annual 2019 report

www.norco.com.au
A 100% AUSTRALIAN FARMER OWNED DAIRY CO-OPERATIVE
 CORPORATE DIRECTORY
REGISTERED OFFICE Norco Co-operative Limited
ARBN 009 717 417 / ABN 17 009 717 417
‘Windmill Grove’, 107 Wilson Street South Lismore NSW 2480
Telephone: 02 6627 8000 Facsimile: 02 6627 8099 Web Site:
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

CONTENTS
www.norco.com.au
SOLICITORS Thomson Geer Lawyers BRISBANE QLD 4000
AUDITORS Ernst & Young Chartered Accountants S+P Lawyers LISMORE NSW 2480
Level 51, 111 Eagle Street BRISBANE QLD 4000 Piper Alderman Lawyers SYDNEY NSW 2000

3 Corporate Profile
4 Facts at a Glance
6 Chairman / Interim Chief Executive Officer’s Report
10 
Chief Operating Officer’s Report

12 Norco Foods
14 Norco Rural / Agribusiness
19 Norco People

24 Directors’ Report
31 Auditor’s Independence Declaration
32 Corporate Governance Statement

37 Financial Statements
59 Independent Auditor’s Report
64 Corporate and Branch Directories

THANK YOU
Thank you to our Co-operative Members, Employees,
Norco Milk Distributors and Customers who feature
in this Annual Report photography.
Your time and participation is greatly appreciated.
OUR 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.

OUR 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 encourage and support people to grow as 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 responsible for providing a safe work 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.

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2
CORPORATE PROFILE

Our Members / Milk Suppliers continue to face challenges that have been ongoing
for some time now and which primarily originate from the prolonged drought
conditions that have affected much of the Norco milk supply region.

What are the challenges on farm?

Member farms have been unable to successfully plant and grow crops for feed and fodder over successive seasons due to the
conditions, placing an enormous burden on farm reserves. Grain growing belts in Queensland and New South Wales have
also suffered failures, meaning that nutritional products required for dairy herds need to be sourced from areas significantly
outside our region. As a result, our Members / Milk Suppliers not only have to contend with the additional workloads caused
by the drought, but also farm input costs that have escalated significantly, in particular for grain and fodder.
How can the Co-operative assist?
The Co-operative has a major role to play in supporting our Members and assisting them to navigate their way through
this difficult period. This starts with having a team of dedicated, on the ground support staff and management who are
the eyes and ears for our Members and the Board of Directors. The Milk Supply Team obtains critical intelligence from our
farm base that helps shape our strategy and support mechanisms. In this regard, the Milk Supply Team conducted three
drought surveys in August and October 2018 and again in June 2019, to quantify the impact the drought was having, and
is still having on our Members / Milk Suppliers. Data was collected on herd size, feed and water availability and to assess
how Members were physically and mentally coping with the exceptionally challenging conditions. This information has
proven to be invaluable in determining the extent of the feed shortage and has been shared with the Norco Grain Team
who can assist Members by securing available grain and fodder supplies in the market place.
Improving the milk price assists Members in managing their on-farm costs which continue to increase. Based on the
Co-operative’s solid trading results early on during the 2018/19 financial year and knowing that Members were being
challenged by the weather conditions, the Board increased the base price for milk by five cents per litre for three months,
September to November 2018. This was at a net cost to business profitability of $1.8 million. On 1 April 2019, the Co-
operative implemented a 6.5 cent per litre increase to all customers which was fully passed on to our Members. These
increases, including the 100 percent pass through of retailer supported levies on private label milk, saw Norco’s average
price increase to 60.14 cents per litre, an increase of 3.07 cents per litre on last year or a 5.4 percent increase.
Being a dairy co-operative but having a diversified business model that includes Norco Rural / Agribusiness (incorporating
Norco Grain mentioned earlier), allows Norco to further support our Members through the provision of extended credit
accounts for essential purchases to support their dairy businesses such as animal health products, manufactured stock
feeds, grain and fodder.
Norco’s proposition resonates with customers and consumers alike
Norco relies on our Members’ quality milk to be able to service our major retail contracts and Route Trade business. In
the regions which we operate in, Norco milk is the fastest growing mainstream white milk brand by a significant margin.
Our teams that manufacture, sell and distribute our Members’ milk and other value added products continue to grow our
business which is an important positive signal to send our Members. Norco will use every litre of milk that our Members
can produce to convert into additional profits that in turn supports our Members’ milk price. This is important for our
Members to know, especially during the current difficult conditions they are experiencing on their farms.
Norco’s proposition of being a 100% Australian farmer owned dairy co-operative resonates with our customers and
growing consumer base alike, however we need to enlist their support and acceptance of the fact that there needs to
be further significant upwards price movement for the shelf price of milk. This will help to ensure that customers and
consumers are part of the solution that sustains a viable dairy industry in Australia.
We hope that this time next year, we can report that the outlook is more settled for our dairy farming community. Both
our Members / Milk Suppliers and the Co-operative itself, desire no more than to be able to bring quality fresh Norco milk
products to the households of east coast Australia both now and long into the future.
In the meantime, we present the reports and financial statements for the Co-operative for the 2018/19 financial year.

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 FACTS AT A GLANCE

4
1.2m
18/19 TOTAL NET PROFIT
total member returns total ave
2017/18 1.9m 2016/17 1.1m
financial ave base step ave total dividend suppliers’ member
2015/16 2.0m 2014/15 3.1m year milk price ups milk pay patronage returns

2018/19 60.14 - 60.14 0.19* 0.76 61.09

2017/18 57.07 - 57.07 0.27 0.64 57.98
2016/17 57.29 0.13 57.42 0.25 0.51 58.18
2015/16 57.30 - 57.30 0.24 0.52 58.06

1,003
18/19 AVE. PER FARM 2014/15 56.48 - 56.48 0.22 0.52 57.22
THOUSAND LITRES 2013/14 53.25 - 53.25 0.14 0.51 53.90
2017/18 1104 2016/17 1033
milk production 2015/16 1016 2014/15 968

total member returns

NORTHERN REGION FIVE (5) YR CONTRACT PRICE

195
total ave
18/19 TOTAL MEMBERS’ financial ave base step ave total dividend suppliers’ member
2017/18 220 2016/17 222 year milk price ups milk pay patronage returns

2015/16 222 2014/15 211 2018/19 60.30 - 60.30 0.20* 0.75 61.25
milk intake MILLION LITRES 2017/18 57.29 - 57.29 0.28 0.64 58.21
2016/17 57.40 0.13 57.53 0.26 0.51 58.30
2015/16 57.28 - 57.28 0.24 0.55 58.07

AS AT 30 JUNE 2019 NORCO AGRIBUSINESS 36

834 staff total member returns

CORPORATE 22
NORCO RURAL 176
NORCO FOODS 600 SOUTHERN REGION FIVE (5) YR CONTRACT PRICE
includes permanent, part-time and casual staff total ave
financial ave base step ave total dividend suppliers’ member
year milk price ups milk pay patronage returns

2018/19 58.74 - 58.74 0.13* 0.89 59.76

18/19 2017/18 55.29 - 55.29 0.16 0.60 56.05

194
2016/17 56.34 0.13 56.47 0.17 0.47 57.11
2017/18 201 2016/17 215
2015/16 57.52 - 57.52 0.16 0.35 58.03
2015/16 218 2014/15 218
member farms *Dividend proposed for consideration at 2019 Annual General Meeting

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 CHAIRMAN / INTERIM
CHIEF EXECUTIVE
OFFICER’S REPORT

On behalf of the Board of Directors I am pleased

to report that we have achieved a net profit of $1.2
million for the 2018/19 financial year versus last
year’s profit of $1.9 million. The result reflects our
determination during the year to support our dairy
farmer Members in an extremely dry period which
has resulted in significant cost burdens to them and a
dramatic decline in on-farm profitability.
Supporting Members’ milk price
The Board took a strong position early in the 2018/19
financial year that the farm gate milk price needed
significant uplift to restore on-farm profitability
and to ensure continued milk supply to service our
processing businesses. This resulted in the Board
increasing the milk price to Members / Milk Suppliers
by 5 cents per litre for all milk supplied for three
consecutive months, September to November 2018.
Fortunately, much of this was able to be funded
out of the Co-operative’s profits due to improved
trading in the first quarter of the financial year. The
net impact to Norco’s profitability was to the value
of $1.8 million, however the Board stands firm that
this was the right thing to do, not only in supporting
our Members financially, but also in sending a firm
signal to the market that customers and consumers
must pay more for milk to ensure the future viability
of the Australian dairy industry. Taking into account
the additional $1.8 million paid to Members, Norco
has improved its result versus the prior year.
Business overview 2018/19
For the 2018/19 financial year we achieved total sales
of $603.0 million compared to $552.2 million for the
previous year and achieved a ROCE of 2.8 percent.
All business units achieved a strong result when
considering the market and climatic dynamics of the
Australian agricultural sector.
In addition to the encouraging results achieved
leading up to the conclusion of the 2018/19 financial
year, the first three months of trading in the current
2019/20 financial year have yielded positive results
demonstrating that the continued roll out of the
Strategic Plan has the Co-operative on the right path.
For further details regarding the 2018/19 financial
result, please refer to the Chief Operating Officer’s
report which follows this report.

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7
 Strategy
Our strategy of supporting our Members / Milk Suppliers while improving operational performance and
growing “Brand Norco” is fundamental to our aspirations as a Co-operative. Our positioning of being owned
by Australian dairy farmers continues to resonate and grow across Australia, particularly in New South Wales
and Queensland and our efforts to support dairy farmers is not lost on our loyal and growing consumer base.
Overall we have made solid progress in achieving the milestones within our Strategic Plan which was put in
place in 2018, including:
1. Reducing the cost of goods sold in order to build profitability.
2. Shifting milk volume to the most profitable product mix to maximise the value of every litre of milk.
3. Building business equity through improved profitability.
4. Fostering a sustainable Member / Milk Supplier base.
5. Enhancing Team Norco to strengthen the Co-operative.
6. Providing investment in Rural / Agribusiness to further strengthen the Co-operative’s diversified income
streams.
Our strategic planning process also identified a need for the Co-operative to increase spending on marketing
activities to continue to promote our products and to further build on the already excellent reputation of
Brand Norco in the market place. It is important that we promote the Norco brand not only in our traditional
territory, but also as we push into new regions through our growing Route Trade business and as a result of
major retailers increasing the number of stores Norco is ranged in. This sales growth needs to be supported
by marketing activities. The weight of consumer demand for Norco branded products through social media
such as the Norco Milk Facebook page has also had a very positive influence on our sales and we thank our
consumers for actively seeking out Norco branded products to purchase as their products of choice.
All of this activity has necessitated an overall change in how we structure our Marketing Team and the resources
that they will require to continue to build on our unique marketing proposition of being a 100% Australian
farmer owned dairy co-operative. This work is not yet complete however we are committed to the principle
that applying additional funds and resources to the marketing of Brand Norco will yield significant benefits to
the Co-operative and Norco Members.
As Norco continues to build our customer list and recruit new Members / Milk Suppliers to help service this
growing demand for Norco milk, our marketing activities are a particularly important selling point to those
interested in being part of the Norco team as we can all play a part in helping to drive sales because ultimately
all available profits are returned back to our Members in increased milk pay and dividends as well as providing
secure employment for more than 800 employees.
In line with our Strategic Plan, in September 2018 the Board announced a restructure at the Raleigh milk factory
to improve operational performance at the site and overall profitability of the Co-operative. This restructure
has allowed for a realignment of customers and put a greater focus on higher value markets such as Organic
and Jersey milk products.
Key personnel
On 31 October 2018 Camille Hogan tendered her resignation as Chief Financial Officer (CFO) with the Board
immediately appointing Rob Randall as Interim CFO to fill that role and at the same time commenced a
recruitment process and subsequently appointed Michael Hampson as Chief Operating Officer (COO) on 4
March 2019. The recruitment of Michael Hampson as COO has been designed to support all areas of the Norco
business and the respective management teams in achieving their agreed outcomes, including the programme
of continuous improvement projects in the Norco Foods’ business which is following on from the project work
initially identified by ImpRes in 2018.
Up until January 2019 Tanya Crowther had spent three years working with the Directors and attending Board
meetings on a consultancy basis, with the Board utilising Tanya’s extensive experience in marketing and export
to supplement their own skills. As a result of an internal realignment of roles and responsibilities following the

