For personal use only Tassal Group Limited’000 $’000 $’000 % ... Income tax expense $870 Net profit ... sustainable growing earnings base for the Company. Underlying results

21 February 2012 The Manager, Listings Australian Securities Exchange Company Announcements Office Level 4, Exchange Centre 20 Bridge Street Sydney, NSW 2000 Via e-lodgement Dear Sir

Tassal Group Limited (TGR): Market Release Results for the Half-Year Ended 31 December 2011

We attach the following: 1. Results Announcement for the Half-Year Ended 31 December 2011. 2. Appendix 4D – “Half-Year Report” incorporating the consolidated financial

report and the Directors’ Report.

3. Media Release.

4. Investor Presentation – Results for the six months ended 31 December 2011.

Please release this information to the market. Yours faithfully

Monika Maedler Company Secretary Tassal Group Limited F

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TASSAL GROUP LIMITED ABN 15 106 067 270

APPENDIX 4D

HALF-YEAR REPORT for the Half-Year ended 31 December 2011

(previous corresponding period: Half-Year ended 31 December 2010)

RESULTS FOR ANNOUNCEMENT TO THE MARKET

A. McCallum Chairman Tassal Group Limited Melbourne, 21 February 2012

Compliance Statement

1. The attached financial report has been prepared in accordance with AASB Standards, other AASB authoritative pronouncements and Interpretations or other standards acceptable to ASX.

2. The attached financial report, and the accounts upon which the report is based, use the same accounting

policies. 3. The attached financial report gives a true and fair view of the matters disclosed. 4. The attached financial report has been independently reviewed by the Company’s auditors. The financial

report is not subject to a qualified independent review statement. 5. The entity has a formally constituted Audit Committee.

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APPENDIX 4D




Half-Year ended

31 December 2011

Half-Year ended

31 December 2010

Period Movement

up / (down)

Period Movement

up / (down)

$’000 $’000 $’000 % Revenue (from all sources) 127,550 109,674 17,876 16.30 EBITDA 28,959 29,109 (150) (0.52) EBIT 21,016 23,177 (2,161) (9.32) Profit before income tax expense attributable to members 17,974 19,638 (1,664) (8.47) Income tax expense (5,012) (5,636) (624) (11.07) Net profit after income tax expense attributable to members 12,962 14,002 (1,040) (7.43) Basic EPS – cents per share 8.86cps 9.65cps

Dividends (Ordinary Shares)

Amount per security

Franked amount per

security Final dividend:

- Previous financial year 2.00¢ 0.00¢ Interim dividend:

- Current reporting period 4.00¢ 0.00¢ - Previous corresponding period 0.00¢ 0.00¢

Brief explanation of any of the figures reported above necessary to enable figures to be understood.

Refer to the “Review of Operations” section at Item 4 in the accompanying Directors’ Report which forms part of the Appendix 4D Half-Year Report, together with the Company’s H1 2012 results media release.

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APPENDIX 4D




Reported Earnings Per Ordinary Fully Paid Share (EPS) Current Period Previous Corresponding

Period Basic EPS – cents per share 8.86 9.65 Diluted EPS – cents per share 8.81 9.61

NTA Backing Current Period Previous Corresponding

Period Net tangible asset backing per ordinary security $1.69 $1.51

TABLE A: Impact of AASB 141 “Agriculture”. The following tables illustrate the effect on net profit after income tax after applying the AASB 141 “Agriculture” accounting standard.

Half-year ended 31 December 2011

AASB 141 Impact $'000

Revenue (from all sources) $0 EBITDA ($2,900) EBIT ($2,900) Profit before income tax expense ($2,900) Income tax expense $870 Net profit after income tax expense ($2,030)

Half-year ended 31 December 2010

AASB 141 Impact $'000

Revenue (from all sources) $0 EBITDA ($5,230) EBIT ($5,230) Profit before income tax expense ($5,230) Income tax expense $1,569 Net profit after income tax expense ($3,661)

Monika Maedler Company Secretary Tassal Group Limited 21st February 2012

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Tassal Group Limited and its Controlled Entities ABN 15 106 067 270

Appendix 4D: Half-Year Report

(Pursuant to Listing Rule 4.2A)

Financial Report for the Half-Year Ended 31 December 2011

(The Half-Year financial report does not include all the notes of the type normally included in an Annual Financial Report. Accordingly, it is recommended that the Half-Year Report is read in conjunction with the Annual Financial Report of Tassal Group Limited for the Financial Year ended 30 June 2011 together with any public announcements made by Tassal Group Limited and its controlled entities during the half-year ended 31 December 2011 in accordance with the continuous disclosure requirements of the Listing Rules of the Australian Securities Exchange).

