 of the Co-operatives National Law (NSW) and, in
addition, excluded herself from any discussions or decisions relating to this entity and
project.
On 27 November 2019 Mr MT Trace advised that he is the Vice President of the
Queensland Dairyfarmers’ Organisation (QDO) and a Director of Subtropical Dairy
Programme Ltd. Mr Trace has declared his interest in accordance with Section 208
of the Co-operatives National Law (NSW) and, in addition, excluded himself from any
discussions or decisions relating to these entities.
On 30 August 2019 Mrs E Watson advised that she has been appointed to the Board
Selection Committee of Subtropical Dairy Programme Ltd. Mrs Watson has declared her
interest in accordance with Section 208 of the Co-operatives National Law
(NSW) and, in addition, excluded herself from any discussions or decisions relating to
this entity up to 27 November 2019 when she ceased being a Director of the Co-
operative.
Rounding off of amounts
The amounts in this report and the accompanying financial statements have been rounded to the nearest
one thousand dollars in accordance with the Co-operatives National Law (NSW).
Auditor’s independence declaration to the directors
The Directors received a declaration of independence from the Co-operative’s auditor, Ernst &
Young. A copy of that declaration is included after this Directors’ Report.
Appreciation
The efforts and contribution of our management and staff during the year were greatly appreciated
by Directors.
Signed in accordance with a resolution of the Directors.
MC Jeffery
Chairman
Lismore, 30 September 2020
 Ernst & Young 111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001

Auditor’s Independence Declaration to the Directors of Norco Co-operative

As lead auditor for the audit of the financial report of Norco Co-Operative Limited for the financial year end
to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relatio
b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Norco Co-Operative Limited and the entities it controlled during the financi

Brad Tozer Partner

30 September 2020

A member firm of Ernst & Young Global Limited

Liability limited by a scheme approved under Professional Standards Legislation

Ernst & Young

‘
‘
‘ Over many decades,
Norco Co-operative Limited has contributed greatly to Australia’s dairy industr
like to congratulate Norco Co-operative Limited and all its members for reachi
There is at least one litre of milk in every Australian household at any given tim
will come from Norco every year.

‘
After a summer of devastating bushfires, made worse by prolonged drought an
would like to recognise the resilience that dairy farmers have shown during this
its continued support to help strengthen the dairy industry.
125 years of continual production and Australian ownership is an incredible ac
to reflect on the great contribution Norco Co-operative Limited has made to reg
right across the country.
Again, congratulations on this fantastic milestone!
Contribution from the Hon John Barilaro MP – Deputy Premier, Minister for R
Minister for Industry and Trade
 Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au

Directors of Norco Co-operative Limited

Operative Limited for the financial year ended 30 June 2020, I declare

ents of the Corporations Act 2001 in relation to the audit; and

conduct in relation to the audit.

the entities it controlled during the financial year.

decades,
ited has contributed greatly to Australia’s dairy industry and regional economies. I would
o Co-operative Limited and all its members for reaching 125 years of business.
of milk in every Australian household at any given time and 195 million litres of milk
very year.
tating bushfires, made worse by prolonged drought and now the COVID-19 pandemic, I
he resilience that dairy farmers have shown during this time and thank the community for
help strengthen the dairy industry.
oduction and Australian ownership is an incredible achievement and a great opportunity
ntribution Norco Co-operative Limited has made to regional Australia and households

n this fantastic milestone!

on John Barilaro MP – Deputy Premier, Minister for Regional New South Wales,
d Trade
CORPORATE GOVERNANCE
STATEMENT
This statement outlines the main corporate governance practices that were in place
throughout the 2019/20 financial year, unless otherwise stated. These practices are dealt
with under the headings: Board of Directors and its Committees; Internal Control
Framework; Ethical Standards; Business Risks and Emergency Planning; and The Role of
Members.
Board of Directors and its Committees
The Board of Directors is responsible for the overall corporate governance of the Co-
operative and aims to align and maximise effort and decision-making across the
business to ensure that strategic objectives are achieved and that decisions are made
within the risk appetite set by the Board. The key functions of the Board include
establishing and overseeing the desired organisational culture and values for Norco,
testing and approving strategy, setting policy, monitoring financial performance
(including approving the annual budget) and also monitoring non-financial performance.
In addition to setting risk appetite, the Board also monitors risk and compliance in a
business environment of increasing legislative and regulatory requirements. The
selection and appointment of the Chief Executive Officer is also a key function of the
Board, as is the ongoing monitoring of the Chief Executive Officer’s performance and
also ensuring there is adequate succession planning in place. The Board of Directors is
also responsible for reporting to members and being accountable to, and focussed on the
needs of members.
The Board has established committees to assist in the performance of its
functions. The standing committees are the Audit and Risk Management Committee,
Member Services Committee and the Human Resources Committee. The Board may form
or convene other ad hoc committees for specific purposes.
To better understand the operations of the Co-operative’s businesses the Board
receives regular management reports, presentations and briefing papers on key aspects
and makes site visits to the Co-operative’s operations.
Composition of the Board
Under the Rules of the Co-operative the Board of Directors is comprised of a
minimum of six non-executive (supplier) Directors who represent the members from
the Northern, Central and Southern regions. Each region is represented
GOVERNANCE
by two supplier Directors, with Directors serving a three year term. At each Annual General Meeting
two Directors retire in accordance with the Rules of the Co-operative. The Rules also allow for two
Independent Directors to be elected to the Board however both Independent Director positions remain
vacant.
An active member of the Co-operative may seek election as a supplier Director in accordance
with the Rules and, if elected, serve a term of three years after which time they retire. Independent
Directors, when nominated and elected, are elected for a term of three years after which time they
retire. The Directors regularly consider whether or not the skills and characteristics which might be
contributed by Independent Directors should be added to the Board to maximise its effectiveness.
Independent Directors are to be nominated by the Board and elected by members.
While there are presently no Independent Directors appointed, the Board continues to engage the
professional services of a number of external consultants and advisors that specialise in the areas
of governance, operational performance, legal, human resources and corporate management.
During the year consultants have attended Board meetings as invitees to provide additional skill sets to
Board discussions and specific advice when required.
Regarding potential conflicts of interest, it is the practice of the Norco Board to open every meeting
by giving Directors the opportunity to declare any actual, potential or perceived conflicts. If a conflict
of interest should arise, the Director concerned takes no part in discussions at the Board meeting on
the issue, nor exercises any influence over other Board members.
The total remuneration package for Directors is voted on at each Annual General Meeting. The
amount paid may vary between Directors depending on their level of responsibilities. Remuneration of
Directors is set out in the notes to the financial statements.
Board Corporate Governance Policy and Emerging Corporate Governance Issues
The purpose of the Corporate Governance Policy Statement is to provide guidance to Directors and
management on how the Co-operative is to be governed in practice. The document was developed
having regard to the Co-operatives National Law
(NSW) and Norco’s Rules. All current Directors have signed Deed Polls and Statutory
Declarations to ensure their commitment to the Corporate Governance Policy Statement
and the duties and responsibilities specifically addressed in the Deed Polls.
A review of the Corporate Governance Policy Statement is undertaken annually by
the Directors to ensure that issues of governance are dealt with in accordance with the
policy. At the same time, the policy is reviewed to ensure it is still relevant and up to date.
All current Directors except for Mr HS Cook have attended and completed the
comprehensive residential AICD Company Directors’ Course. Mr Cook was registered to
attend a Company Directors’ Course during August 2020 at a QLD venue but due to
the NSW / QLD border closure as a result of COVID-19 restrictions, he was not able to
attend that event, however he will attend a NSW-based course 12 to 16 October 2020.
Co-operatives National Law in NSW
The Co-operative continues to operate under the Co-operatives National Law (CNL)
which was introduced on 3 March 2014.
Board Committees
The Directors seek to achieve best practice in corporate governance and
accountability through the following standing Board Committees which assist the Board in
the execution of its responsibilities. These committees are subject to Charters which have
been approved by the Board and which define their respective objectives, powers, roles
and responsibilities.
Audit and Risk Management Committee
The objective of the Audit and Risk Management Committee is to assist the Board of
Directors in fulfilling its statutory and fiduciary responsibilities relating to accounting and
reporting practices of the Co-operative and subsidiaries. The Committee advises on the
establishment and maintenance of an overall framework of internal control and
appropriate ethical standards for the management of the Co-operative. The
Committee gives the Board additional assurance regarding the quality and reliability of
financial information prepared for use by the Board in determining policies for inclusion
in financial statements. The Audit and Risk Management Committee also embraces, as
part of its Charter, the Co-operative’s Risk Management Program.
The Audit and Risk Management Committee ensures:
• compliance with statutory responsibilities relating to financial disclosure;
• focus on significant changes in accounting policies, standards and practices or other reporting
requirements likely to affect developments in financial reporting;
• regular reviews of operations and policies are conducted;
• review of the audit and annual financial statements and interim financial information
and the adequacy of existing external audit arrangements with particular emphasis on the
scope and quality of the audit; and
• risk management reporting systems are in place to effectively identify and manage
strategic, operational and financial risks. To give further effect to identifying and
quantifying risks faced by the Co-operative, a risk register has been developed which is
managed under the scope of the Audit and Risk Management Committee. The risk register
details the probability and impact of various business risks and creates a risk score together
with a mitigation plan.
The Audit and Risk Management Committee reviews the performance of the external
auditors on an annual basis and meets them during the year as follows:
• to review the results and findings of the audit, the adequacy of financial and operating
controls, and to monitor the implementation of any recommendations made; and
• to review the draft financial statements and the audit report and to make the necessary
recommendation to the Board for the approval of the financial statements.
The Audit and Risk Management Committee also reviews the Co-operative’s Executive
Authority Limits on at least an annual basis to ensure that the delegated levels of authority
are appropriate for key employee positions.
The Committee is comprised of three Directors and meets at least six times per year. The
Chairperson of the Co-operative shall not be a member of the Committee.
Member Services Committee
The objective of the Member Services Committee is to make properly considered
recommendations to the Board of Directors in relation to the adoption of policies
pertaining to non-milk supply, member issues.
In giving effect to this objective, the Committee will make recommendations to the
Board of Directors in relation to policies regarding:
• developing and encouraging the sustainability of the Norco farm base through
initiatives such as improving farming techniques, study tours and improving business
skills;
• assisting with the ongoing wellbeing of the Norco farm base by helping members with
succession planning, mental health issues and social networking / support;
• providing and disseminating information from external sources relating to issues
such as the education and training of potential Directors, government assistance and
climate variability; and
• providing support to the Norco farm base through the management of issues such
as exceptional circumstances, disaster recovery planning and other critical farm issues
(such as tick infestations).
The Committee is comprised of up to three Directors and meets at least every
quarter.
Human Resources Committee
The objective of the Human Resources Committee is to make properly considered
recommendations to the Board of Directors in relation to the adoption of policies
pertaining to Human Resources within Norco.
In giving effect to this objective, the Committee will make recommendations to the
Board of Directors in relation to policies regarding:
• Developing and monitoring succession plans within Norco;
• Remuneration, salary and staff entitlements;
• The effective use of Human Resources throughout Norco;
• Performance management culture;
• Efficiency and value of Human Resources;
• Training and development;
• Continuous improvement;
• Work Health and Safety (WHS); and
• The review and updating of the Committee’s Charter from time to time.
The Committee is comprised of up to three Directors and meets at least every
quarter.
INTERNAL CONTROL FRAMEWORK
The Board acknowledges that it is responsible for the overall internal control framework, but
recognises that no cost- effective internal control system will preclude all errors and irregularities.
To assist in discharging this responsibility, the Board has instigated an internal control framework
which can be categorised under the following headings:
• Corporate Strategy – there are clearly defined short, medium and long term strategic objectives set
and reviewed by the Board of Directors on at least an annual basis and an operational strategic
plan developed by management to meet these objectives. Strategic issues are considered at each
meeting of the Board of Directors.
• Financial reporting - there is a comprehensive budgeting system with an annual budget approved
by the Board. Monthly actual results are reported against budget and revised rolling year end forecasts
are prepared monthly.
• Quality and integrity of personnel - the Co-operative’s policies are detailed in a policy and procedures
manual. New policies and procedures are developed, or amendments made to existing policies and
procedures, as the need arises.
• Investment appraisal - the Co-operative has clearly defined guidelines for capital expenditure. These
include annual budgets, detailed appraisal and review procedures and due diligence requirements where
businesses are being acquired and divested.
• Executive authority limits – the Co-operative has clearly defined financial authority limits for
management positions in relation to capital expenditure, foreign exchange, forward purchase
agreements, forward grain sale agreements and general expenses.
Quality Accreditation and Auditing
The Norco Foods division strives to ensure that its products are of the highest standard. The Lismore Ice
Cream Business Unit is licensed by the NSW Food Authority and has certification against SQF Code
Edition 8 Level 3: Comprehensive Food Safety and Quality Management System, Coles Food
Manufacturing Supplier Requirements V2 March 2017 (CFMSR), Woolworths Quality Assurance
Standard, ALDI Quality Assurance, U.S. Food and Drug Administration registered and has an
Approved
Arrangement with the Department of Agriculture for export. The Labrador milk
factory is licensed by SafeFood QLD and has certification against SQF Code Edition 8
Level 3: Comprehensive Food Safety and Quality Management System, Coles Food
Manufacturing Supplier Requirements V2 March 2017 (CFMSR), ALDI Quality
Assurance and has an Approved Arrangement with the Department of Agriculture for
export. The Raleigh milk factory is licensed with the NSW Food Authority and certified
for SQF Code Edition 8 Level 3: Comprehensive Food Safety and Quality Management
System, ALDI Quality Assurance, Walmart Supply Chain Security, ACO accreditation
and has an Approved Arrangement with the Department of Agriculture for export. Raleigh
is also Kosher certified for the production of all A2 products.
In the Norco Agribusiness unit both the Norco Stockfeeds manufacturing mills at
Lismore New South Wales and Windera Queensland have FeedSafe
accreditation under the Stockfeed Manufacturers’ Association of Australia and
HACCP accreditation. Norco is a member of the Stockfeed Manufacturers’
Association of Australia.
Norco maintains accreditation against AS4801:2001 - Occupational Health and
Safety Management Systems.
Norco Rural Stores are audited internally in line with AS4801 as well as requirements
under the following Australian Standards:
• AS 3833:2007 – The storage and handling of mixed classes of dangerous goods, in
packages and IBC’s.
• AS 4775:2007 – Emergency eyewash and shower equipment.
• AS 4084:2012 – Steel Storage Racking.
To maintain currency of knowledge and skills, Rural employees undergo various ongoing
safety related training in the following areas:
• Norco Agvet Awareness course developed in line with the above mentioned standards as
well as following nationally accredited units of competency relating to:
o AHCCHM101A – Follow basic chemical safety rules.
o AHCCHM304A – Transport, handle and store chemicals.
• Heavy and light vehicle load restraint.
• Online safety courses in areas such as:
o Manual handling.
o Forklift safety.
o Fire safety training.
o Chain of Responsibility.
o Safety data sheets.
In response to the COVID-19 restrictions, the WHS
learning mode of delivery for the Norco Agvet Awaren
implementing a new safety database system which mee
ISO45001 with a goal to transition to the internatio
and Safety Management Systems.
Safety
Norco is committed to the safety and wellbeing of staff
strives to comply with the provisions of a safe working
safety an integral part of our organisation, which is esse
successful business into the future. On a monthly basis,
management reports detailing the safety performance
monitors this information closely. The Board also re
various site WHS committee meetings that are held.
is provided to the Human Resources Committee when t
Norco maintains accreditation against AS4801:2001 O
Management Systems. This accreditation is current to 1
Environment
Norco aims to ensure that the highest standard of enviro
operative recognises that it has a responsibility to e
sensitive to the environment and comply with the letter
environmental legislation. Norco is also a party to the A
a ‘Buy Recycled’ procurement practice as part of ou
ETHICAL STANDARDS
All Directors, managers and employees are expecte
objectivity, striving at all times to enhance the reputatio
My Great Grandfather attended the very first meeting which was held at Clunes which led to the eventual establishment of
NORCO as we know it today. I was an employee for 29 years from 1967 until 1996.

