REAL FOOD LIMITED
ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2017
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Contents
Chairman and CEO Letter
Director’s Report
Auditor’s Independence
Declaration
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Statement
of Financial Position
Consolidated Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
Notes to the Financial Statements
Director’s Declaration
Independent Auditor’s Report
Additional Information for
Listed Public Companies
Corporate Directory
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OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT CHAIRMAN AND CEO LETTER
Dear Shareholder
The Directors of Oliver’s Real Food Limited
(“Olivers”, the “Company”, or “OLI”) are pleased
to present the first annual report since the
company’s initial public offering on the Australian
Securities Exchange on 21 June 2017.
The 2017 financial year (“FY2017”) was one that
positioned our business for a healthy outlook,
including the achievement of numerous key
milestones that shape our organisation:
→ Opening 3 new stores at Chinderah,
Ferry Park and Ballarat;
→ Buyback of 7 franchises, with one more
completed after the close of the year, to
fulfill the strategy for 100% company owned
structure;
→ Delivering close to $21 million in revenue,
being 21% higher than the prior year and on a
trajectory to achieve $42m in FY18;
→ Completing sizing and site identification
survey to confirm $1bn east coast highway
food market and Oliver’s market share is
approximately 3% of this total;
→ Significant investment in the Oliver’s
proprietary technology platform known as
OliVerse, making considerable progress
towards delivery of a single-point platform
and internal capabilities that
provide operating efficiency
via daily purchasing
& inventory data to
stores, distribution
centres and
kitchens;
→ Renewal of
the Australian
Certified Organic
(ACO) Standard,
allowing the
Company to label
certain processes
and products as
‘Certified Organic’.
This is a core part
of the Company’s
branding. Qualifying for
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this certificate requires rigorous adherence
to the ACO rules not only by Oliver’s but also
by its suppliers;
→ The successful launch of a new and
innovative range of plant-based vegan and
vegetarian offerings from the IKU company,
in addition to the introduction of organic
edamame beans and Australia’s first organic
coconut water offering;
→ Completion of the assignment of the global
registered and unregistered intellectual
property rights to Oliver’s Real Food Limited;
→ Buy the remaining 24% interest in Retail
Technology Services Pty Ltd to enable
Oliver’s Real Food Limited to control design,
development and delivery of technology for
the brand and its related entities;
→ Strengthening our leadership team with the
appointment of key executives holding prior
C suite experience, the build out of the Board
to deepen financial expertise and broaden
exposure to retail operations; and
→ Successfully listing on the Australian stock
exchange, after raising $15m, in a difficult
market environment.
STRONGLY POSITIONED TO ACHIEVE
FY18 PROSPECTUS FORECAST
We have already changed the way
hundreds of thousands of people
eat when they are travelling,
and many people tell us that
we have “changed their
lives” (and their health)
for the better. But this
positive impact is just the
beginning for Oliver’s.
The Board believes that
Oliver’s is well positioned
for substantial growth,
leveraging our first mover
advantage in providing
organic healthy fast food
free of artificial additives on
Australia’s major highways.
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Importantly, the distribution
and product strategies
that have been used
to grow the business
over many years
will be enhanced
and the expansion
efforts will be
accelerated from
the capital raised
on 21 June 2017.
As a newly listed
entity, the Board and
Management of Oliver’s
Real Food Limited are
focused on maximising
FY18 potential of the
business and creating sustained
growth. This will be delivered via:
→ Continued roll out of new stores across
Australia, having plans to operate 33 stores
by end FY18 expected to deliver $42m
annualised revenue;
→ New store acquisitions which are consistent
with the growth plans detailed in the Oliver’s
Prospectus. We are pleased to announce
that we have strong momentum in place, and
since 30 June 2017 we have secured strategic
locations in Maryborough and Euroa. More
acquisition announcements will follow
shortly.
→ Completion of buyback for the remaining
interest in The Delicious and Nutritious Food
Company Pty Ltd, producer of the Red
Dragon Organics range of specialist organic
beverages being distributed through 500+
retailers and cafes;
→ Internal efficiency programmes that were
established in FY17, delivering Cost of Goods
and Staff Cost saving targets, after two
months of trading in FY18;
→ Expanding the capability of our operational
management teams including our store
managers, regional managers and executive
team who all support store performance,
customer advocacy, brand momentum and
shareholder returns;
→ Investing in the Oliver’s
Marketplace online sales
platform to enable Oliver’s Real
Food Shop to deliver a richer
online sales experience
across a broader range of
products to a wider market
with digital advertising
plans for FY18;
→Continued expansion
of our product offerings
across various channels,
with Oliver’s Nespresso
compatible compostable
organic coffee capsules proving
an example of recent success in
product extension to new markets
online and Red Dragon’s organic lemon,
lime and bitters growing its reach and overall
sales.
Given the progress being made in FY18 to date,
the Directors feel Oliver’s Real Food Limited is
well positioned to achieve its FY18 Prospectus
forecast.
We would like to thank our committed and
passionate staff across Australia, who work
tirelessly on a daily basis to deliver the solid
growth and operational improvements across
the business. Thank you also to the Board and
the various advisors that successfully guided
Oliver’s Real Food Limited through its listing on
the Australian stock exchange on 21 June 2017.
Thank you for your confidence and continued
support in these early stages of our thriving
listed organisation. Your Directors believe
Oliver’s is well positioned to deliver healthy
returns for the many OLI shareholders in the year
ahead.
Mark Richardson
Chairman
Jason Gunn
Chief Executive Officer
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT OUR COMPANY
Oliver’s Real Food is
the world’s first certified organic
fast food chain with stores at
locations along the arterial highways
of Australia’s eastern seaboard.
We provide our customers with
premium quality, “real food”
that is fresh, natural, and free
from artificial additives,
7 days a week.
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OLIVER’S REAL FOOD LIMITED
2017 ANNUAL REPORT 7
OUR MISSION
To make Real Food available
conveniently on the highways
of Australia.
To educate and empower individuals
to live happier and healthier lives,
through good food choices, and
To increase consciousness
for positive personal, social &
environmental impacts from
our food choices.
Oliver’s plans to operate 33 stores by
end of FY18 and over 60 stores within
the next few years
FY18
FORECAST
33 STORES
1. WYONG NTH - AUG 2005
12. GUNDAGAI - JUN 2015
23. MARYBOROUGH - SEP 2017
2. WYONG STH - APR 2006
13. GOULBURN - JUL 2015
24. EUROA - FY18
3. HEXHAM - APR 2009
14. PENLINK OUT - SEP 2015
25. PORT MACQUARIE - FY18
4. OFFICER OUT - DEC 2013
15. COFFS HARBOUR - DEC 2015
26. BULAHDELAH - FY18
5. OFFICER IN - JAN 2014
16. PENLINK IN - JAN 2016
27. HALFWAY CREEK - FY18
6. EASTLINK OUT - MAR 2014
17. LITHGOW - MAY 2016
28. LITTLE RIVER OUT - FY18
7. GEELONG STH - JUN 2014
18. CHINDERAH - DEC 2016
29. SUTTON FOREST - FY18
8. GEELONG NTH - JUL 2014
19. FERRY PARK - MAY 2016
30. BATHURST - FY18
9. WALLAN NTH - DEC 2014
20. BALLARAT - JUN 2017
31. HATTON VALE - FY18
10. WALLAN STH - DEC 2014
21. ARATULA - JUL 2017
32. COONALPYN - FY18
11. EASTLINK IN - FEB 2015
22. HORSHAM - AUG 2017
33. DUBBO - FY18
Note: Circumstances may change and the Company may not necessarily open future sites in the order presented above
and may substitute other locations for those listed above, at the sole discretion of the Board
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OLIVER’S REAL FOOD LIMITED
2017 ANNUAL REPORT 9
OLIVER’S REAL FOOD LIMITED ABN 33 166 495 441
AND CONTROLLED ENTITIES, DIRECTORS’ REPORT
Your Directors present their report on the consolidated entity (referred to herein as the Group)
consisting of Oliver’s Real Food Limited (Oliver’s) and its controlled entities for the financial year ended
30 June 2017. The information in the preceding Operating and Financial Review forms part of this
Directors Report for the financial year ended 30 June 2017 and is to be read in conjunction with the
following information:-
GENERAL INFORMATION
DIRECTORS
The following persons were directors of Oliver’s Real Food Ltd during or since the end of the financial
year up to the date of this report:
→ Mark Anthony Richardson - appointed 26 November 2016
→ Jason Antony Gunn
→ Katherine Hatzis
→ John Flower Diddams - appointed 11 August 2016
→ Peter Rodwell - appointed 26 November 2016
Particulars of each Director’s experience and qualifications are set out later in this report.
PRINCIPAL ACTIVITIES
During the financial year the principal continuing activities of the consolidated entity consisted of
management and franchising of Quick Service Restaurants (“QSR”) in Australia under the branding of
“Oliver’s Real Food”
DIVIDENDS PAID OR RECOMMENDED
No dividend was declared or paid during the reporting period.
REVIEW OF OPERATIONS
At the end of the reporting period, the Group operated 20 Oliver’s stores in Australia - 19 Corporate
stores and 1 franchised store. Key statutory financial metrics in respect of the current period and the
prior financial period are summarised in the following table:
Revenue from ordinary activities ($m)
Raw materials and consumables used ($m)
Gross profit ($m)
Gross margin
Earnings before interest, taxes, depreciation and
amortisation (EBITDA) ($m)
Net (loss) / profit after tax attributable to members ($m)
Earnings per share - basic (cents)
Net Assets ($m)
Net Tangible Assets ($m)
Cash and cash equivalent ($m)
2017
20.7
(6.8)
13.9
67.2%
(2.3)
(2.9)
(0.03)
23.8
17.1
6.3
2016
17.1
(6.6)
10.5
61.3%
1.8
0.6
0.01
3.1
2.1
0.8
Change
21.2%
2.6%
32.9%
5.9%
(230.4%)
(559.8%)
(400.0%)
664.9%
732.6%
657.0%
The Group’s revenues increased by 21.2% to $20.7 million mainly due to like-for-like sales growth, new
store openings and the buyback of certain franchised stores.
This increase in revenues combined with strong business controls flowed through to increased gross
profit for the financial period of $13.9 million with gross margin increased from 61.3% to 67.2%.