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CONTENTS Tassal Group Limited and its Controlled Entities Financial Report for the Half-Year Ended 31 December 2011

2

DIRECTORS’ REPORT 3-8

AUDITOR’S INDEPENDENCE DECLARATION 9

CONDENSED CONSOLIDATED INCOME STATEMENT 10

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 11

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 12

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 13

CONDENSED CONSOLIDATED STATEMENT OF CASHFLOWS 14

NOTES TO THE CONDENSED FINANCIAL STATEMENTS 15-21

DIRECTORS’ DECLARATION 22

INDEPENDENT REVIEW REPORT 23

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DIRECTORS’ REPORT Tassal Group Limited and its Controlled Entities Financial Report for the Half-Year Ended 31 December 2011

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The Directors of Tassal Group Limited (“Tassal” or “the Company”) submit the financial report for the half-year ended 31 December 2011 of the consolidated entity, being the Company and its controlled entities.

In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:

1. DIRECTORS The names of the Directors of Tassal Group Limited who held office at any time during or since the end of the half-year are:

Name: Mr Allan McCallum (Chairman) Mr Mark Ryan (Managing Director and Chief Executive Officer) Mr David Groves Mr Gary Helou Mr Clive Hooke Ms Jill Monk Mr Rudi Tsai Mr John Watson The above named Directors held office during the whole of the half-year, except for: Mr Rudi Tsai, who was appointed on 26 October 2011; Ms Jill Monk, who resigned on 25 October 2011.

2. PRINCIPAL ACTIVITIES During the half-year the principal activities of the consolidated entity were the farming, processing and marketing of Atlantic salmon.

There were no significant changes in the nature of the activities of the consolidated entity during the half-year.

3. DIVIDENDS On 22 August 2011, the Directors declared a final unfranked dividend of 2.00 cents per fully paid ordinary share amounting to $2.926 million in respect of the financial year ended 30 June 2011. The final dividend was paid on 6 October 2011.

Half-Year

ended 31 Dec 2011

$’000

Half-Year ended

31 Dec 2010 $’000

Interim dividend provided for - - Final dividend paid in respect of prior financial year 2,926 2,884 2,926 2,884

4. REVIEW OF OPERATIONS

The Directors of Tassal Group Limited (Tassal) present the Company’s Appendix 4D: Half Year Report to 31 December 2011 (1H12). The financial and operating performance of Tassal over 1H12 reflected the continuation of the Company’s focused strategy to deliver long term sustainable growth in shareholder value. The cornerstone of this strategy is a focus towards increased domestic retail and wholesale penetration and distribution, and shifting away from the export market. Overall, maximum value will be achieved through growing underlying domestic market per capita consumption, which Tassal has been successfully doing. Tassal has made significant progress towards achieving its key priorities for FY2012 as set out in the Company’s 2011 Annual Report:

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• maximising sales price and sales returns in both the domestic and export markets, whilst at the same time growing domestic market per capita consumption;

• maximising efficiency with respect to working capital management; and • ensuring that Tassal progresses towards achieving the underlying financial metrics underpinning the

Company’s Strategic Plan FY2016.

Financial results Statutory results The key 1H12 statutory financial results were:

• revenue up 16.30% to $127.550 million (1H11: $109.674 million);

• earnings before interest, tax, depreciation and amortisation (EBITDA) down 0.52% to

$28.959 million (1H11: $29.109 million);

• net profit after tax (NPAT) down 7.43% to $12.962 million (1H11: $14.002 million);

• accounting standard AASB 141 “Agriculture” increment of $2.030 million after tax (1H11: $3.661 million), which was$1.631 million below 1H11 and the key reason for the lower NPAT. This follows the AASB 141 adjustment for the six months ended 30 June 2011 of $8.683 million after tax, resulting in a total increase in the value of Tassal’s biological assets of $10.713 million after tax over the past 12 months, reflecting the overall significant improvement in fish performance;

• operating cash flow up 2.72% to $19.102 million (1H11: $18.596 million); and

• gearing ratio as represented by net debt to equity decreased to 30.65% (31 December 2010: 35.96%),

which is within Tassal’s target range of 30% to 35%.

As presented in Tassal’s 2011 Annual Report, after considering the presentation of the fair value adjustment for biological assets and the presentation of discounts and rebates, Tassal has re-assessed the presentation of revenue under applicable accounting standards.