8
resignation of the International Business Development Manager, Tanya was appointed to the full-time role
of General Manager Export. Tanya’s experience in developing brands and her understanding of the business
models needed to successfully enter major export markets were key considerations when appointing Tanya
to this position.
Milk Supply
Adverse climatic conditions in the second half of 2018 which have persisted into 2019 resulted in a reduction
in overall milk supply from Members and meant that Norco needed to increase its external milk purchases to
ensure we continued to meet customers’ requirements. Our Milk Supply and Operations teams managed this
challenging environment extremely well to minimise any financial impact to the business. To ensure we meet
customer demand going forward and to counter the effects that the drought is having on parts of our supply
region, our Milk Supply Team has been active in securing new Members / Milk Suppliers during June 2019
and this work currently continues. The majority of this new Member milk supply started in August 2019, with
further new milk supply to commence in October 2019.
Dairy industry
Norco has maintained an active interest in supporting the development of a Mandatory Code of Conduct
and taken a number of necessary steps to accommodate industry recommendations into our Milk Supply
Agreements with our Members / Milk Suppliers. As the Australian dairy industry adjusts to its new environment
of declining milk volumes, the industry has collectively agreed to build an Australian Dairy Plan. Norco has,
and will continue to engage in this process to ensure that the Northern Dairy Industry is considered in the
development of the Australian Dairy Plan.
Organisational structure review
During the course of the latter part of the year, the Board endorsed an organisational structure review to
provide for future stability and growth with key outcomes to be achieved or maintained being:
• Accurate and transparent financial reporting;
• Greater clarity regarding accountability and responsibility between various business units; and
• Greater innovation in generating profit and growth in all areas to allow profits to be available for reinvestment
and growth of the Co-operative.
In September 2019 the Board of Directors finalised this review resulting in the promotion of Michael Hampson
to the position of Chief Executive Officer and a realignment of the corporate structure. Michael will have overall
responsibility for providing strategic leadership by working with the Board and the Executive Management Team to
ensure effective and efficient delivery of the goals and objectives set out in Norco’s Strategic Plan. Michael’s direct
reports are Andrew Burns Executive General Manager Foods, Damon Bailey Executive General Manager Rural /
Agribusiness, Gary Elliott Executive General Manager Corporate Services and Sean Southwood Financial Controller.
The Board commends the Senior Executive Team for their diligent efforts over the last twelve months and our
employees for their commitment to drive operational improvements to support our Members’ milk price. We
also thank our customers for making Norco the fastest growing milk brand in Australia in the regions we operate
in and we sincerely thank our Members / Milk Suppliers, many of whom have encountered some of the most
challenging conditions in many years, for their continuing support of our incredible Co-operative.

GREG McNAMARA
Chairman / Interim Chief
Executive Officer

9
 CHIEF OPERATING OFFICER’S REPORT

It is certainly my pleasure to be providing my first report to the Members of the Co-operative after joining the
business in March of this year. Our business, and the team of people that work tirelessly to improve operational
and financial outcomes, is certainly worthy to be proud of, particularly how we are putting in place real change
to deliver long term strategy and value to Members.
Our Member milk intake for 2018/19 was 194.5 million litres, which was lower than last year’s total of 219.9 million
litres. The investment of five cents per litre during Spring 2018 and the 6.5 cent per litre increase from April 1,
saw our average price for the year equal 60.14 cents per litre including the 100 percent pass through of retailer
supported levies on private label milk and represents an increase of 3.07 cents per litre on last year or 5.4 percent.
Our net operating profit result before tax for the 2018/19 financial year was $1.2 million and whilst down on the
$1.9 million of the prior year, includes a net $1.8 million of additional milk proceeds provided to Members in the
Spring of 2018. When allowing for this, the operating result of $3.0 million reflects the strength of the business to
manage through one of the most difficult periods in the dairy industry in recent times. This result also includes
further increased payments to Members for their milk of $2.9 million over the prior year, showing the additional
value the management team have been able to derive from Members’ milk over the year.
Top line revenue continues to grow, with sales now reaching $603.0 million for the financial year, representing
growth of 9.2 percent. There is little doubt that the consumer and our business partners appreciate the top
quality products that we make for them and value the 100% Australian farmer owned proposition, which is a key
to our engagement with our loyal consumers.
The Norco Milk business continued to grow, with our Norco branded milk sales growing at 35.8 percent across
the major retailers and 8.8 percent in our vibrant Route Trade business. Where we operate, we are the fastest
growing mainstream white milk brand by a significant margin, which provides a great home for the milk of
our Members. This is a credit to the Foods’ leadership team as they compete with vastly reduced resources
compared to the large multinationals, yet have ensured that our brand remains relevant and top of mind in the
eyes of the consumer.
The contribution of our Norco Milk business grew from $4.1 million to $5.9 million, reflecting improved operational
performance across the two milk facilities at Labrador and Raleigh, and ongoing product mix management and
pricing to drive greater returns for Members. The approach here is delivering results, and we will continue efforts
from an operational perspective to reduce costs and make ourselves more competitive and profitable.
Ice cream sales to our customers softened due to the effect of the unfavourable selling conditions over summer,
which led to heavy discounting by the large brand owners. The Ice Cream Business Unit team looked deeply
into the operations of their business unit to improve performance and reduce cost to partly offset the impact of
lower sales. This work will assist us moving forward as we have been able to build a flexible operating platform
and reduce our costs when demand ebbs.
With such changes in demand, and our ice cream business being predominately private label, our profitability
declined $0.8 million to $2.8 million over the year. Our focus will remain to be the lowest cost producer to
support our place in the Australian market as a co-manufacturer of choice to retailers and brand owners, and to
further leverage this as we look to grow the international business over the medium term.
The Rural / Agribusiness division continues to perform well, notwithstanding the difficult climatic conditions for
agriculture generally in our part of the world. Contribution from this business was $4.3 million, up $0.3 million on
the prior year, and incorporates a record payout in patronage of $1.5 million to our Members.
Our total assets grew to $211.4 million, up $9.4 million due to increases in inventories to service and support our
growth, and also an increase in our trade receivables of $5.0 million which was also a result of business growth
and the increase in Interest Free Extended Accounts offered to our Members to support cash flow through the
last season. We have also added $7.5 million of fixed assets to improve our competiveness and to insure that our
facilities remain vibrant and can support the growth of our customers and the changing needs of our consumers.
Total interest bearing liabilities increased by $5.7 million to fund the increase in fixed asset investment. In an
environment of low interest rates, which we anticipate will continue for some time, the cost of the increase
in debt is easily covered from the projects that have been implemented. We continue to hold a very strong
relationship with our bankers, Rabobank, and they remain a key supporter of our Co-operative.

10
Securing the Regional Growth Fund grant of $15 million has enabled us to look at the ice cream business
holistically and plan for a future with improved cost performance. As we continue with the finer details of this
project, we reflect on the significant effort of the leadership team to secure the $15 million grant that represents
a considerable cash injection to our business.
Safety is something that we take quite seriously at Norco, and we are committed to reducing our injury frequency
rate, as we have done in 2018/19. However, we have much work to do in this area, and requires us all to be vigilant
and eliminating any unsafe behaviours and practices in our business. Safety is the number one responsibility of
us all and a refreshed behaviours based safety program will be introduced over the coming year to ensure that
our team members remain safe and we reduce the occurrence of harm to our people.
The results of our activity management project work across the business, which focuses on ten key business
streams, is delivering value and results for our Co-operative. These business streams are holistic and cover both
financial and non-financial improvement areas to ensure that we make change not only profitability, but see our
business continue its journey on creating competitive advantage, and deliver more positive experiences for our
team members.
Throughout the 2018/19 year a number of challenges existed, not the least being the significant adverse weather
for the duration of the year that significantly reduced milk flows in autumn from our dairy farmer Members. We
have embarked on a considerable milk procurement program and have taken on additional supply of circa 35
million litres annualised for the 2019/20 year, to ensure the continued growth of our brand and the servicing of
our key customers.
We continue to build on our already strong relationships with our trading partners, and we thank them for their
support during the year and look forward to working with them to bring further “100% Australian farmer owned”
products to their consumers into the future.
Lastly, I would like to thank the efforts of the management team and the entire employee team at Norco that
have played a key part in creating additional value for Members’ milk and the Co-operative over the course of
the year, and making me feel welcome as I joined the business, it is most appreciated. We all look forward to the
exciting road ahead of us, not that it will be without challenge, however there are certainly opportunities that we
all look forward to capturing in the years ahead.

MICHAEL HAMPSON
Chief Operating Officer

11
 NORCO FOODS distribution via an increase to farm gate milk price. This is a
welcome and timely recognition of the difficulties many of

The 12 months reviewed in this year’s Annual Report has our Members / Milk Suppliers are facing on the farm.

again been a period of both growth and challenge for the Additionally, our Sales teams were busily involved in seeking
Norco Foods business. price increases from each and every customer that purchases

We were all challenged by the continuing dry conditions Norco products during March / April 2019. The level of support

this year. Rising feed costs, lack of water and a shrinking milk and willingness to assist our dairy farmer Members in times

pool are just some of the issues causing great concern to of need was overwhelming and the task of implementing a

our Members and the dairy industry in general. These issues general price increase, while always difficult, was completed

are an important consideration for the various Sales and and delivered. This customer acceptance of the new pricing

Operations teams in Norco Foods’ who continue to do what allowed the Co-operative to quickly implement a further farm

they can to support the milk price paid to our Members. gate milk price increase to our Members.

As a result of the drought and with widespread support and Our sales of Norco branded milk continue to gain momentum

concern demonstrated by the broader community for the through our Route Trade which has a growing footprint and

future of dairy farming in Australia, we have seen a significant through increased retailer ranging in New South Wales and

momentum shift in the retail sector. This has resulted in an Queensland. We are proud to state that Norco is the fastest

end to the $1 per litre milk program that has been in place growing white milk business in our territory, increasing our

for many years across the major retailer house brands for distribution and market share with tremendous support from

white milk. The retailers have been supportive by handing our growing and loyal consumer base. Our brand is incredibly

the funds generated from their shelf price increases during strong with a true and honest appeal that we proudly

2018/19 directly back to the processors, including Norco, for announce each and every day, being
Norco, a 100% Australian farmer owned dairy co-operative