EBITDA, NPAT and EPS were impacted by significant items. These included $0.7 million of costs
associated with the IPO and $0.1 million on loss from disposal of fixed assets. Further, additional
corporate overheads were incurred for the IPO and for the anticipated growth in FY2018,
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
On 21 June 2017, Oliver’s successfully listed its shares on ASX having raised $15,000,000 (before costs)
by initial public offering.
On 1 December 2016, the company acquired all the equity issued by Revilo’s Pty Limited for total
consideration of $455,416 (including 1,833,330 shares at $0.19 each). Revilo’s Pty Limited is the holding
company of its wholly-owned subsidiaries: a) Coffs Harbour Franchise Pty Ltd which is the franchisee of
the Oliver’s franchised store; and b) Slacks Creek Pty Ltd which is the franchisee of the Oliver’s Slacks
Creek store.
On 1 May 2017, the company acquired a further 24% of the outstanding shares in Retail Technology
Services Pty Ltd for a share consideration at a fair value of $103,625 (i.e. 500,000 ordinary shares at
$0.20725 each). This brings the Parent entity interest in Retail Technology Services Pty Ltd to 100%.
During the year, the Group acquired four businesses with the intention to convert the existing
businesses into Oliver’s branded stores as well as bought back 6 franchised stores, the details of which
are included in note 14 of the Financial Report.
In June 2017, the Group acquired the global intellectual property of ‘Oliver’s’ for a share consideration
of $500,000, settled by way of the issue of 2.5m shares, from Taonga Nui Holdings Limited, a company
associated with two directors of the company, details of which are included in note 28 of the Financial
Report.
In the opinion of the Directors, there were no other significant changes in state of affairs of the Group
that occurred during the financial year under review.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL PERIOD
On 7 July 2017, the company acquired the remaining 25% equity interest in The Delicious & Nutritious
Co Pty Ltd (the owner of the intellectual property and the business known as Red Dragon), which the
company already held 75% equity interest.
On 13 July 2017, the Group opened a new store at Aratula on the Cunningham Highway in Queensland.
On 1 August 2017, the company acquired the remaining Oliver’s franchised store from the franchisee at
Eastlink Outbound in Victoria.
On 10 August 2017, the company entered into a contract to acquire a QSR business located at Euroa
in Victoria, which is expected to be completed during September 2017. This site is scheduled to be
developed into an Oliver’s Real Food Restaurant during 2017.
On 17 August 2017, the Group opened a new store at Horsham in Victoria.
On 1 September 2017, the company acquired the land and buildings as well as a QSR business located
at Maryborough in Queensland. This site is scheduled to be developed into an Oliver’s Real Food
Restaurant during 2017.
No other material events occurred subsequent to the financial year under review.
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LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Information about likely developments in the operations of the Group and the expected results of those
operations in future financial years have not been included in this financial report as disclosure of the
information would be likely to result in unreasonable prejudice to the Group. However, the Group will
continue to pursue the increase in profitability of its Oliver’s stores network during the next financial
year.
Please also refer to the Prospectus for other likely developments of the Group during FY2018.
ENVIRONMENTAL REGULATION
The consolidated entity is not subject to any significant environmental regulation under Australian
Commonwealth or State law.
INDEMNITY AND INSURANCE OF OFFICERS
The company has indemnified the directors and executives of the company for costs incurred, in their
capacity as a director or executive, for which they may be held personally liable, except where there is
a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the directors
and executives of the company against a liability to the extent permitted by the Corporations Act
2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the
premium.
INDEMNIFYING AUDITOR
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify
the auditor of the company or any related entity against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the
auditor of the company or any related entity.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in
any proceedings to which the company is a party for the purpose of taking responsibility on behalf of
the company for all or any part of those proceedings.
The company was not a party to any such proceedings during the year.
NON-AUDIT SERVICES
Details of the amounts paid or payable to RSM Australia for non-audit services provided during the year
by the auditor are outlined in Note 7 to the financial statements.
The Directors are of the opinion that the services, as disclosed in Note 7 to the financial statements, do
not compromise the external auditor’s independence, based on advice received from the Audit and
Risk Committee, for the following reasons:
→ all non-audit services have been reviewed and approved to ensure they do not adversely affect the
integrity and objectivity of the auditor; and
→ the nature of the services provided does not compromise the general principles relating to auditor
independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the
Accounting Professional and Ethical Standards Board.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT The following fees were paid or payable to RSM Australia for non-audit services provided during the
year ended 30 June 2017:
Taxation Services
Due diligence investigations
Others
$
13,970
283,250
46,872
344,092
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 30 June 2017 has been received and can be
found on page 29 of the Financial Report.
OPTIONS
At the date of this report, the unissued ordinary shares of Oliver’s Real Food Ltd under option are as
follows:
Grant Date
11/8/2016
21/4/2017
21/4/2017
3/5/2017
Date of Expiry
Exercise Price
Number under Options
14/10/2019
20/4/2021
6/4/2021
26/5/2021
$0.0133
$0.30
$0.30
$0.30
1,125,000
2,250,000
2,000,000
3,700,000
9,075,000
Option holders do not have any rights to participate in any issues of shares or other interests in the
company or any other entity.
Other than as set out above, there have been no options granted over unissued shares or interests of
any controlled entity within the Group during or since the end of the reporting period.
Further details are set out in Note 26 of the Financial Report.
For details of options issued to directors and executives as remuneration, refer to the Remuneration
Report.
ASIC CORPORATIONS (ROUNDING IN FINANCIAL/DIRECTORS’ REPORTS)
INSTRUMENT 2016/191
The company is an entity to which ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 applies and, accordingly, amounts in the directors’ report have been rounded to
the nearest thousand dollars.
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OLIVER’S REAL FOOD LIMITED BOARD OF DIRECTORS
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Mark Richardson
Chairman and Independent
Non-executive Director
Jason Gunn
Executive Director &
Chief Executive Officer
Katherine Hatzis
Non-executive Director
John Diddams
Independent
Non-executive Director
Peter Rodwell
Independent
Non-executive Director
Emma Lawler
Company Secretary
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT INFORMATION RELATING TO DIRECTORS AND COMPANY SECRETARY
Mark Anthony Richardson Chairman and Independent Non-Executive Director
Qualifications Mark has a BSc (Hons) in Chemical Engineering and an MBA from Stanford
Graduate School of Business. He is a member of Australian Institute of
Company Directors.
Experience Mark co-founded Wolseley Private Equity in 1999. Wolseley has invested
over $400 million of equity in Australian and New Zealand companies
in Food Distribution, Day Hospitals, Logistics and Transport, Printing
and Communication, Travel, Business Process Outsourcing, Franchising,
Infrastructure Engineering and Childcare Centres ranging from $25 million
to $400 million in scale.
Prior to Wolseley Mark spent 11 years at Bain & Company where he was a
Partner responsible for client work in a variety of sectors. Mark specialises
in strategy development and implementation, organisational effectiveness
and CEO mentoring. He started his career working for Shell International
and Esso Exploration as an offshore exploration engineer in the South
Atlantic, North Sea and Holland.
Interest in Shares
1,233,333 ordinary shares
Interest in Options
750,000 options over ordinary shares
Special Responsibilities
Independent Non-Executive Chairman
Audit and Rick Committee Member
Remuneration and Nomination Committee Chair
Directorships held in other listed
entities during the three years prior
to the current year
None
Jason Antony Gunn Executive Director & Chief Executive Officer
Qualifications
Jason is a graduate of the Australian Institute of Company Directors.
Experience
Jason successfully anticipated the health food trend within the fast food
market and leads the organisation with his passion and commitment
to healthy nutrient dense food and sustainable business practices. His
passion has resulted in Oliver’s status as the Australia’s first Certified
Organic fast food chain. A self-described ‘serial entrepreneur’, Jason has
led the creation of a series of successful businesses. Before launching
Oliver’s, he created Info-Link Building Information System Australia. Info-
Link was successfully franchised internationally and sold to Reed Business
Information Pty Ltd in 1997.
Interest in Shares
45,262,500 ordinary shares
Interest in Options
1,000,000 options over ordinary shares
Special Responsibilities
Executive Director
Founder & Chief Executive Officer
Directorships held in other listed
entities during the three years prior
to the current year
None
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Katherine Hatzis Non-Executive Director
Qualifications
Kathy has a BCom (Economics/Marketing), is a CPM and a graduate of the
Australian Institute of Company Directors.
Experience
Kathy is a founder of Oliver’s and board member since inception in 2003,
committed to the acceleration of the Oliver’s nutritional movement and its
positive social impact. She has 25 years experience in strategic planning,
mergers and joint venture operations, brand, customer marketing, retail
store merchandising and digital media from senior roles held at Optus,
St.George, Westpac, ANZ, and Citibank. Until recently, she was Deputy
Chair of the Australian Marketing Institute (Marketing’s peak professional
body). Kathy has a BCom in Economics and Marketing, is a CPM and a
Graduate of the Australian Institute of Company Directors.
Interest in Shares
23,987,500 ordinary shares
Interest in Options
500,000 options over ordinary shares
Special Responsibilities Non-Executive Director
Audit and Rick Committee Member
Remuneration and Nomination Committee Member
Directorships held in other listed
entities during the three years prior
to the current year
None
John Flower Diddams
Independent Non-Executive Director
Qualifications
John has a B.Com from UNSW, is a Fellow of CPA Australia and a Fellow of
the Australian Institute of Company Directors.
Experience
John has over 35 years of senior management experience as CFO, CEO
and for the past 20 years as a professional non-executive director and
has extensive knowledge and practical experience in the application of
Australian Corporations Law, ASX Listing Rules, international accounting
standards, and corporate governance principals.
John has managed the process to raise capital and seek ASX listing for a
number of diverse enterprises, including IPO’s for offerings such as oil and
gas interests, food and retail, biotech, the internet and medical products.
He is also a Non-Executive Director and Deputy Chair of House With
No Steps, a “not for profit” organisation that supports 3,000 people in
eastern Australia to make the most of their abilities.