1. Presentation of fair value adjustment for biological assets

During FY2011, Tassal reassessed its presentation of the fair value adjustment for biological assets within the statutory results in order to reflect more relevant information for the users of the Company’s financial statements. Based on this reassessment, it was determined that instead of providing a gross presentation of the net market value of non-living produce extracted; a net amount would be presented. Both approaches comply with the requirements of Accounting Standard AASB 141. Overall, this reassessment had no impact on earnings, but did affect revenue and cost of goods sold for 1H11. For 1H11 comparative purposes, statutory revenue was reduced by $104.949 million, with the fair value adjustment of biological assets presented as a separate line item for a net increment of $5.230 million.

2. Presentation of discounts and rebates

Tassal also reassessed its presentation of discounts and rebates during FY2011 to ensure that items were classified consistent with the Company’s accounting policy on revenue recognition. Based on this reassessment, it was determined that certain selling expenses should be reclassified and recognised within revenue. Overall, this reclassification had no impact on earnings, however revenue for 1H11 for comparative purposes reduced by $8.004 million.

The significant negative for Tassal during 1H12 was the volatility and downward trend of the global salmon market base price, with Tassal’s sales pricing ($/kg) down 19.62% on 1H11. Given oversupply in the global salmon market, export conditions are not expected to improve for the 2012 calendar year. Tassal’s focus on

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growing underlying domestic market per capita consumption counteracts export market volatility and has built a sustainable growing earnings base for the Company.

Underlying results Tassal has continued to follow the guidance for underlying results issued by the Australian Institute of Company Directors and Financial Services Institute of Australasia in March 2009. There were no non-recurring items recorded for either 1H12 or 1H11. Operating results From an operational perspective Tassal’s performance reflected the Company’s continued focus on delivering its overall Strategic Plan FY2016 targets. Albeit there has been some downward price pressure in both the domestic and export fresh hog markets, the basic operating fundamentals underpinning the Strategic Plan FY2016 were either met or exceeded for 1H12. The key 1H12 operating results highlights were:

• revenue up 16.30% to $127.550 million (1H11: $109.674 million);

• EBITDA up 9.13% to $26.059 million (1H11: $23.879 million);

• NPAT up 5.72% to $10.932 million (1H11: $10.341 million); and

• operating cash flows up 2.72% to $19.102 million (1H11: $18.596 million).

Operating results Sales results

• Tassal commenced FY2012 with the objective of delivering a sales mix that maximised value. The

cornerstone for this was to ensure that traditional domestic markets grow in a value maximising way to deliver incremental margins from volume strategies – with the key focus to accelerate domestic market per capita consumption.

• Domestic market sales revenue was up 18.69% to $114.06 million. Strong sales growth was underpinned

by retail and wholesale market segment growth which was achieved through both increasing existing product sales with existing customers, and further penetrating domestic retail and wholesale segments through attracting new customers and developing new products. o Retail – strong retail sales performance, with revenue up 17.19% to $72.33 million, and volume up

16.88% on 1H11;

o Wholesale – despite downward price pressure due to falling global salmon prices for fresh hog, wholesale sales revenue was up 21.38% to $41.73 million, and volume up 28.73% on 1H11.

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• The positive performance from the domestic market was partially offset by declining export market performance that was affected by lower overseas base pricing (NOK/Hog kg) due to excess supply, and NOK foreign exchange volatility with the USD. Sales pricing $/kg for Tassal was down 19.62% on 1H11 – with volumes up 17.94%, sales revenue was down 5.29% on 1H11. Even though the average size profile of Tassal harvest fish is the optimum size for the domestic market, with any average population of fish there will always be a percentage that will be bigger than the average, and therefore there will correspondingly be the need to export the larger fish.

Production results • Tassal continues to implement a successful fish farming programme, with the average harvest size for

1H12 up 6.75% on 1H11. A priority for 2H12 and moving forward is to implement a harvest strategy that will underpin improved survivability and lower incidence and costs of Amoeba Gill Disease (AGD): o improving survivability will be underpinned through a revised harvest strategy beginning in 2H12

which will see the new harvest Year Class commence earlier and at a higher harvest rate to ensure that all fish due to mature in the following summer in the South East of Tasmania are removed prior to the end of calendar year 2012; and

o maximising the opportunities to grow fish in Macquarie Harbour, where AGD is not an issue. As a

result, there are significant cost savings and growth advantages as fish do not face the same summer water pressures as the South East of Tasmania. Further lease space in Macquarie Harbour is currently being sought and Tassal is optimistic of achieving additional lease space.

• Significant focus continues to be directed on feed diets and raw material substitution. Our strategies have:

o mitigated the effects of movements in the key raw materials making up the feed diets, ensuring that

we have readily substitutable fish feed diets on hand that do not compromise but enhance fish growth; and

o improved feed conversion that has not only increased harvest size, but also grown the fish more

efficiently.