12
We are the only major dairy business in Australia that can
make such a statement and we proudly do so on each
and every bottle of milk we produce. Our long history,
heritage and our co-operative structure are key strengths
and provide us with a very solid emotional base to work
from. Our Marketing team has again delivered this year
providing the tools and communication to allow our
brand to grow. Utilising Facebook, our team has delivered
an amazing array of communication platforms to assist in
educating and informing our current and new consumers
of our dairy farming community, our brand, our products,
our history and the quality of our products, all of which we
take great pride in. We have also heavily invested time in
communicating with our consumers about the difficulties
our dairy farmer Members (our Co-operative owners) have
had and continue to have on farm. A selection of these short
yet educational videos are located on our public web site. If
you haven’t seen them, it’s well worth a visit to our site to
view them.
The use of our milk within the café market is one of our
fastest growing market segments. We constantly receive
feedback that our milk is of the highest quality and performs
extremely well under the careful control of the experienced
Barista. The product itself actually does the selling for us
with large numbers of inquiries received, primarily coming
from recommendations made by other current users. The
supermarket segment is also in growth with additions
in store counts and distribution along with a growing
consumer base continuing to drive both north and south of
our heartland. We will have some exciting news to share in
the first half of the 2019/20 financial year.
Our export milk business had another record year. Growing
volumes coupled with solid price gains delivered a healthy
profit from this business unit for Norco. Fresh milk into
China due to high barriers of entry, remains a challenge;
however, we have significantly improved our capability and
continue to capitalise on ‘first mover advantage’ with the
Norco brand. Whilst our main focus this year was to grow
our China business, we have commenced in earnest on
creating fresh milk opportunities in other Asian high growth
markets such as Vietnam.
The outlook for our export ice cream business is highly
positive. We have managed to implement a number of
new initiatives for our current export customers and have
progressed further opportunities in China and other Asian
markets that will be realised during the coming year.
Our overall domestic ice cream business had a challenging
year in 2018/19. Being a contract manufacturer, we are
somewhat at the mercy of the customer to furnish us
with an order for product. With a mild summer and retailer
initiated shelf price increases which reduced sales rates, we
did witness a year of volume decline over previous years.
This combined with rising costs and reduced production,
meant our performance wasn’t where we would have
liked, nor expected it to be. Strategic changes to the way
we operate were rolled out in the last quarter of the year
and although we saw some significant and positive gains,
we didn’t achieve our budgeted targets. However, the
2019/20 year has started well and continues to build on the
operational gains made late in 2018/19. With a solid plan to
continue to drive value while reducing costs and driving
efficiencies, our hard work is coming to fruition. We do play
in an extremely competitive market and we will always be
challenged, however we will continue to search for and
implement activities that will drive our momentum forward.
Our Operations teams across the three manufacturing sites
continue to ensure our plants run smoothly. The teams strive
to constantly deliver efficiency based activities that allow us
to produce our high quality consumer products at the best
price possible, that in turn allow our Sales teams to win in
the market place. At our Raleigh milk plant, we implemented
a strategy to exit a large supply contract after a thorough
review. Initially when the contract was secured it was the
best outcome for the business unit at that time, however
over the years, the benefits of the contract manufacturing
agreement had reduced to the point where exiting was now
the best outcome for Norco. Working over several months,
our Finance and Operations teams defined and modelled
the strategy, aligned the process steps, and in October 2018
implemented the strategy to exit the contract arrangement.
It was a very difficult process, however handled with
complete professionalism and executed 100 percent to our
expectations and delivered on time.
Following an in-depth review of our ice cream production
facility at Lismore that identified a need to grow the
business and improve operational efficiencies, a detailed
application was made to the Australian Government
under their Regional Growth Fund program for funding.
Following review of the application, Norco was one of just
15 successful applicants to receive grant funding approval
to the value of $15 million. The Australian Government’s
funding, to be matched dollar for dollar by Norco, will be
activated once the Board of Directors receive a final scope of
works and approves Norco’s capital expenditure investment.
In this regard, the management team is currently working
with a small selection of construction and engineering
companies to continue to finesse the content of the project
for the Board to consider in the 2019/20 year. The approval
of this project would allow us to drive efficiency based
activities and production growth initiatives that will see our
throughput grow from the current 50m litres to 75m, with
the aim to achieve 100m litres in the years to come.
The year ahead is filled with significant opportunities,
and the teams across Norco Foods are diligently working
on specific and detailed activity projects that will provide
value, efficiencies, cost reductions and incremental sales
opportunities to further strengthen our position for both
our Member and the Co-operative. I look forward to keeping
you informed in the years ahead.
ANDREW BURNS
General Manager Norco Foods
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 NORCO RURAL /
AGRIBUSINESS
The financial year ending 30 June 2019 has proven to
be an extremely challenging year. We have continued to
endure what is one of the longest running droughts that
East Coast Australia has experienced. The drought that
developed across the eastern seaboard during 2017/18 has
taken in the entire footprint that Norco Rural / Agribusiness
services. The dry has intensified and we have seen a
continued decline in seasonal conditions throughout
the entire 2018/19 financial year with most regions in a
substantially worse position than twelve months ago.
Along the eastern side of the range, coastal regions did
enjoy some isolated rainfall events towards the end of
2018 and also during late summer and early autumn of
2019. Along the New England Tablelands of New South
Wales conditions remain difficult and we have seen this
region experience a complete failure of the season and
many livestock producers have been forced to implement
significant destocking programs. Similarly, the Darling
Downs and Burnett regions in Queensland are suffering
14
significant drought conditions. The Burnett region was
fortunate to have received some rainfall events late 2018
and during late summer, but generally speaking soil
moisture profiles throughout the Downs and Burnett were
too limited to result in any significant pasture growth or
crop production either for fodder, hay or grain. Destocking
has also been common throughout these regions.
From an operational perspective, one of the most obvious
challenges resulting from the drought conditions has been
the ability to find and secure nutritional products. The
vast majority of hay and grain needed to meet northern
New South Wales and Queensland requirements has been
sourced from areas significantly outside our traditional
supply area. Hay, both large square / round and small bales
are coming from southern New South Wales, Victoria and
South Australia. For more than eighteen months now the
majority of east coast grain requirements have been met
by grain imports from Victoria, South Australia and Western
Australia. There has also been stringent importation
permits granted for two shipments of Canadian hard
milling wheat into Australia.
The requirement for the continued importation of grain
and hay from interstate will continue for several months
into the new financial year as the 2019/20 winter crop will
be significantly down on average due to the continuing
drought conditions. Manufacturers of nutritional products
have struggled to meet the demand the market has.
Several weeks’ lead time and “closed books” to potential
new clients has been the norm.
With the challenges the season has placed on the Rural
business in terms of the procurement activities of our
clients, our focus has been on operational performance
and maintaining tight cost control and stringent business
management.
For the Agribusiness division, the focus for our Norco
Grain business has been around procurement activities
to source and deliver the bulk nutritional requirements
for our Members, stock feed mills and external clients. For
our stock feed mills, the demand for product has been
relentless throughout the year and we have strived to meet
our customers’ expectations.
Work Health and Safety
The Co-operative continues to conform to the requirements
of AS 4801:2001 Occupational Health and Safety Systems
and is accredited to 15 February 2022. Rural / Agribusiness
continues to drive positive behavioural changes as a result of
our continued commitment to employee health and safety.
Through the collaborative engagement between Rural
/ Agribusiness and Norco’s WHS team, we continue to
see ongoing positive outcomes with a year on year
improvement in our workers’ compensation claims history.
Rural / Agribusiness experienced a 53 percent reduction in
total workers’ compensation claims costs and a 68 percent
reduction in the average cost of claims.
Due to the geographical spread of our rural stores and
stock feed mills, Rural / Agribusiness uses a LMS (Learning
Management System) to effectively deliver our identified
and compulsory safety training modules to all staff who can
access LMS remotely. Recently we have introduced a new
online health and safety training system which has content
that is more comprehensive, improved training functionality,
and maintains more accurate training records. All staff
training records are maintained and administered centrally,
as is our ongoing renewal, updating and upskilling activities.
At a business unit operational level we have introduced
an online incident reporting tool that logs all activities
associated with a workplace incident and which maps
work and accountability flows arising from that incident
and subsequent reporting. All sites complete bi-monthly
15
 workplace inspections and the findings from these audits
are logged centrally. Additionally, each site is audited
annually by a WHS team member, plus several randomly
selected sites are audited by an external auditor annually.
Financial Performance
Given the extremes in seasonal conditions throughout the
full 2018/19 financial year, Rural / Agribusiness sales tracked
relatively consistent to expectations and the forecast. The first
half of the year produced a very solid performance, with the
first quarter particularly strong. December 2018 and January
2019 fell short and this coincided with the full impact of the
lack of rain. Similar to 2017/18, the fourth quarter of the year
did not meet expectations in terms of sales.
In the Rural division, another record year for gross sales
was achieved. Within our results for 2018/19, we did
have the full year benefit of our two new agencies at
Gympie and Wauchope. Both agencies performed above
expectations during their first full year of operation. For the
Rural division, a gross sales increase of 3.9 percent over the
previous year was achieved and this is an excellent result
considering the difficult season.
16
The Agribusiness division also set a gross sales record, with
a significant increase over the prior 12 month period of 78
percent. There were two primary drivers of this sales growth:
1) 
Volume: the tonnages of bulk and manufactured
nutritional products that we sold was up year on year;
and
2) 
Value: the per tonne cost of goods sold was up
significantly year on year due to the impacts of drought
and commodity price increases. With an approximate
adjustment for the full year impact of drought on
commodity price increases, the division’s year on year
adjusted sales growth is approximately 15 percent.
Within Rural, the number of customer transactions
we processed for the full year declined by 3 percent.
Conversely, the average dollar value of a transaction
increased by 5.7 percent. At the Gross Profit (GP) margin
level, GP was stable and in line with last year. Rural’s Net
Profit was favourable to last year by 2.3 percent and ROCE
(Return on Capital Employed) was also favourable to last
year by 16.5 percent.
As previously detailed, the gross sales increase in
Agribusiness has been partly driven by commodity
value increases, but also due to volume growth. Despite
consecutive winter and summer crops that were both
significantly impacted by drought, our Norco Grain
business delivered a 70.8 percent increase in the volume
traded over the prior year. This is a significant increase in
volume and far surpasses our previous record volume.
Within our Agribusiness division, the volume of nutritional
products manufactured was favourable 13.7 percent
over the prior year. Our Lismore facility set a number of
monthly production records throughout the year and at
year end the volume manufactured was the highest that
we are aware of for this plant. ROCE was also favourable by
1.2 percent versus last year.
At the EBITDA (Earnings before Interest, Taxes, Depreciation
and Amortisation) line, Rural was favourable 1.2 percent
and Agribusiness was favourable by 15.7 percent to last
year. The combined EBITDA after the Suppliers’ Patronage
Scheme is included in calculations, is favourable to last
year’s EBITDA by 6.7 percent.
Suppliers’ Patronage Scheme
The number of Member farms that purchased goods from
Rural / Agribusiness and participated in the Suppliers’
Patronage Scheme remained stable at 93 percent of total
farms, however Member spend increased by 14.9 percent
year on year. Again, as detailed previously, the drought
has resulted in higher demand for bulk fodder products at
a higher drought impacted cost. The Suppliers’ Patronage
Scheme payout to Members was another record at $1,487,599
and represents an increase on last year of 6.4 percent.
Outlook
Seasonal conditions remain dry and challenging as we
move through into winter. The Bureau of Meteorology’s
forecast for winter and spring is drier than average for most
parts of mainland Australia, including east coast Australia.
We remain optimistic that rain will come, but maintain a
conservative view of the season through to December 2019.
DAMON BAILEY
General Manager Norco Rural /
Agribusiness
17
18
NORCO PEOPLE
Human Resources
Over the past year, the Human Resources Team has focused
on training and mentoring employees in leadership
development across all areas of the business as we are
committed to bringing out the best in our people.
With the growth, challenges and changes in our business
we have seen opportunities for existing employees to
strengthen their skills into leadership roles or succession plan
for the future. The New Supervisors Team Leader upskilling
program has continued to benefit our employees giving
them an understanding of the professional boundaries for
their respective roles. From that initial training experience,
current managers are continuing ongoing training through
the Leadership and Management program.
The Human Resources Team has again successfully
submitted the Workplace Gender Equality Agency Report.
The Workplace Gender Equality Agency is an Australian
Government statutory agency created by the Act and is
charged with promoting and improving gender equality in
Australian workplaces. Norco continues to be compliant
with the Workplace Gender Equality Act 2012 for another
12 months.
The team continues to provide leadership and advice in
Industrial and Employee Relations and negotiating the
renewal of Enterprise Bargaining Agreements across the
business units of Norco.
As Norco continues to grow, Human Resources will play a
critical role in ensuring that we have a high performing and
engaged workforce equipped to deliver ever better results
for the business.
Work Health & Safety
The 2018/19 financial year saw an 18 percent decrease
in the number of Workers’ Compensation claims, with a
9 percent reduction in total claims cost. Incident trends
companywide have revealed that manual handling is the
predominant mechanism of injury resulting in strains and
sprains of the lower back, shoulders and hands/fingers.
All incidents and injuries such as those caused by manual
handling activities, are thoroughly investigated by the
Safety Team. The Co-operative takes a proactive approach
whenever possible, to engineer out processes that require
manual intervention and which have the potential to
cause injury. Projects that require capital to address safety
concerns are fully supported by the Board of Directors and
management.
During the year Norco successfully met the requirements
for re-accreditation of our WHS Management System
against the Australia Standard for Occupational Safety
Management Systems AS4801. The Norco internal safety
auditing program also revealed consistent improvement
across our major sites compared with the previous year. The
Safety Team also completed a full review of our Workers’
Compensation and Return to Work Program.
The Safety Team has assisted the business units with
various strategic risk management projects throughout the
year resulting in a shift to a more proactive safety mentality.
Some of these projects included:
• Continuation of the proactive guarding project designed
to lessen the risk of moving machinery, reducing the risk
to all employees who work around plant and equipment.
• Continuation of a proactive heights project, focusing on
heights access and the tasks performed at heights in order
to determine and implement engineering solutions to
minimise the risk of this type of work.
• Electrical Safe Work Practice project with assessment and
re-categorisation of switchboards with ongoing hazard
identification and control.
• A full Contractor management review.
• Continued efforts in the areas of asbestos management
with additional site assessments completed throughout
the year and remedial actions being taken.
Our goals for the future include achieving improved injury
frequency rates through increased engagement in safety
from both management and employees alike.
19
20
INNOVATION
HELPS NORCO
GROW
Norco’s General Manager of Information, Communications and
Technology (ICT), Sandra Hollands and her team has responded to
the needs of a growing business by providing technological solutions
to ensure our Co-operative keeps pace with an ever-changing
manufacturing environment.

SAP APPS
SAP Apps allow real time improvement for the Plant Maintenance Teams across all
three Foods’ factories – goodbye to walking back to the office to get their next job
via a piece of paper!