Interest in Shares
2,275,000 ordinary shares
Interest in Options
1,625,000 options over ordinary shares
Special Responsibilities
Independent Non-Executive Director
Directorships held in other listed
entities during the three years prior
to the current year
Audit and Rick Committee Chair
Remuneration and Nomination Committee Member
Skydive The Beach Group Limited (ASX:SKB)
Volpara Health Technologies Limited (ASX:VHT)
Indoor Skydive Australia Group Ltd (Resigned 30/10/2014)
Martin Aircraft Company Limited (Resigned 3/3/2016)
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT Peter Rodwell
Independent Non-Executive Director
Experience
Peter has over forty years’ experience in the Restaurant category. From
2003-2015, he was McDonald’s Division al President for Australia, Asia,
Pacific, Middle east and Africa, creating, growing and regenerating
businesses in developing and mature markets, with specialities in pricing,
product development, store management, franchising and frontline staff
engagement. Most recently he has been consulting to the industry across
a range of companies and operational improvement programmes.
Interest in Shares
900,000 ordinary shares
Interest in Options
500,000 options over ordinary shares
Special Responsibilities
Independent Non-Executive Director
Directorships held in other listed
entities during the three years prior
to the current year
None
COMPANY SECRETARY
The following person held the position of company secretary at the end of the financial year:
Emma Lawler — Emma was appointed as Company Secretary on 21 April 2017. Emma has two decades
of experience as a company secretary and governance professional. Emma holds a Bachelor of
Business and a Graduate Diploma in Applied Corporate Governance and is a Fellow of the Governance
Institute of Australia.
MEETINGS OF DIRECTORS
During the financial year, 14 meetings of directors (including committees of directors) were held.
Attendances by each director during the year were as follows:
Directors’ Meetings
Audit & Risk Committee
Remuneration & Nomination
Committee
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Mark Anthony
Richardson*
Jason Antony Gunn
Katherine Hatzis
John Flower Diddams**
Peter Rodwell***
10
14
14
13
10
9
13
14
12
8
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
* Mark Richardson was appointed on 26/11/2016
** John Diddams was appointed on 11/8/2016
***Peter Rodwell was appointed on 26/11/2016
Note: Oliver’s listed on the ASX on 21 June 2017, as such the Audit & Risk and Remuneration & Nomination Committees which
took effect on date of listing did not meet in the period from 21 - 30 June 2017
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REMUNERATION REPORT (AUDITED)
This Remuneration Report (Report), which has been audited, describes the Key Management Personnel
(KMP) remuneration arrangements for the period ended 30 June 2017 (FY17) for Oliver’s, in accordance
with the Corporations Act 2001 and its regulations.
The remuneration report contains the following sections:
→ Who this report covers
→ Overview of the remuneration framework
→ Governance
→ Linking reward and performance
→ Share based remuneration
→ Key terms of the Oliver’s Incentive Plan
→ Non-Executive Director remuneration framework
→ Contractual arrangements with executive KMP
→ Details of remuneration for KMPs
→ Directors and executive KMP shareholdings in Oliver’s
→ Other statutory disclosures
WHO THIS REPORT COVERS
This report covers Non-Executive Directors and executive KMP (collectively KMP) and includes:
Non-Executive Directors
Mark Richardson - appointed 26 November 2016
Chairman and Independent Non-Executive Director
Katherine Hatzis
Non-Executive Director
John Diddams - appointed 11 August 2016
Independent Non-Executive Director
Peter Rodwell - appointed 26 November 2016
Independent Non-Executive Director
Executive Key Management Personnel
Jason Gunn
Director and Chief Executive Officer
Alan Lee - appointed 24 November 2016
Chief Financial Officer
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT OVERVIEW OF OLIVER’S REMUNERATION FRAMEWORK
Oliver’s remuneration strategy and policies aim to attract and retain talented people to run and manage
Oliver’s and to align their interests with that of Shareholders. The Board is committed to having a
remuneration strategy and policy that rewards, and retains appropriately experienced and skilled
employees and executives throughout all levels of the company.
In the case of all senior employees, this will be realised by providing a fixed remuneration component
together with specific ‘at risk’ performance based short-term incentives and, where appropriate
for selected executives, long-term equity incentives subject to market competitive service and
performance conditions.
The Board has committed to regularly reviewing all Board and key executive management remuneration
and incentive arrangements (at least biennially) to ensure they remain competitive, in line with market
expectations and guidelines and remain appropriate for Oliver’s as it changes and grows.
GOVERNANCE
When Oliver’s listed on the ASX, it established a Remuneration and Nomination Committee (RNC)
whose role is to assist the Board with its remuneration responsibilities, to ensure that Oliver’s:
→ has coherent and appropriate remuneration policies and practices which enable Oliver’s to attract
and retain Directors and executives who will create value for Shareholders;
→ fairly and responsibly remunerates Directors and executives having regard to Oliver’s performance,
the performance of the executives and the general market environment; and
→ has policies and procedures that are effective to attract, motivate and retain appropriately skilled
and diverse people that meet Oliver’s needs and that are consistent with Oliver’s strategic goals
and human resource objectives.
The members of the RNC comprise Mark Richardson (Chair), Kathy Hatzis and John Diddams, each of
whom are Non- executive Directors and all have appropriate qualifications and experience to enable
the RNC to fulfil its role.
EXTERNAL REMUNERATION CONSULTANTS
The Terms of Reference for the RNC requires that any remuneration consultants engaged be appointed
by the RNC. During FY2017 Oliver’s engaged the services of Ian Crichton, Principal, Crichton &
Associates Pty Limited as external remuneration consultants, however whilst these services did not
include a remuneration recommendation in relation to any of Oliver’s key management personnel, they
did include a benchmarking analysis.
Any advice that may be received from remuneration consultants will be carefully considered by the
RNC to ensure it is given free of undue influence by Oliver’s executives.
STRUCTURE OF REMUNERATION
The remuneration framework for KMP includes both fixed and performance-based pay.
Fixed Remuneration
Fixed remuneration is set using a combination of historical levels and sector comparisons. Fixed
remuneration includes base pay, statutory contributions for superannuation and non-monetary benefits.
Superannuation is provided up to the statutory maximum allowed. Other benefits may include phone
allowance, ‘packaged’ motor vehicle, supplementary superannuation and other items determined on
total employment cost basis.
18
19
Fixed remuneration will be reviewed annually and any increases approved by the RNC and the Board
based on market movements, promotion or above average performance appraisal scores.
In addition to fixed remuneration, each of the executive KMP are entitled to additional Short Term
Incentives (STI) and Long Term Incentives (LTI), as outlined below, subject to achieving pre-determined
milestones.
Short Term Incentive
Oliver’s short-term incentive plan is designed to reward employees and executives for performance
against a pre-determined scorecard of measures linked to Oliver’s short-term business performance for
the relevant 12 month performance period (individual and team performance are also considered for
selected roles).
The specific performance measures may vary from year to year depending on Oliver’s evolving business
and financial objectives. The measures are selected on the basis that they will lead to improved and
sustainable financial performance and shareholder returns.
In FY17, there was no STI paid to executive KMP.
Long Term Incentive
Oliver’s will consider offers under LTI to selected executives on an annual basis that will be designed
to provide both retention and incentive impact if the executive remains employed with Oliver’s for a
minimum term and Oliver’s meets performance vesting conditions set.
An initial grant of LTI made prior to the IPO was awarded as Options under the Oliver’s Employee
Incentive Plan (OEIP). These Options are subject to the OEIP rules and other regulatory requirements,
including the ASX Listing Rules.
The CEO and CFO received a pre-IPO grant of 1,000,000 and 400,000 Options respectively. No
further offers have been made to the CEO and CFO under the OEIP at this stage.
A summary of the terms of OEIP and details of the pre-IPO Grant Options are set out in this Report and
were detailed in the Prospectus.
Any proposed future grants of Options to the CEO will be submitted to shareholders for approval.
Proportions of fixed and variable remuneration
The Board and RNC consider annually the fixed remuneration and proportion of variable remuneration
that is dependent on performance (“at risk”) for each executive KMP. The relative proportions of fixed
versus variable pay received by executive KMP during the current financial period and proposed for the
next financial period are as follows:
Fixed Remuneration
At Risk - STI (on target)
At Risk - LTI (on target)
Proposed FY18
FY17
Proposed FY18
FY17
Proposed FY18
FY17
Jason Gunn
$340,000
$220,000
$119,000
Alan Lee
$250,000
$123,000
$62,000
0%
0%
$0
$0
0%
0%
Assessment Of Performance
Performance of executive KMPs will be assessed against the agreed non-financial and financial targets
on a regular basis. Based on this assessment, the Chairman will make a recommendation to the RNC for
Board approval of the amount of STI and LTI to award (as applicable) to each KMP.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT HOW REWARD IS LINKED TO PERFORMANCE
Performance indicators
As Oliver’s only listed on the ASX on 21 June 2017, statutory disclosures relating to dividend payments,
dividend payout ratio, and increase / (decrease) in share price are not applicable. Key financial metrics
over the last three years are shown below:
2017
2016
2015
Revenue $m
EBITDA $m
Net Profit After tax $m
20.7
17.1
12.7
(2.3)
1.8
1.6
(2.9)
0.6
0.9
Performance and Impact On Remuneration
It should be noted that there is no direct link between remuneration and performance in FY17. There
were no STI payments made in FY17 to executive KMP and the only LTI award made was for pre-IPO
grants of options.
The Board will report on the link between pay and performance in future reports.
SHARE BASED REMUNERATION
Oliver’s operates an LTI plan for eligible senior executives (the Oliver Employee Incentive Plan (OEIP)) as
a means of encouraging employees to share in the ownership of the Company and promote its long-
term success as a common goal. The Board will make offers to persons to participate in the OEIP based
on their contribution to the Company. Under the terms of the OEIP the Board may make awards of
Options, performance rights, service rights, deferred share awards, exempt share awards, cash rights or
stock appreciation rights. No offer of an award may be made to the extent it breaches the Constitution,
the Listing Rules, the Corporations Act or any other applicable law.
Grants of 3,700,000 Options were made to twenty senior executives (including the CEO and CFO) pre-
IPO as disclosed in the Prospectus and in the remuneration tables at the end of this Report. No grants
of Options have been made since listing on the ASX on 21 June 2017.
The key terms of the OEIP and details of the pre-IPO Award to KMP are as follows:
All capitalised terms have the meaning as defined within the OEIP.