I list just a few of the major milestones during my time:

o The Labor Government (Minister Don Day) changing quota milk allocations to a fairer system so it enabled farmers in non-
metropolitan areas to have a better share which improved their four weekly pay cheque massively. A number of Directors
of the Co-operative were heavily involved in this process which went against their political persuasion.
o The Amalgamation with Casino Dairy and Central Dairy (Raleigh/Dorrigo). Many others followed all strengthening Norco
for all farmers involved.
o The purchase of the PDS Rural Store businesses which when added to the existing Norco Rural Stores allowed some
rationalisation and allowed Norco into new territory particularly the Tablelands. This has been further expanded. The
promotion by using farmers such as Denzil Thomas, Hugh and Warren Gallagher and the Shearman Family has been the best I
have seen. Many other farming families have been included.
o Diversification of the Norco distribution business which enabled distribution of many products not made by the Co-
operative. This part of the business, built up by the employees, became valuable when the Co-operative needed financial
support.
o The market milk joint venture with QUF/Gold Coast Milk which I understand Norco owns outright today due to pre-emptive
rights agreements and some courageous decision making by those at the time.
There have been many honest hardworking farmers and employees over 125 years. I remember so many during my time. I
found that when
the Board and Senior Management were stable the Co-operative performed to its best.
There will always be challenges but to operate for 125 years is a truly remarkable achievement. Congratulations NORCO.
Contribution from Mr Graeme Hancock past Norco Commercial Manager/Secretary
 ning.
onsibility.
eets.
he COVID-19 restrictions, the WHS Team is developing a distance
delivery for the Norco Agvet Awareness course. The WHS Team is also
new safety database system which meets the requirements for AS4801 and
a goal to transition to the international standard for Occupational Health
agement Systems.

ted to the safety and wellbeing of staff across its entire operations. Norco
with the provisions of a safe working environment and continues to make
part of our organisation, which is essential if we are to continue building a
ss into the future. On a monthly basis, the Board of Directors receives
orts detailing the safety performance and trends for the business and
formation closely. The Board also receives a copy of all minutes of the
HS committee meetings that are held. In addition, a detailed WHS report
Human Resources Committee when the Committee meets. As noted above
accreditation against AS4801:2001 Occupational Health and Safety
tems. This accreditation is current to 15 February 2022.

sure that the highest standard of environmental care is achieved. The Co-
ises that it has a responsibility to ensure that its operations are
nvironment and comply with the letter and spirit of all applicable
gislation. Norco is also a party to the Australian Packaging Covenant and has
’ procurement practice as part of our obligations under the Covenant.
NDARDS
managers and employees are expected to act with the utmost integrity and
ng at all times to enhance the reputation and performance of Norco. Every
employee has a nominated manager or supervisor to whom they may refer any issue
arising from their employment and there is a suite of Human Resource policies and
procedures that assist in ensuring employees’ conduct is of the highest standard
possible. In addition, the Corporate Governance Policy Document serves to provide
guidance to Directors on how the Co-operative should be governed from a practical
perspective. The Norco Foods division also has an Ethical Sourcing Policy which sets
out the standards that the business expects all suppliers to comply with when
producing and supplying products and/or services for Norco Foods, no matter
where they operate in the world.
BUSINESS RISKS AND EMERGENCY PLANNING
Management has identified, and continues to identify, business risks and potential
emergencies with the aim of minimising any consequential adverse effects on the Co-
operative.
Business risks arise from such matters as:
• action by competitors and industry rationalisation;
• government policy changes;
• physical loss of assets through fire or another natural disaster and the resultant business
interruption that may occur;
• the impact of exchange rate movements on the price of raw materials and on sales
• variations in interest rates;
• difficulties in sourcing raw materials; and
• the purchase, development and use of information systems, and other emergencies that
may occur.
THE ROLE OF MEMBERS
The Board of Directors aims to ensure that the members are informed of all major
developments affecting the Co operative’s state of affairs. Information is communicated
to members as follows:
• The Annual Report is distributed to all members. The Annual Report includes relevant
information about the operations of the Co-operative for the financial year just ended,
changes in the state of affairs of the Co-operative and details of future developments, in
addition to the other disclosures required by the Co operatives Legislation;
• Meetings are held at least twice yearly with supplier members
at various locations to personally inform them about the affairs of the Co-operative. The impact of
COVID-19 has meant a change in format of these meetings to on-line meetings and this has been
embraced well by supplier members;
• In addition to the meetings with supplier members, a more informal communication network called
‘NorcoNet’ is active in some localities within the Norco supply area. The purpose of ‘NorcoNet’ is to
bring small groups of members together on a regular basis to form a local network to discuss general
dairy industry issues and issues that relate to the Co-operative;
• The preparation and distribution of a monthly Norco Bulletin and ad hoc newsletters;
• Some proposed major changes in the Co-operative which relate to the core businesses, Rules and
compulsory schemes are required by the Co operatives National Law (NSW) to be submitted to a vote of
members; and
• Communication is a two-way process, and the Board encourages individual members or
groups of members to apply to attend Board Committee and / or meetings by appointment.
The Board encourages full participation of members at the Annual General Meeting to ensure a
high level of accountability and identification with the Co-operative’s strategies and goals. Due to the
geographical spread of members, the holding of the Annual General Meeting is rotated between the three
member regions. Important issues are presented to the members as single resolutions for their
consideration.
The members are responsible for the election of Directors.
 STATEMENT OF PROFIT OR LOSS
& OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2020
2020 2019
Before Before
Significant Significant Significant Significant
Items Items (1) Total Items Items (1) Total
$000 $000 $000 $000 $000 $000

683,426 - 683,426 602,961 - 602,961

543 - 543 249 - 249

474 - 474 512 - 512

(155,310) - (155,310) (125,840) - (125,840)

(376,901) - (376,901) (338,317) - (338,317)

(72,659) - (72,659) (68,828) - (68,828)
(10,199) - (10,199) (6,177) - (6,177)
(2,675) - (2,675) (2,369) - (2,369)
(3,759) - (3,759) (6,191) - (6,191)
(57,482) (305) (57,787) (54,907) - (54,907)

(104) - (104) 140 - 140

- (192) (192) - (597) (597)

5,354 (497) 4,857 1,233 (597) 636

- (445) (445) - (626) (626)

5,354 (942) 4,412 1,233 (1,223) 10

- - - - - -

5,354 (942) 4,412 1,233 (1,223) 10

- 423 423 - 31 31
- 423 423 - 31 31

5,354 (519) 4,835 1,233 (1,192) 41

Notes
Revenue from contracts with customers
4

Other income 5.1

Finance income

Milk payments to suppliers 5.3

Cost of sales
Employee expenses 5.4
Depreciation expense 5.5
Borrowing costs/finance costs 5.2
Occupancy expenses
Administration and other costs
(Loss)/gain on disposal of non-current assets

Restructure costs
Profit/(loss) before tax from ordinary
activities before income tax expense
and member distributions

Member distributions 7

Profit/(loss) before income tax

Income tax expense 6

Net profit/(loss) attributable to members

Other comprehensive income

Other comprehensive income

to be reclassified to profit or loss

in subsequent periods:
Net gain on cash flow hedges Other
comprehensive income for the year, net
of tax
Total comprehensive income/(loss) for
the year, net of tax

(1) Significant items are presented separately due to their nature and size.
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
OFIT OR LOSS
HENSIVE INCOME
 ture and size.
ehensive income should be read in conjunction with the accompanying notes.
 STATEMENT OF FINANCIAL POSITION As at 30 June 2020
2020 2019
$000 $000
4,686 5,332
61,000 61,932
39,339 41,632
1,991 1,279
107,016 110,175

3 3

66,879 64,166
19,628 -
37,038 37,038
123,548 101,207
230,564 211,382

85,460 82,307
5,471 1,818
- 423
9,886 9,669
100,817 94,217

397 397
47,966 40,428
1,554 1,138
49,917 41,963
150,734 136,180
79,830 75,202
10,087 10,294

69,743 64,908

30,656 26,244

39,087 38,664
69,743 64,908
Assets Notes
Current assets
Cash and cash equivalents 20.1
Trade and other receivables 8
Inventories 9
Other assets
Total current assets
Non-current assets
Investments 10

Property, plant and equipment 11

Right-of-use assets 12
Intangible assets and goodwill 13
Total non-current assets
Total assets
Liabilities

Current liabilities
Trade and other payables 14

Interest-bearing loans and borrowings 15

Derivative financial instruments 16
Employee benefit liabilities 17
Total current liabilities

Non-current liabilities

Trade and other payables 14

Interest-bearing loans and borrowings 15
Employee benefit liabilities 17
Total non-current liabilities
Total liabilities
Net assets attributable to members

Members’ interest 18.1

Net assets

Equity
Retained earnings Reserves
19

Total equity
The above statement of financial position should be read in conjunction with the accompanying notes.

STATEMENT OF CHANGES IN EQUITY

For the year ended 30 June 2020

Cash flow Asset revaluation

Retained hedge
earnings reserve reserve
$000 $000 $000
At 1 July 2019 26,244 (423) 39,087
Profit for the year 4,412 - -
Other comprehensive income - 423 -
Total comprehensive income for the year 4,412 423 -

At 30 June 2020 30,656 - 39,087

At 1 July 2018 27,289 (454) 39,087

Effect of adoption of new accounting standards (1,055) - -

At 1 July 2018 (restated) 26,234 (454) 39,087
Profit for the year 10 - -
Other comprehensive income - 31 -
Total comprehensive income for the year 10 31 -

At 30 June 2019 26,244 (423) 39,087

The above statement of changes in equity should be read in conjunction with the accompanying notes.

STATEMENT OF CASH FLOWS

N As at 30 June 2020

8
9
Y

sset revaluation

Total equity
$000
64,908
4,412
423
4,835

69,743
65,922

(1,055)
64,867
10
31
41

64,908
 For the year ended 30 June 2020

Notes

Operating activities
Receipts from customers
Payments to suppliers and employees Interest received
Interest paid

Milk supplier payments

Net cash flows from operating activities

Investing activities

Proceeds from sale of property, plant and equipment Purchase of property, plant and equipment

Net cash flows used in investing activities

Financing activities

Suppliers’ share contribution

Distributions paid to members
Payment of finance lease liabilities
Payment of principal portion of lease liabilities
(Repayments of)/proceeds from borrowings
Net cash flows (used in)/from financing activities

Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at 1 July

Cash and cash equivalents at 30 June

2020 2019
$000 $000

684,756 596,662

(509,169) (463,359)
474 512
(2,675) (2,369)
(152,372) (128,561)
21,014 2,885

116 273
(9,186) (7,573)
(9,070) (7,300)

(207) 101
(445) (626)
- (305)
(3,537) -
(8,401) 5,959
(12,590) 5,129

(646) 714

5,332 4,618
4,686 5,332
The above statement of cash flows should be read in conjunction with the accompanying notes.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
1. Corporate information
The financial statements of Norco Co-operative Limited and its controlled entities (the “Co-operative”) for the year ended 30 June 2020 were authoris
resolution of the directors on 30 September 2020.
Norco Co-operative Limited is a for-profit Co-operative under the Co-operatives National Law (NSW), incorporated and domiciled in Lismore, Au
of its registered place of business at “Windmill Grove” 107 Wilson Street, South Lismore, New South Wales. The principal operations of the Co-oper
and sale of dairy products, the manufacture of stockfeed and rural retailing.
2. Summary of significant accounting policies
2.1 Basis of preparation
The general purpose financial report has been prepared on the basis of historical cost (except for certain land and building assets where in 2004 fair va
derivative financial instruments which are at fair value) and in accordance with the requirements of the Corporations Act 2001. Cost is based on the
in exchange for assets.
In the application of Australian equivalents to International Financial Reporting Standards (‘IFRS’) management is required to make judgements, est
carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on
other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgements. Actual results m
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Judgements made by management in the application of IFRS that have significant effects on the financial statements and estimates with a significant r
year are disclosed, where applicable, in the relevant notes to the financial statements and Note 3. Accounting policies are selected and applied in a ma
financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other eve
The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2020 and the comparative in
statements for the year ended 30 June 2019. Where necessary, comparatives have been reclassified to conform to current year classification.
 5.2