• Tassal’s processing facilities continue to operate at global best practice. Previous capital investment on infrastructure has generated throughput and yield benefits on existing business. The direct supply of some fresh salmon products to retail customers continues to allow the Company’s salmon to present a premium product in a premium condition, which maximises sales opportunities. All processing facilities continue to deliver cost reductions and throughput efficiencies.

Working capital management • Tassal continues to strengthen its balance sheet through an active working capital management

programme

o operating cash flow was up 2.72% to $19.102 million (1H11: $18.596 million); o gearing, being net debt to equity, reduced to 30.65% (31 December 2010: 35.96%), and is at the low

end of Tassal’s target range of 30% to 35%; o cash spend on capital expenditure was down 26.83% to $16.272 million (1H11: $22.239 million); and o average debtor days reduced by 15.82 days to 14.49 days outstanding.

The Directors believe that it is important to acknowledge the following fundamentals as they apply to Tassal:

• With Tassal being a minor participant in the global salmon market, its ability to exert any influence over global salmon prices is negligible. Apart from the Japanese market where Tassal receives a premium for its high quality salmon, the Company participates in the balance of the global salmon market at a similar price to the global salmon spot price. Accordingly, in the export market Tassal is subject to the volatilities and variances of both the foreign exchange rate and the global spot salmon price.

• Like other aquaculture and agriculture businesses, salmon farming is a capital intensive industry. Salmon farming is a rolling process and in a steady state of production there will be three concurrent Year Class generations at different points in their lifecycle, together with a minimum level of capital expenditure required. With Tassal in a growth mode executing its Strategic Plan FY2016, funding has been required not only for the growth of the current production of fish and replacement capital expenditure, but also to fund expansionary fish production and capital expenditure on infrastructure assets.

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• Given the production lifecycle of fish, there is a fundamental gap in the infrastructure investment, working capital and profit and loss cycles. Accordingly, it is important to apply AASB 141 “Agriculture” in understanding Tassal’s financial results and to ensure consistency in financial comparison and measurement with global aquaculture companies.

• Tassal has robust risk mitigation strategies in place to manage risks in an operational and financial

context. However, it is still faced with agricultural risk, with summer remaining a challenging period in terms of fish growth. Summer 2011/2012 has been particularly challenging with warm water present requiring significant focus and attention.

Strategic Plan FY2016 Tassal’s number one focus is to sustainably grow long term shareholder value. The Company undertook a Strategic Review during FY2011 to ensure that it was focused on putting in place an optimal strategy to generate shareholder value. Following this Strategic Review, Tassal extended its Strategic Plan out to FY2016. To ensure that the Company maintains its focus on sustainable long term shareholder value creation, Tassal will now commence working on a Strategic Plan out to FY2025 – albeit the Company will still continue to report on its progress towards the Strategic Plan FY2016 targets. Tassal’s goal is to position the Company to deliver sustainable acceptable returns to its shareholders as the leader in salmon in Australia, selling a highly recognised and ethical valued brand and product to consumers and retailers. Tassal will be recognised as the champion of the Australian sustainable salmon industry for consumers, customers and regulators, and values and be valued by our employees. To ensure that Tassal delivers on this strategy, Tassal’s number one focus for FY2012 and beyond is to maximise domestic market per capita consumption. With the domestic market growing by 21.59% to 9,691 hog tonnes for Tassal in 1H12, Tassal is clearly delivering on this cornerstone to its growth strategy. Tassal has been building a strong brand, leading product innovation, and responding to consumer and customer needs. The Company’s focus will remain on ensuring global best practice is achieved with respect to fish growing costs, and maintaining global best practice processing costs and yields. An understanding of the main drivers of the Strategic Plan FY2016 (and their performance in 1H12) is essential in interpreting the results as against the Strategic Plan – both for FY2012 and beyond. Set out below is a summary of the key metrics that underpin the Strategic Plan – and the progress over 1H12:

5. SUBSEQUENT EVENTS There has not arisen in the interval between the end of the half-year and the date of this report, any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of Tassal, to affect significantly the operations of the consolidated entity, the results of those operations, or the state affairs of the consolidated entity, in subsequent financial years.

6. BUSINESS DEVELOPMENT The Company has and continues to examine a number of business development opportunities to grow the business organically and by acquisition.

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7. INDEPENDENCE DECLARATION BY AUDITOR There were no former partners or directors of Deloitte Touche Tohmatsu who are or were, at any time during the half-year ended 31 December 2011, an officer of the Group.