20
21
Purpose
The purpose of the OEIP is to encourage Employees to share in the ownership
of the Company and to promote the long-term success of the Company as a
goal shared by all Employees.
Eligibility
Participants in the OEIP must be persons who are in full-time or part-time
employment of a Group Company and includes a director of a Group Company.
Form of Equity
The Company may offer an Award which includes an Option, a Performance
Right, a Service Right, a Deferred Share Award, an Exempt Share Award, a Cash
Right, or a Stock Appreciation Right, in accordance with the terms of the OEIP.
The Company may offer or issue Options, which are rights to be issued a
Share upon payment of the Exercise Price and satisfaction of specified Vesting
Conditions. These terms apply unless the Offer specifies otherwise:
→ Options are Restricted Awards until they are exercised or expire.
→ An Offer may specify a Restriction Period for Shares issued on the exercise
of Options.
→ Options are subject to adjustment.
FY17 Pre-IPO Award
To date, only Options have been granted under the OEIP.
Terms of the Award
A grant of Awards under the OEIP are subject to the terms and conditions of
the OEIP Rules, the Offer documentation, the Company’s Constitution, the ASX
Listing Rules, the Corporations Act or any other applicable law.
FY17 Pre-IPO Award - Executive KMP
→ Exercise Price $0.30
→ Vest in three equal tranches (1 July 2019, 1 July 2020, 30 June 2020)
→ Expiry date: 26 February 2021
→ Option purchase price - $0.0001
→ Vesting conditions - options will only vest if the following performance
conditions are met:
→ Tranche 1 - continuous employment at vesting date (service condition)
→ Tranche 2 - Achieve Prospectus earnings forecast in FY18
→ Tranche 3 - TSR absolute CAGR over the first 3 years of listing on the
ASX:
→ TSR CAGR < 7.5%: 0% vesting
→ TSR CAGR 7.5%: 25% vesting. Straight line interpolation between
7.5% and 10%
→ TSR CAGR 10.0%: 50% vesting. Straight line interpolation between
10% and 12.5%
→ TSR CAGR > 12.5%: 100% vesting
FY17 Pre-IPO Award - Non- executive Directors
→ Exercise Price $0.30
→ Vest in 2 equal tranches (21 June 2018 and 21 June 2019)
→ Expiry date: 20 April 2021
→ Option purchase price - $0.0001
→ Vesting conditions - options will only vest if the Non-executive Director is in
continuous service as a Non-executive Director from Grant Date to Vesting
Date.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT Vesting and Exercise
The Awards held by a Participant will vest in and become exercisable by that
Participant upon the satisfaction of any Vesting Conditions specified in the
Offer and in accordance with the OEIP.
Vesting Conditions may be waived at the absolute discretion of the Board
(unless such waiver is excluded by the terms of the Award).
The vesting of an Award on the satisfaction of any Vesting Conditions will not
automatically trigger the exercise of the Award unless specified in the Offer.
A Participant is, subject to the OEIP, entitled to exercise an Award on or after
the Vesting Date. Any exercise must be for a minimum number or multiple of
Shares (if any) specified in the terms of the Offer.
If the Board determines that for a taxation, legal, regulatory or compliance
reason it is not appropriate to issue or transfer Shares, the Company may in lieu
and final satisfaction of the Company’s obligation to issue or transfer Shares as
required upon the exercise of an Award by a Participant, make a cash payment
to the Participant equivalent to the Fair Market Value as at the date of exercise
of the Award (less any unpaid Exercise Price applicable to the exercise of the
Award) multiplied by the relevant number of Shares required to be issued or
transferred to the Participant upon exercise of the Award.
If a Participant dies or becomes disabled before the end of the Restriction
Period or prior to the Vesting Date, the Board will determine, in its sole and
absolute discretion, the manner in which all unvested or restricted Awards will
be dealt with.
With respect to Options, Performance Rights, Service Rights and other Awards
where the Participant may be entitled to acquire Shares in the future on exercise
of the Award:
→ A Participant is not entitled to participate in a new issue of Shares or other
securities made by the Company to holders of its Shares without exercising
the Awards before the record date for the relevant issue.
→ If, prior to the exercise of an Award, the Company makes a pro-rata bonus
issue to the holders of its Shares, and the Award is not exercised prior to the
record date in respect of that bonus issue, the Award will, when exercised,
entitle the holder to one Share plus the number of bonus shares which
would have been issued to the holder if the Award had been exercised prior
to the record date.
→ If, prior to the exercise of an Award, the Company undergoes a
reorganisation of capital (other than by way of a bonus issue or issue for
cash) the terms of the Awards of the Participant will be changed to the
extent necessary to comply with the Listing Rules as they apply at the
relevant time.
Adjustments -
Reorganisation of
Capital, Bonus and New
Issues
Restriction Period
Restriction Period means the period during which Awards, or Shares issued
on exercise of Awards, must not be sold or disposed of, being the period
specified in the OEIP, and as specified in the Offer.
22
23
Change of Control
Change of Control means, in relation to the Company, either:
→ any person, either alone or together with any associate (as defined in the
Corporations Act), who did not have a relevant interest (as defined in the
Corporations Act) in more than 50% of the issued Shares in the Company,
acquires a relevant interest in more than 50% of the issued Shares in the
Company other than listing on a recognised stock exchange before 31
December 2017; or
→ the Board concludes that there has been a change in the Control of the
Company.
On the occurrence of a Change of Control, the Board will determine, in its sole
and absolute discretion, the manner in which all unvested and vested Awards
will be dealt with.
If a takeover bid is made to acquire all the issued Shares of the Company, or
a scheme of arrangement, selective capital reduction or other transaction
is initiated which has an effect similar to a full takeover bid for Shares in
the Company, then Participants are entitled to accept the takeover bid or
participate in the other transaction in respect of all or part of their Awards
other than Exempt Share Awards notwithstanding that the Restriction Period in
respect of such Awards has not expired. The Board may, in its discretion, waive
unsatisfied Vesting Conditions in relation to some or all Awards in the event of
such a takeover or other transaction.
Non-transerable Awards
A Participant must not sell, transfer, mortgage, pledge, charge, grant security
over or otherwise dispose of any Restricted Awards, or agree to do any of
those things, during the Restriction Period.
The Company may implement any procedures it considers appropriate to
ensure that Restricted Awards are not disposed of during the Restriction
Period, including applying a holding lock in respect of Shares.
The Board may at any time in its discretion waive or shorten the Restriction
Period applicable to an Award.
No Hedging
Participants must not enter into transactions or arrangements, including by
way of derivatives or similar financial products, which limit the economic risk of
holding unvested Awards.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT Share Issues
Shares issued under the OEIP will upon allotment:
→ be credited as fully paid;
→ rank equally for dividends and other entitlements where the record date
is on or after the date of allotment, but will carry no right to receive any
dividend or entitlement where the record date is before the date of
allotment; and
→ be subject to any restrictions imposed under the OEIP, and
→ otherwise rank equally with the existing issued Shares at the time of
allotment.
As soon as practicable after the date of the allotment of Shares, the Company
will, unless the Board otherwise resolves, apply for official quotation of such
Shares on the ASX.
The Company may, in its discretion, either issue new Shares or cause existing
Shares to be acquired for transfer to the Participant, or a combination of both
alternatives, to satisfy the Company’s obligations under the OEIP.
If the Company determines to cause the transfer of Shares to a Participant, the
Shares may be acquired in such manner as the Company considers appropriate,
including from a trustee appointed under the OEIP.
The Company may appoint a trustee on terms and conditions which it considers
appropriate to acquire and hold Shares, options, or other securities of the
Company either on behalf of Participants or for the purposes of the OEIP.
Administration of the
OEIP and Amendment
The OEIP will be administered by the Board, or a committee of the Board, which
will have an absolute discretion.
The Board may only exercise its powers in accordance with the Listing Rules.
An Offer of Awards must not be made if the total of:
→ the number of Shares which are the subject of the Offer of Awards; and
→ underlying Shares issued or that may be issued as a result of any Offers of
Award, or similar offer of Shares under a predecessor or other employee
incentive plan, made at any time during the previous 3 year period in
reliance on relief granted by ASIC (however obtained),
would exceed 5% of the number of Shares on issue at the time of the Offer.
Under no circumstances will Awards be granted under the OEIP if it is an issue
of securities that, combined with all other employee share scheme interests
outstanding, would exceed 15% of the Company’s then outstanding issued
capital.
NON-EXECUTIVE DIRECTOR REMUNERATION
Non-executive Directors enter into service agreements through a letter of appointment which are not
subject to a fixed term. Non-executive Director Remuneration will be market competitive and will not
contain performance-based components. Non-executive Directors will receive fees (and statutory
superannuation entitlements) commensurate with their role.
All Non-executive Directors received a pre-IPO equity interest in Oliver’s in part as compensation for
the significant time commitment expended by them in the pre-IPO period and to ensure levels of
compensation were awarded commensurate with their skills. Full details of these interests are included
in the remuneration tables at the end of this Report. A minimum shareholding policy guideline has
been adopted to further assist in aligning Non-executive Director’s interests with all Shareholders. The
shareholding level of directors is detailed in the tables later in this Report.
24
25
The total amount of fees paid to all Non-executive Directors for their services as Directors must not
exceed in aggregate in any financial year the amount fixed by Oliver’s in general meeting. This amount
has been fixed at $500,000 per annum.
For FY17 and FY18, the annual base Non-executive Director fees currently agreed to be paid by Oliver’s
is $120,000 to the Chairperson (including all committee fees), $60,000 for each other Non-executive
Director and an additional $20,000 to the respective chairs and $10,000 for other members of the
Audit and Risk Committee and the RNC. These amounts comprise fees to be paid in cash and are
inclusive of any superannuation payments required to be made. The CEO is not remunerated separately
for acting as a Director.
Based on the fees to be paid in FY18, the full year of Non-executive Director fees will be $350,000
which is 70% of the total fee pool approved and disclosed in the Prospectus of $500,000.
The total amount of fees paid in FY17 is shown in the remuneration tables at the end of this Report.
Non-executive Directors do not receive fees that are contingent on performance, shares in return for
their services, retirements benefits, other than statutory superannuation or termination benefits.