The business need

Management identified a need for all three plants to be on one system which had
a mobile solution for tradespersons to reduce the time spent doing paperwork and
walking in and out of the factory.

The challenges
• To get Wi-Fi to work in challenging environments which include minus 25 degree
freezers and wash down areas on the production floor.
• Apps must be designed so staff who wear gloves for WHS reasons in freezer areas
can use the hand held tablets.
• How to engage with the different teams to get the most practical solution for
their work patterns.

The business benefits

• Ability to see all assigned work orders anywhere in the factory.
• Reduced laundry costs as staff had to change clothes each time they entered
the factory.
• Ability to see machine and component work order history plus see manuals,
standard operating procedures (SOP’s), shutdown and start-up documentation
digitally.
• Production Supervisors are able to sign off work orders digitally on the spot.
• Ability to create on the fly work orders by trades staff.
• Ability to book out spare parts for work orders digitally.
• “Take 5 for Safety & QA” – staff had to carry and complete three separate paper
forms for each work order. The SAP App digitises all this information and saves
it to SAP.

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 NEXT G
Have you ever stood in the back paddock on the highest point
in just the right position while holding perfectly still to get
mobile coverage? Well, it is just as hard when you are inside
a milk factory that has thick concrete walls and insulated
composite panels in all areas where signal is required. Thanks
to a collaborative effort, NextG is now available in all areas of the
two Norco Foods’ milk factories at Labrador and Raleigh.

The business need

Norco’s managers identified the need for a digital solution to
reduce the time spent by team members doing paperwork.
Unfortunately, due to the building materials and design, the
Telstra signal was not able to penetrate or be distributed within
the factory buildings. Norco reached out to Powertec partner,
Azentro for a solution to this signal problem. The Powertec team
along with Kore Communications, made multiple site visits to
determine the scope of the project and propose a solution.

The challenges
• To strategically position Cel-Fi units and antennas to enhance the intermittent signal within the buildings to allow for a
paperless transition.
• There was to be no disruption to production and 100 percent adherence to quality standards in food manufacturing areas.
• To ensure the ingress protection rated installation process due to the cold environment within the factory was not
compromised.

The business benefits

By enabling a more efficient mobile coverage, time management has improved significantly. The improved 3G and 4G signal
across all areas of the milk factories now allows management and staff to record and share real-time data.
The improved signal is also a fantastic benefit for the health and safety of our employees, for example, for those staff needing
to work in isolated areas of the factories or working outside normal hours. In addition, communication with delivery drivers
and other external partners is now simple and efficient – a great improvement on their previous situation.
From Ms Hollands’ perspective, the roll out of the NextG and SAP Apps projects could not have been successfully achieved
without the full support of the various teams at the Foods’ factories and the assistance that the Maintenance Teams provided
to the external technicians and contractors who undertook the installation work.

FUTURE KEY FOCUS AREAS FOR I.C.T.

Moving forward, the ICT Team will be focusing on four key platforms to deliver positive outcomes for our business units.
These platforms are:-
• Efficiency • Risk Management • Quality of Information • Innovation
This will be achieved through extending the Norco SAP footprint, having integrated Data Warehousing so staff have access to
centralised information from shop floor to top level (all in one user friendly application), electronic document management
to automate the paper flows in our business and finally by implementing a Cyber awareness and training strategy.
Our people are a critical layer within the fabric of our security programs. Ransomware damage costs are predicted to reach
$20 billion by 2021 and 91 percent of successful data breaches start with a spear phishing attack. As a result of this threat, we
need to up skill our employees as they are our last line of defence, being the “Human Firewall”. We also hope that what they
learn at Norco can also be used at home to help protect their family and friends.

22
23
 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 2019 and the Auditors’ report.
The Board of Directors currently comprises six supplier Directors (non-executive) and there are
currently no Independent Directors elected to the Board.
The Strategic Plan for Growth 2018-2023 that was rolled out last year continues to be the blueprint that
guides the business and operational improvement projects. Strategic discussions play an important
role at each and every Board meeting and time is always allocated to this important aspect of the
business, which allows the Directors and the management team to look forward and discuss emerging
opportunities and trends as well as future challenges. The Directors have a shared desire to ensure
Norco’s strategic business objectives are met while at all times, acting in the best interests of the
Members as a whole.
The Board has spent a significant amount of time over the last financial year (and continues to do so)
in formulating strategies to assist Members who are continuing to deal with severe drought conditions
on their farms. The Directors receive regular reports from the Milk Supply Team and three drought
surveys were undertaken during the year. This is invaluable information in helping the Board to
determine their response to Members and also provides a credible platform on which to discuss price
with customers of Norco manufactured products.
During the year, the Chairman asked members of the management team to provide in depth
information regarding various aspects of the business in addition to usual monthly business updates.
Marketing plans and campaign updates were presented by Ben Menzies (Marketing Manager) during
the year. Michael Ryan (Strategic Procurement Manager) and other management team members
attended the Chicago Pack Expo during October 2018 and on his return, Mr Ryan discussed with
Directors Norco’s aspirations to meet the 2025 targets set by APCO (Australian Packaging Covenant
Organisation) and the activities being initiated to meet the APCO requirements. Directors also toured
the Ice Cream Business Unit in Lismore to again view the extensive strategic capital expenditure
works nearing finalisation that address vat aging issues and also improve efficiency and overall future
capacity at the site.
The Directors also continue to be committed to their ongoing professional development and during
the year have had the opportunity to attend, and represent Norco, at a range of industry conferences
as can be seen in their profiles. The Co-operative maintains Australian Institute of Company Directors
(AICD) membership for all Directors on an annual basis and is supportive of Directors attending AICD
educational courses and functions as well as industry events. Directors are constantly on a path of
learning as the Co-operative has a diversified business model. Continually 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 manner possible, using all relevant information, tools and resources available to
them.
Up until January 2019 Ms Tanya Crowther had spent three years working with the Directors and
attending Board meetings on a consultancy basis, with the Board utilising Tanya’s extensive experience
in marketing and export to supplement their own skills. As a result of an internal realignment of
management roles and responsibilities following the resignation of the International Business
Development Manager, Tanya was appointed to the full-time role of General Manager Export. Tanya’s
experience in developing brands and her understanding of the business models needed to successfully
enter major export markets were key considerations when appointing Tanya to this position.

24
25
 Gregory J McNamara – Chairman
Greg McNamara has been a Director of Norco Co-operative Limited for 23 years and is from the Central Region. In addition to his role
as Chairman of the Board of Directors and being a member of the Member Services Committee, during the 2018/19 financial year Greg
continued to act as Interim Chief Executive Officer of the Co-operative.
Greg owns and operates a dairy farm at Goolmangar just outside Lismore, with his wife Sue and son Todd. Their dairy herd comprises
300 head of cattle. He has extensive experience across a wide range of agricultural industries, as witnessed through his involvement with
Organic Industries Australia.
In his role as Interim Chief Executive Officer, Greg has maintained a firm focus on ensuring the operational performance of the Co-
operative continues to improve in line with the Strategic Plan 2018-2023 implemented by the Board the previous year. Fostering a culture
of continuous improvement and operational excellence in the Foods’ manufacturing division continues to be a strategic goal, along with
the growth of the Rural / Agribusiness division.
Greg is a member of the Australian Institute of Company Directors and continues to be a keenly sought after speaker for industry events
and forums. During the year Greg presented at the Australian Dairy Conference, ABARES Regional Outlook Conference and the NSW
Fishermen’s Co-operative Association. Greg also attended the Dairy Leaders Breakfast in Melbourne, the Trans-Tasman Dairy Leaders
Forum and the NSW Co-ops Conference during 2018/19. Greg is also a Board member of the New South Wales Business Chamber and
Organic Industries Australia.
Michael C Jeffery – Deputy Chairman
Michael Jeffery has been a Director of Norco Co-operative Limited for seven years having been first elected to the Board on 14 November
2012 and is from the Southern Region. Michael is Deputy Chairman of the Board of Directors, a member of the Audit and Risk Management
Committee and a member of the Human Resources Committee.
Michael has been farming at Austral Eden near Kempsey in a family partnership for 30 years and milks a herd of 350 cows. He has
extensive business, marketing and dairy industry experience, including in overseas countries and has held a number of positions including
directorships in dairy related export, consulting and genetics businesses. Michael has served in a number of capacities on industry bodies
such as the NSW Dairy Farmers’ Association, Holstein Australia, the Dairy Express Management Committee and LiveCorp’s China Live
Export Industry Working Group. Michael is currently the Deputy Chairman of ST Genetics Australia Pty Ltd. Michael has a keen interest in
social media from a dairy industry perspective which has been of great benefit to the Norco business in recent years through identifying
marketing opportunities and alerting Directors and management to emerging issues and industry developments in a timely manner.
Michael is a member of the Governance Institute of Australia and the Australian Institute of Company Directors. Michael has completed
the AICD Finance for Directors course and holds an Advanced Diploma in Agriculture. During the year, Michael attended the Dairy
Research Foundation Symposium and the Trans-Tasman Dairy Leaders Forum. He also presented to the NSW Farmers Association State
of the State Dairy Industry Sustainability Forum in December 2018. Michael also represented Norco at the China International Import
Expo in Shanghai during November 2018. For three years now, Michael has represented Norco on the Steering Committee for the
Australian and New Zealand Co-operative Leaders Forum, also attending the event in May 2019.
Gregory J Billing - Director
Greg was elected to the Board of Directors on 9 November 2016 and is a supplier Director from the Southern Region. Greg is a member
of the Member Services Committee.
Greg farms at Dorrigo with his wife Carmen and together they have a dairy herd of 300 at their property. As a Norco Board member,
during 2018/19 Greg has focused much of his time advocating for a strong and resilient dairy industry in northern Australia and with his
peers on the Board, has worked hard to get better outcomes for Norco’s dairy farmer members. Being a dairy farmer as well as a Director,
Greg has great empathy for the dairy farming community and the present difficult conditions being experienced on farm. Greg is also a
supporter of the farmer owned co-operative model and is encouraging of strategies that grow a stronger business with a positive and
aggressive vision for the future and which in turn, builds resilience and wealth for Norco’s members.
Greg is a member of the Australian Institute of Company Directors. Greg will have served a three year term on the Norco Board of
Directors leading up to the 2019 Annual General Meeting and has made the difficult decision not to run for a second term and will retire
in November 2019.

26
Heath B J Hoffman - Director
Heath Hoffman has been a Director of Norco Co-operative Limited for five years having been first elected to the Board on 12 November
2014 and is a supplier Director from the Northern Region. He is the Chairperson of the Audit and Risk Management Committee.
Heath is a member of a family partnership that owns and operates a dairy farm near Warwick milking 300 Holstein cows on a full
TMR (total mixed ration) system. Heath is an effective team member in the Board room yet also contributes to the discussions as an
independent thinker. He has an excellent rapport with both his fellow Board members and Norco’s dairy farmer members alike. For
Heath, a basic strategic goal is to ensure there is a successful future for the northern dairy industry. In this regard, Heath has been a willing
participant in the production of video content that has been used on Norco’s social media platforms to highlight the effects that the
ongoing drought is having on farm input costs and milk production and to seek consumers’ support in continuing to purchase Norco
branded milk products.
Heath is a member of the Australian Institute of Company Directors. During the year, Heath attended the Dairy Research Foundation
Symposium in July 2018 with Deputy Chairman Michael Jeffery. He also attended the Australian Dairy Conference in Canberra with the
Chairman in February 2019.
Leigh Shearman - Director
Leigh Shearman has been a Director of Norco Co-operative Limited for seven years having been first elected to the Board on 14 November
2012 and is from the Central Region. Leigh is Chairperson of the Member Services Committee and a member of the Human Resources
Committee.
Leigh owns and operates a dairy farm at Goolmangar just outside Lismore milking 220 cows. Leigh also has experience across a broad
agricultural base gained over many years, including beef, horticulture and intensive piggery farming. She has also owned and operated
a retail franchise and has worked in the banking industry for 10 years. Leigh has a Diploma in Rural Business Management, Diploma
of Agriculture and Certificate III Financial Services. Leigh is the chairperson of the Far North Coast Dairy Industry Group Inc (DIG),
chairperson of the Goolmangar Water Users Association and is also a strong advocate for farmers having the “right to farm” to protect
their livelihoods.
Leigh is a member of the Australian Institute of Company Directors. As Chairperson of the Member Services Committee, Leigh is
committed to encouraging members having the opportunity to improve their skills and farming techniques to ensure the long term
sustainability of the Norco farm base. Unfortunately, plans for a further overseas study tour in 2019 have been put on hold due to the
difficult farming conditions caused by the continuing drought that is affecting much of the Norco region. With the Chairman currently
having the additional role of Interim Chief Executive Officer and having an increasingly full calendar, Leigh has assisted in taking on
speaking roles, attending and speaking to several Lismore based community groups, such as Probus.
Elke Watson - Director
Elke was elected to the Board of Directors on 9 November 2016 and is a supplier Director from the Northern Region. Elke is the Chairperson
of the Human Resources Committee and a member of the Audit and Risk Management Committee.
Elke and her husband Peter farm at Conondale in Queensland where they milk 250 cows. They also have four adult children with an
interest in the farm. As a Director, Elke values being part of a co-operative and is an enthusiastic team player in the Board room and a
willing ambassador for the Norco brand at functions and industry events.
Elke has a Diploma in Human Resource Management and is in the process of studying a business management degree on a part-time
basis. She has extensive business experience outside of the farm environment, including 25 years’ experience in financial management.
Elke is the Chairperson of the Sunshine Coast branch of the Subtropical Dairy Program and a past State Councillor of the Queensland
Dairyfarmers’ Organisation (QDO) and maintains membership in this organisation.
Elke is a graduate of the Australian Institute of Company Directors (AICD) and is committed to her ongoing professional development.
In the 2018/19 financial year Elke attended a range of events as a Norco Director including the AICD seminars Spotlight on the Economy
and Psychology of Leadership.