20.2

11

18
7
20.2
20.2
20.2

20.1

mpanying notes.
STATEMENTS

“Co-operative”) for the year ended 30 June 2020 were authorised for issue in accordance with a

onal Law (NSW), incorporated and domiciled in Lismore, Australia. The Co-operative operates out
re, New South Wales. The principal operations of the Co-operative are the processing, manufacture

xcept for certain land and building assets where in 2004 fair value was deemed to be cost and
uirements of the Corporations Act 2001. Cost is based on the fair values of the consideration given

rds (‘IFRS’) management is required to make judgements, estimates and assumptions about
ources. The estimates and associated assumptions are based on historical experience and various
hich form the basis of making the judgements. Actual results may differ from these estimates.
to accounting estimates are recognised in the period in which the estimate is revised if the revision
n affects both current and future periods.
ts on the financial statements and estimates with a significant risk of material adjustments in the next
d Note 3. Accounting policies are selected and applied in a manner which ensures that the resulting
g that the substance of the underlying transactions or other events is reported.
ments for the year ended 30 June 2020 and the comparative information presented in these financial
reclassified to conform to current year classification.
 The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($’000) unless otherwise stated under the option av
Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191. The Co-operative is an

The financial report complies with Australian Accounting Standards, which include International Financial Reporting Standards (IFRS) as issued by the Inte
2.2 Changes in accounting policies, disclosures, standards and interpretations New and amend
The Co-operative applied AASB 16 Leases for the first time. The nature and effect of the changes as a result of adoption of this new a
Several other amendments and interpretations apply for the first time in 2020, but do not have a material impact on the fi

AASB 16 supersedes AASB 117 Leases and it replaces AASB 117 Leases, AASB Interpretation 4 Determining whether an Arrangement contains a Lease, AASB
Incentives and AASB Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the
and disclosure of leases and requires lessees to recognise most lease
Lessor accounting under AASB 16 is substantially unchanged from AASB 117. Lessors will continue to classify leases as either operating or finance leases using similar
AASB 16 does not have an impact for lease
The Co-operative adopted AASB 16 using the modified retrospective method of adoption, with the date of initial application of 1 July 2019. Under this method, the stan
cumulative effect on initially applying the standard recognised at the date of initial application. The Co-operative elected to use the transition practical expedient to not reass
lease at 1 July 2019. Instead, the Co-operative applied the standard only to contracts that were previously identified as leases applying AASB 117 and AASB Inte
Arrangement contains a
The Co-operative has lease contracts for various items of vehicles and properties. Before the adoption of AASB 16, the Co-operative classified each of its leases (as lessee)

Upon adoption of AASB 16, the Co-operative applied a single recognition and measurement approach for all leases except for short- term leases and leases of low-valu
transition requirements and practical expedients, which
Leases previousl
The Co-operative did not change the initial carrying amounts of recognised assets and liabilities at the date of initial application for leases previously classified as finance lease
liabilities equal the lease assets and liabilities recognised under AASB 117). The requirements of AASB 16 were a
Leases previously a
The Co-operative also applied the av
• Used a single discount rate to a portfolio of leases
• Relied on its assessment of whether leases are onerous immediat
• Applied the short-term leases exemptions to leases with lease term that ends within 12
• Excluded the initial direct costs from the measurement of the right-of-u
• Used hindsight in determining the lease term where the contract contained options to extend or terminate the lease
• Right-of-use assets of $18,346,000 were recognised and presented separately in the statement of financial position. This includes the lease assets recognised previously und
reclassifi
• Lease liabilities of $18,005,000 (included in Interest bearing loans and borrowings) were recognised in addition to liabilities previously recognised
The lease liabilities as at 1 July 2019 can be reconciled to the operating lease comm

Operating lease commitments as at 30 June 2019

Weighted average incremental borrowing rate as at 1 July 2019

Discounted operating lease commitments as at 1 July 2019

Less:
Commitments relating to short-term leases
Commitments relating to leases of low-value assets
Add:
Commitments relating to leases previously classified as finance leases
Lease payments relating to renewal periods not included in operating lease commitments as at 30 June 2019
Lease liabilities as at 1 July 2019
Accounting Standards and Interpretations issued but not yet effective
The following Australian Accounting Standards and Interpretations have recently been issued or amended but are not yet effective and have not been adopted by th
period ended 30 June 2020:

• AASB 2019-1 Amendments to Australian Accounting Standards - References to the Conceptual Framework
• AASB 2018-6 Amendments to Australian Accounting Standards - Definition of a Business
• AASB 2019-3 Amendments to Australian Accounting Standards - Interest Rate Benchmark Reform
• AASB 2018-7 Amendments to Australian Accounting Standards - Definition of Material
• AASB 2019-7 Amendments to Australian Accounting Standards - Disclosure of GFS Measures of Key Fiscal Aggregates and GAAP/ GF
• AASB 2019-5 Amendments to Amendments to Australian Accounting Standards - Disclosure of the Effect of New IFRS Standards Not Y
• AASB 1059 Service Concession Arrangements: Grantors
• AASB 2019-2 Amendments to Australian Accounting Standards - Implementation of AASB 1059
• AASB 2020-4 Amendments to Australian Accounting Standards - Covid-19-Related Rent Concessions
• AASB 17 Insurance Contracts
• AASB 1060 General Purpose Financial Statements - Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities
• AASB 2020-2 Amendments to Australian Accounting Standards - Removal of Special Purpose Financial Statements for Certain For-Pro
• AASB 2020-1 Amendments to Australian Accounting Standards - Classification of Liabilities as Current or Non-current
• AASB 2020-3 Amendments to Australian Accounting Standards - Annual Improvements 2018-2020 and Other Amendments
• AASB 2014-10 Amendments to Australian Accounting Standards - Sale or Contribution of Assets between an Investor and its Associate
• Amendments to IFRS 17 Insurance Contracts
• Amendments to IFRS 4 Insurance Contracts, Extension of the Temporary Exemption from Applying IFRS 9
The Co-operative anticipates that the adoption of these standards in the period of initial application have no material impact on the financial statemen
2.3 Significant accounting policies
a) Basis of consolidation
The financial statements comprise the financial statements of the Co-operative and its subsidiaries as at 30 June 2020. Control is achieved when the C
to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, t
and only if, the Co-operative has:
• Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
• Exposure, or rights, to variable returns from its involvement with the investee; and
• The ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Co- operative has less th
rights of an investee, the Co-operative considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
• The contractual arrangement with the other vote holders of the investee;
• Rights arising from other contractual arrangements; and
• The Co-operative’s voting rights and potential voting rights.
The Co-operative re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the thr
of a subsidiary begins when the Co-operative obtains control over the subsidiary and ceases when the Co-operative loses control of the subsidiary. As
of a subsidiary acquired or disposed of during the year are included in the statement of profit or loss and other comprehensive income from the date th
date the Co-operative ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Co-operative and to t
this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries
line with the Co- operative’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transaction
operative are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Co- operative loses contr
related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognised i
retained is recognised at fair value.
b) Current versus non-current classification
The Co-operative presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current w
• Expected to be realised or intended to be sold or consumed in the normal operating cycle;
• Held primarily for the purpose of trading;
• Expected to be realised within twelve months after the reporting period; or
• Cash or a cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current. A liability is current when it is:
• Expected to be settled in the normal operating cycle;
• Held primarily for the purpose of trading;
• Due to be settled within twelve months after the reporting period; or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The Co-operative classifies all other liab
c) Revenue from contracts with customers
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the considerati
to be entitled in exchange for those goods or services. The Co-operative has generally concluded that it is the principal in its revenue arrangements and that it typica
before revenue transferring them to the customer.
Variable consideration
If the consideration in a contract includes a variable amount, the Co-operative estimates the amount of consideration to which it will be entitled in exchange for tran
The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulativ
when the associated uncertainty with the variable consideration is subsequently resolved. Some contracts for the sale of dairy products provide customers with disco
variable consideration.
Sale of goods
Revenue from contracts with customers is recognised when the performance obligation has been satisfied. The performance obligation is satisfied at the point of de
and rewards of the item is transferred. For the Foods division, the performance obligation is satisfied when goods are transferred to the central distribution centre. F
at the point of sale.
d) Finance income
Interest income is recorded using the effective interest rate (EIR). The EIR is the rate that exactly discounts the estimated future cash receipts over the expected life
period, where appropriate, to the net carrying amount of the financial asset. Interest income is included in other income in the statement of profit or loss and other c
e) Government grants
Grants received for the construction of non-current assets are deferred and recorded as revenue over the life of the funded asset.
f) Dividends
Dividend income is recognised when control of a right to receive consideration for the investment in assets is attained, usually evidenced by approval of the dividen
g) Borrowing costs
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. All loans and borrowings are initially recognised
received less directly attributable transaction costs.
h) Leases
The Co-operative assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified
for consideration.
Co-operative as a lessee
The Co-operative applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Co-operativ
lease payments and right-of-use assets representing the right to use the underlying assets.
(i) Right-of-use assets
The Co-operative recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets a
accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of leas
costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-li
term and the estimated useful lives of the assets, as follows:
• Property 5 to 10 years
• Motor vehicles 3 to 5 years
If ownership of the leased asset transfers to the Co-operative at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calcula
the asset.
The right-of-use assets are also subject to impairment. Refer to the accounting policies in Note 2.3(r) Impairment of non-financial assets.
(ii) Lease liabilities
At the commencement date of the lease, the Co-operative recognises lease liabilities measured at the present value of lease payments to be made over the lease term
payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expe
guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Co-operative and payments of penaltie
term reflects the Co-operative exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unle
inventories) in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Co-operative uses its incremental borrowing rate at the lease commencement date because the interest rate im
determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.
lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a
determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
The Co-operative’s lease liabilities are included in interest-bearing loans and borrowings.
(iii) Short-term leases and leases of low-value assets
The Co-operative applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e.,
those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease o
exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are r
basis over the lease term.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term if there is no reasonable certainty t
ownership by the end of the lease term.
i) Cash and cash equivalents
Cash and short-term deposits in the statement of financial position comprise cash at bank and on hand and short-term deposits with an original maturi
purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank ove
j) Trade and other receivables
A receivable represents the Co-operative’s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before p
They are generally due for settlement within 30-90 days and therefore are all classified as current. Trade receivables are recognised initially at the am
unconditional unless they contain significant financing components when they are recognised at fair value. The Co-operative holds the trade receivab
contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest rate (EIR) method.
For trade receivables, the Co-operative applies a simplified approach in calculating ECLs. Therefore, the Co-operative does not track changes in cred
allowance based on lifetime ECLs at each reporting date. The Co-operative has established a provision matrix that is based on its historical credit loss
looking factors specific to the debtors and the economic environment.
k) Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for, as follows:
• Raw materials: purchase cost on a first in, first out basis.
• Finished goods and work in progress: cost of direct materials and labour and a proportion of manufacturing overheads based on normal operating ca
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necess
Maintenance spares are recognised as inventories and expensed when utilised.
l) Foreign currencies
Transactions in foreign currencies are initially recorded by the Co-operative’s entities at their respective functional currency spot rates at the date the
recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.
Differences arising on settlement or translation of monetary items are recognised in profit or loss with the exception of monetary items that are design
operative’s net investment in a foreign operation. These are recognised in OCI until the net investment is disposed of, at which time, the cumulative a
Tax charges and credits attributable to exchange differences on those monetary items are also recognised in OCI.
In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-
liability relating to advance consideration, the date of the transaction is the date on which the Co-operative initially recognises the non-monetary asset
the advance consideration. If there are multiple payments or receipts in advance, the Co-operative determines the transaction date for each payment o
m) Taxes
Current income tax
Current income tax assets and liabilities for the current year are measured at the amount expected to be recovered from or paid to the taxation authorit
compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Co-operative operates and gen
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except:
• When the GST incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the GST is recognised as pa
or as part of the expense item, as applicable.
• When receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financ
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing ac
payable to, the taxation authority is classified as part of operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
n) Investments
Investments in subsidiaries held by the Co-operative are accounted for at cost in the statement of financial position of the Parent entity less any impai
The Co-operative has designated to account for its investments in unlisted entities at fair value through profit and loss. Financial assets at fair value th
statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss and other comprehensive incom
o) Property, plant and equipment
Items of property, plant and equipment including buildings and leasehold property, but excluding freehold land, are measured at cost less accumulated
losses recognised. Freehold land is held at cost and is not depreciated.
Plant and equipment is depreciated on a straight-line basis over the estimated useful life of the assets, units of output, life of project or other appropriate basis.
Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is shorter, using the straight- line method.
The following estimated useful lives are used in the calculation of depreciation:
- Buildings 2 - 5%
- Plant and vehicles 8 - 33%
- Leasehold plant and equipment 10 - 20%
The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.
Impairment
The carrying values of items of property, plant and equipment are reviewed for impairment at each reporting date, with recoverable amounts being estimated when
indicate that the carrying value may be impaired.
The recoverable amount of property, plant and equipment is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future
present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit (CGU) to which the asset be
can be estimated to be close to its fair value.
An impairment exists when the carrying value of an asset or CGU exceeds its estimated recoverable amount. The asset or cash- generating unit is then written down
Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is includ
is derecognised.
p) Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination are their
Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated
development costs, are not capitalised and the related expenditure is reflected in the statement of profit or loss and other comprehensive income in the year in which
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset m
period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected
consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as chang
amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss and other comprehensive income as the expense category th
the intangible assets.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The as
annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the as
of profit or loss and other comprehensive income when the asset is derecognised.
q) Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination over the Co-operative’s interest in
identifiable assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Co-operative’s CGUs, or g
benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Co-operative are assigned to those units or groups of units. Ea
goodwill is so allocated:
• Represents the lowest level within the Co-operative at which the goodwill is monitored for internal management purposes; and
• Is not larger than a segment based on the Co-operative’s primary reporting format determined as if applying AASB 8 Operating Segments.
Impairment is determined by assessing the recoverable amount of the CGU (group of CGUs), to which the goodwill relates. When the recoverable amount of the CG
carrying amount, an impairment loss is recognised. When goodwill forms part of a CGU (group of CGUs) and an operation within that unit is disposed of, the good
disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this manner
values of the operation disposed of and the portion of the CGU retained. Impairment losses recognised for goodwill are not subsequently reversed.
r) Impairment of non-financial assets
The Co-operative assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment
operative estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired
amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current marke
money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such
appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded com
indicators.
An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer ex
indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estim
recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable a
cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset
recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a r
adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
s) Trade and other payables
Trade and other payables are carried at amortised cost and due to their short-term nature they are not discounted. They represent liabilities for goods a
operative prior to the end of the financial year that are unpaid and arise when the Co-operative becomes obliged to make future payments in respect o
services.
t) Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.
Gains or losses are recognised in profit or loss when the liabilities are derecognised.
u) Employee benefit liabilities
Provisions are recognised when the Co-operative has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflo
benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Co-operative expects s
reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtua
provision is presented in the statement of profit or loss and other comprehensive income net of any reimbursement.
Wages, salaries and sick leave
Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave which are expected to be settled within 12 months o
in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are
accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.
Long service leave and annual leave
The Co-operative does not expect its long service leave or annual leave benefits to be settled wholly within 12 months of each reporting date. The Co
long service leave and annual leave measured as the present value of expected future payments to be made in respect of services provided by employe
projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of serv
discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currencies that match, as closely as po
outflows.
v) Members’ interest
In periods before 1 July 2004, members units in the Co-operative were recorded in equity as contributed equity. On 1 July 2004, the Co-operative re-c
current interest-bearing liabilities in accordance with generally accepted International Accounting Practice. Any distributions paid on these instrumen
This position which was clarified by UIG 2 Members’ Shares in Co-operative Entities and Similar Instruments, which the Co- operative adopted effec
w) Norco capital units
Norco Capital Units are carried at the principal amount. Interest is accrued at the entitlement rate and is included in “Note 15 Interest-bearing loans an
x) Derivative financial instruments and hedge accounting
Initial recognition and subsequent measurement
The Co-operative uses interest rate swaps (derivative financial instruments) to hedge its interest rate risks. Such derivative financial instruments are in
date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the f
liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except for the effective portion of cash flow
Comprehensive Income (OCl) and later reclassified to profit or loss when the hedge item affects profit or loss.
For the purpose of hedge accounting, hedges are classified as:
• Cash flow hedges: when hedging the exposure to variability in cash flows that is either attributable to a particular risk associated with a recognised a
forecast transaction or the foreign currency risk in an unrecognised firm commitment.
At the inception of a hedge relationship, the Co-operative formally designates and documents the hedge relationship to which it wishes to apply hedge
objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction
and how the
entity will assess the effectiveness of changes in the hedging instrument’s fair value in offsetting the exposure to changes in the hedged item’s fair value or cash flo
hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they ac
throughout the financial reporting periods for which they were designated.
Hedges that meet all the qualifying criteria for hedge accounting are accounted for, as described below:
Cash flow hedges
The effective portion of the gain or loss on the hedging instrument is recognised in OCI in the cash flow hedge reserve, while any Ineffective portion is recognised
or loss as other operating expense.
The Co-operative uses interest rate swaps to hedge the exposure to cash flow movements in loan movements. The Co-operative has entered into interest rate swaps
fair valued by comparing the contracted rate to the future market rates for contracts with the same length of maturity. During 30 June 2020, there were no swaps tha
interest rate swaps (2019: $0.4 million).
If the forecast transaction or firm commitment is no longer expected to occur, the cumulative gain or loss previously recognised in equity is transferred to the incom
expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, any cumulative gain or loss previously recogn
remains in other comprehensive income until the forecast transaction or firm commitment affects profit or loss.
y) Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement d
based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
• In the principal market for the asset or liability, or
• In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that marke
best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and
market participant that would use the asset in its highest and best use.
The Co-operative uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising t
and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follow
is significant to the fair value measurement as a whole:
• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
• Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For the purpose of fair value disclosures, the Co-operative has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the a
value hierarchy, as explained above.
3. Significant accounting judgements, estimates and assumptions Significant judgements
The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts in the financial sta
evaluates its judgments and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgments and estimates on
various factors it believes to be reasonable under the circumstances, the result of which form the basis of the carrying values of assets and liabilities that are not read
Actual results may differ from these estimates under different assumptions and conditions.
Management has identified the following critical accounting policies for which significant judgments, estimates and assumptions are made. Actual results may diffe
assumptions and conditions and may materially affect financial results or the financial position reported in future periods.
Further details of the nature of these assumptions and conditions may be found in the relevant notes to the financial statements.
Impairment of non-financial assets other than goodwill
The Co-operative assesses impairment of all assets at each reporting date by evaluating conditions specific to the Co-operative and to the particular asset that may l
product and manufacturing performance, technology, economic and political environments and future product expectations. If an impairment trigger exists the reco
determined.
Provision for expected credit losses of trade receivables and contract assets
The Co-operative uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision rates are based on days past due for groupings o
similar loss patterns (i.e., customer type and rating and age profile of debt).
The provision matrix is initially based on the Co-operative’s historical observed default rates. The Co-operative will calibrate the matrix to adjust the histo
forward-looking information. For instance, if forecast economic conditions (i.e., gross domestic product) are expected to deteriorate over the next year which can le
in the manufacturing sector, the historical default rates are adjusted. At every reporting date, the historical observed default rates are updated and changes in the for
The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs i
and of forecast economic conditions. The Co-operative’s
historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future. The inf
operative’s trade receivables is disclosed in Note 8.
Provision for inventory obsolescence
The Co-operative periodically reviews the inventory ledger to identify inventory items that may be held in excess of their net realisable value. For suc
for inventory obsolescence amount is raised which represents the amount for which the Co-operative may not recover through use of sale of the good
identified.
Leases - Estimating the incremental borrowing rate
The Co-operative cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lea
interest that the Co-operative would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a
in a similar economic environment. The IBR therefore reflects what the Co-operative ‘would have to pay’, which requires estimation when no observ
subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for exampl
subsidiary’s functional currency). The Co-operative estimates the IBR using observable inputs (such as market interest rates) when available and is re
estimates (such as the subsidiary’s stand-alone credit rating).
Determining the lease term of contracts with renewal and termination options – Co-operative as lessee
The Co-operative determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the leas
exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.
The Co-operative has several lease contracts that include extension and termination options. The Co-operative applies judgement in evaluating wheth
not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise e
the commencement date, the Co-operative reassesses the lease term if there is a significant event or change in circumstances that is within its control
to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asse
The Co-operative included the renewal period as part of the lease term for leases of property, motor vehicles and other equipment with shorter non-ca
The renewal periods for leases of property with longer non-cancellable periods (i.e., > 10 years) are not included as part of the lease term as these are
In addition, the renewal options for leases of motor vehicles are not included as part of the lease term because the Co-operative typically leases motor
and, hence, is not exercising any renewal options. Furthermore, the periods covered by termination options are included as part of the lease term only
to be exercised.
Refer to Note 12 for information on potential future rental payments relating to periods following the exercise date of extension and termination optio
term.
 otherwise stated under the option available to the Co-operative under ASIC
ent 2016/191. The Co-operative is an entity to which the instrument applies.
Statement of compliance
tandards (IFRS) as issued by the International Accounting Standards Board.
interpretations New and amended standards and interpretations
s as a result of adoption of this new accounting standard is described below.
o not have a material impact on the financial statements of the Co-operative.
AASB 16 Leases
ngement contains a Lease, AASB Interpretation 115 Operating Leases-
andard sets out the principles for the recognition, measurement, presentation
uires lessees to recognise most leases on the statement of financial position.
rating or finance leases using similar principles as in AASB 117. Therefore,
16 does not have an impact for leases where the Co- operative is the lessor.
uly 2019. Under this method, the standard is applied retrospectively with the
ition practical expedient to not reassess whether a contract is, or contains, a
applying AASB 117 and AASB Interpretation 4 Determining whether an
Arrangement contains a Lease at the date of initial application.
assified each of its leases (as lessee) at the inception date as either a finance
lease or an operating lease.
t- term leases and leases of low-value assets. The standard provides specific
ents and practical expedients, which have been applied by the Co-operative.
Leases previously accounted for as finance leases
previously classified as finance leases (i.e., the right-of-use assets and lease
he requirements of AASB 16 were applied to these leases from 1 July 2019.
Leases previously accounted for as operating leases
The Co-operative also applied the available practical expedients wherein it:
discount rate to a portfolio of leases with reasonably similar characteristics
whether leases are onerous immediately before the date of initial application
with lease term that ends within 12 months of the date of initial application
m the measurement of the right-of-use asset at the date of initial application
tions to extend or terminate the lease Based on the above, as at 1 July 2019:
ase assets recognised previously under finance leases of $895,000 that were
reclassified from property, plant and equipment.
n to liabilities previously recognised as finance lease liabilities of $341,000.
conciled to the operating lease commitments as at 30 June 2019, as follows:
            $000  