There is no intent to seek to increase the Non-executive Director fee pool at the 2017 AGM and there
were no increases to Non-executive Directors’ fees since listing on the ASX on 21 June 2017.
Special arrangements for FY17
In addition to ongoing Director’s fees, Mr Diddams was paid $50,000 for his advisory services in
connection with the IPO, including chairing the Due Diligence Committee established for the Offer.
Each Non-Executive Director was offered and accepted ‘pre-IPO’ Options which were subject to
Oliver’s listing on ASX before 31 December 2017 and subject to the Director remaining employed as
a Non- Executive Director for the predetermined service period following the IPO which is vesting of
50% 12 months after IPO (vest on 21 June 2018) and the remainder vest on 21 June 2019 (subject to the
Director remaining a Director at that date).
Details of the pre-IPO Options granted are included in the remuneration tables at the end of the Report.
CONTRACTUAL ARRANGEMENTS WITH EXECUTIVE KMPs
Remuneration and other conditions of employment are set out in the executive KMPs employment
contracts. The key elements of these employment contracts are summarised below:
Name
Jason Gunn
Title
Chief Executive Officer
Terms of
Agreement
Details
No fixed term - subject to termination provisions detailed below
Annual remuneration including cash salary, superannuation and non-cash benefits -
$340,000
Incentives - eligible to participate in short term incentive and equity remuneration plans
Termination - 6 months notice in writing. The Company may terminate employment
without payment in lieu of notice in circumstances involving serious or wilful misconduct.
Termination
All payments on termination will be subject to the termination benefits cap under the
Corporations Act 2001 in the absence of shareholder approval.
Post-employment - 6 months restraint provisions
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT Name
Alan Lee
Title
Chief Financial Officer
Terms of
Agreement
Details
No fixed term - subject to termination provisions detailed below
Annual remuneration including cash salary, superannuation and non-cash benefits -
$250,000
Incentives - eligible to participate in short term incentive and equity remuneration plans
Termination - 3 months notice in writing. The Company may terminate employment
without payment in lieu of notice in circumstances involving serious or wilful misconduct.
Termination
All payments on termination will be subject to the termination benefits cap under the
Corporations Act 2001 in the absence of shareholder approval.
Post-employment - 3 months restraint provisions
KMP REMUNERATION FOR THE YEAR ENDED 30 JUNE 2017
(Note: No comparatives are available as Oliver’s listed on the ASX on 21 June 2017)
2017
Name
Fixed Remuneration
At Risk - STI (on target)
Cash salary and
fees
Superannuation
Non-monetary
benefits
Long service
leave and
annual leave
Short term
incentive
Fair value of LTI
award (options)
Total
Executive Director
Jason Gunn
Chief Executive Officer
$220,000
Non- Executive Directors
Mark Richardson
Chairman
Katherine Hatzis
John Diddams
Peter Rodwell
Other Executive KMP
Alan Lee
Chief Financial Officer
$67,110
$43,764
$105,000
$35,833
$123,000
$594,707
$3,090
$223,090
$4,398
$71,508
$2,932
$46,696
$13,508
$118,508
$2,932
$38,765
$1,236
$124,236
$28,096
$622,803
Note 1: The fair value of options granted as remuneration and as shown in the above table has been determined in accordance
with Australian accounting standards and will be recognised as an expense over the relevant vesting period to the extent that
conditions necessary for vesting are satisfied.
KMP SHAREHOLDING
The table below provides the number of ordinary shares in Oliver’s Real Food Limited held by each KMP during
each period including their related parties:
26
27
As at 30 June 2017
Mark Richardson, Chairman
Jason Gunn, CEO
Katherine Hatzis, Director
John Diddams, Director
Peter Rodwell, Director
Alan Lee, CFO
Balance at Listing
Date or Appointment
Shares received
during the period on
exercise of Options
Additional shares
issued
Balance at the end of
the period
1,233,333
45,262,500
23,987,500
400,000
900,000
-
-
-
-
1,875,000
-
-
-
-
-
-
-
-
1,233,333
45,262,500
23,987, 500
2,275,000
900,000
-
This concludes the remuneration report, which has been audited.
LOANS TO DIRECTORS AND EXECUTIVES
No loans were made to directors and executives of Oliver’s Real Food Limited including their close
family and entities related to them during the year.
OPTIONS OUTSTANDING
The number of options over ordinary shares in the company held during the financial year by each
director and other members of key management personnel of the consolidated entity, including their
personally related parties, is set out below:
Mark Richardson
Jason Gunn
Katherine Hatzis
John Diddams
John Diddams
Peter Rodwell
Alan Lee
Opening
balance
Granted during
the year
Exercised during
the year
Closing balance
Date of expiry
Total Exercisable
-
-
-
-
-
-
-
750,000
1,000,000
500,000
-
-
-
750,000
20/4/2021
1,000,000
26/2/2021
500,000
20/4/2021
3,000,000
(1,875,000)
1,125,000
14/10/2019
500,000
500,000
400,000
-
-
-
500,000
20/4/2021
500,000
20/4/2021
400,000
26/2/2021
-
-
-
-
-
-
-
SHARES ISSUED ON THE EXERCISE OF OPTIONS
There were 1,875,000 ordinary shares of Oliver’s Real Food Limited issued on the exercise of options
during the year ended 30 June 2017 and up to the date of this report.
END OF REMUNERATION REPORT
The Directors’ Report, incorporating the Remuneration Report, is signed in accordance with a
resolution of the Board of Directors.
Mark Richardson
Chairman
Jason Gunn
Chief Executive Officer
Dated: 21 September 2017
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT AUDITORS INDEPENDENCE DECLARATION
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Oliver’s Real Food Limited for the year ended 30 June
2017, 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 audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
David Talbot
Partner
Sydney, NSW
Dated: 21 September 2017
28
29
OLIVER’S REAL FOOD LTD ABN: 33 166 495 441 AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE YEAR ENDED 30 JUNE 2017
Note
Consolidated Group
2017
$
2016
$
Continuing operations
Revenue
Other income
Raw materials and consumables used
Employee benefits expense
Administration expense
Occupancy expense
Depreciation and amortisation expense
Finance costs
Other expenses
(Loss) / Profit before income tax
Tax (benefit) / expense
Net (Loss) / Profit for the year
Total other comprehensive income for the year
Total comprehensive (loss) / income for the year
Net (loss) / profit attributable to:
Members of the parent entity
Non-controlling interest
Total comprehensive (loss) / income attributable to:
Members of the parent entity
Non-controlling interest
Earnings per share
Basic earnings per share (cents
Diluted earnings per share (cents)
3
3
4
5
4
8
8
20,755,626
398,054
17,133,682
2,773,970
(6,805,372)
(6,632,611)
(8,721,549)
(6,508,678)
(4,772,140)
(2,901,375)
(3,033,433)
(1,962,624)
(923,836)
(419,149)
(97,913)
(3,619,712)
750,863
(2,868,849)
(568,210)
(285,935)
(143,362)
904,857
(280,518)
624,339
-
-
(2,868,849)
624,339
(2,815,208)
(53,641)
(2,868,849)
(2,815,208)
(53,641)
(2,868,849)
(0.03)
(0.03)
662,421
(38,082)
624,339
662,421
(38,082)
624,339
0.01
0.01
The accompanying notes form part of these financial statements.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT OLIVER’S REAL FOOD LTD ABN: 33 166 495 441 AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017
Note
Consolidated Group
2017
$
2016
$
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Total current assets
Non-current assets
Trade and other receivables
Property, plant and equipment
Deferred tax assets
Intangible assets
Other non-current assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Other financial liabilities
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Other financial liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Parent interest
Non-controlling interest
Total equity
9
10
11
15
10
13
19
14
15
16
17
18
19
20
17
18
19
20
21
30
31
6,344,096
1,273,212
1,340,481
153,248
9,111,037
-
10,737,090
571,982
6,676,844
428,610
18,414,526
27,525,563
2,233,286
252,723
308,756
-
235,515
3,030,280
109,876
158,569
61,247
345,201
674,893
3,705,173
23,820,390
25,215,628
121,883
(1,681,237)
23,656,274
164,116
23,820,390
838,598
856,323
947,888
140,708
2,783,517
62,500
4,006,704
144,029
1,055,007
367,581
5,635,821
8,419,338
1,823,837
1,446,176
58,663
331,986
131,858
3,792,520
907,886
307,684
47,195
250,100
1,512,865
5,305,385
3,113,953
1,795,438
-
1,200,003
2,995,441
118,512
3,113,953
The accompanying notes form part of these financial statements.
30
31
OLIVER’S REAL FOOD LTD ABN: 33 166 495 441 AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED
30 JUNE 2017
Share Capital
Ordinary
Retained
Earnings
Reserves
Option
Reserve
Subtotal
Non-
controlling
Interests
Note
$
$
$
$
$
Total
$
1,008,900
537,582
1,546,482
(3,507)
1,542,975
662,421
662,421
(38,082)
624,339
-
662,421
-
662,421
(38,082)
624,339
Consolidated Group
Balance at 1 July 2015
Comprehensive income
Profit for the Year
Total comprehensive income for
the year
Transactions with owners, in their
capacity as owners, and other
transfers
Shares issued
during the year
Total transactions with owners and
other transfers
Other
Non-controlling interest arising on
acquisition
Total Other
Balance at 1 July 2016
Comprehensive income
Profit for the Year
Total comprehensive income for
the year
Transactions with owners, in their
capacity as owners, and other
transfers
Shares issued
during the year
Transaction costs
Payment of share options
Transfer from option reserve on
exercise of option
Option expense recognised in the
year
Total transactions with owners and
other transfers
Other
Acquisition of non-controlling
interest
Total Other
786,538
786,538
-
-
-
1,795,438
1,200,003
786,538
786,538
786,538
-
786,538
160,101
160,101
-
2,995,441
160,101
118,512
160,101
3,113,953
2,995,441
118,512
3,113,953
-
-
-
-
(2,815,208)
(2,815,208)
(53,641)
(2,868,849)
-
(2,815,208)
-
(2,815,208)
(53,641)
(2,868,849)
24,681,558
(1,261,368)
24,681,558
(1,261,368)
174,440
174,440
136,838
(136,838)
-
84,281
84,281
24,681,558
(1,261,368)
174,440
-
84,281
23,420,190
136,838
121,883
23,678,911
-
23,678,911
(202,870)
(202,870)
99,245
(103,625)
-
(202,870)
-
(202,870)
99,245
(103,625)
Balance at 30 June 2016
1,795,438
1,200,003
Balance at 30 June 2017
25,215,628
(1,681,237)
121,883
23,656,274
164,116
23,820,390
The accompanying notes form part of these financial statements.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT OLIVER’S REAL FOOD LTD ABN: 33 166 495 441 AND CONTROLLED ENTITIES OLIVER’S
REAL FOOD LTD ABN: 33 166 495 441 AND CONTROLLED ENTITIES CONSOLIDATED
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2017
Cash flows from operating activities
Receipts from customers
Interest received
Other income
Payments to suppliers and employees
Finance costs
Income tax paid
Note
Consolidated Group
2017
$
2016
$
20,506,383
18,587,137
6,567
50,401
7,289
57,733
(22,701,339)
(19,705,416)
(419,149)
(77,376)
(276,585)
(48,504)
Net cash provided by (used in) operating activities
25a
(2,634,513)
(1,378,346)
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Payment for purchase of business, net of cash acquired
Purchase of property, plant and equipment
Net cash provided by (used in) investing activities
Cash flows from investing activities
Proceeds from issue of shares
Proceeds from borrowings
Cost of issuance of shares
Proceeds from exercise of options
Proceeds from issue of options
Repayment of borrowings
Net cash provided by (used in) financing activities
Net increase in cash held
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
9
The accompanying notes form part of these financial statements.