27
 DIRECTOR ELECTIONS – 2018/19
The retiring Directors Ms L Shearman (Central Region) and Mr MC Jeffery (Southern Region) being eligible, offered themselves
for re-election. Member nominations were also received from Mr PJ Weir (Central Region) and Mr GW Forbes (Southern
Region) and accordingly a postal ballot was held for both the Central and Southern Regions resulting in Ms Shearman and Mr
Jeffery being re-elected for three year terms effective from the 2018 Annual General Meeting on 14 November 2018.
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:

Audit and Risk Management

Directors’ Meetings Committee Meetings
A B A B
GJ McNamara 14 14 - -
MC Jeffery 14 14 8 8
GJ Billing 14 11 - -
HBJ Hoffman 14 14 8 7
L Shearman 14 14 - -
E Watson 14 13 8 7

A R eflects the number of meetings held during the time the Director held office during the year
B Number of meetings attended

During the course of the 2018/19 financial year there were also 11 Directors’ meetings held by teleconference and one Audit
and Risk Management Committee meeting held by teleconference. 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. Teleconferences are a cost effective and practical way for Directors to discuss specific
issues in a timely manner given that their residences are spread over a large geographic area.

CORPORATE INFORMATION
Corporate structure
Norco Co-operative Limited is a co-operative limited by shares which is incorporated and domiciled in Australia.

28
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 541 full-time, 62 part-time permanent and 231 casual employees at 30 June 2019 (2018 545 full-
time, 60 part-time permanent and 238 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 $41,000 (2018: $815,000 profit).
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 2018/19 financial year totalled $626,000 (being a dividend rate of 6.0% [six percent] on issued capital),
declared and approved by Members at the 2018 Annual General Meeting, which was held on 14 November 2018.
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 2019 (see page 6).
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.

29
 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 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 31 October 2018 Mr GJ McNamara provided the Member Services Committee (a Board committee) with information from
Australian Business Energy to consider in relation to a potential energy partnership between Norco Co-operative Limited and
Australian Business Energy that could benefit Norco’s Members. Mr McNamara is a Director of the NSW Business Chamber
and 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 potential arrangement.
On 1 November 2018 Mrs E Watson advised that she has taken up a Director position on the Board of Maple Street Co-
operative Society Limited and on 28 February Mrs Watson advised she was elected Chairperson of the Sunshine Coast branch
of the Subtropical Dairy Program. Mrs Watson has declared her interests in accordance with Section 208 of the Co-operatives
National Law (NSW) and, in addition, excludes herself from any discussions or decisions relating to these entities.
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.

GJ McNamara
Chairman
Lismore, 25 September 2019

30
31
 CORPORATE GOVERNANCE STATEMENT
This statement outlines the main corporate governance
practices that were in place throughout the 2018/19
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 including
strategic direction and enhancing organisational
performance, the sound management of its business and
assets, confirming financial objectives, understanding
and managing risks to maximise opportunities,
establishing goals for management and monitoring
performance against those goals. The Board of Directors
is also responsible for reporting to members and being
accountable to, and focussed on the needs of members
and meeting statutory and regulatory requirements.
To give further effect, the Audit and Risk Management
Committee assists in the execution of the Board’s
responsibilities. The Member Services Committee meets
regularly and plays an important role in assisting the
Board of Directors in managing the important relationship
between the Co-operative and its members. The Human
Resources Committee has a focus on succession
planning and remuneration as well as other human
resources related matters.
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 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
32
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. The Board did employ the services of a
consultant, Tanya Crowther to complement the skills
of the Directors, with Tanya having a strong marketing
focus. This role ceased in January 2019 when Tanya
moved to the full-time role of General Manager Export
within the business.
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 have attended and completed the
comprehensive residential AICD Company Directors’
Course.
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
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 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;
33
 • 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
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 Edition8 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
34
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, 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,
encompassing all Norco Rural Stores. Norco Rural Stores
are audited internally in line with AS4801 as well as the
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.
Norco has implemented a process for Rural employees
to be trained in the internal Norco Agvet course
delivered by the WHS Team.
The Norco Agvet course has been developed from
specific requirements within the above mentioned
standards as well as following nationally accredited
units of competency relating to:
• AHCCHM101A – Follow basic chemical safety rules.
• AHCCHM304A – Transport, handle and store
chemicals.
Safety
Norco is committed to the safety and wellbeing of staff
across its entire operations. Norco strives to comply
with the provisions of a safe working environment
and continues to make safety an integral part of our
organisation, which is essential if we are to continue
building a successful business into the future. On
a monthly basis, the Board of Directors receives
management reports detailing the safety performance
and trends for the business and monitors this
35
 information closely. The Board also receives a copy of all
minutes of the various site WHS committee meetings that
are held. In addition, a detailed WHS report is provided to
the Human Resources Committee when the Committee
meets. As noted above Norco maintains accreditation
against AS4801:2001 Occupational Health and Safety
Management Systems. This accreditation is current to 15
February 2022.
Environment
Norco aims to ensure that the highest standard of
environmental care is achieved. The Co-operative
recognises that it has a responsibility to ensure that
its operations are sensitive to the environment and
comply with the letter and spirit of all applicable
environmental legislation. Norco is also a party to the
Australian Packaging Covenant and has a ‘Buy Recycled’
procurement practice as part of our obligations under the
Covenant.
ETHICAL STANDARDS
All Directors, managers and employees are expected to
act with the utmost integrity and objectivity, striving 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
36
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;
• 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 2019
2019 2018
Before Before
Significant Significant Significant Significant
Items Items (1) Total Items Items (1) Total
Notes $000 $000 $000 $000 $000 $000

Revenue from contracts with

customers 4.1 602,961 - 602,961 552,242 - 552,242

Other income 5.1 249 - 249 132 - 132

Finance income 512 - 512 336 - 336

Milk payments to suppliers 5.2 (125,840) - (125,840) (133,633) - (133,633)

Cost of sales (338,317) - (338,317) (282,847) - (282,847)
Employee expenses 5.3 (68,828) - (68,828) (68,675) - (68,675)
Depreciation expense 5.4 (6,177) - (6,177) (6,047) - (6,047)
Borrowing costs expense (2,369) - (2,369) (2,293) - (2,293)
Occupancy expenses (6,191) - (6,191) (5,648) - (5,648)
Administration and other costs (54,907) - (54,907) (51,881) - (51,881)
Gain on disposal of non-current assets 140 - 140 218 - 218
Restructure costs - (597) (597) - (663) (663)
Profit/(loss) before tax from
ordinary activities before
income tax expense and
member distributions 1,233 (597) 636 1,904 (663) 1,241

Member distributions 7 - (626) (626) - (562) (562)

Profit/(loss) before income
tax 1,233 (1,223) 10 1,904 (1,225) 679

Income tax expense 6 - - - - - -

Net profit/(loss) attributable
to members 1,233 (1,223) 10 1,904 (1,225) 679

Other comprehensive income

Other comprehensive income
to be reclassified to profit or loss
in subsequent periods:
Net gain on cash flow hedges - 31 31 - 136 136
Other comprehensive income
for the year, net of tax - 31 31 - 136 136
Total comprehensive
income/(loss) for the year,
net of tax 1,233 (1,192) 41 1,904 (1,089) 815

(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.

37
 STATEMENT OF FINANCIAL POSITION As at 30 June 2019

2019 2018
Notes $000 $000
Assets
Current assets
Cash and cash equivalents 19.1 5,332 4,618
Trade and other receivables 8 61,932 56,856
Inventories 9 41,632 38,854
Other assets 1,279 1,698
Total current assets 110,175 102,026

Non-current assets
Investments 10 3 3
Property, plant and equipment 11 64,166 62,888
Intangible assets and goodwill 12 37,038 37,038
Total non-current assets 101,207 99,929
Total assets 211,382 201,955

Liabilities
Current liabilities
Trade and other payables 13 82,307 77,839
Interest-bearing loans and borrowings 14 1,818 2,520
Derivative financial instruments 15 423 248
Employee benefit liabilities 16 9,669 9,476
Total current liabilities 94,217 90,083

Non-current liabilities
Trade and other payables 13 397 397
Interest-bearing loans and borrowings 14 40,428 34,072
Derivative financial instruments 15 - 206
Employee benefit liabilities 16 1,138 1,082
Total non-current liabilities 41,963 35,757
Total liabilities 136,180 125,840

Net assets attributable to members 75,202 76,115

Members’ interest 17.1 10,294 10,193

Net assets 64,908 65,922

Equity
Retained earnings 26,244 27,289
Reserves 18 38,664 38,633
Total equity 64,908 65,922

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

38
STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2019

Cash flow Asset
Retained hedge revaluation
earnings reserve reserve Total equity
$000 $000 $000 $000

At 1 July 2018 27,289 (454) 39,087 65,922

Effect of adoption of new accounting standards
(Note 2.2) (1,055) - - (1,055)
At 1 July 2018 (restated) 26,234 (454) 39,087 64,867

Profit for the year 10 - - 10

Other comprehensive income - 31 - 31
Total comprehensive income for the year 10 31 - 41

At 30 June 2019 26,244 (423) 39,087 64,908

At 1 July 2017 26,610 (590) 39,087 65,107

Profit for the year 679 - - 679

Other comprehensive income - 136 - 136
Total comprehensive income for the year 679 136 - 815

At 30 June 2018 27,289 (454) 39,087 65,922

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

STATEMENT OF CASH FLOWS For the year ended 30 June 2019

2019 2018
Notes $000 $000
Operating activities
Receipts from customers 596,662 584,312
Payments to suppliers and employees (463,359) (445,372)
Interest received 512 336
Interest paid (2,369) (2,293)
Milk supplier payments (128,561) (134,976)
Net cash flows from operating activities 19.2 2,885 2,007

Investing activities
Proceeds from sale of property, plant and equipment 273 258
Purchase of property, plant and equipment 11 (7,573) (9,766)
Net cash flows used in investing activities (7,300) (9,508)

Financing activities
Suppliers’ share contribution 17 101 880
Distributions paid to members 7 (626) (562)
Payment of finance lease liabilities 19.2 (305) (387)
Proceeds from borrowings 19.2 5,959 7,566
Net cash flows from financing activities 5,129 7,497

Net increase/(decrease) in cash and cash equivalents 714 (4)
Cash and cash equivalents at 1 July 4,618 4,622
Cash and cash equivalents at 30 June 19.1 5,332 4,618

The above Statement of cash flows should be read in conjunction with the accompanying notes.