The auditor’s independence declaration made under section 307C of the Corporations Act 2001 is set out on page 9 and forms part of this Directors’ Report for the half-year ended 31 December 2011.

8. ROUNDING OFF OF AMOUNTS The Company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance with that Class Order amounts in the Directors’ Report and the half-year financial report have been rounded off to the nearest thousand dollars, unless otherwise stated.

Signed in accordance with a resolution of Directors made pursuant to Section 306 (3) of the Corporations Act 2001.

On behalf of the Directors

A. McCallum Chairman Melbourne, 21 February 2012

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AUDITOR’S INDEPENDENCE DECLARATION Tassal Group Limited and its Controlled Entities Financial Report for the Half-Year Ended 31 December 2011

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21 February 2012 Dear Board Members

Tassal Group Limited In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Tassal Group Limited. As lead audit partner for the review of the financial statements of Tassal Group Limited for the half-year ended 31 December 2011 I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

(ii) any applicable code of professional conduct in relation to the review. Yours sincerely DELOITTE TOUCHE TOHMATSU

David Harradine Partner Chartered Accountants Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

The Board of Directors Tassal Group Limited 2 Salamanca Square Battery Point TAS 7004

Deloitte Touche Tohmatsu A.B.N. 74 490 121 060 ANZ Centre Level 9 Hobart Tas 7000 GPO Box 777 Hobart Tas 7001 Australia DX 197 Tel: +61 (0) 3 6237 7000 Fax: +61 (0) 2 6237 7001 www.deloitte.com.au

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CONDENSED CONSOLIDATED INCOME STATEMENT Tassal Group Limited and its Controlled Entities Financial Report for the Half-Year Ended 31 December 2011

10

Note

Half-Year Ended 31 Dec 2011


$’000 $’000

Revenue 2 (a) 125,369 107,972

Other income 2 (b) 2,075 2,012

Fair value adjustment of biological assets 2,900 5,230

Share of profits / (losses) of associates accounted for using the equity method

4

106

(310)

Changes in inventories of finished goods and work in progress

21,051

15,517

Raw materials and consumables used (91,531) (70,402)

Employee benefits expense (22,338) (19,940)

Depreciation and amortisation expense 2 (c) (7,943) (5,931)

Finance costs 2 (c) (3,042) (3,539)

Other expenses (8,673) (10,971)

Profit before income tax expense 17,974 19,638

Income tax expense (5,012) (5,636)

Profit for the period 12,962 14,002

Half-Year Ended Half-Year Ended 31 Dec 2011 31 Dec 2010 Net tangible asset backing per ordinary share (cents per share) 168.54 150.55 Earnings per ordinary share(EPS)*

Basic (cents per share) 8.86 9.65

Diluted (cents per share) 8.81 9.61

* Weighted average numbers of ordinary shares on issue used as the denominator in the calculation of EPS Number for Basic EPS 146,304,404 145,136,658

Number for Diluted EPS 147,145,096 145,680,636

Notes to the condensed financial statements are included on pages 15 to 21.

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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Tassal Group Limited and its Controlled Entities Financial Report for the Half-Year Ended 31 December 2011

11

Note



$’000 $’000

Profit for the period 12,962 14,002

Other comprehensive income

Gain/(loss) on cash flow hedges taken to equity 33 -

Gain/(loss) on revaluation of property (315) -

Income tax (expense)/ benefit relating to components of other comprehensive income

85

-

Other comprehensive income for the period (net of tax)

(197)

-

Total comprehensive income for the period attributed to owners of the parent

12,765

14,002

Notes to the condensed financial statements are included on pages 15 to 21. F

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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION Tassal Group Limited and its Controlled Entities Financial Report for the Half-Year Ended 31 December 2011