-
5,817,179
(8,107,395)
(658,804)
(4,065,116)
(3,306,855)
(12,172,511)
1,851,520
23,555,000
1,831,712
(1,261,368)
24,000
174,440
786,538
1,085,574
-
-
-
(4,011,262)
(2,030,073)
20,312,522
5,505,498
838,598
6,344,096
(157,961)
315,213
523,385
838,598
32
33
OLIVER’S REAL FOOD LTD ABN: 33 166 495 441 AND CONTROLLED ENTITIES NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
These consolidated financial statements and notes represent those of Oliver’s Real Food Ltd and
Controlled Entities (the “consolidated group” or “group”). The separate financial statements of the
parent entity, Oliver’s Real Food Limited have not been presented within this financial report as
permitted by the Corporations Act 2001.
The financial statements were authorised for issue on 21 September 2017 by the directors of the
company.
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
These general purpose financial statements have been prepared in accordance with the Corporations
Act 2001, Australian Accounting Standards and Interpretations of the Australian Accounting Standards
Board. The Group is a for-profit entity for financial reporting purposes under Australian Accounting
Standards. Material accounting policies adopted in the preparation of these financial statements
are presented below and have been consistently applied unless stated otherwise. These financial
statements also comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board (‘IASB’).
Except for cash flow information, the financial statements have been prepared on an accruals basis and
are based on historical costs, modified, where applicable, by the measurement at fair value of selected
non-current assets, financial assets and financial liabilities.
(a) Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the
Oliver’s Real Food Ltd) and all of the subsidiaries (including any structured entities). Subsidiaries
are entities the Parent controls. The Parent controls an entity when it is exposed to, or has rights
to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. A list of the subsidiaries is provided in Note 12.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial
statements of the Group from the date on which control is obtained by the Group. The
consolidation of a subsidiary is discontinued from the date that control ceases. Inter-company
transactions, balances and unrealised gains or losses on transactions between Group entities
are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed and
adjustments made where necessary to ensure uniformity of the accounting policies adopted by
the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as
“non-controlling interests”. The Group initially recognises non-controlling interests that are present
ownership interests in subsidiaries and are entitled to a proportionate share of the subsidiary’s net
assets on liquidation at either fair value or the non-controlling interests’ proportionate share of the
subsidiary’s net assets. Subsequent to initial recognition, non-controlling interests are attributed
their share of profit or loss and each component of other comprehensive income. Non-controlling
interests are shown separately within the equity section of the statement of financial position and
statement of comprehensive income.
(b) Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a
combination involving entities or businesses under common control. The business combination will
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT be accounted for from the date that control is obtained, whereby the fair value of the identifiable
assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to
certain limited exemptions).
When measuring the consideration transferred in the business combination, any asset or liability
resulting from a contingent consideration arrangement is also included. Subsequent to initial
recognition, contingent consideration classified as equity is not remeasured and its subsequent
settlement is accounted for within equity. Contingent consideration classified as an asset or
liability is remeasured each reporting period to fair value, recognising any change to fair value in
profit or loss, unless the change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations, other than those associated
with the issue of a financial instrument, are recognised as expenses in profit or loss when incurred.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain
purchase.
Business combinations are initially accounted for on a provisional basis. The acquirer
retrospectively adjusts the provisional amounts recognised and also recognises additional assets
or liabilities during the measurement period, based on new information obtained about the facts
and circumstances that existed at the acquisition date. The measurement period ends on either
the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the
information possible to determine fair value.
(c) Goodwill
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the
excess of the sum of:
(i) the consideration transferred;
(ii) any non-controlling interest (determined under either the full goodwill or proportionate interest
method); and
(iii) the acquisition date fair value of any previously held equity interest;
over the acquisition date fair value of net identifiable assets acquired.
The acquisition date fair value of the consideration transferred for a business combination plus
the acquisition date fair value of any previously held equity interest shall form the cost of the
investment in the separate financial statements.
Fair value remeasurements in any pre-existing equity holdings are recognised in profit or loss in
the period in which they arise. Where changes in the value of such equity holdings had previously
been recognised in other comprehensive income, such amounts are recycled to profit or loss.
If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets
exceeds the sum of the consideration transferred, the amount of any non-controlling interests in
the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if
any), so the excess is recognised immediately in profit or loss as a bargain purchase gain
Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of
impairment testing, goodwill is allocated to each of the Group’s operating segments expected
to benefit from the synergies of the combination. Operating segments, to which goodwill, has
been allocated are tested for impairment annually or more frequently when there is an indication
that the unit may be impaired. If the recoverable amount of the operating segments is less than
its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets of the unit on a pro-rata basis of the
carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not
reversed in a subsequent period. On disposal of a subsidiary, the attributable amount of goodwill
is included in the determination of the profit or loss on disposal.
34
35
At the end of each reporting period, the Group reviews the carrying amounts of its tangible and
intangible assets to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any). Where it is not possible to estimate
the recoverable amount of an individual asset, the Group estimates the recoverable amount of
the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of
allocation can be identified, corporate assets are also allocated to individual cash-generating units.
Otherwise they are allocated to the smallest group of cash-generating units for which a reasonable
and consistent allocation basis can be identified.
Recoverable amount 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 which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-
generating unit) is increased to the revised estimate of its recoverable amount. Hence the
increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset (or cash-generating unit) in
prior financial years. A reversal of an impairment loss is recognised immediately in profit or loss.
(d)
Income Tax
The income tax expense (income) for the year comprises current income tax expense (income) and
deferred tax expense (income).
Current income tax expense charged to profit or loss is the tax payable on taxable income for the
current period. Current tax liabilities (assets) are measured at the amounts expected to be paid
to (recovered from) the relevant taxation authority using tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability
balances during the year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss
when the tax relates to items that are recognised outside profit or loss or arising from a business
combination.
Except for business combinations, no deferred income tax is recognised from the initial
recognition of an asset or liability, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled and their measurement also reflects
the manner in which management expects to recover or settle the carrying amount of the
related asset or liability. With respect to non-depreciable items of property, plant and equipment
measured at fair value and items of investment property measured at fair value, the related
deferred tax liability or deferred tax asset is measured on the basis that the carrying amount of the
asset will be recovered entirely through sale. When an investment property that is depreciable
is held by the entity in a business model whose objective is to consume substantially all of the
economic benefits embodied in the property through use over time (rather than through sale),
the related deferred tax liability or deferred tax asset is measured on the basis that the carrying
amount of such property will be recovered entirely through use.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to
the extent that it is probable that future taxable profit will be available against which the benefits
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates,
and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the
reversal of the temporary difference can be controlled and it is not probable that the reversal will
occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it
is intended that net settlement or simultaneous realisation and settlement of the respective asset
and liability will occur. Deferred tax assets and liabilities are offset where: (i) a legally enforceable
right of set-off exists; and (ii) the deferred tax assets and liabilities relate to income taxes levied by
the same taxation authority on either the same taxable entity or different taxable entities where
it is intended that net settlement or simultaneous realisation and settlement of the respective
asset and liability will occur in future periods in which significant amounts of deferred tax assets or
liabilities are expected to be recovered or settled.
(e) Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-
recurring basis, depending on the requirements of the applicable accounting standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a
liability in an orderly (i.e. unforced) transaction between independent, knowledgeable and willing
market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing
information is used to determine fair value. Adjustments to market values may be made having
regard to the characteristics of the specific asset or liability. The fair values of assets and liabilities
that are not traded in an active market are determined using one or more valuation techniques.
These valuation techniques maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the
asset or liability (i.e. the market with the greatest volume and level of activity for the asset or
liability) or, in the absence of such a market, the most advantageous market available to the entity
at the end of the reporting period (i.e. the market that maximises the receipts from the sale of the
asset or minimises the payments made to transfer the liability, after taking into account transaction
costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s
ability to use the asset in its highest and best use or to sell it to another market participant that
would use the asset in its highest and best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to
share-based payment arrangements) may be valued, where there is no observable market price in
relation to the transfer of such financial instruments, by reference to observable market information
where such instruments are held as assets. Where this information is not available, other valuation
techniques are adopted and, where significant, are detailed in the respective note to the financial
statements.
(f)
Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net
realisable value on a ‘first in first out’ basis. Cost comprises of direct materials and delivery costs,
direct labour, import duties and other taxes, an appropriate proportion of variable and fixed
overhead expenditure based on normal operating capacity, and, where applicable, transfers from
cash flow hedging reserves in equity. Costs of purchased inventory are determined after deducting
rebates and discounts received or receivable.
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase
36
37
and delivery costs, net of rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make the sale
(g) Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where
applicable, any accumulated depreciation and impairment losses.