39
 NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2019

1. Corporate information
The financial statements of Norco Co-operative Limited and its controlled entities (the “Co-operative”) for the year ended 30
June 2019 were authorised for issue in accordance with a resolution of the directors on 25 September 2019.
Norco Co-operative Limited is a for-profit Co-operative under the Co-operatives National Law (NSW), incorporated and
domiciled in Lismore, Australia. The Co-operative operates out of its registered place of business at “Windmill Grove” 107 Wilson
Street, South Lismore, New South Wales. The principal operations of the Co-operative are the processing, manufacture 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 value was deemed to be cost and derivative financial instruments which are at fair value) and in
accordance with the requirements of the Corporations Act 2001. Cost is based on the fair values of the consideration given in
exchange for assets.
In the application of Australian equivalents to International Financial Reporting Standards (‘IFRS’) management is required to
make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from
other sources. The estimates and associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstance, the results of which form the basis of making the judgements. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future
periods if the revision affects both current and future periods.
Judgements made by management in the application of IFRS that have significant effects on the financial statements and
estimates with a significant risk of material adjustments in the next year are disclosed, where applicable, in the relevant notes to
the financial statements and Note 3. Accounting policies are selected and applied in a manner which ensures that the resulting
financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying
transactions or other events is reported.
The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2019
and the comparative information presented in these financial statements for the year ended 30 June 2018. Where necessary,
comparatives have been 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 available to the Co-operative under ASIC Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191. The Co-operative is an entity to which the instrument applies.
Statement of compliance
The financial report complies with Australian Accounting Standards, which include International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board.
2.2 Changes in accounting policies, disclosures, standards and interpretations
New and amended standards and interpretations
The Co-operative applied AASB 15 Revenue from Contracts with Customers and AASB 9 Financial Instruments for the first
time. The nature and effect of the changes as a result of adoption of these new accounting standards are described below.
Several other amendments and interpretations apply for the first time in 2019, but do not materially impact the financial
statements of the Co-operative.
AASB 15 Revenue from Contracts with Customers
AASB 15 Revenue from Contracts with Customers supersedes AASB 118 Revenue and related interpretations and it applies,
with limited exceptions, to all revenue arising from contracts with its customers. AASB 15 establishes a five-step model to
account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects
the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.
AASB 15 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when
applying each step of the model to contracts with their customers. The standard also specifies the accounting for the
incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the standard requires
extensive disclosures.
The Co-operative adopted AASB 15 using the full retrospective method of adoption. There was no significant impact on
recognition or measurement in the financial statements as a result of the adoptions but there has been a change in the
required disclosures to reflect the requirements of the new accounting standard.
Under AASB 15, discounts and rebates give rise to variable consideration and hence required to be netted off against revenue.
This resulted in a reclassification of these balances from cost of sales to revenue in both years. The underlying profit was not
impacted.
AASB 9 Financial Instruments
AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement for annual periods
beginning on or after 1 July 2018, bringing together all three aspects of the accounting for financial instruments: classification
and measurement; impairment; and hedge accounting.
With the exception of hedge accounting, which the Co-operative applied prospectively, the Co-operative has applied AASB 9
retrospectively, with the initial application date of 1 July 2018.

40
The effect of adopting AASB 9 as at 1 July 2018 was, as follows
 1 July 2018
$000
Assets
Trade receivables (1,055)
Total assets (1,055)
Total adjustment on equity:
Retained earnings (1,055)
(1,055)

The change did not have material impact on the Co-operative’s operating, investing and financing cash flows.
The adoption of AASB 9 has fundamentally changed the Co-operative’s accounting for impairment losses for financial assets
by replacing AASB 139’s incurred loss approach with a forward-looking expected credit loss (ECL) approach. AASB 9 requires
the Co-operative to recognise an allowance for ECLs for all debt instruments not held at fair value through profit or loss and
contract assets.
Upon the adoption of AASB 9, the Co-operative recognised additional impairment on the Co-operative’s trade receivables of
$1,055,000, which resulted in a decrease in retained earnings of $1,055,000 as at 1 July 2018.
Accounting Standards and Interpretations issued but not yet effective
Certain Australian Accounting Standards and Interpretations have recently been issued or amended but are not yet effective
and have not been adopted by the Co-operative for the annual reporting period ended 30 June 2019, outlined in the table
below.

Reference Title Summary Application Application

date of date for the
standard Co-operative
AASB 16 Leases The key features of AASB 16 in relation to the Company is that lessees are 1 January 1 July 2019
required to recognise assets and liabilities for all leases with a term of more than 2019
12 months, unless the underlying asset is of low value.

The impact of these changes in standards and interpretations is in the process of being quantified.
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 2019. Control
is achieved when the Co-operative is exposed, or has rights, to variable returns from its involvement with the investee and has
the ability to affect those returns through its power over the investee. Specifically, the Co-operative controls an investee if, 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 than a majority of the voting or similar 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 three elements of control. Consolidation of a subsidiary begins when the Co-operative obtains control
over the subsidiary and ceases when the Co-operative loses control of the subsidiary. Assets, liabilities, income and expenses
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 the Co-operative gains control until the 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 the non-controlling interests, even if this results in the non-controlling interests having a deficit
balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies
into line with the Co-operative’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash
flows relating to transactions between members of the Co-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 control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling
interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment 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 when it is:
• 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.

41
 A liability is current when:
• It is expected to be settled in the normal operating cycle;
• It is held primarily for the purpose of trading;
• It is 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 liabilities as non-current.
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 consideration to which the Group expects to be entitled in exchange for those goods or services.
The Group has generally concluded that it is the principal in its revenue arrangements and that it typically controls the goods
or services 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 transferring the goods to the customer. The variable consideration is estimated at contract
inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue
recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Some
contracts for the sale of dairy products provide customers with discounts. The discounts give rise to 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 delivery to the customer when the risks 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. For Rural,
the performance obligation is 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 of the financial instrument or a shorter 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
comprehensive income.
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 dividend at a meeting of shareholders.
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 at the fair value of the consideration received less directly attributable transaction costs.
h) Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the
inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a
specific asset or assets and the arrangement conveys a right to use the asset (or assets), even if that asset is (or those assets are)
not explicitly specified in an arrangement.
Co-operative as a lessee
Finance leases are capitalised at the commencement of the lease at the inception date fair value of the leased property or, if
lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and
reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance
charges are recognised in finance costs in the statement of profit or loss and other comprehensive income.
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 that the Co-operative will obtain ownership by the end of the lease term.
Operating lease payments are recognised as an expense in the statement of profit or loss and other comprehensive income
on a straight-line basis over the lease term. Lease incentives are recognised in the statement of profit or loss and other
comprehensive income as an integral part of the total lease expense.
Co-operative as a lessor
Leases in which the Co-operative retains substantially all the risks and rewards of ownership of the leased asset are classified as
operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased
asset and recognised as an expense over the lease term on the same basis as rental income.
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 maturity of three months or less. For the purposes of the statement of cash flows, cash and cash
equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.
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 payment of the consideration is due). They are generally due for settlement within 30-90 days
and therefore are all classified as current. Trade receivables are recognised initially at the amount of consideration that is
unconditional unless they contain significant financing components when they are recognised at fair value. The Co-operative
holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently
at amortised cost using the effective interest rate (EIR) method.

42
For trade receivables, the Co-operative applies a simplified approach in calculating ECLs. Therefore, the Co-operative does not
track changes in credit risk, but instead recognises a loss 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 experience, adjusted for forward-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 capacity but excluding borrowing costs.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and
the estimated costs necessary to make the sale.
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 transaction first qualifies for 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 designated as part of the hedge of the Co-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 amount is reclassified to profit or loss.
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-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction
is the date on which the Co-operative initially recognises the non-monetary asset or non-monetary liability arising from the
advance consideration. If there are multiple payments or receipts in advance, the Co-operative determines the transaction date
for each payment or receipt of advance consideration.
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 authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted, at the reporting date in the countries where the Co-operative operates and generates taxable income.
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 part of the cost of acquisition of the asset 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 financial position.
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 activities, which is recoverable from, or 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 impairment charges.
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 through profit or loss are carried in the statement of financial position at fair value with net changes in fair
value recognised in the statement of profit or loss and other comprehensive income.
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 depreciation and less any impairment 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 10 - 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 events or changes in circumstances indicate that the carrying value may be impaired.

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 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 cash flows are discounted to their 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 belongs, unless the asset’s value in use 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 to its recoverable amount.
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 included in profit or loss in the year the asset 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 fair value as at the date of acquisition. Following initial recognition, intangible assets are carried
at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding
capitalised 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 expenditure is incurred.
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 may be impaired. The amortisation 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 useful life
or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the
amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The 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 that is consistent with the function of 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 assessment of indefinite life is reviewed 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 asset and are recognised in the statement 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 the net fair value of the acquiree’s 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 groups of CGUs, that are expected to 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. Each unit or
group of units to which the 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 CGU (group of CGUs) is less than the 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 goodwill associated
with the operation 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 is measured based on the relative 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 testing for an asset is required, the Co-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
in use. Recoverable amount is 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 and is written down to its recoverable 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 market assessments of the time value of 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 transactions can be identified, an appropriate
valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded
companies or other available fair value 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 exist or may have decreased. If such an indication exists, the recoverable amount is estimated. A
previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the
asset’s 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 amount. That increased amount cannot exceed the carrying amount that would have

44
been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is
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 reversal the depreciation charge is 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 and services provided to the Co-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 of the purchase of these goods and
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 outflow of resources embodying economic 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 some or all of a provision to be
reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the
reimbursement is virtually certain. The expense relating to any 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 of the reporting date are recognised in respect of employees’ services up to the reporting date. They
are measured at the amounts expected to be paid when the liabilities are settled. Expenses for non-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-operative recognises a liability for long service leave and annual leave measured as the present
value of expected future payments to be made in respect of services provided by employees up to the reporting date using
the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee
departures, and periods of service. Expected future payments are discounted using market yields at the reporting date on high
quality corporate bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash
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-classified these instruments to non-current interest-bearing liabilities in accordance with generally
accepted International Accounting Practice. Any distributions paid on these instruments are treated as a borrowing cost.
This position which was clarified by UIG 2 Members’ Shares in Co-operative Entities and Similar Instruments, which the Co-
operative adopted effective 1 July 2004.
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 14
Interest-bearing loans and borrowings”.
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 initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial
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 hedges, which is recognised in Other 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 asset or liability or a highly probable 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 accounting and the risk management objective and strategy for undertaking the hedge. The
documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being
hedged 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 flows attributable to the hedged risk. Such 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 actually have been highly effective 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 immediately in the statement of profit or loss as other operating expense.

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 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 which are economic hedges, which are fair valued by comparing the contracted
rate to the future market rates for contracts with the same length of maturity. The $0.4 million (30 June 2018: $0.5 million) of
swaps have been designated as effective interest rate swaps and therefore satisfy the accounting standard requirements for
hedge accounting.
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 income statement. If the hedging instrument 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 recognised in other
comprehensive income 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 date. The fair value measurement is 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 by the Co-operative.
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 market participants act in their economic 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 best use or by selling it to another 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 the use of relevant observable inputs 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 follows, based on the lowest level input that 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 asset or liability and the level of the fair 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 statements. Management continually evaluates its judgments and estimates in relation
to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgments and estimates on historical
experience and on other 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 readily apparent from other sources. 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 differ from these estimates under different 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 lead to impairment. These include product and manufacturing performance, technology,
economic and political environments and future product expectations. If an impairment trigger exists the recoverable amount
of the asset is 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 of various customer segments that have 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 historical credit loss experience with forward-looking information. For instance, if forecast economic
conditions (i.e., gross domestic product) are expected to deteriorate over the next year which can lead to an increased number
of defaults 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 forward-looking estimates are analysed.
The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a
significant estimate. The amount of ECLs is sensitive to changes in circumstances 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 information about the ECLs on the Co-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 such items that are identified, a provision for inventory obsolescence amount is raised which represents
the amount for which the Co-operative may not recover through use of sale of the goods. Obsolete stock is written off when
identified.

