Tassal : Sustainability Report 2016

SUSTAINABILITY REPORT

2016

1. About this Report

   This report is Tassal's sixth annual sustainability report, and has been compiled using the Global Reporting Initiative's (GRI) G4 requirements for an 'In Accordance - Core' report. The report outlines the performance of material sustainability topics for

   the Tassal Group FY2016 (1st July 2015 to 30th June 2016), presented together with year on year data trends. Restatements of previous years' data are referred to throughout the report where applicable.

   Report Boundary

   The report boundary has significantly changed from our 2015 report. This year's report boundary additions include:

   • De Costi Seafoods (a wholly owned subsidiary of Tassal Group based in Sydney, NSW)

   • A second Salmon smolt hatchery at Rookwood Road, Tasmania and,

   • Tassal's new fishmeal and fish oil (Salmon) processing facility in Triabunna, Tasmania.

     Reporting on Material Topics and Applying the GRI Principles for Defining Report Content

     A materiality assessment was not conducted for this reporting period, as, although there have been significant changes to the business as a result of the acquisition of De Costi Seafoods, we believe that the core topics identified in our FY2015 materiality assessment are still relevant across the business. Additional contextual information as a result of the business expansion is provided. Tassal's material topics are available in Appendix 1. The GRI's 'Principles for Defining Report Content' (Sustainability Context; Stakeholder Inclusiveness; Materiality and Completeness) were applied as follows:

     Sustainability Context and Completeness: The materiality assessment conducted in FY2015 provided participants with an extensive list of economic, environmental and social GRI Aspects within a local, national and global context.

     Tassal Group Limited

     ACN 106 067 270

     GPO Box 1645

     Hobart, Tasmania AUSTRALIA 7000

     [e-mail] www.tassal.com.au

     Stakeholder Inclusiveness: A comprehensive

     cross-departmental representation of Tassal's internal stakeholders participated in the FY2015 materiality assessment. While external stakeholders were not specifically contacted in the preparation of this report, Tassal's extensive Community Engagement program ensures that all key stakeholders are part of everyday communication activities, the results of which are published in this report.

     Materiality: Materiality assessment conducted in FY2015.

     Going forward, Tassal will conduct a materiality assessment in preparation for the FY2017 sustainability report and will continue this process every second year.

     Data

     As we work towards fully incorporating De Costi Seafoods into Tassal Group operations, we are progressively evolving the data that we include for sustainability report readers. In this transition phase, we include the following data:

     Data	Tassal Group Salmon	De Costi Seafoods
     Environmental	Marine Operations, Freshwater Hatcheries and Processing	N/A*
     Animal Welfare	Marine Operations, Freshwater Hatcheries and Processing	N/A*
     Human Resources	All
     Quality	All
     Safety (including contractors)	All
     Financial	All (complete financial statements for the Tassal Group are available in the Tassal Group Limited Annual Report 2016 www.tassal.com.au/annual-reports/).

     *De Costi environmental and animal welfare data were not available at the time of report compilation due to a streamlining of reporting. This data will be provided in the next reporting period.

     Assurance

     External report assurance was not specifically sought for this report, however, a third party review of Tassal's reporting against the GRI G4 sustainability reporting framework was conducted by sustainability consultancy ZOOiD.

     The following data is independently audited on an annual basis:

   • Financial

   • Food quality

   • Salmon freshwater and marine operations

     (Aquaculture Stewardship Council (ASC) certification), and

   • Safety management system (AS4801 and OHS AS 18001: 2007).

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   Contents

   1. About this Report

   2

   2. Reflections

   4

   3. The Tassal Group

   9

   4. Strategy

   14

   5. Environment

   31

   6. Sustainable Salmon Feed

   44

   7. Animal Welfare

   46

   8. People and Communities

   51

   9. Workplace Health and Safety

   61

   10. Quality Assurance

   66

   11. Glossary

   68

   12. References

   73

   13. Appendix

   74

   14. GRI Content Index

   77

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2. Reflections

Message from Allan McCallum, Chairman and Mark Ryan, Managing Director & CEO

Traditionally, our company's annual sustainability report is published early in the calendar year and our leadership commentary is confined to the 12-month reporting period of the previous financial year. This year, however we are departing from that usual format as an acknowledgment of extraordinary circumstances in more recent months.

In sustainability terms, when we come to report on FY2017 early in 2018, we will be recording it as a most challenging period in our company's recent history.

Financial year 2016 has seen a significant change in Tasmania in the review and scrutiny of Salmon farming. By and

large, the increased scrutiny has been positive and constructive with respect to the communities in which we operate, the many suppliers we deal with, the scientific community, Governments at all levels, our customers, shareholders and industry employees. As a business and industry, we have a lot to be proud of

in terms of the sustainability and health benefits of Salmon as a global protein, world standard accreditations, high level of economic contribution to Tasmania, high level of innovation and continued investment in farming and processing

in Australia.

At the core of our success, we owe it to our dedicated team at Tassal, who have worked tirelessly to deliver

exceptional results despite the challenges experienced. We are immensely proud

of all our people at Tassal and take this opportunity to thank them for their hard work.

Overall, Tassal farms the ocean to produce a high quality / healthy source of protein, leveraging its industry leading scientific know how, that is both

sustainable and efficient in its production, respecting the resources of the earth and the wider society in which it operates.

We have delivered earnings growth in nine out of the past 10 years, and in the past five years our Total Shareholder Returns have been in the top quartile of the ASX 200. Consumption of Salmon has approximately doubled in Australia since 2004/05, which has been largely led by Tassal's focus on domestic per capita consumption initiatives, significant investment in marketing and education to consumers, and investment in Salmon value added products. Tassal has also delivered strong capital investment in hatchery and farming infrastructure, underpinning future growth. The outlook and demand for Salmon and Seafood protein is significant, both domestically

and internationally, and Tassal is well placed to continue to meet this growing need from consumers.

As Tassal and the Tasmanian Salmon industry seek to grow Salmon farming output, we acknowledge that this will bring a heightened level of stakeholder interest. Growth will also bring an element of risk to optimal growth and forecast plans, particularly as we grow into newer regions or increase the level of farming

in existing regions. Ensuring social license and operational planning are

co-dependent through strategic planning processes will be critical.

In late calendar year 2016, conditions at Macquarie Harbour required careful

response and adaption. The challenges at Macquarie Harbour are complex. No one should be in any doubt as to how seriously we take the issues. We acknowledge a number of environmental non-compli- ances over the summer of 2016-17 at

one of our marine leases in Macquarie Harbour. Thankfully, by autumn of 2017 a substantial recovery and a return to compliance was underway at Macquarie Harbour. This was the culmination of an

incredible amount of work from Tassal and peak science and environmental experts who worked nimbly to ensure recovery solutions were in place.

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