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Equity-

Note

As at 31 Dec 2011

As at 30 June 2011

As at 31 Dec 2010

$'000 $'000 $'000

Current Assets

Cash and cash equivalents 12,353 7,960 7,098

Trade and other receivables 9,803 8,477 18,229

Inventories 69,397 48,346 55,502

Biological assets 140,540 147,938 131,987

Current tax assets - - 194

Other financial assets 544 511 511

Other 1,156 828 448

Total Current Assets 233,793 214,060 213,969

Non-Current Assets

Trade and other receivables - - 561

Investments accounted for using the equity method

4 6,760 6,654 7,117

Other financial assets 97 103 108

Property, plant and equipment 207,342 200,169 188,084

Goodwill 14,851 14,851 14,851

Other intangible assets 24,184 24,184 24,184

Other 507 522 537

Total Non-Current Assets 253,741 246,483 235,442

Total Assets 487,534 460,543 449,411

Current Liabilities

Trade and other payables 45,425 38,208 43,353

Borrowings 42,519 46,299 50,200

Provisions 4,206 3,743 3,608

Other 821 844 865

Total Current Liabilities 92,971 89,094 98,026

Non-Current Liabilities

Borrowings 57,385 49,115 50,136

Deferred tax liabilities 50,886 45,959 41,294

Provisions 671 692 658

Other - 2 6

Total Non-Current Liabilities 108,942 95,768 92,094

Total Liabilities 201,913 184,862 190,120

Net Assets 285,621 275,681 259,291

Equity

Issued capital 5 154,027 154,027 154,027

Reserves 9,769 9,865 9,753

Retained Earnings 6 121,825 111,789 95,511

Total Equity 285,621 275,681 259,291

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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Tassal Group Limited and its Controlled Entities Financial Report for the Half-Year Ended 31 December 2011

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Ordinary shares

Asset

revaluation reserve

Hedging reserve

settled employee benefits reserve

Retained earnings

Total attributable to owners of the parent

$’000 $’000 $’000 $’000 $’000 $’000 Balance as at 1 July 2010 151,177 9,515 - 117 84,393 245,202 Profit for the period - - - - 14,002 14,002 Gain/(loss) on cash flow hedge (net of any related tax)

-

-

-

-

-

-

Gain/(loss) on revaluation of property (net of any related tax)

-

-

-

-

-

-

Total comprehensive income for the period

-

-

-

-

14,002

14,002

Payment of dividends - - - - (2,884) (2,884) Issue of shares pursuant to Dividend Reinvestment Plan

911

-

-

-

-

911

Issue of shares pursuant to underwriting agreement relating to Dividend Reinvestment Plan

1,971

-

-

-

-

1,971 Share issue costs (32) - - - - (32) Issue of shares pursuant to Executive Long Term Incentive Plan

-

-

-

-

-

-

Recognition of share-based payments

-

-

-

121

-

121

Balance as at 31 December 2010 154,027 9,515 - 238 95,511 259,291 Balance as at 1 July 2011 154,027 9,515 - 350 111,789 275,681 Profit for the period - - - - 12,962 12,962 Gain/(loss) on cash flow hedge (net of any related tax)

-

-

23

-

-

23

Gain/(loss) on revaluation of property (net of any related tax)

-

(220)

-

-

-

(220)

Total comprehensive income for the period

-

(220)

23

-

12,962

12,765

Payment of dividends - - - - (2,926) (2,926) Issue of shares pursuant to Dividend Reinvestment Plan

-

-

-

-

-

-

Issue of shares pursuant to underwriting agreement relating to Dividend Reinvestment Plan

-

-

-

-

-

- Share issue costs - - - - - - Issue of shares pursuant to Executive Long Term Incentive Plan

-

-

-

-

-

-

Recognition of share-based payments

-

-

-

101

-

101

Balance as at 31 December 2011 154,027 9,295 23 451 121,825 285,621


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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Tassal Group Limited its and Controlled Entities Financial Report for the Half-Year Ended 31 December 2011

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Note Half-Year Ended 31 Dec 2011


$’000 $’000

Cash Flows from Operating Activities

Receipts from customers 138,025 124,009

Payments to suppliers and employees (114,903) (101,710)

Interest received 111 51

Interest and other costs of finance paid (4,131) (3,754)

Net cash (used in)/provided by operating activities

19,102 18,596

Cash Flows from Investing Activities

Payment for property, plant and equipment (16,310) (22,239)

Proceeds from sale of property,

plant and equipment

38

-

Net cash (used in)/ provided by investing activities

(16,272) (22,239)

Cash Flows from Financing Activities

Proceeds from borrowings 27,264 11,592

Repayment of borrowings (22,775) (11,705)

Payment for share underwriting costs - (45)

Dividends paid to members of the parent entity (2,926) (2)

Net cash (used in)/ provided by financing activities

1,563 (160)

Net increase / (decrease) in cash and cash equivalents

4,393

(3,803) Cash and cash equivalents at the beginning of the Half-Year

7,960

4,252

Cash and cash equivalents at the end of the Half-Year

7

12,353

449

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS Tassal Group Limited its and Controlled Entities Financial Report for the Half-Year Ended 31 December 2011