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4. Revenue from contracts with customers
4.1 Disaggregated revenue information
Set out below is the disaggregation of the Co-operative’s revenue from contracts with customers:
2019 2018
$000 $000
Type of goods or service
Sale of goods - Foods 337,652 331,651
Sale of goods - Rural 244,996 192,506
Sale of goods - Milk supply 20,313 28,085
Total revenue from contracts with customers 602,961 552,242

Geographical markets
Australia 598,663 548,307
Other 4,298 3,935
Total revenue from contracts with customers 602,961 552,242

Timing of revenue recognition

Goods transferred at a point in time 602,961 552,242
Total revenue from contracts with customers 602,961 552,242

5. Other income and expenses

5.1 Other income
2019 2018
$000 $000
Rental income 152 132
Sundry income 97 -
249 132

5.2 Milk payments to suppliers

2019 2018
$000 $000
Milk payments to Norco member suppliers 117,010 125,483
Milk payments to external suppliers 8,830 8,150
125,840 133,633

5.3 Employee expenses
2019 2018
$000 $000
Salaries and wages (including contractors) 59,495 59,805
Workers compensation 2,144 1,617
Superannuation costs 4,557 4,618
Payroll tax 2,632 2,635
68,828 68,675

5.4 Depreciation expense

2019 2018
$000 $000
Plant and equipment 5,673 5,555
Buildings 504 492
6,177 6,047

5.5 Administration and other costs
Administration and other costs include the following:
2019 2018
$000 $000
Inventory obsolescence 63 63
Expected credit losses/doubtful and bad debts (Note 8) 417 261
Minimum lease payments recognised as an operating lease expense 80 82

47
 6. Income tax expense
The major components of income tax expense for the years ended 30 June 2019 and 2018 are:
2019 2018
$000 $000
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:
2019 2018
$000 $000
Accounting profit before income tax 10 679

At Australia’s statutory income tax rate of 30% (2018: 30%) 3 204
Non-deductible amounts 1,056 936
Movement in temporary differences (936) 5
Tax loss movement (123) (1,145)
- -
Tax losses
At 30 June 2019, the Co-operative had an estimated gross $6.1m in carry forward losses (2018: $6.5m). These tax losses
have not been brought to account in the statement of financial position. There are no available franking credits.
Temporary differences - not recorded
The Co-operative has a surplus of deductible temporary differences. The deferred tax asset associated with these
differences has not been recognised at 30 June 2019.
2019 2018
$000 $000
Unrecognised deferred tax assets and liabilities
Provision for expected credit losses 763 277
Provision for employee benefits 3,242 3,167
Trademark (819) (819)
Provision for obsolescence 477 386
3,663 3,011

7. Member distributions
2019 2018
$000 $000
Expensed in the year 626 562

8. Trade and other receivables

2019 2018
$000 $000
Trade receivables 63,354 55,501
Allowance for expected credit losses/provision for doubtful debts (2,542) (923)
60,812 54,578
Other receivables 1,120 2,278
61,932 56,856

Set out below is the movement in the allowance for expected credit losses/provision for doubtful debts of trade receivables
and contract assets:
2019 2018
$000 $000
As at 1 July 923 693
Adjustment on adoption of AASB 9 (Note 2.2) 1,055 -
Charge for the year (Note 5.5) 417 261
Write-off - (31)
Other 147 -
As at 30 June 2,542 923

48
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 receivable is impaired. The carrying value of trade and other receivables approximates
fair value.
At 30 June, the ageing analysis of trade receivables is as follows:

< 30 30-60 61-90

Total days days days 91+ days
$000 $000 $000 $000 $000
2019 63,354 41,447 14,330 4,571 3,006
2018 55,501 35,518 13,695 3,835 2,453
Receivables past due but not considered impaired are: $3.0m (2018: $2.4m). Payment terms have not been renegotiated,
however communications with counterparties have satisfied management that payment will be received in full.

9. Inventories
2019 2018
$000 $000
Raw materials 11,929 9,372
Finished goods and work in progress 31,294 30,767
Provision to net realisable value (1,591) (1,285)
Total inventories at the lower of cost and net realisable value 41,632 38,854

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
2019 2018
$000 $000
Shares
Unlisted corporations 3 3

11. Property, plant and equipment

2019 2018
$000 $000
Land and buildings
At cost 28,943 28,640
Accumulated depreciation (6,747) (6,243)
Net carrying amount 22,196 22,397

Plant, equipment and vehicles

At cost 98,030 90,844
Accumulated depreciation (60,898) (53,784)
Net carrying amount 37,132 37,060

Capital expenditure work in progress

At cost 4,838 3,431
Net carrying amount 4,838 3,431

Total property, plant and equipment

At cost 131,811 122,915
Accumulated depreciation (67,645) (60,027)
Net carrying amount 64,166 62,888

Reconciliation of carrying amounts at the beginning and the end of the year
2019 2018
$000 $000
Land and buildings
At 1 July 22,397 22,877
Transfers from work in progress 303 12
Depreciation expense (504) (492)
At 30 June 22,196 22,397

49
 2019 2018
$000 $000
Plant, equipment and vehicles
At 1 July 37,060 29,962
Disposals (118) (40)
Transfers from work in progress 5,863 12,693
Depreciation expense (5,673) (5,555)
At 30 June 37,132 37,060

Capital expenditure work in progress

At 1 July 3,431 6,370
Additions 7,573 9,766
Transfers to property, plant and equipment (6,166) (12,705)
At 30 June 4,838 3,431

Total property, plant and equipment

At 1 July 62,888 59,209
Additions 7,573 9,766
Disposals (118) (40)
Depreciation expense (6,177) (6,047)
At 30 June 64,166 62,888

There were no impairment losses recognised in the 2019 or 2018 financial years.
Leased manufacturing plant included in plant and vehicles is pledged as security for the related finance lease liabilities.
There were no additions to leased assets during the year.
The Co-operative’s property, plant and equipment is subject to a first charge as security over its interest-bearing liabilities.
See Note 14(c) for further information.
All assets acquired under finance lease were acquired for nil cash flow and are considered to be a non-cash
financing and investing activity.

12. Intangible assets and goodwill

2019 2018
$000 $000
Acquired goodwill 34,309 34,309
Trademark 2,729 2,729
Net carrying amount 37,038 37,038

(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 the Co-operative are Norco Foods, 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 (2018: 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.

13. Trade and other payables

2019 2018
$000 $000
Current
Trade payables 66,871 64,298
Accruals 15,436 13,541
82,307 77,839

Non-current
Other payables 397 397

Trade payables are generally on 30 day terms. The fair value of trade and other payables approximates their carrying value.

50
14. Interest-bearing loans and borrowings
2019 2018
$000 $000
Current
Lease liability 233 494
Norco Capital Units 85 88
Term loans - secured 1,500 1,938
1,818 2,520
Non-current
Lease liability 108 152
Term loans - secured 40,320 33,920
40,428 34,072

The Co-operative finance facility with Rabobank was amended during the year, the Borrowing Base Facility is scheduled to
expire on 30 September 2020 and the Term Loan Facility is scheduled to expire on 30 September 2020. Bank Guarantees
and Credit Card Facilities remain in place with St George Bank.
Refer to Note 14(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 discounting the expected future cash 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 29.
(c) Assets pledged as security
The carrying amounts of assets pledged as security for current and non-current interest-bearing liabilities are:
2019 2018
$000 $000
Property asset charges 64,166 62,888
Trademark 2,729 2,729
Total assets pledged as security 66,895 65,617

There are no specific terms and conditions related to the above pledges.
(d) Financing facilities
The following financing facilities are available for the Co-operative at 30 June:
2019 2018
$000 $000
Term loan facilities
Used facilities 41,820 35,858
Unused facilities 21,305 20,142
63,125 56,000

Bank guarantees and finance leases

Used facilities 1,353 1,353
Unused facilities 347 347
1,700 1,700
Business credit card facility
Used facilities 34 34
Unused facilities 106 106
140 140

Total finance facilities

Used facilities 43,207 37,245
Unused facilities 21,758 20,595
64,965 57,840

15. Derivative financial instruments

2019 2018
$000 $000
Financial liabilities at fair value through OCI
Current
Interest rate swap contracts - cash flow hedges 423 248

Non-current
Interest rate swap contracts - cash flow hedges - 206

51
 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 contracts with the same maturity terms. An amount of $0.4m (2018: $0.5m) of
swaps have been designated as effective interest rate swaps and therefore satisfy the accounting standard requirements
for hedge accounting. The timing of the interest rate payments for the swaps are in line with the interest rate payments
of the bank facility.
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 (2018: Level 2).

15.1 Hedging activities and derivatives

Cash flow hedges
The Co-operative is holding the following interest rate swaps
Maturity

As at 30 June Less than 1 to 3 3 to 6 6 to 9 9 to 12

2019 1 month months months months months Total
$000 $000 $000 $000 $000 $000

Interest rate
swaps - - - - 423 423

Change in fair value

used for measuring
As at 30 June 2019
Notional Carrying Line item in the statement of ineffectiveness for the
amount amount financial position period
$000 $000 $000

Interest rate swaps 25,188 423 Derivative financial instruments

As at 30 June 2018
Interest rate swaps 25,188 454 Derivative financial instruments

The impact of hedged items on the statement of financial position is, as follows:
As at 30 June 2019 As at 30 June 2018
Change in fair Change in fair
value used value used
for measuring Cash flow hedge for measuring Cash flow hedge
ineffectiveness reserve ineffectiveness reserve
$000 $000 $000 $000

Interest rate swaps - (423) - (454)

The effect of the cash flow hedge in the statement of profit or loss and other comprehensive income is, as follows:

Amount
Total hedging Ineffectiveness reclassified from
gain/(loss) recognised in OCI to profit or
Year ended 30 June 2019 recognised in OCI profit or loss loss
$000 $000 $000
Interest rate swaps 31 - -

Year ended 30 June 2018

Interest rate swaps 136 - -

16. Employee benefit liabilities

2019 2018
$000 $000
Current
Employee entitlements 9,669 9,476

Non-current
Employee entitlements 1,138 1,082

52
17. Members’ interest
17.1 Movements in shares on issue
$000
Opening balance - 9,313,000 fully paid shares 9,313
Repurchases of cancelled shares (76)
Subscriptions 956
At 30 June 2018 - 10,193,000 fully paid shares 10,193

Opening balance - 10,193,000 fully paid shares 10,193

Repurchases of cancelled shares (353)
Subscriptions 454
At 30 June 2019 - 10,294,000 fully paid shares 10,294

17.2 Terms and conditions of contributed equity

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

18. 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-operative carried land and buildings at fair value. From 1 July 2004, the Co-operative deemed the
fair value to be cost. The asset revaluation reserve represents the historical accumulation of revaluation adjustments. The
reserve will 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 disposal of land and buildings.
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.

19. Cash and cash equivalents

19.1 Reconciliation of cash
For the purpose of the statement of cash flows, cash and cash equivalents compose of the following at 30 June:
2019 2018
$000 $000
Cash at bank and on hand 5,332 4,618

19.2 Cash flow reconciliation

2019 2018
$000 $000
Reconciliation of net profit before tax to net cash flows:
Profit before tax 10 679
Adjustments for:
Depreciation of property, plant and equipment 6,177 6,047
Member distribution expense 626 562
Expected credit losses 417 261
Inventory obsolescence 63 63
Net gain on disposal of property, plant and equipment (140) (218)
Changes in assets and liabilities:
Increase in trade and other receivables (6,548) (6,685)
Increase in inventories (2,841) (4,954)
Decrease/(increase) in other assets 404 (312)
Increase in trade and other payables 4,468 6,980
Increase/(decrease) in employee benefit liabilities 249 (416)
Net cash flows from operating activities 2,885 2,007

Changes in liabilities from financing activities

Cash
inflows/
2018 (outflows) 2019
$000 $000 $000
Liabilities with cash flows from financing activities
Interest bearing loans and borrowings (excluding lease liabilities) 35,946 5,959 41,905
Suppliers’ share contribution 10,193 101 10,294
Distribution paid to members - (626) (626)
Lease liabilities 646 (305) 341
46,785 5,129 51,914

53
 Cash
inflows/
2017 (outflows) 2018
$000 $000 $000

Liabilities with cash flows from financing activities
Interest bearing loans and borrowings (excluding lease liabilities) 28,380 7,566 35,946
Suppliers’ share contribution 9,313 880 10,193
Distribution paid to members - (562) (562)
Lease liabilities 1,033 (387) 646
38,726 7,497 46,223

20. Controlled entities

% equity interest Investment $000
Name Principal activities 2019 2018 2019 2018
Logan Valley Dairies Pty Ltd Dormant 100% 100% 165 165
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 Pty Ltd Property Holder 100% 100% 15,783 15,783
ACN 146 859 074 Pty Ltd* Dormant 100% 100% - -
15,948 15,948
* Investment <$101
** 100 shares at $1 each

21. Commitments
Capitalised finance lease commitments for plant and vehicles:
2019 2018
$000 $000
Within one year 233 515
After one year but not more than five years 108 137
Total minimum lease payments 341 652
Deduct future finance charges - (5)
341 647

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

2019 2018
$000 $000
Within one year 2,591 2,517
After one year but not more than five years 6,787 5,944
More than five years 2,351 3,247
11,729 11,708

Cancellable operating lease commitments for vehicles and plant:

2019 2018
$000 $000
Within one year 1,350 1,393
After one year but not more than five years 1,484 2,056
2,834 3,449

22. 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-operative holds an interest which has not been provided for.
Bank Guarantees
Contingent liabilities exist in respect of bank guarantees given to various parties that amount to $1,353,000 (2018:
$1,353,000) and are not included as creditors.

54
23. 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 guarantee contracts at 30 June 2019 (2018: $Nil).