14,563
3%
 13,429

(545)

(63)

341

5,184
18,346

ive and have not been adopted by the Co-operative for the annual reporting

work

Fiscal Aggregates and GAAP/ GFS Reconciliations

ect of New IFRS Standards Not Yet Issued in Australia

Profit Tier 2 Entities

al Statements for Certain For-Profit Private Sector Entities
or Non-current
d Other Amendments
een an Investor and its Associate or Joint Venture

S9
rial impact on the financial statements.

020. Control is achieved when the Co-operative is exposed, or has rights,

wer over the investee. Specifically, the Co-operative controls an investee if,

nvestee);

nd when the Co- operative has less than a majority of the voting or similar
ower over an investee, including:

are changes to one or more of the three elements of control. Consolidation

ve loses control of the subsidiary. Assets, liabilities, income and expenses
mprehensive income from the date the Co-operative gains control until the

e parent of the Co-operative and to the non-controlling interests, even if

financial statements of subsidiaries to bring their accounting policies into
nd cash flows relating to transactions between members of the Co-

tion. If the Co- operative loses control over a subsidiary, it derecognises the
resultant gain or loss is recognised in profit or loss. Any investment

t classification. An asset is current when it is:

months after the reporting period.

 Co-operative classifies all other liabilities as non-current.

n amount that reflects the consideration to which the Co-operative expects

venue arrangements and that it typically controls the goods or services

t will be entitled in exchange for transferring the goods to the customer.

e reversal in the amount of cumulative revenue recognised will not occur
roducts provide customers with discounts. The discounts give rise to

ligation is satisfied at the point of delivery to the customer when the risks
d to the central distribution centre. For Rural, the performance obligation is

e cash receipts over the expected life of the financial instrument or a shorter
tatement of profit or loss and other comprehensive income.

evidenced by approval of the dividend at a meeting of shareholders.

d borrowings are initially recognised at the fair value of the consideration

ght to control the use of an identified asset for a period of time in exchange

of low-value assets. The Co-operative recognises lease liabilities to make

ilable for use). Right-of-use assets are measured at cost, less any
se assets includes the amount of lease liabilities recognised, initial direct
ssets are depreciated on a straight-line basis over the shorter of the lease

rchase option, depreciation is calculated using the estimated useful life of

ial assets.

ments to be made over the lease term. The lease payments include fixed
an index or a rate, and amounts expected to be paid under residual value
o-operative and payments of penalties for terminating the lease, if the lease
ate are recognised as expenses (unless they are incurred to produce

ment date because the interest rate implicit in the lease is not readily
educed for the lease payments made. In addition, the carrying amount of
s to future payments resulting from a change in an index or rate used to
ase option). It also applies the lease of low-value assets recognition
and leases of low-value assets are recognised as expense on a straight-line

m if there is no reasonable certainty that the Co-operative will obtain

erm deposits with an original maturity of three months or less. For the
d above, net of outstanding bank overdrafts.

passage of time is required before payment of the consideration is due).

les are recognised initially at the amount of consideration that is
o-operative holds the trade receivables with the objective to collect the
e (EIR) method.
rative does not track changes in credit risk, but instead recognises a loss
t is based on its historical credit loss experience, adjusted for forward-

rheads based on normal operating capacity but excluding borrowing costs.

etion and the estimated costs necessary to make the sale.

al currency spot rates at the date the transaction first qualifies for

es of exchange at the reporting date.

on of monetary items that are designated as part of the hedge of the Co-
d of, at which time, the cumulative amount is reclassified to profit or loss.

of it) on the derecognition of a non-monetary asset or non-monetary

y recognises the non-monetary asset or non-monetary liability arising from
transaction date for each payment or receipt of advance consideration.

from or paid to the taxation authorities. The tax rates and tax laws used to
re the Co-operative operates and generates taxable income.

ich case the GST is recognised as part of the cost of acquisition of the asset

or payables in the statement of financial position.

sing from investing and financing activities, which is recoverable from, or

ation authority.

n of the Parent entity less any impairment charges.

loss. Financial assets at fair value through profit or loss are carried in the
loss and other comprehensive income.

re measured at cost less accumulated depreciation and less any impairment

ject or other appropriate basis.
aight- line method.

ear end.

able amounts being estimated when events or changes in circumstances

ing value in use, the estimated future cash flows are discounted to their
cific to the asset.
ing unit (CGU) to which the asset belongs, unless the asset’s value in use

generating unit is then written down to its recoverable amount.

ted from its use or disposal.

rrying amount of the asset) is included in profit or loss in the year the asset

in a business combination are their fair value as at the date of acquisition.

airment losses. Internally generated intangibles, excluding capitalised
ehensive income in the year in which the expenditure is incurred.

indication that the intangible asset may be impaired. The amortisation

ing period. Changes in the expected useful life or the expected pattern of
appropriate, and are treated as changes in accounting estimates. The
ve income as the expense category that is consistent with the function of

he cash-generating unit level. The assessment of indefinite life is reviewed

finite is made on a prospective basis.
eds and the carrying amount of the asset and are recognised in the statement

on over the Co-operative’s interest in the net fair value of the acquiree’s

ng value may be impaired.

ach of the Co-operative’s CGUs, or groups of CGUs, that are expected to
d to those units or groups of units. Each unit or group of units to which the

d
ng Segments.
hen the recoverable amount of the CGU (group of CGUs) is less than the
hin that unit is disposed of, the goodwill associated with the operation
Goodwill disposed of in this manner is measured based on the relative
sequently reversed.

n exists, or when annual impairment testing for an asset is required, the Co-
ue less costs of disposal and its value in use. Recoverable amount is
 unt, the asset is considered impaired and is written down to its recoverable

count rate that reflects current market assessments of the time value of
ns are taken into account. If no such transactions can be identified, an
hare prices for publicly traded companies or other available fair value

d impairment losses may no longer exist or may have decreased. If such an

f there has been a change in the estimates used to determine the asset’s
sset is increased to its recoverable amount. That increased amount
ent loss been recognised for the asset in prior years. Such reversal is
a revaluation increase. After such a reversal the depreciation charge is
basis over its remaining useful life.