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1. Summary of accounting policies

a) Statement of compliance The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 ‘Interim Financial Reporting’. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 ‘Interim Financial Reporting’. The half-year financial report does not include all the notes of the type normally included in an annual financial report and should be read in conjunction with the annual financial report for the financial year ended 30 June 2011, together with any public announcements made by Tassal Group Limited and its controlled entities during the half-year ended 31 December 2011, in accordance with the continuous disclosure requirement of the Listing Rules of the Australian Securities Exchange. The half-year financial report was authorised for issue by the Directors on 21 February 2012.

b) Basis of preparation

The condensed consolidated financial statements have been prepared on the basis of historical cost, except if relevant, for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted. The Company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance with that Class Order amounts in the Directors’ Report and the half-year financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.

c) Significant accounting policies

The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the Company’s 2011 annual financial report for the financial year ended 30 June 2011, other than as detailed below. Where appropriate figures for the comparative period have been restated to make them comparable with the disclosures adopted for the half-year ended 31 December 2011. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

d) Adoption of new and revised Accounting Standards

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current reporting period. There are no new and revised Standards and amendments thereof and Interpretations effective for the current reporting period that are relevant to the Group. The adoption of all the new and revised Standards and Interpretations has not resulted in any changes to the Group’s accounting policies and has no effect on the amounts reported for the current or prior periods. The new and revised Standards and Interpretations has not has a material impact and not resulted in changes to the Group’s presentation of, or disclosure in, its half-year financial statements

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Note Half-Year Ended 31 Dec 2011


$’000 $’000

2. Profit from operations

Profit from operations before income tax expense includes the following items of revenue and expense:

(a) Revenue

Revenue from the sale of goods 125,250 107,912

Interest revenue 111 51

Rental revenue 8 9

Total revenue 125,369 107,972

(b) Other Income

Gain/(loss) on disposal of property,

plant and equipment

38 (86)

Government grants received 1,122 968

Other 915 1,130

Total other income 2,075 2,012

(c) Expenses

Depreciation of non-current assets 7,928 5,916

Amortisation of non-current assets 15 15

Total depreciation and amortisation 7,943 5,931

Interest – other entities 1,632 2,026

Finance lease charges 1,410 1,513

Total finance costs 3,042 3,539

Cost of sales

117,266 107,570

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Half-Year Ended Financial Year Ended Half-Year Ended

31 December 2011

30 June 2011

31 December 2010

Cents per

share

Total $’000

Cents per

share

Total $’000

Cents per

share

Total $’000

3. Dividends

(a) Recognised amounts

Fully paid ordinary shares:

Interim dividend paid in respect of current financial year (Unfranked)

-

-

-

-

-

-

Final dividend paid in respect of prior financial year (Unfranked)

2.00

2,926

2.00

2,884

2.00

2,884

2.00 2,926 2.00 2,884 2.00 2,884 On 22 August 2011, the Directors declared a final unfranked dividend of $2.926 million (2.00 cents per ordinary share) in respect of the financial year ended 30 June 2011. The dividend was paid on 6 October 2011.

(b) Unrecognised amounts

Fully paid ordinary shares:

Interim dividend in respect of current financial year (Unfranked)

-

-

-

-

-

-

Final dividend in respect of current financial year (Unfranked)

-

-

2.00

2,926

-

-

- - 2.00 2,926 - -

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4. Investments accounted for using the equity method

Name of Entity Principal activity

Ownership Interest Contribution to Net Profit

Carrying Value of Investment


%


%


$’000


$’000


$’000


$’000

Associates:

Salmon Enterprises of Tasmania Pty Ltd (i)

Atlantic salmon hatchery

68.94

68.94

106

(310)

6,760

7,117

106 (310) 6,760 7,117

(i) The Consolidated entity owns 68.94% (2010: 68.94%) of the issued capital

and 61.22% (2010: 61.22%) of the voting shares of Salmon Enterprises of Tasmania Pty Ltd (“Saltas”). Saltas supplies smolt to the Tasmanian aquaculture industry. Saltas is an Associate of the Company, however the Board does not consider it appropriate to consolidate Saltas as the nature of the voting powers of the Board members as detailed in the Constitution of Saltas is such that the consolidated entity does not have the capacity to control Saltas.

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As at As at 31 December

2011 31 December

2010

Number $’000 Number $’000 5. Issued capital

(a) Ordinary share capital (fully paid) Ordinary shares 146,304,404 154,027 146,304,404 154,027 (b) Movements in ordinary share capital Balance as at the beginning of the half-year 146,304,404 154,027 144,197,882 151,177

Issue of shares pursuant to Dividend Reinvestment Plan (i)

-

-

665,861

911

Issue of shares pursuant to underwriting agreement relating to Dividend Reinvestment Plan (ii)

-

-

1,440,661

1,971 Share issue costs - - - (32) Issue of shares pursuant to Executive Long Term Incentive Plan

-

-

-

-

Balance as at the end of the half-year

146,304,404

154,027

146,304,404

154,027

(c) Issuances, repurchases and repayment of equity securities

(i) Shares issued pursuant to the Company’s Dividend Reinvestment Plan:

Previous half-year: On 11 October 2010, 665,861 ordinary shares were issued pursuant to the Company’s Dividend Reinvestment Plan at an issue price of $1.3680 per share. A discount of 5% was applicable.