24. 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 equity and debt. The management of 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 Co-
operative has complied with all requirements of the Co-operatives National Law (NSW) during the year.

25. Directors and executive disclosures

25.1 Key management personnel
(i) The directors of Norco Co-operative Limited during the financial year were:
Greg McNamara (Non-Executive Chairman)
Michael Jeffery (Non-Executive Deputy Chairman)
Leigh Shearman (Non-Executive)
Heath Hoffman (Non-Executive)
Greg Billing (Non-Executive)
Elke Watson (Non-Executive)

(ii) The executives of Norco Co-operative Limited during the financial year were:
Camille Hogan (Chief Financial Officer) (a)
Mark Myers (Co-operative Secretary)
Andrew Burns (GM Norco Foods)
Damon Bailey (GM Norco Rural / Agribusiness)
Rob Randall (GM Supply Chain)
Michael Hampson (Chief Operating Officer) (b)

(a) Resigned as Chief Financial Officer effective 31 October 2018.

(b) Appointed Chief Operating Officer effective 4 March 2019.

25.2 Compensation of key management personnel and Directors

2019 2018
$ $
Short term - wages and salaries 1,601,434 1,994,588
Termination benefits 173,364 684,888
Superannuation 158,934 212,699
Non-cash 16,932 36,075
Total compensation 1,950,664 2,928,250

Total KMP excluding Directors 6 9

The above amounts only relate to the cash and other benefits paid to key management personnel for the period of their
employment with the Co-operative or for the period they held a position as a key management person.

25.3 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 management personnel members.
Sales
Sale of farm supplies and stores to key management personnel and related entities are on the same commercial terms and
conditions as enjoyed by other non key management personnel members.

25.4 Share transactions

2019 2018
Aggregate number of shares held by Co-operative key management personnel
and their related entities at 30 June 677,022 649,448
Aggregate number of shares acquired by key management personnel and their
related entities during the year 27,574 46,929

26. Superannuation commitments

All employees participate in an employer sponsored defined contribution/accumulation style superannuation plan.
Contributions by the Co-operative of 9.5% (2018: 9.5%) of employees’ wages and salaries are legally enforceable except
employees of the Ice Cream division who are paid 11% (2018: 11%) superannuation commitments in line with their Enterprise
Bargaining Agreement.

55
 27. Auditor’s remuneration
The auditor of Norco Co-operative Limited is Ernst & Young (Australia).
2019 2018
$ $
Amounts received or due and receivable by Ernst & Young (Australia) for:
An audit or review of the financial report 144,000 141,000
Other services
Financial statements compilation 11,000 11,000
155,000 152,000

28. Information relating to the Norco Co-operative Limited (the Parent)

2019 2018
$000 $000
Information relating to Norco Co-operative Limited:
Current assets 110,180 102,026
Total assets 195,605 186,173
Total liabilities (135,191) (124,851)
Net assets attributable to members 60,414 61,322

Members’ interest 13,519 13,418
Net assets 46,895 47,904

Asset revaluation reserve 31,215 31,215
Cash flow hedge reserve (423) (454)
Retained earnings 16,103 17,143
Total equity 46,895 47,904

Profit of the Parent entity 9 679
Total comprehensive income of the Parent for the year 40 815

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 23.
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 22.
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 21.

29. 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 guarantee contracts. The main purpose 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 financial assets include trade
and other 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-operative’s senior management is supported by the Audit and Risk Management
Committee that advises on financial risks and the appropriate financial risk governance framework for the Co-operative.
The Audit and Risk Management Committee provides assurance to the Co-operative’s Board of Directors that the Co-
operative’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risks
are identified, measured and managed in accordance with the Co-operative’s policies and risk objectives. All derivative
activities for risk management purposes are carried out by 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 shall be undertaken. The
board of 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 14.
At balance date, the Co-operative had the following mix of financial assets and liabilities exposed to Australian variable
interest rate risk:
2019 2018
$000 $000
Financial assets and liabilities
Cash and cash equivalents 5,332 4,618
Derivative financial instruments (423) (454)
Net exposure 4,909 4,164

56
Interest rate swap contracts outlined in Note 15, 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 finance costs using variable rate debt with an appropriate
level of instruments to fix interest exposure. The Co-operative constantly analyses its interest rate exposure. To manage
this mix in a cost-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 variable rate interest amounts calculated by reference to an agreed-
upon notional principal amount. Consideration is given to potential renewals of existing positions, alternative financing
and the mix of fixed and variable interest rates.
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) Higher/(Lower)
2019 2018 2019 2018
$’000 $’000 $’000 $’000
+1.0% (100 basis points) (53) (46) - 2
-1.0% (100 basis points) 53 46 - (2)

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 shift in the forward curve.
• 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 balance date.

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-operatives policy to secure grain quantities and prices through forward grain contracts.
As these contracts are regular advance purchase contracts for process inputs, derivative accounting is not applied and
contract 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-operative’s exposure to credit risk arises from potential default of the counter party, with a
maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is addressed in each
applicable note.
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 securitise its trade and other 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 assessment of their independent credit rating, financial position, past experience and industry
reputation. Risk limits are set for each individual customer in accordance with parameters set by the board. These risk limits
are regularly 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, finance leases and committed available credit lines.
The table below reflects contractual finance principal repayments and interest resulting from recognised financial liabilities
as of 30 June 2019. Cash flows for financial liabilities without fixed amount or timing are based on the conditions existing
at 30 June 2019.
The remaining contractual maturities of the consolidated entity’s and parent entity’s financial liabilities are presented with
an analysis of the financial assets.
2019 2018
$000 $000
0-1 year 84,040 81,709
1-5 years 40,825 35,099
124,865 116,808

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 and other financial liabilities mainly originate from the financing of assets used in our ongoing
operations such as property, plant, equipment and investments in working capital e.g. inventories and trade receivables.
These assets are considered in the consolidated entity’s overall liquidity risk.

57
 1 to 5 Over
Year ended 30 June 2019 <12 months years 5 years Total
$000 $000 $000 $000
Cash and cash equivalents 5,332 - - 5,332
Trade and other receivables 61,932 - - 61,932
Interest-bearing loans and borrowings (1,500) (40,320) - (41,820)
Finance leases (233) (108) - (341)
Trade and other payables (82,307) (397) - (82,704)
Net maturity (16,776) (40,825) - (57,601)

1 to 5 Over
Year ended 30 June 2018 <12 months years 5 years Total
$000 $000 $000 $000
Cash and cash equivalents 4,618 - - 4,618
Trade and other receivables 56,856 - - 56,856
Interest-bearing loans and borrowings (1,938) (33,920) - (35,858)
Finance leases (515) (137) - (652)
Trade and other payables (77,839) (397) - (78,236)
Net maturity (18,818) (34,454) - (53,272)

Fair value
The methods for estimating fair value are outlined in the relevant notes to the financial statements.

30. 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 operations or the Co-operative’s state of affairs.

DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Norco Co-operative Limited, I state that:
In the opinion of the directors:
(a) t he financial statements and notes of the Co-operative are 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 2019 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) t here 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

G.J. McNamara
Chairman
Lismore
25 September 2019

58
 Ernst & Young Tel: +61 7 3011 3333
111 Eagle Street Fax: +61 7 3011 3100
Brisbane QLD 4000 Australia ey.com/au
GPO Box 7878 Brisbane QLD 4001

INDEPENDENT AUDITOR’S REPORT

To the Members of Norco Co-operative Limited

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 the statement of financial position as at 30 June 2019, the statement of profit or loss and
other comprehensive income, the statement of changes in equity and the statement of cash flows for
the year then ended, notes comprising a summary of significant accounting policies and other
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 2019 and of
its financial performance for the 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 standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Co-operative in accordance with the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES110 Code of Ethics for Professional Accountants (the Code) that are relevant
to our audit of the financial report in Australia; and we have fulfilled our other ethical 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 opinion.

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59
 Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial statements. The results of our audit procedures, including the
procedures performed to 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 12 of the financial report discloses the individual
intangible assets and goodwill and the assumptions
used in testing these assets.
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 12 of the financial report.

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2. Interest bearing loans and borrowings
Why significant
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 2019 and
expects to continue to be compliant for the remaining
period of the facility.
Note 14 of the financial report discloses the details of
the interest bearing loans and borrowings.
3. Milk payments to suppliers
Why significant
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.
For three months of the year, the board approved the
price per litre was 5 cents higher than the initial board
approved rate. A proportion of this was passed
through from a customer.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
How our 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 2019.
• 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.
How our audit addressed the key audit matter
Our audit procedures included the following:
• Selected a sample of payments made to milk suppliers
during the year and determined whether the payment
was based upon Board approved rates.
• Tested, on a sample basis, the effectiveness of
selected controls over the Co-operative’s monthly milk
supply reconciliation process where volumes of milk
paid for were reconciled to the volumes of milk
supplied and other quality measures such as fat and
protein percentages were addressed.
• Tested, on a sample basis customer receipts to invoice
and bank statement.
• Tested whether the milk supply rate used for the
applicable three month period was 5 cents higher than
the initial board approved rates.
61
 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
comprises the information in the Co-operative’s Annual Report for the year ended 30 June 2019 but
does not include the financial report and the auditor’s report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If,
based upon the work we have performed, we conclude that there is a material misstatement of this
other information; we are required to report that fact. We have nothing to report in this regard.

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 true and fair view in accordance with Australian Accounting Standards, the Corporations Act 2001
and Co-operatives National Law (NSW) and for such internal control as the Directors determine is
necessary to enable the preparation of the financial report that gives a true and fair 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 continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the Directors either intend to liquidate the Co-operative
or cease operations, or have no realistic alternative but to do so.

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 material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.

As part of an audit in accordance with Australian Auditing Standards, we exercise professional

judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Directors.

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Co-operative’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Co-operative’s to cease to continue as a
going concern.

• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.

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

We also provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.

From the matters communicated to the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
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
Lismore
25 September 2019

A member firm of Ernst & Young Global Limited

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63
 BRANCH DIRECTORY
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 6627 8099
NORCO RURAL
‘Windmill Grove’, 107 Wilson Street SOUTH LISMORE NSW 2480 (PO Box 3107 LISMORE DC NSW 2480)
Phone: 02 6627 8000 Fax: 02 6627 8099
NORCO AGRIBUSINESS
Windmill Grove’, 107 Wilson Street SOUTH LISMORE NSW 2480 (PO Box 3107 LISMORE DC NSW 2480)
Phone: 02 6627 8000 Fax: 02 6627 8099
MILK SUPPLY
Windmill Grove’, 107 Wilson Street SOUTH LISMORE NSW 2480 (PO Box 486, LISMORE NSW 2480)
Phone: 02 6627 8029 Fax: 02 6627 8095

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: 07 5511 7298
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 6621 9170
NORCO STOCKFEEDS
2814 Murgon – Gayndah Road WINDERA QLD 4605 Phone: 07 4168 6186 Fax: 07 4168 6214
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 66258499
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 4163 6310 Fax: 07 4162 4992
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 8200 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
QUINALOW 3 Myall Street QUINALOW QLD 4403 Phone: 07 4692 1333
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 66904800 Fax: 02 66904899

64
 CORPORATE DIRECTORY
REGISTERED OFFICE Norco Co-operative Limited
ARBN 009 717 417 / ABN 17 009 717 417
‘Windmill Grove’, 107 Wilson Street South Lismore NSW 2480
Telephone: 02 6627 8000 Facsimile: 02 6627 8099 Web Site:
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

CONTENTS
www.norco.com.au
SOLICITORS Thomson Geer Lawyers BRISBANE QLD 4000
AUDITORS Ernst & Young Chartered Accountants S+P Lawyers LISMORE NSW 2480
Level 51, 111 Eagle Street BRISBANE QLD 4000 Piper Alderman Lawyers SYDNEY NSW 2000

3 Corporate Profile
4 Facts at a Glance
6 Chairman / Interim Chief Executive Officer’s Report
10 
Chief Operating Officer’s Report

12 Norco Foods
14 Norco Rural / Agribusiness
19 Norco People

24 Directors’ Report
31 Auditor’s Independence Declaration
32 Corporate Governance Statement

37 Financial Statements
59 Independent Auditor’s Report
64 Corporate and Branch Directories

THANK YOU
Thank you to our Co-operative Members, Employees,
Norco Milk Distributors and Customers who feature
in this Annual Report photography.
Your time and participation is greatly appreciated.
 annual 2019 report
www.norco.com.au
A 100% AUSTRALIAN FARMER OWNED DAIRY CO-OPERATIVE