They represent liabilities for goods and services provided to the Co-
o make future payments in respect of the purchase of these goods and

utable transaction costs.

g the effective interest method.

ast event, it is probable that an outflow of resources embodying economic

on. When the Co-operative expects some or all of a provision to be
ly when the reimbursement is virtually certain. The expense relating to any
nt.

ed to be settled within 12 months of the reporting date are recognised

o be paid when the liabilities are settled. Expenses for non-

onths of each reporting date. The Co-operative recognises a liability for

pect of services provided by employees up to the reporting date using the
loyee departures, and periods of service. Expected future payments are
urrencies that match, as closely as possible, the estimated future cash

On 1 July 2004, the Co-operative re-classified these instruments to non-

distributions paid on these instruments are treated as a borrowing cost.
which the Co- operative adopted effective 1 July 2004.

in “Note 15 Interest-bearing loans and borrowings”.

erivative financial instruments are initially recognised at fair value on the

carried as financial assets when the fair value is positive and as financial

for the effective portion of cash flow hedges, which is recognised in Other

ar risk associated with a recognised asset or liability or a highly probable

hip to which it wishes to apply hedge accounting and the risk management
ment, the hedged item or transaction, the nature of the risk being hedged
 hedged item’s fair value or cash flows attributable to the hedged risk. Such
going basis to determine that they actually have been highly effective

ny Ineffective portion is recognised immediately in the statement of profit

has entered into interest rate swaps which are economic hedges, which are
0 June 2020, there were no swaps that have been designated as effective

d in equity is transferred to the income statement. If the hedging instrument

ulative gain or loss previously recognised in other comprehensive income

ket participants at the measurement date. The fair value measurement is

ntageous market must be accessible by the Co-operative.

sset or liability, assuming that market participants act in their economic

s by using the asset in its highest and best use or by selling it to another

to measure fair value, maximising the use of relevant observable inputs

value hierarchy, described as follows, based on the lowest level input that

ndirectly observable
le
ure, characteristics and risks of the asset or liability and the level of the fair
reported amounts in the financial statements. Management continually
bases its judgments and estimates on historical experience and on other
assets and liabilities that are not readily apparent from other sources.

ns are made. Actual results may differ from these estimates under different

and to the particular asset that may lead to impairment. These include
an impairment trigger exists the recoverable amount of the asset is

sed on days past due for groupings of various customer segments that have

calibrate the matrix to adjust the historical credit loss experience with
orate over the next year which can lead to an increased number of defaults
s are updated and changes in the forward-looking estimates are analysed.
cant estimate. The amount of ECLs is sensitive to changes in circumstances
s actual default in the future. The information about the ECLs on the Co-

of their net realisable value. For such items that are identified, a provision
over through use of sale of the goods. Obsolete stock is written off when

borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of
nds necessary to obtain an asset of a similar value to the right-of-use asset
requires estimation when no observable rates are available (such as for
d conditions of the lease (for example, when leases are not in the
terest rates) when available and is required to make certain entity-specific

lessee
vered by an option to extend the lease if it is reasonably certain to be
d.
plies judgement in evaluating whether it is reasonably certain whether or
onomic incentive for it to exercise either the renewal or termination. After
cumstances that is within its control and affects its ability to exercise or not
cant customisation to the leased asset).
other equipment with shorter non-cancellable periods (i.e., 3 to 10 years).
as part of the lease term as these are not reasonably certain to be exercised.
Co-operative typically leases motor vehicles for not more than five years
cluded as part of the lease term only when they are reasonably certain not

e of extension and termination options that are not included in the lease
 4. Revenue from contracts with customers Disaggregated revenue information
Set out below is the disaggregation of the Co-operative’s revenue from contracts
with customers:

2020 2019
$000 $000

375,818 337,652

280,951 244,996
26,657 20,313
683,426 602,961

678,926 598,663

4,500 4,298
683,426 602,961

683,426 602,961

683,426 602,961
Type of goods or service Sale of goods - Foods Sale of goods - Rural
Sale of goods - Milk supply
Total revenue from contracts with customers

Geographical markets
Australia Other
Total revenue from contracts with customers

Timing of revenue recognition

Goods transferred at a point in time
Total revenue from contracts with customers

5. Other income and expenses

5.1 Other income
2020 2019
$000 $000
131 152
412 97
543 249
Rental income
Sundry income
2020 2019
$000 $000
566 21
2,109 2,348
2,675 2,369
5.2 Borrowing costs/finance costs
Interest on lease liabilities
Borrowing costs
4. Revenue from contracts with customers Disaggregated revenue information
Set out below is the disaggregation of the Co-operative’s revenue from contracts
with customers:

Type of goods or service Sale of goods - Foods Sale of goods - Rural

Sale of goods - Milk supply
Total revenue from contracts with customers

Geographical markets
Australia Other
Total revenue from contracts with customers

Timing of revenue recognition

Goods transferred at a point in time
Total revenue from contracts with customers

5. Other income and expenses

5.1 Other income

Rental income
Sundry income

5.2 Borrowing costs/finance costs

Interest on lease liabilities
Borrowing costs
 5.3 Milk payments to suppliers
2020 2019
$000 $000
151,450 117,010
3,860 8,830
155,310 125,840
Milk payments to Norco member suppliers
Milk payments to external suppliers
2020 2019
$000 $000
62,633 59,495
2,534 2,144
4,709 4,557
2,783 2,632
72,659 68,828
5.4 Employee expenses
Salaries and wages (including contractors) Workers compensation
Superannuation costs
Payroll tax

2020 2019
$000 $000
5,846 5,673
511 504
3,842 -
10,199 6,177
5.5 Depreciation expense
Plant and equipment Buildings
Right-of-use assets
 5.6 Administration and other costs
Administration and other costs include the following:
Inventory obsolescence Expected credit losses (Note 8)
6. Income tax expense
The major components of income tax expense for the years ended 30 June 2020 and 2019 are:
Current income tax:
Current income tax charge
Adjustments for current tax of prior periods
Deferred tax:
Relating to origination and reversal of temporary differences
Income tax expense reported in the statement of profit or loss and other comprehensive income
A reconciliation between tax expense and the product of accounting profit before income tax multiplied by Co-operative applicable
income tax rate is as follows:
Accounting profit before income tax
At Australia’s statutory income tax rate of 30% (2019: 30%) Non-deductible amounts
Movement in temporary differences Other movements in tax
Tax loss movement

2020
$000
53
145

2020 2019
$000 $000

- -

- -

- -

- -

2020 2019
$000 $000
4,412 10
1,323 3
316 1,056
181 (936)
(380) -
(1,440) (123)
- -
Tax losses
At 30 June 2020, the Co-operative had an estimated gross $0.9m in carry forward losses (actual 2019: $5.7m). These tax losses have not been brought to account in
There are no available franking credits.
Temporary Differences – Net
The Co-operative has a surplus of deductible temporary differences. In effect the deferred tax liabilities are recorded, however are 100% offset by deferred tax asse
balance sheet. At 30 June 2020 and 2019 a surplus of temporary difference assets was present as disclosed below.
 2020 2019
$000 $000
778 763
3,432 3,242
(819) (819)
506 477
(2,344) (2,199)
(5,888) -
5,980 -
1,645 1,464
Unrecognised deferred tax assets and liabilities
Provision for expected credit losses Provision for employee benefits Trademark
Provision for obsolescence Property, plant and equipment Right-of-use asset
Lease liability
 2
0
1
9
$
0
0
0
6
3
4
1
7

tax losses have not been brought to account in the statement of financial position.

however are 100% offset by deferred tax assets so a net $Nil position is seen in the
 7. Member distributions
2020 2019
$000 $000
445 626
Expensed in the year
2020 2019
$000 $000
62,832 63,354
(2,593) (2,542)
60,239 60,812
761 1,120
61,000 61,932
8. Trade and other receivables
Trade receivables
Allowance for expected credit losses
Other receivables
Set out below is the movement in the allowance for expected credit losses of trade receivables and contract assets:
2020 2019
$000 $000
2,542 923
- 1,055
145 417
(94) 147
2,593 2,542
As at 1 July
Adjustment on adoption of AASB 9 Charge for the year (Note 5.6) Other
As at 30 June
Trade receivables are generally on 30-90 day terms. An allowance for expected credit losses is made where there is objective evidence that a trade rec
value of trade and other receivables approximates fair value.
At 30 June, the ageing analysis of trade receivables is as follows:

< 30 30-60
    Total              days              days             days     91+ days     
$000 $000 $000
2020 62,832 42,607 12,648
2019 63,354 41,447 14,330
Receivables past due have been considered for impairment and are partially included in the $2.6m expected credit loss provision based on manageme
collected.
9. Inventories
2020 2019
$000 $000
11,447 11,929
29,580 31,294
(1,688) (1,591)
39,339 41,632
Raw materials
Finished goods and work in progress Provision to net realisable value
Total inventories at the lower of cost and net realisable value
An allowance for inventory obsolescence is made where there is objective evidence that inventories are carried in excess of their net realisable value.

10. Investments 2020

$000
 Shares
Unlisted corporations 3

11. Property, plant and equipment

Land and buildings

At cost
Accumulated depreciation
Net carrying amount

Plant, equipment and vehicles

At cost
Accumulated depreciation
Net carrying amount

Capital expenditure work in progress

At cost
Net carrying amount

Total property, plant and equipment

At cost
Accumulated depreciation
Net carrying amount
2020 2019
$000 $000

29,022 28,943

(7,258) (6,747)
21,764 22,196

97,102 98,030
(58,429) (60,898)
38,673 37,132

6,442 4,838
6,442 4,838

132,566 131,811
(65,687) (67,645)
66,879 64,166
assets:

there is objective evidence that a trade receivable is impaired. The carrying

61-90
     days     91+ days     
$000 $000
4,934 2,643
4,571 3,006
credit loss provision based on management’s expectation of cash to be

ied in excess of their net realisable value.

2020 2019
$000 $000
3 3
 2020 2019
$000 $000
22,196 22,397

79 303
(511) (504)
21,764 22,196

37,132 37,060
(116) (118)
7,503 5,863
(5,846) (5,673)
38,673 37,132

4,838 3,431
9,186 7,573
(7,582) (6,166)
6,442 4,838

64,166 62,888
9,186 7,573
(116) (118)
(6,357) (6,177)
66,879 64,166
Reconciliation of carrying amounts at the beginning and the end of the year
Land and buildings
At 1 July
Transfers from work in progress Depreciation expense
At 30 June

Plant, equipment and vehicles

At 1 July Disposals
Transfers from work in progress Depreciation expense
At 30 June

Capital expenditure work in progress

At 1 July Additions
Transfers to property, plant and equipment
At 30 June

Total property, plant and equipment

At 1 July Additions Disposals
Depreciation expense
At 30 June

There were no impairment losses recognised in the 2020 or 2019 financial years.
The Co-operative’s property, plant and equipment is subject to a first charge as security over its interest-bearing liabilities. See Note 15(c) for further information.
The Co-operative adopted AASB 16 Leases for the year ended 30 June 2020, under which all operating and finance lease commitments are now included a right-of
Notes 2.3 (h), 12 and 15).
 12 Leases
Co-operative as a lessee
The Co-operative has lease contracts for various items of property and motor vehicles used in its operations. All the leases generally have lease terms between 3 and
obligations under its leases are secured by the lessor’s title to the leased assets. Generally, the Co-operative is restricted from assigning and subleasing the leased as
Co-operative to maintain certain financial ratios. There are several lease contracts that include extension and termination options and variable lease payments, whic
The Co-operative also has certain leases of machinery with lease terms of 12 months or less and leases of office equipment with low value. The Co-operative applie
low-value assets’ recognition exemptions for these leases.
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:

Property Motor vehicles

$000 $000
As at 1 July 2019 (on adoption of AASB 16) 15,234 3,112
Additions 2,603 2,521
Depreciation expense (2,343) (1,499)
As at 30 June 2020 15,494 4,134
Set out below are the carrying amounts of lease liabilities (included under interest-bearing loans and borrowings)
and the movements during the period:

As at 1 July 2019 (on adoption of AASB 16)

Additions
Accretion of interest
Payments
At 30 June 2020
Current

Non-current
The following are the amounts recognised in profit or loss:

Depreciation expense of right-of-use assets

Interest expense on lease liabilities
Expense relating to short-term leases (included in occupancy expenses)
Expense relating to leases of low-value assets (included in occupancy expenses)
Total amount recognised in profit or loss
ee Note 15(c) for further information.
mmitments are now included a right-of use assets and lease liabilities (see
enerally have lease terms between 3 and 10 years. The Co-operative’s
assigning and subleasing the leased assets and some contracts require the
ons and variable lease payments, which are further discussed below.
with low value. The Co-operative applies the ‘short-term lease’ and ‘lease of

Total
$000
18,346
5,124
(3,842)
19,628

2020
$000
18,346
5,124
566
(4,103)
19,933
3,887

16,046

2020

$000
3,842
566
2,176
1,584
8,168
 The Co-operative had total cash outflows for leases of $7,863,000 in 2020. The Co-operative also had non-cash additions to right-of-use assets and le
Set out below are the undiscounted potential future rental payments relating to periods following the exercise date of extension and termination option
term:

2020
Extensions options expected not to be exercised Termination options expected to be exercised

13. Intangible assets and goodwill

Acquired goodwill
Trademark
Net carrying amount
(a) Impairment test of acquired goodwill
Goodwill acquired through business combinations has been allocated at an entity level to the relevant cash generating units (CGUs). The CGUs for th
Norco Rural Retail and Norco Agribusiness. The goodwill acquired and trademark are allocated to the Norco Foods CGU.
The discount rate applied to cash flow projections is 12% pre-tax (2019: 12%). Key assumptions used in the value in use calculation are:
• Revenue: based on projected growth predictions;
• Cost of sales: based on revenue growth; and
• Other costs: based on rural store growth and expected wage increases.
No reasonably possible change in the key assumptions noted would result in an impairment.