Property
Land and buildings are shown at historical cost less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Depreciation
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property,
plant and equipment (excluding land) over their expected useful lives as follows:
Class of fixed Asset
Buildings
Leasehold improvements
Plant and equipment
Plant and equipment under lease
Depreciation Rate
40 years
3-15 years
3-7 years
2-5 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of
each reporting period.
Leasehold improvements and plant and equipment under lease are depreciated over the
unexpired period of the lease or the estimated useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no
future economic benefit to the consolidated entity. Gains and losses between the carrying amount
and the disposal proceeds are taken to profit or loss. Any revaluation surplus reserve relating to
the item disposed of is transferred directly to retained profits.
(h) Leases
Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of
the asset (but not the legal ownership) are transferred to entities in the consolidated group, are
classified as finance leases.
Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts
equal to the fair value of the leased property or the present value of the minimum lease payments,
including any guaranteed residual values. Lease payments are allocated between the reduction of
the lease liability and the lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful
lives or the lease term.
Operating lease payments, net of any incentives received from the lessor, are charged to profit or
loss on a straight-line basis over the term of the lease.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT
(i)
Impairment of Assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to
amortisation and are tested annually for impairment, or more frequently if events or changes in
circumstances indicate that they might be impaired. Other non-financial assets are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying
amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use.
The value-in-use is the present value of the estimated future cash flows relating to the asset using
a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs.
Assets that do not have independent cash flows are grouped together to form a cash-generating
unit.
(j)
Intangible Assets Other than Goodwill
Intangible assets acquired as part of a business combination, other than goodwill, are initially
measured at their fair value at the date of the acquisition. Intangible assets acquired separately are
initially recognised at cost. Indefinite life intangible assets are not amortised and are subsequently
measured at cost less any impairment. Finite life intangible assets are subsequently measured at
cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising
from the de-recognition of intangible assets are measured as the difference between net disposal
proceeds and the carrying amount of the intangible asset. The method and useful lives of finite life
intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful
life are accounted for prospectively by changing the amortisation method or period.
Patents and trademarks
Significant costs associated with patents and trademarks are deferred and amortised on a straight-
line basis over the period of their expected benefit, being their finite life of 5 years.
Brands & IP
Brands & IP are not amortised. Instead, brands are tested annually for impairment, or more
frequently if events or changes in circumstances indicate that it might be impaired, and is carried
at cost less accumulated impairment losses. Impairment losses on Brands and IP are taken to profit
or loss and are not subsequently reversed.
As both the Brands & IP are an important element for the Oliver’s business, i.e. they are crucial for
the operation of the Oliver’s business, the Directors are of the opinion that both Brands and IP have
an indefinite life.
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over
the period of their expected benefit, being their finite life of 5 years.
Customer contracts
Customer contracts acquired in a business combination are amortised on a straight-line basis over
the period of their expected benefit, being their finite life of 10 years.
(k) Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of
the primary economic environment in which that entity operates. The consolidated financial
statements are presented in Australian dollars which is the parent entity’s functional currency.
38
39
(l) Employee Benefits
Short-term employee benefits
Provision is made for the Group’s obligation for short-term employee benefits. Short-term
employee benefits are benefits (other than termination benefits) that are expected to be settled
wholly before 12 months after the end of the annual reporting period in which the employees
render the related service, including wages and salaries. Short-term employee benefits are
measured at the (undiscounted) amounts expected to be paid when the obligation is settled.
The Group’s obligations for short-term employee benefits such as wages and salaries are
recognised as part of current trade and other payables in the statement of financial position.
The Group’s obligations for employees’ annual leave and long service leave entitlements are
recognised as provisions in the statement of financial position
Other long-term employee benefits
Provision is made for employees’ long service leave and annual leave entitlements not expected
to be settled wholly within 12 months after the end of the annual reporting period in which the
employees render the related service. Other long-term employee benefits are measured at the
present value of the expected future payments to be made to employees.
Expected future payments incorporate anticipated future wage and salary levels, durations of
service and employee departures and are discounted at rates determined by reference to market
yields at the end of the reporting period on government bonds that have maturity dates that
approximate the terms of the obligations. Any remeasurements for changes in assumptions of
obligations for other long-term employee benefits are recognised in profit or loss in the periods in
which the changes occur.
The Group’s obligations for long-term employee benefits are presented as non-current provisions
in its statement of financial position, except where the Group does not have an unconditional right
to defer settlement for at least 12 months after the end of the reporting period, in which case the
obligations are presented as current provisions.
Equity-settled compensation
The Group operates an employee share and option plan. Share-based payments to employees
are measured at the fair value of the instruments issued and amortised over the vesting periods.
Share-based payments to non-employees are measured at the fair value of goods or services
received or the fair value of the equity instruments issued, if it is determined the fair value of
the goods or services cannot be reliably measured, and are recorded at the date the goods or
services are received. The corresponding amount is recorded to the option reserve. The fair
value of options is determined using the Black-Scholes pricing model. The number of shares and
options expected to vest is reviewed and adjusted at the end of each reporting period such that
the amount recognised for services received as consideration for the equity instruments granted is
based on the number of equity instruments that eventually vest.
(m) Provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive)
obligation as a result of a past event, it is probable the consolidated entity will be required to
settle the obligation, and a reliable estimate can be made of the amount of the obligation. The
amount recognised as a provision is the best estimate of the consideration required to settle
the present obligation at the reporting date, taking into account the risks and uncertainties
surrounding the obligation. If the time value of money is material, provisions are discounted using a
current pre-tax rate specific to the liability. The increase in the provision resulting from the passage
of time is recognised as a finance cost.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT
(n) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks, other
short-term highly liquid investments with original maturities of three months or less, and bank
overdrafts. Bank overdrafts are reported within borrowings in current liabilities on the statement of
financial position.
(o) Revenue and Other Income
Revenue is recognised when it is probable that the economic benefit will flow to the consolidated
entity and the revenue can be reliably measured. Revenue is measured at the fair value of the
consideration received or receivable.
Sale of goods
Sale of goods revenue is recognised at the point of sale, which is where the customer has taken
delivery of the goods, the risks and rewards are transferred to the customer and there is a valid
sales contract. Amounts disclosed as revenue are net of sales returns and trade discounts.
Franchise fee revenue
Revenue from franchise operations includes initial franchise, documentation and training fees
generated from sales of franchises to franchisees. These are recognised directly in the accounting
period in which the franchise is sold.
Ongoing franchise fees consist of franchise fees and royalty fees. These ongoing fees are
recognised in the accounting period in which they are generated.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a
method of calculating the amortised cost of a financial asset and allocating the interest income
over the relevant period using the effective interest rate, which is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial asset to the net carrying
amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is
established.
(p) Trade and Other Receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised
cost using the effective interest method, less any provision for impairment. Trade receivables are
generally due for settlement within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectable are written off by reducing the carrying amount directly. A provision for impairment
of trade receivables is raised when there is objective evidence that the consolidated entity
will not be able to collect all amounts due according to the original terms of the receivables.
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or
financial reorganisation and default or delinquency in payments (more than 60 days overdue) are
considered indicators that the trade receivable may be impaired. The amount of the impairment
allowance is the difference between the asset’s carrying amount and the present value of
estimated future cash flows, discounted at the original effective interest rate. Cash flows relating
to short-term receivables are not discounted if the effect of discounting is immaterial.
Other receivables are recognised at amortised cost, less any provision for impairment.
40
41
(q) Trade and Other Payables
These amounts represent liabilities for goods and services provided to the consolidated entity
prior to the end of the financial year and which are unpaid. Due to their short-term nature they are
measured at amortised cost and are not discounted. The amounts are unsecured and are usually
paid within 30 days of recognition.
(r) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that
necessarily take a substantial period of time to prepare for their intended use or sale, are added to
the cost of those assets, until such time as the assets are substantially ready for their intended use
or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
(s) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the
amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The
net amount of GST recoverable from, or payable to, the ATO is included with other receivables or
payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from
investing or financing activities which are recoverable from, or payable to, the ATO are presented
as operating cash flows included in receipts from customers or payments to suppliers.
(t) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
Where the Group retrospectively applies an accounting policy, makes a retrospective restatement
or reclassifies items in its financial statements, an additional (third) statement of financial position
as at the beginning of the preceding period in addition to the minimum comparative financial
statement is presented.
(u) Rounding of Amounts
The parent entity has applied the relief available to it under ASIC Corporations (Rounding
in Financial/Directors’ Reports) Instrument 2016/191. Accordingly, amounts in the financial
statements have been rounded to the nearest dollar.
(v) Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgements incorporated into the financial statements based
on historical knowledge and best available current information. Estimates assume a reasonable
expectation of future events and are based on current trends and economic data, obtained both
externally and within the Group.
(i) Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non-financial assets other than goodwill and
other indefinite life intangible assets at each reporting date by evaluating conditions specific to
the consolidated entity and to the particular asset that may lead to impairment. If an impairment
trigger exists, the recoverable amount of the asset is determined. This involves fair value less
costs of disposal or value-in-use calculations, which incorporate a number of key estimates and
assumptions.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT (ii) Provision for impairment of receivables
The provision for impairment of receivables assessment requires a degree of estimation and
judgement. The level of provision is assessed by taking into account the recent sales experience,
the ageing of receivables, historical collection rates and specific knowledge of the individual
debtor’s financial position.
(iii) Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and
judgement. The level of the provision is assessed by taking into account the recent sales
experience, the ageing of inventories and other factors that affect inventory obsolescence.
(iv) Estimation of useful lives of assets
The consolidated entity determines the estimated useful lives and related depreciation and
amortisation charges for its property, plant and equipment and finite life intangible assets. The
useful lives could change significantly as a result of technical innovations or some other event. The
depreciation and amortisation charge will increase where the useful lives are less than previously
estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold
will be written off or written down.
(v) Business combinations
As discussed above, business combinations are initially accounted for on a provisional basis. The
fair value of assets acquired, liabilities and contingent liabilities assumed are initially estimated by
the consolidated entity taking into consideration all available information at the reporting date.
Fair value adjustments on the finalisation of the business combination accounting is retrospective,
where applicable, to the period the combination occurred and may have an impact on the assets
and liabilities, depreciation and amortisation reported.