(ii) Shares issued pursuant to underwriting agreement relating to the Company’s Dividend Reinvestment Plan: Previous half-year: On 11 October 2010, 1,440,661 ordinary shares were issued to Austock Securities Limited at an issue price of $1.3680 per share and pursuant to an underwriting agreement relating to the Company’s Dividend Reinvestment Plan.

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As at As at As at

Note

31 December 2011

30 June 2011

31 December 2010

$’000 $’000 $’000 6. Retained earnings

Balance at the beginning of the period 111,789 84,393 84,393 Profit attributable to members of the parent entity 12,962 30,280 14,002 Dividends provided for or paid 3 (2,926) (2,884) (2,884) Balance at the end of the period 121,825 111,789 95,511

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7. Notes to the condensed consolidated statement of cash flows

Reconciliation of cash

For the purposes of the Condensed Consolidated Statement of Cash Flows, cash includes cash on hand and at bank and short-term deposits at call, net of outstanding bank overdrafts. Cash as at the end of the period as shown in the Condensed Consolidated Statement of Cash Flows is reconciled as follows:

As at As at

31 December 2011

31 December 2010

$’000 $’000 Cash 12,353 7,098 Bank overdrafts - (6,649)

12,353 449

8. Contingent liabilities and

contingent assets There are no contingent liabilities or contingent assets at the date of this half-year report.

9. Seasonality

The consolidated entity’s principal activities, being the farming, processing and marketing of Atlantic Salmon are not generally subject to material or significant seasonal fluctuations.

10. Segment information

The Group has adopted AASB 8 “Operating Segments” and AASB 2007-3 “Amendments to Australian Accounting Standards arising from AASB 8” with effect from 1 January 2009. AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. In contrast, the predecessor Standard (AASB 114 “Segment Reporting”) required an entity to identify two sets of segments (business and geographical), using a risk and rewards approach, with the entity’s system of internal financial reporting to key management personnel serving only as a starting point for the identification of such segments. The Group previously reported two segments under AASB 114 based on geographical location, however Tassal’s system of internal reporting to key management personnel are such that there is only one reportable segment as defined in AASB 8, this being the sale of finfish.

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DIRECTORS’ DECLARATION Tassal Group Limited its and Controlled Entities Financial Report for the Half-Year Ended 31 December 2011

22

The Directors declare on 21 February 2012 that:

a) in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and

b) in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity.

Signed in accordance with a resolution of the Directors made pursuant to Section 303(5) of the Corporations Act 2001.

On behalf of the Directors

A. McCallum Chairman Melbourne, 21 February 2012

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INDEPENDENT REVIEW REPORT Tassal Group Limited its and Controlled Entities Financial Report for the Half-Year Ended 31 December 2011

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Independent Auditor’s Review Report to the Members of Tassal Group Limited

We have reviewed the accompanying half-year financial report of Tassal Group Limited, which comprises the condensed consolidated statement of financial position as at 31 December 2011, and the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of cash flows and the condensed consolidated statement of changes in equity for the half-year ended on that date, selected explanatory notes and, the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the end of the half-year or from time to time during the half-year as set out on pages 10 to 22. Directors’ Responsibility for the Half-Year Financial Report The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2011 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Tassal Group Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Auditor’s Independence Declaration In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Tassal Group Limited, would be in the same terms if given to the directors as at the time of this auditor’s report. Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Tassal Group Limited is not in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2011 and of its performance for the half-year ended

on that date; and (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. DELOITTE TOUCHE TOHMATSU

David Harradine Partner Chartered Accountants Hobart, 21 February 2012 Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

Deloitte Touche Tohmatsu A.C.N. 74 490 121 060 ANZ Centre Level 9 22 Elizabeth Street Hobart TAS 7000 GPO Box 777 Hobart TAS 7001 Australia DX 197 Tel: +61 (0) 3 6237 7000 Fax: +61 (0) 3 6237 7001 www.deloitte.com.au

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For personal use only Tassal Group Limited’000 $’000 $’000 % ... Income tax expense $870 Net profit ... sustainable growing earnings base for the Company. Underlying results