2020 2019
$000 $000

67,940 66,871

17,520 15,436
85,460 82,307

397 397
14. Trade and other payables
Current
Trade payables Accruals

Non-current
Other payables
Trade payables are generally on 30 day terms. The fair value of trade and other payables approximates their carrying value.
2020 2019
$000 $000

3,887 233

84 85
1,500 1,500
5,471 1,818

16,046 108

31,920 40,320
47,966 40,428
15. Interest-bearing loans and borrowing
Current
Lease liability (Note 12) Norco Capital Units Term loans - secured
 Non-current
Lease liability (Note 12) Term loans - secured

The Co-operative finance facility with Rabobank was amended during the year, the Borrowing Base Facility is scheduled to expire on 30 September 2
scheduled to expire on 30 September 2023. Bank Guarantees and Credit Card Facilities remain in place with St George Bank.
Refer to Note 15(d) for financing facilities available to the Co-operative.
(a) Fair values
The carrying amount of the Co-operative’s current and non-current borrowings approximates their fair value. The fair values have been calculated by
flows at prevailing market interest rates.
(b) Interest rate, foreign exchange and liquidity risk
Details regarding interest rate, foreign exchange and liquidity risk is disclosed in Note 30.
(c) Assets pledged as security
The carrying amounts of assets pledged as security for current and non-current interest-bearing liabilities are:

2020 2019
$000 $000
66,879 64,166
2,729 2,729
69,608 66,895
Property asset charges Trademark
Total assets pledged as security
There are no specific terms and conditions related to the above pledges.
on-cash additions to right-of-use assets and lease liabilities of $5,124,000 in 2020.
ercise date of extension and termination options that are not included in the lease

             Total  
$000
12,173
                    -  
           12,173  

2020 2019
$000 $000
34,309 34,309
2,729 2,729
37,038 37,038

sh generating units (CGUs). The CGUs for the Co-operative are Norco Foods,
Norco Foods CGU.
n the value in use calculation are:

heir carrying value.

cility is scheduled to expire on 30 September 2021 and the Term Loan Facility is
with St George Bank.

value. The fair values have been calculated by discounting the expected future cash

s are:
(d) Financing facilities
The following financing facilities are available for the Co-operative at 30 June:

Term loan facilities Used facilities Unused facilities

Bank guarantees and finance leases

Used facilities Unused facilities

Business credit card facility

Used facilities Unused facilities

Total finance facilities

Used facilities Unused facilities

16. Derivative financial instruments 2020

$000
Financial liabilities at fair value through OCI

Current
Interest rate swap contracts - cash flow hedges -

2020 2019
$000 $000

33,420 41,820
35,580 21,305
69,000 63,125
1,298 1,353

402 347
1,700 1,700
19 34

135 106
154 140

34,737 43,207

36,117 21,758
70,854 64,965
The Co-operative has entered into cash flow interest rate swaps, which are measured at fair value by comparing the contract rate to the future market rates for con
During 2019, an amount of $0.4m of swaps have been designated as effective interest rate swaps and therefore satisfy the accounting standard requireme
timing of the interest rate payments for the swaps are in line with the interest rate payments of the bank facility. As at 30 June 2020, the Co-Operative had no inte
The Co-operative has applied fair value factors in accordance with AASB 13. The inputs used in the valuation method are classified as Level 2 (2019: Level 2).

16.1 Hedging activities and derivatives

Cash flow hedges
The Co-operative does not hold interest rate swaps as at 30 June 2020.

Change in fair value used fo

As at 30 June 2019
Notional amount Carrying Line item in the statement of measuring ineffec
amount financial position
$000 $000 $000
Interest rate swaps 25,188 423 Derivative financial instruments -
The impact of hedged items on the statement of financial position is, as follows:
30 June 2020 30 June 2019
 Change in fair value used Change in fair value
for measuring Cash flow hedge used for measuring Cash flow hedge
ineffectiveness reserve ineffectiveness reserve

$000 $000 $000 $000

- - - (423)

Interest rate swaps

The effect of the cash flow hedge in the statement of profit or loss and other comprehensive income is, as follows:
Total hedging gain/(loss) Ineffectiveness recognised in Amount reclassified from OCI
recognised in OCI profit or loss to profit or
Year ended 30 June 2020 loss

$000 $000 $000

Interest rate swaps 423 - -
Year ended 30 June 2019
Interest rate swaps 31 - -

17. Employee benefit liabilities

Current
Employee entitlements
Non-current
Employee entitlements
2020 2019
$000 $000
9,886 9,669

1,554 1,138
 2019
$000

423

ontract rate to the future market rates for contracts with the same maturity terms.
atisfy the accounting standard requirements for hedge accounting. The
30 June 2020, the Co-Operative had no interest rate swaps.
are classified as Level 2 (2019: Level 2).

Change in fair value used for

measuring ineffectiveness for
the period
$000
-
Amount reclassified from OCI
to profit or
loss

$000
-

-
 18. Members’ interest
18.1 Movements in shares on issue

Opening balance - 10,193,000 fully paid shares

Repurchases of cancelled shares
Subscriptions
At 30 June 2019 - 10,294,000 fully paid shares
Opening balance - 10,294,000 fully paid shares

Repurchases of cancelled shares

Subscriptions
At 30 June 2020 - 10,087,000 fully paid shares

18.2 Terms and conditions of contributed equity

Contributed equity has rights in accordance with the Co-operatives National Law (NSW).

19. Reserves
Asset revaluation reserve
Effective 1 July 2004, the Co-operative changed the valuation basis applied to non-current land and buildings. Under historical AGAAP, the Co-opera
value. From 1 July 2004, the Co-operative deemed the fair value to be cost. The asset revaluation reserve represents the historical accumulation of rev
no longer be available to offset decrements in the value of land and buildings and will be transferred to retained earnings on impairment and/or dispos
Cash flow hedge reserve
This reserve records the portion of the gain or loss on a hedging instrument in a cash flow hedge that is determined to be an effective hedge.

20. Cash and cash equivalents

20.1 Reconciliation of cash
For the purpose of the statement of cash flows, cash and cash equivalents compose of the following at 30 June:

2020 2019
$000 $000
4,686 5,332

Cash at bank and on hand

20.2 Cash flow reconciliation

Reconciliation of net profit before tax to net cash flows: Profit before tax

Adjustments for:
Depreciation of property, plant and equipment Depreciation of right-of-use assets
Member distribution expense Expected credit losses Inventory obsolescence
Net loss/(gain) on disposal of property, plant and equipment

Changes in assets and liabilities:

Decrease/(increase) in trade and other receivables Decrease/(increase) in inventories
(Increase)/decrease in other assets
Increase in trade and other payables Increase in employee benefit liabilities

Net cash flows from operating activities

Changes in liabilities from financing activities

Cash inflows/ Adoption of

2019 (outflows) AASB 16

$000 $000 $000

 Liabilities with cash flows from financing activities

Interest bearing loans and borrowings

(excluding lease liabilities) 41,905 (8,401) -

Suppliers’ share contribution 10,294 (207) -

Distribution paid to members - (445) -
Lease liabilities 341 (3,537) 18,005
52,540 (12,590) 18,005
2020 2019
$000 $000
4,412 10

6,357 6,177

3,842 -
445 626
145 417
53 63
104 (140)
787 (6,548)

2,240 (2,841)
(712) 404
2,708 4,468
633 249
21,014 2,885
 $000

10,193
(353)
454
10,294
10,294

(945)
738
10,087

dings. Under historical AGAAP, the Co-operative carried land and buildings at fair
e represents the historical accumulation of revaluation adjustments. The reserve will
etained earnings on impairment and/or disposal of land and buildings.

determined to be an effective hedge.

pose of the following at 30 June:

New leases 2020

$000 $000
 - 33,504

- 10,087
- (445)
5,124 19,933
5,124 63,079
 Cash
2018 inflows/ (outflows)

$000 $000
Liabilities with cash flows from financing activities

Interest bearing loans and borrowings (excluding lease liabilities) 35,946 5,959
Suppliers’ share contribution 10,193 101
Distribution paid to members - (626)
Lease liabilities 646 (305)
46,785 5,129

21 Controlled entities
% equity interest Investment $000
Name Principal activities 2020 2019 2020
Logan Valley Dairies Pty Ltd Dormant 100% 100% 165
Norco Wholesalers Pty Ltd* Wholesaler 100% 100% -
Fieldco Pty Ltd* Dormant 100% 100% -
Norcofields Pty Ltd* Dormant 100% 100% -
Beaudesert Milk Pty Ltd* Dormant 100% 100% -
Norco Milk Pty Ltd** Dormant 100% 100% -
Gold Coast Milk Pty Ltd Property Holder 100% 100% 15,783
ACN 146 859 074 Pty Ltd* Dormant 100% 100%        -                            -          
       15,948                  15,948
* Investment <$101
** 100 shares at $1 each
22. Commitments
Capitalised finance lease commitments for plant and vehicles:

Within one year

After one year but not more than five years
Total minimum lease payments

Non-cancellable operating lease commitments for equipment, land and buildings:

Within one year

After one year but not more than five years
More than five years

Cancellable operating lease commitments for vehicles and plant:

Within one year

After one year but not more than five years

The Co-operative adopted AASB 16 Leases for the year ended 30 June 2020, under which operating and finance lease commitments are now included a
and 15).
23. Contingent liabilities Legal Actions
The directors are not aware of any material legal actions being brought against the Co-operative, its controlled entities or any joint venture to which the Co-operativ
provided for.
Bank Guarantees
Contingent liabilities exist in respect of bank guarantees given to various parties that amount to $1,298,000 (2019: $1,353,000) and are not included as creditors.

24. Financial guarantee contracts

A letter of financial support is provided by Norco Co-operative Limited to Norco Wholesalers Pty Limited. The Co-operative has no other outstanding financial gua
(2019: $Nil).
25. Capital management
The Co-operative manages its capital structure through regular reviews of its exposure to debt and members as shareholders. The Co-operative has no set levels for
the Co-operative views members shares as equity. Members’ interests are managed in line with the requirements of the Co-operatives National Law (NSW). The
requirements of the Co-operatives National Law (NSW) during the year.

26. Directors and executive disclosures

26.1 Directors
(i) The directors of Norco Co-operative Limited during the financial year were: Michael Jeffery (Non-Executive)
Heath Hoffman (Non-Executive) Greg McNamara (Non-Executive) Leigh Shearman (Non-Executive) Greg Billing (Non-Executive) (a) Elke Watson
(Non-Executive) (c) Matthew Trace (Non-Executive) (d)
(a) Retired as Non-Executive Director effective 27 November 2019
(b) Ceased as Non-Executive Director effective 27 November 2019
(c) Elected Non-Executive Director effective 27 November 2019
(d) Elected Non-Executive Director effective 27 November 2019
26.2 Key management personnel
(i) The executives of Norco Co-operative Limited during the financial year were: Michael Hampson (Chief Executive Officer) (a)
Sean Southwood (Chief Financial Officer) (b) Andrew Burns (EGM Foods) (c)
Damon Bailey (EGM Rural/Agribusiness) Brett Arthur (GM Commercial Foods) (d)
(a) Appointed Chief Executive Officer effective 3 October 2019, formerly Chief Operating Officer
(b) Appointed Chief Financial Officer 13 November 2019, formerly Financial Controller
(c) Resigned as EGM Norco Foods effective 28 February 2020.
(d) Appointed GM Commercial Foods effective 28 February 2020
 2019

$000

41,905
10,294
(626)
341
51,914

00
2019
165
-
-
-
-
-
15,783
                          -          
5,948                  15,948

2019
$000
233
108
341
341

2019

$000
2,591
6,787
2,351
11,729

2019

$000
1,350
1,484
2,834
ease commitments are now included as lease liabilities (see Notes 2.3 (h), 12

joint venture to which the Co-operative holds an interest which has not been

) and are not included as creditors.

has no other outstanding financial guarantee contracts at 30 June 2020

The Co-operative has no set levels for equity and debt. The management of
peratives National Law (NSW). The Co-operative has complied with all

ve)
ling (Non-Executive) (a) Elke Watson (Non-Executive) (b) Heath Cook

xecutive Officer) (a)

 26.3 Compensation of key management personnel and Directors
2020 2019
$ $
1,712,406 1,601,434
121,130 173,364
140,334 158,934
16,931 16,932
1,990,801 1,950,664
Short term - wages and salaries Termination benefits Superannuation
Non-cash
Total compensation

The above amounts only relate to the cash and other benefits paid to Directors and key management personnel for the period of their employment wit
they held a position as a Director or key management person.
26.4 Transactions with and balances with key management personnel
Purchases
Purchases of milk from key management personnel and related entities are on the same commercial terms and conditions as enjoyed by other non key
Sales
Purchases of milk from key management personnel and related entities are on the same commercial terms and conditions as enjoyed by other non key

26.5 Share transactions

2020 2019
500,847 677,022

29,825 27,574

Aggregate number of shares held by Co-operative Directors and their related entities at 30 June
Aggregate number of shares acquired by Co-operative Directors and their related entities during the year

27. Superannuation commitments

All employees participate in an employer sponsored defined contribution/accumulation style superannuation plan. Contributions by the Co-operative
wages and salaries are legally enforceable except employees of the Ice Cream division who are paid 11% (2019: 11%) superannuation commitments i
Agreement.
28. Auditor’s remuneration
The auditor of Norco Co-operative Limited is Ernst & Young (Australia).

Amounts received or due and receivable by Ernst & Young (Australia) for:
An audit or review of the financial report
Other services
Financial statements compilation
      175,500                155,000
In the year ended 30 June 2020 an additional initial fee of $17,500 was paid to Ernst & Young
associated with additional audit requirements associated with the first-time adoption and audit of AASB 16 Leases.
ersonnel for the period of their employment with the Co-operative or for the period

rms and conditions as enjoyed by other non key management personnel members.

rms and conditions as enjoyed by other non key management personnel members.

ear

uation plan. Contributions by the Co-operative of 9.5% (2019: 9.5%) of employees’

1% (2019: 11%) superannuation commitments in line with their Enterprise Bargaining

          2020                     2019
$ $

164,000 144,000

11,500 11,000

option and audit of AASB 16 Leases.

 2020 2019
$000 $000

107,016 110,180

214,782 195,605
(149,745) (135,191)
65,037 60,414

13,312 13,519

51,725 46,895

31,215 31,215

- (423)
20,510 16,103
51,725 46,895

4,413 9

4,836 40
29. Information relating to the Norco Co-operative Limited (the Parent)
Information relating to Norco Co-operative Limited:
Current assets Total assets Total liabilities
Net assets attributable to members

Members’ interest
Net assets
Asset revaluation reserve Cash flow hedge reserve Retained earnings
Total equity

Profit of the Parent entity

Total comprehensive income of the Parent for the year
Details of any guarantees entered into by the Parent entity in relation to the debts of its subsidiaries
The Parent’s share of the jointly controlled entities financial guarantees is included in disclosures in Note 24.
Details of any contingent liabilities of the Parent entity
The Parent’s share of the jointly controlled entities contingent liabilities is included in disclosures in Note 23.
Details of any contractual commitments by the Parent entity for the acquisition of property, plant or equipment
The Parent’s share of the jointly controlled entities commitments is included in disclosures in Note 22.

30. Financial risk management objectives and policies

The Co-operative’s principal financial liabilities, other than derivatives, comprise of loans and borrowings, trade and other payables, and financial gua
of these financial liabilities is to finance the Co-operative’s operations and to provide guarantees to support its operations. The Co-operative’s principal finan
receivables and cash and short-term deposits that derive directly from its operations.
The Co-operative is exposed to market risk, credit risk and liquidity risk. The Co-operative’s senior management oversees the management of these risks. The Co
supported by the Audit and Risk Management Committee that advises on financial risks and the appropriate financial risk governance framework for the Co-oper
Management Committee provides assurance to the Co-operative’s Board of Directors that the Co-operative’s financial risk-taking activities are governed by appr
that financial risks are identified, measured and managed in accordance with the Co-operative’s policies and risk objectives. All derivative activities for risk man
specialist teams that have the appropriate skills, experience and supervision. It is the Co-operative’s policy that no trading in derivatives for speculative purposes
directors reviews and agrees policies for managing each of these risks which are summarised below.

Risk exposures and responses Interest rate risk

The Co-operative’s exposure to interest rate risks relates primarily to the Co-operative’s long-term debt and associated
obligations. The level of debt is disclosed in Note 15.
At balance date, the Co-operative had the following mix of financial assets and liabilities exposed to Australian variable interest rate risk:

2020 2019
$000 $000
4,686 5,332
- (423)
4,686 4,909
Financial assets and liabilities Cash and cash equivalents Derivative financial instruments Net exposure

Interest rate swap contracts during 2019 outlined in Note 16, with a fair value of $0.4m loss are exposed to fair value movements if interest rates change. The Co
finance costs using variable rate debt with an appropriate level of instruments to fix interest exposure. The Co-operative constantly analyses its interest rate expos
efficient manner, the Co-operative has entered into interest rate swaps, in which they agree to exchange, at specified intervals, the difference between fixed and v
by reference to an agreed-upon notional principal amount. Consideration is given to potential renewals of existing positions, alternative financing and the mix of
The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting date:
Judgements of reasonably possible movements: Post tax profit Equity Higher/(Lower)
2019
$’000

2020 2019 2020

$’000 $’000 $’000
- (53) -
- 53 -
+1.0% (100 basis points) -
-1.0% (100 basis points) -
The movements in post-tax profit are due to the movement in fair value of cash, based on movements in interest rates only.
Significant assumptions used in the interest rate sensitivity analysis include:
• A price sensitivity of derivatives based on a reasonably possible movement of interest rates at balance dates by applying the change as a parallel s
• The net exposure at balance date is representative of what the Co-operative was and is expecting to be exposed to in the next twelve months from
Foreign currency risk
The Co-operative has no material exposure to foreign currency therefore this is not an applicable risk.
Commodity price risk
The Co-operative’s exposure to commodity price risk is present through the grain purchasing requirements for the Agribusiness business. It is the Co-
quantities and prices through forward grain contracts. As these contracts are regular advance purchase contracts for process inputs, derivative ac
fair value movements are not recorded.
Credit risk
Credit risk arises from the financial assets of the Co-operative, which comprise cash and cash equivalents and trade and other receivables. The Co-op
from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is a
The Co-operative does not hold any credit derivatives to offset its credit exposure.
The Co-operative trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is it the Co-operative’s policy to s
receivables.
It is the Co-operative’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures including an assessmen
financial position, past experience and industry reputation. Risk limits are set for each individual customer in accordance with parameters set by the b
monitored.
In addition, receivable balances are monitored on an ongoing basis with the result that the Co-operative’s exposure to bad debts is not significant.
There are no significant concentrations of credit risk within the consolidated entity.
Liquidity risk
The Co-operative’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, fin
credit lines.
The table below reflects contractual finance principal repayments and interest resulting from recognised financial liabilities as of 30 June 2020. Cash
fixed amount or timing are based on the conditions existing at 30 June 2020.
The remaining contractual maturities of the consolidated entity’s and parent entity’s financial liabilities are presented with an analysis of the financial
perative Limited (the Parent)
mited:

etained earnings

ar
Parent entity in relation to the debts of its subsidiaries
nancial guarantees is included in disclosures in Note 24.
ent entity
ontingent liabilities is included in disclosures in Note 23.
he Parent entity for the acquisition of property, plant or equipment
ommitments is included in disclosures in Note 22.

and policies
other than derivatives, comprise of loans and borrowings, trade and other payables, and financial guarantee contracts. The main purpose
operative’s operations and to provide guarantees to support its operations. The Co-operative’s principal financial assets include trade and other
ive directly from its operations.
k and liquidity risk. The Co-operative’s senior management oversees the management of these risks. The Co-operative’s senior management is
mittee that advises on financial risks and the appropriate financial risk governance framework for the Co-operative. The Audit and Risk
o-operative’s Board of Directors that the Co-operative’s financial risk-taking activities are governed by appropriate policies and procedures and
aged in accordance with the Co-operative’s policies and risk objectives. All derivative activities for risk management purposes are carried out by
rience and supervision. It is the Co-operative’s policy that no trading in derivatives for speculative purposes shall be undertaken. The board of
ach of these risks which are summarised below.

isk
ates primarily to the Co-operative’s long-term debt and associated

mix of financial assets and liabilities exposed to Australian variable interest rate risk:
quivalents Derivative financial instruments Net exposure

Note 16, with a fair value of $0.4m loss are exposed to fair value movements if interest rates change. The Co-operative’s policy is to manage its
riate level of instruments to fix interest exposure. The Co-operative constantly analyses its interest rate exposure. To manage this mix in a cost-
nterest rate swaps, in which they agree to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated
ount. Consideration is given to potential renewals of existing positions, alternative financing and the mix of fixed and variable interest rates.
erest rate risk exposures in existence at the reporting date:
Post tax profit Equity Higher/(Lower) Higher/(Lower)

-
-
ement in fair value of cash, based on movements in interest rates only.
 st rate sensitivity analysis include:
ed on a reasonably possible movement of interest rates at balance dates by applying the change as a parallel shift in the forward curve.
presentative of what the Co-operative was and is expecting to be exposed to in the next twelve months from balance date.

re to foreign currency therefore this is not an applicable risk.

ity price risk is present through the grain purchasing requirements for the Agribusiness business. It is the Co-operatives policy to secure grain
in contracts. As these contracts are regular advance purchase contracts for process inputs, derivative accounting is not applied and contract

s of the Co-operative, which comprise cash and cash equivalents and trade and other receivables. The Co-operative’s exposure to credit risk arises
y, with a maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is addressed in each applicable note.
t derivatives to offset its credit exposure.
nised, creditworthy third parties, and as such collateral is not requested nor is it the Co-operative’s policy to securitise its trade and other

tomers who wish to trade on credit terms are subject to credit verification procedures including an assessment of their independent credit rating,
dustry reputation. Risk limits are set for each individual customer in accordance with parameters set by the board. These risk limits are regularly

tored on an ongoing basis with the result that the Co-operative’s exposure to bad debts is not significant.
f credit risk within the consolidated entity.

in a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, finance leases and committed available

ce principal repayments and interest resulting from recognised financial liabilities as of 30 June 2020. Cash flows for financial liabilities without
onditions existing at 30 June 2020.
he consolidated entity’s and parent entity’s financial liabilities are presented with an analysis of the financial assets.
 2020 2019
$000 $000
90,847 84,040
49,352 40,825
140,199 124,865
0-1 year
1-5 years
Maturity analysis of financial assets and liability based on management’s expectation.
The risk implied from the values shown in the table below reflects a balanced view of cash inflows and outflows. Leasing obligations, trade payables
originate from the financing of assets used in our ongoing operations such as property, plant, equipment and investments in working capital e.g. inven
assets are considered in the consolidated entity’s overall liquidity risk.

<12 months 1 to 5 years

Year ended 30 June 2020 $000 $000
Cash and cash equivalents 4,686 -
Trade and other receivables 61,000 -
Interest-bearing loans and borrowings (1,500) (31,920)
Lease liabilities (3,887) (16,046)
Trade and other payables (85,460) (397)
Net maturity (25,161) (48,363)

<12 months 1 to 5 years

Year ended 30 June 2019 $000 $000

Cash and cash equivalents 5,332 -
Trade and other receivables 61,932 -
Interest-bearing loans and borrowings (1,500) (40,320)
Lease liabilities (233) (108)
Trade and other payables (82,307) (397)
Net maturity (16,776) (40,825)
Fair value
The methods for estimating fair value are outlined in the relevant notes to the financial statements.
31. Events after the reporting period
There have been no significant events occurred after the reporting period which may affect either the Co-operative’s operations or results of those ope
affairs.

DIRECTORS’ DECLARATION
30 June 2020
In accordance with a resolution of the directors of Norco Co-operative Limited, I state that: In the opinion of the directors:
(a) the financial statements and notes of the Co-operative are in accordance with the Corporations Act 2001 and Co-operatives National Law (NSW),
(i) giving a true and fair view of the Co-operative’s financial position as at 30 June 2020 and of its performance for the year ended on that date; and
(ii) complying with Accounting Standards, as required by the Co-operatives National Law (NSW);
and
(b) there are reasonable grounds to believe that the Co-operative will be able to pay its debts as and when they become due and payable.

On behalf of the Board

M.C. Jeffery Chairman Lismore
30 September 2020
nd outflows. Leasing obligations, trade payables and other financial liabilities mainly
ent and investments in working capital e.g. inventories and trade receivables. These

Over 5 years Total

$000 $000
- 4,686
- 61,000
- (33,420)
- (19,933)
- (85,857)
- (73,524)

Over 5 years Total

$000 $000
- 5,332
- 61,932
- (41,820)
- (341)
- (82,704)
- (57,601)

Co-operative’s operations or results of those operations or the Co-operative’s state of

directors:
nd Co-operatives National Law (NSW), including:
ce for the year ended on that date; and

become due and payable.

 Ernst & Young 111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001

Independent Auditor’s Report to the Members of Norco Co-operative Limit

Report on the Audit of the Financial Report
Opinion

We have audited the financial report of Norco Co-operative Limited (“the Co-operative”), which comprises
position as at 30 June 2020, the statement of profit or loss and other comprehensive income, the statement
the statement of cash flows for the year then ended, notes comprising a summary of significant accounting
explanatory information and the Directors’ Declaration.
In our opinion:
the accompanying financial report of Norco Co-operative Limited is in accordance with the
Corporations Act 2001 and Co-operatives National Law (NSW), including:
(i) giving a true and fair view of the Co-operative’s financial position as at 30 June 2020 and of its fina
year ended on that date; and

(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those s
described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We a
operative in accordance with the auditor independence requirements of the Corporations Act 2001 and the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfille
responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our au
the current year. These matters were addressed in the context of our audit of the financial report as a who
opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our de
addressed the matter is provided in that context.
 Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au

rs of Norco Co-operative Limited

ted (“the Co-operative”), which comprises the statement of financial

ther comprehensive income, the statement of changes in equity and
prising a summary of significant accounting policies and other

d is in accordance with the

cluding:
l position as at 30 June 2020 and of its financial performance for the

Corporations Regulations 2001.

tandards. Our responsibilities under those standards are further

inancial Report section of our report. We are independent of the Co-
ments of the Corporations Act 2001 and the ethical requirements of the
Code of Ethics for Professional Accountants (including Independence
cial report in Australia. We have also fulfilled our other ethical

t and appropriate to provide a basis for our opinion.

gment, were of most significance in our audit of the financial report of

of our audit of the financial report as a whole, and in forming our
ese matters. For each matter below, our description of how our audit
 Independent Auditor’s Report Norco Co-Operativ

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Rep
including in relation to these matters. Accordingly, our audit included the performance of procedures designed to
of the risks of material misstatement of the financial statements. The results of our audit procedures, including th
address the matters below, provide the basis for our audit opinion on the accompanying financial report.
1. Recoverable value of intangible assets and goodwill

Why significant How our audit addressed the key audit matter

The annual non-current asset impairment assessment was a key
audit matter due to the value of these assets relative to total
assets and the degree of estimation and assumptions required to
be made by the Co-operative, specifically concerning future
discounted cash flows.
Note 13 of the financial report discloses the individual intangible
assets and goodwill and the key assumptions used in the Co-
operative’s cash flow model to test these assets for impairment.
Our audit procedures included the following:
 Assessed whether the impairment testing metho
operative complied with the requirements of Australia
 Tested the mathematical accuracy of the cash fl
model.
 Assessed the key assumptions within the cash flo
rates and discount rate.
 Considered the accuracy of historical cash flow f
the Co-operative’s forecasting capability.
 We applied our knowledge of the business and co
external information where possible.
 Assessed the impairment related disclosures incl
financial report.

2. Interest bearing loans and borrowings

Why significant How our audit addressed the key audit matter

The Co-operative’s interest-bearing loans and borrowings was a
key audit matter due to their value and the importance of the loan
facility in funding the Co-operative’s operations. In addition, the
facility is subject to the Co-operative complying with financial
covenants.
The Co-operative assessed it is in compliance with the applicable
financial covenants as at 30 June 2020 and expects to continue to
be compliant for the remaining period of the facility.
Note 15 of the financial report discloses the details of the interest
bearing loans and borrowings.
Our audit procedures included the following:
 Confirmed the loans and borrowings outstanding
operative’s financiers at 30 June 2020.
 Examined the Co-operative’s calculations to sup
compliance with applicable financial covenants.
 Assessed the adequacy of the disclosures relating
included the financial report.
3. Milk payments to suppliers
 Independent Auditor’s Report Norco Co-Operative Limited
Page 2

or’s Responsibilities for the Audit of the Financial Report section of our report,
it included the performance of procedures designed to respond to our assessment
ments. The results of our audit procedures, including the procedures performed to
pinion on the accompanying financial report.
ill

audit addressed the key audit matter

Our audit procedures included the following:

 Assessed whether the impairment testing methodology used by the Co-
operative complied with the requirements of Australian Accounting Standards.
 Tested the mathematical accuracy of the cash flow forecasts and impairment
model.
 Assessed the key assumptions within the cash flow model including growth
rates and discount rate.
 Considered the accuracy of historical cash flow forecasts in order to evaluate
the Co-operative’s forecasting capability.
 We applied our knowledge of the business and corroborated our work with
external information where possible.
 Assessed the impairment related disclosures included in Note 13 of the
financial report.

audit addressed the key audit matter

Our audit procedures included the following:

 Confirmed the loans and borrowings outstanding with the each of the Co-
operative’s financiers at 30 June 2020.
 Examined the Co-operative’s calculations to support their testing of
compliance with applicable financial covenants.
 Assessed the adequacy of the disclosures relating to funding and covenants
included the financial report.
Independent Auditor’s Report Norco Co-Operative Limited
Page 3
Why significant How our audit addressed the key audit matter

The Co-operative’s milk payments to suppliers was a key audit
matter due to the significance the milk supply process to
members and on the operations of the business.
Payments are made to milk suppliers based upon the quantity
and quality of milk supplied. The price paid is based on rates
approved by the Co-operative’s Board.
Our audit procedures included the following:
 Selected a sample of payments made to milk
determined whether the payment was based upo
 Tested, on a sample basis, the effectiveness
Co-operative’s monthly milk supply reconciliatio
milk paid for were reconciled to the volumes of
quality measures such as fat and protein percent
 Tested, on a sample basis customer receipts
statement.

Information Other than the Financial Report and Auditor’s Report

The Directors of the Co-operative are responsible for the other information. The other information compris
Co-operative’s Annual Report for the year ended 30 June 2020 but does not include the financial report and
thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and,
whether the other information is materially inconsistent with the financial report or our knowledge obtaine
appears to be materially misstated. If, based upon the work we have performed, we conclude that there is
of this other information; we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The Directors of the Co-operative are responsible for the preparation of the financial report that gives a tru
accordance with Australian Accounting Standards, the Corporations Act 2001 and Co-operatives National La
internal control as the Directors determine is necessary to enable the preparation of the financial report tha
view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Co-operative’s ability to con
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting u
intend to liquidate the Co-operative
or cease operations, or have no realistic alternative but to do so.

Independent Auditor’s Report Norco Co-Operativ

Auditor’s Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from mate
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is
but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detec
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the ag
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgment and maint
throughout the audit. We also:
 Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, de
procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basi
of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
forgery, intentional omissions, misrepresentations, or the override of internal control.
 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are a
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s or the Grou
 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and r
the directors.
 Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on t
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw a
report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinio
based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions
or the Group to cease to continue as a going concern.
 Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
report represents the underlying transactions and events in a manner that achieves fair presentation.
 Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business act
express an opinion on the financial report. We are responsible for the direction, supervision and performance of th
solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit an
findings, including any significant deficiencies in internal control that we identify during our audit.

Independent Auditor’s Report Norco Co-Op

We also provide the directors with a statement that we have complied with relevant ethical requirements r
and to communicate with them all relationships and other matters that may reasonably be thought to bear o
where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most significanc
financial report of the current year and are therefore the key audit matters. We describe these matters in o
law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, w
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.

Ernst & Young

Bradley Tozer Partner
30 September 2020

HEAD OFFICES
NORCO CORPORATE
‘Windmill Grove’, 107 Wilson Street SOUTH LISMORE NSW 2480 (PO Box 486 LISMORE NSW 2480) Phone: 02 6627 8000 Fax: 02 6
NORCO RURAL
‘Windmill Grove’, 107 Wilson Street SOUTH LISMORE NSW 2480 (PO Box 3107 LISMORE DC NSW 2480) Phone: 02 6627 8000 Fax:
NORCO AGRIBUSINESS
Windmill Grove’, 107 Wilson Street SOUTH LISMORE NSW 2480 (PO Box 3107 LISMORE DC NSW 2480) Phone: 02 6627 8000 Fax: 02
MILK SUPPLY
Windmill Grove’, 107 Wilson Street SOUTH LISMORE NSW 2480 (PO Box 486, LISMORE NSW 2480) Phone: 02 6627 8029 Fax: 02 6
NORCO FOODS
NORCO MILK – LABRADOR
Cnr Pine Ridge Road & Gold Coast Highway LABRADOR QLD 4215 (PO Box 530, SOUTHPORT QLD 4215) Phone: 07 5511 7200 Fax: 0
NORCO MILK – RALEIGH
North Street RALEIGH NSW 2454 Phone: 02 5641 6100 Fax: 02 5641 6198
ICE CREAM BUSINESS UNIT
Union Street SOUTH LISMORE NSW 2480 (PO Box 486, LISMORE NSW 2480) Phone: 02 6627 8000 Fax: 02 6627 8102

NORCO AGRIBUSINESS – NORCO STOCKFEEDS AND NORCO GRAIN

NORCO STOCKFEEDS
Krauss Avenue SOUTH LISMORE NSW 2480 Phone: 02 66278299 Fax: 02 6627 8298
NORCO STOCKFEEDS
2814 Murgon – Gayndah Road WINDERA QLD 4605 Phone: 07 4168 6300 Fax: 07 4168 6399
NORCO GRAIN – TOOWOOMBA
22 Carrel Drive HARRISTOWN QLD 4350 Phone: 07 4637 3313 Fax: 07 4637 3399
NORCO RURAL BRANCHES
ALSTONVILLE 17 Kays Lane Russelton Estate ALSTONVILLE NSW 2477 Phone: 02 6625 8400 Fax: 02 6625 8499
ARMIDALE 252 Mann Street ARMIDALE NSW 2350 Phone: 02 6775 4300 Fax: 02 6775 4399
BEAUDESERT 9A Thiedke Road BEAUDESERT QLD 4285 Phone: 07 5542 4500 Fax: 07 5542 4599
BELLINGEN 1076 Waterfall Way BELLINGEN NSW 2454 Phone: 02 6692 3800 Fax: 02 6692 3899
BOWRAVILLE 51 Carbin Street BOWRAVILLE NSW 2449 Phone: 02 6564 5400 Fax: 02 6564 5499
BUNDABERG 96 Mount Perry Road BUNDABERG QLD 4670 Phone: 07 4326 3500 Fax: 07 4326 3599
CASINO 136 Dyraaba Street CASINO NSW 2470 Phone: 02 6661 2100 Fax: 02 6661 2199
COFFS HARBOUR 25 Wingara Drive COFFS HARBOUR NSW 2450 Phone: 02 6691 2800 Fax: 02 6691 2899
DUNGOG Stroud Road DUNGOG NSW 2420 Phone: 02 4999 2600 Fax: 02 4999 2699
GAYNDAH 59 Dalgangal Road GAYNDAH QLD 4625 Phone: 07 4140 8542 Fax: 07 4140 8572
GLEN INNES 165 Lang Street GLEN INNES NSW 2370 Phone: 02 6739 7400 Fax: 02 6739 7499
GLOUCESTER Cnr Church & Phillip Streets GLOUCESTER NSW 2422 Phone: 02 6558 9600 Fax: 02 6558 9666
GRAFTON 19 Queen Street GRAFTON NSW 2460 Phone: 02 6641 3400 Fax: 02 6641 3499
GYMPIE 11 Station Road GYMPIE QLD 4570 Phone: 07 5481 4600 Fax: 07 5481 4699
HEATHERBRAE 9 Hank Street HEATHERBRAE NSW 2324 Phone: 02 4988 5300 Fax: 02 4988 5399
KEMPSEY 3 Kemp Street WEST KEMPSEY NSW 2440 Phone: 02 6563 3700 Fax: 02 6563 3799
KINGAROY 97 River Road KINGAROY QLD 4610 Phone: 07 4336 2400 Fax: 07 4336 2409
KYOGLE Willis Street KYOGLE NSW 2474 Phone: 02 6632 5900 Fax: 02 6632 5999
LISMORE 105 Wilson Street SOUTH LISMORE NSW 2480 Phone: 02 6627 8266 Fax: 02 6627 8094
MACKSVILLE Tilly Willy Street MACKSVILLE NSW 2447 Phone: 02 6598 8700 Fax: 02 6598 8799
MURGON 21 Lamb Street MURGON QLD 4605 Phone: 07 4168 3060 Fax: 07 4168 2996
MURWILLUMBAH 17 Buchanan Street MURWILLUMBAH NSW 2484 Phone: 02 6671 3600 Fax: 02 6671 3699
STUARTS POINT 906 Stuarts Point Road STUARTS POINT NSW 2441 Phone: 02 6569 0955 Fax: 02 6569 0983
TAREE 3 Grey Gum Road TAREE NSW 2430 Phone: 02 5594 2500 Fax: 02 5594 2599
TENTERFIELD 445 Rouse Street TENTERFIELD NSW 2372 Phone: 02 6736 7300 Fax: 02 6736 7399
TOOWOOMBA 22 Carrel Drive TOOWOOMBA QLD 4350 Phone: 07 4637 3300 Fax: 07 4637 3399
WAUCHOPE 4/6 Wallace Street WAUCHOPE NSW 2446 Phone: 02 5514 0334
WOOLGOOLGA 16 Featherstone Drive WOOLGOOLGA NSW 2456 Phone: 02 6690 4800 Fax: 02 6690 4899
BRANCH DIRECTORY
CORPORATE DIRECTORY
REGISTERED OFFICENorco Co-operative LimitedARBN 009 717 417 / ABN 17 009 717 417‘Windmill Grove’, 107 Wilson Street Sou

AUDITORS
Ernst & Young Chartered Accountants
Level 51, 111 Eagle Street BRISBANE QLD 4000
FINANCIERS/BANKERS
Rabobank Australia
Level 14, Waterfront Place, 1 Eagle Street BRISBANE QLD 4000
St George Bank
Level 12, Waterfront Place, 1 Eagle Street BRISBANE QLD 4000

SOLICITORS
Thomson Geer Lawyers BRISBANE QLD 4000
Addisons Lawyers SYDNEY NSW 2000
S+P Walters Solicitors LISMORE NSW 2480
Piper Alderman Lawyers SYDNEY NSW 2000

thank yo
Thank you to our Co-operative Members, Employees, Norco Milk Distributors and Customers who feature in this Ann
pho
Your time and pa
is greatly ap

www.norco.com.au
matter

es included the following:

mple of payments made to milk suppliers during the year and
er the payment was based upon Board approved rates.
ample basis, the effectiveness of selected controls over the
nthly milk supply reconciliation process where volumes of
reconciled to the volumes of milk supplied and other
uch as fat and protein percentages were addressed.
ample basis customer receipts to invoice and bank

t
other information comprises the information in the
de the financial report and the auditor’s report

ordingly we do not express any form of assurance

he other information and, in doing so, consider

or our knowledge obtained in the audit or otherwise
we conclude that there is a material misstatement
o report in this regard.

ncial report that gives a true and fair view in

Co-operatives National Law (NSW) and for such
n of the financial report that gives a true and fair

Co-operative’s ability to continue as a going concern,

ncern basis of accounting unless the Directors either

Report Norco Co-Operative Limited

Page 4
s a whole is free from material misstatement,
n. Reasonable assurance is a high level of assurance,
tandards will always detect a material misstatement
if, individually or in the aggregate, they could
of this financial report.
ssional judgment and maintain professional scepticism

er due to fraud or error, design and perform audit

propriate to provide a basis for our opinion. The risk
ulting from error, as fraud may involve collusion,

audit procedures that are appropriate in the

the Company’s or the Group’s internal control.
accounting estimates and related disclosures made by

accounting and, based on the audit evidence

y cast significant doubt on the Company’s or Group’s
, we are required to draw attention in our auditor’s
quate, to modify our opinion. Our conclusions are
future events or conditions may cause the Company

luding the disclosures, and whether the financial

presentation.
the entities or business activities within the Group to
sion and performance of the Group audit. We remain

and timing of the audit and significant audit

g our audit.

ditor’s Report Norco Co-Operative Limited

Page 5
 ant ethical requirements regarding independence,
onably be thought to bear on our independence, and

hat were of most significance in the audit of the

describe these matters in our auditor’s report unless
mely rare circumstances, we determine that a matter
doing so would
ication.

2480) Phone: 02 6627 8000 Fax: 02 6627 8099

W 2480) Phone: 02 6627 8000 Fax: 02 6627 8099

W 2480) Phone: 02 6627 8000 Fax: 02 6627 8099

2480) Phone: 02 6627 8029 Fax: 02 6627 8095

D 4215) Phone: 07 5511 7200 Fax: 07 5511 7298

0 Fax: 02 6627 8102

N
 02 6625 8499

9
99

691 2899

6558 9666

02 6671 3699
6569 0983

90 4899
Grove’, 107 Wilson Street South Lismore NSW 2480Telephone: 02 6627 8000 Facsimile: 02 6627 8099 Web Site: www.norco.com.au
hank you
ers who feature in this Annual Report
photography.
Your time and participation
is greatly appreciated.