(vi) Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more frequently if events or changes in circumstances
indicate impairment, whether goodwill and other indefinite life intangible assets have suffered
any impairment, in accordance with the accounting policy stated in note 1. The recoverable
amounts of cash-generating units have been determined based on value-in-use calculations. These
calculations require the use of assumptions, including estimated discount rates based on the
current cost of capital and growth rates of the estimated future cash flows.
(vii) Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated
entity considers it is probable that future taxable amounts will be available to utilise those
temporary differences and losses.
(viii) Employee benefits provision
As discussed above, the liability for employee benefits expected to be settled more than 12
months from the reporting date are recognised and measured at the present value of the
estimated future cash flows to be made in respect of all employees at the reporting date. In
determining the present value of the liability, estimates of attrition rates and pay increases through
promotion and inflation have been taken into account.
(ix) Lease make good provision
A provision has been made for the present value of anticipated costs for future restoration of
leased premises. The provision includes future cost estimates associated with closure of the
premises. The calculation of this provision requires assumptions such as application of closure
dates and cost estimates.
The provision recognised for each site is periodically reviewed and updated based on the
42
43
facts and circumstances available at the time. Changes to the estimated future costs for sites
are recognised in the statement of financial position by adjusting the asset and the provision.
Reductions in the provision that exceed the carrying amount of the asset will be recognised in
profit or loss.
(w) New Accounting Standards for Application in Future Periods
Accounting Standards issued by the AASB that are not yet mandatorily applicable to the Group,
together with an assessment of the potential impact of such pronouncements on the Group when
adopted in future periods, are discussed below:
→ AASB 9: Financial Instruments and associated Amending Standards (applicable to annual
reporting periods beginning on or after 1 January 2018).
The Standard will be applicable retrospectively (subject to the provisions on hedge accounting
outlined below) and includes revised requirements for the classification and measurement
of financial instruments, revised recognition and derecognition requirements for financial
instruments and simplified requirements for hedge accounting.
The key changes that may affect the Group on initial application include certain simplifications
to the classification of financial assets, simplifications to the accounting of embedded
derivatives, upfront accounting for expected credit loss, and the irrevocable election to
recognise gains and losses on investments in equity instruments that are not held for trading
in other comprehensive income. AASB 9 also introduces a new model for hedge accounting
that will allow greater flexibility in the ability to hedge risk, particularly with respect to hedges
of non-financial items. Should the entity elect to change its hedge policies in line with the new
hedge accounting requirements of the Standard, the application of such accounting would be
largely prospective.
Although the directors anticipate that the adoption of AASB 9 may have an impact on the
Group’s financial instruments, including hedging activity, it is impracticable at this stage to
provide a reasonable estimate of such impact.
→ AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods
beginning on or after 1 January deferred by AASB 2015-8: Amendments to Australian Accounting
Standards - Effective Date of AASB 15).
When effective, this Standard will replace the current accounting requirements applicable to
revenue with a single, principles-based model. Apart from a limited number of exceptions,
including leases, the new revenue model in AASB 15 will apply to all contracts with customers
as well as non-monetary exchanges between entities in the same line of business to facilitate
sales to customers and potential customers. The core principle of the Standard is that an entity
will recognise revenue to depict the transfer of promised goods or services to customers in an
amount that reflects the consideration to which the entity expects to be entitled in exchange
for the goods or services. To achieve this objective, AASB 15 provides the following five-step
process:
→ identify the contract(s) with a customer;
→ identify the performance obligations in the contract(s);
→ determine the transaction price;
→ allocate the transaction price to the performance obligations in the contract(s); and
→ recognise revenue when (or as) the performance obligations are satisfied.
The transitional provisions of this Standard permit an entity to either: restate the contracts
that existed in each prior period presented per AASB 108: Accounting Policies, Changes
in Accounting Estimates and Errors (subject to certain practical expedients in AASB 15); or
recognise the cumulative effect application to incomplete contracts on the date of initial
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT
application. There are also enhanced disclosure requirements regarding revenue.
Although the directors anticipate that the adoption of AASB 15 may have an impact on the
Group’s financial statements, it is impracticable at this stage to provide a reasonable estimate of
such impact.
→ AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable
to leases in AASB 117: Leases and related Interpretations. AASB 16 introduces a single lessee
accounting model that eliminates the requirement for leases to be classified as operating or
finance leases.
The main changes introduced by the new Standard are as follows:
→ recognition of a right-of-use asset and liability for all leases (excluding short-term leases with
less than 12 months of tenure and leases relating to low-value assets);
→ depreciation of right-of-use assets in line with AASB 116: Property, Plant and Equipment in
profit or loss and unwinding of the liability in principal and interest components;
→ inclusion of variable lease payments that depend on an index or a rate in the initial
measurement of the lease liability using the index or rate at the commencement date;
→ application of a practical expedient to permit a lessee to elect not to separate non-lease
components and instead account for all components as a lease; and
→ inclusion of additional disclosure requirements.
The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard
to comparatives in line with AASB 108 or recognise the cumulative effect application as an
adjustment to opening equity on the date of initial application.
Although the directors anticipate that the adoption of AASB 16 will impact the Group’s financial
statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
44
45
NOTE 2: PARENT INFORMATION
The following information has been extracted from the books and records of the parent and has been
prepared in accordance with Australian Accounting Standards.
STATEMENT OF FINANCIAL POSITION
Assets
Current Assets
Non-current Assets
Total Assets
Liabilities
Current Liabilities
Non-current Liabilities
Total Liabilities
Equity
Issued Capital
Retained Earnings
Option Reserve
Total Equity
2017
$
2016
$
23,428,400
4,609,574
1,367,652
276,512
24,796,052
4,886,086
136,127
3,353,671
503,769
443,198
639,896
3,796,869
25,215,628
1,795,438
(1,181,355)
(706,221)
121,883
-
24,156,156
1,089,217
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
Total Profit
(611,972)
(532,436)
Total Comprehensive Income
(611,972)
(532,436)
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2017 and 30 June 2016
Contractual commitments
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2017
and 30 June 2016
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT NOTE 3: REVENUE AND OTHER INCOME
(a). Revenue from continuing operations
a. Revenue from continuing operations
Sales Revenue
Revenue from sale of goods
Franchise and royalty revenue
Initial franchise and training fees
Other Revenue
Interest received
Total Revenue
Other Income
Gain on disposal of property, plant and equipment
Other income
Gain in bargain purchase
Total Other Income
NOTE 4: PROFIT FOR THE YEAR
Consolidated Group
2017
$
2016
$
Note
19,893,812
15,910,162
854,247
866,146
1,000
350,085
20,749,059
17,126,393
6,567
7,289
20,755,626
17,133,682
14,037
2,704,335
203,648
180,369
69,635
-
398,054
2,773,970
Profit before tax from continuing operations includes the following specific expenses:
Consolidated Group
2017
$
2016
$
Note
6,805,372
6,632,611
419,149
285,935
8,721,549
6,508,678
79,610
-
3,033,433
1,962,624
874,051
49,785
84.281
97,913
540,721
27,489
-
143,362
Expenses
Cost of sales
Finance costs
Employee benefit expense
Bad and doubtful debts
- trade receivables
Rental expense on operating leases
Depreciation
Amortisation
Share-based payment expenses
Loss on disposal of property, plant and equipment
46
47
NOTE 5: TAX EXPENSE
a. The components of tax (benefit)/expense income comprise:
Current tax
Deferred tax
Recoupment of prior year tax losses
Under provision in respect of prior years
b. The prima facie tax on profit from ordinary activities before income tax
is reconciled to income tax as follows:
Prima facie tax payable on profit from ordinary activities before income tax
at 30% (2016:30%)
- consolidated group
Add:
Tax effect of:
Consolidated Group
2017
$
2016
$
Note
(673,905)
(226,958)
255,517
25,001
150,000
(750,863)
280,518
(1,085,914)
271,457
- non-deductable depreciation and amortisation
14,936
9,061
- non-allowable items
- write-downs to recoverable amounts
- share options expensed during year
- under-provision for income tax in prior years
- Costs for raising capital
Less:
Tax effect of:
- Gain on bargain purchase
Income tax attribute to entity
-
-
25,163
150,000
199,063
-
-
-
-
-
(696,752)
280,518
(54,111)
-
(750,863)
280,518
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT NOTE 6: KEY MANAGEMENT PERSONNEL COMPENSATION
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration
paid or payable to each member of the Group’s key management personnel (KMP) for the year ended
30 June 2017.
The totals of remuneration paid to KMP of the company and the Group during the year are as follows:
Short term employee benefits
Post-employment benefits
Share-based payments
Total KMP compensation
Short-term employee benefits
2017
$
2016
$
594,707
328,394
-
28,096
-
-
622,803
328,394
These amounts include fees and benefits paid to the non-executive chair and non-executive directors as
well as all salary, paid leave benefits, fringe benefits and cash bonuses awarded to executive directors
and other key management personnel.
Post-employment benefits
These amounts are the current year’s superannuation contributions made during the year.
Share-based payments
These amounts represent the expense related to the participation of KMP in equity-settled benefit
schemes as measured by the fair value of the options, rights and shares granted on grant date.
Further information in relation to KMP remuneration can be found in the Remuneration Report.
NOTE 7: AUDITOR’S REMUNERATION
Remuneration of the auditor for:
- auditing or reviewing the financial statements
129,805
75,000
Consolidated Group
2017
$
2016
$
- taxation services
- due diligence services
- others
48
13,970
283,250
46,872
-
-
-
473,897
75,000
NOTE 8: EARNINGS PER SHARE
a. Reconciliation of earnings to profit or loss:
(Loss)/Profit
Profit attributable to non-controlling equity interest
Redeemable and convertible preference share dividends
Earnings used to calculate basic EPS
Earnings used in the caluclation of dilutive EPS
49
Consolidated Group
2017
$
2016
$
(2,868,849)
624,339
53,641
38,082
(2,815,208)
(2,815,208)
662,421
662,421
b. Weighted average number of ordinary shares outstanding during the year
used in calculating basic EPS
98,733,200
78,067,494
Weighted average number of ordinary shares outstanding during the year used in
calculating dilutive EPS
98,733,200
78,067,494
EPS
- Basic (cents per share)
- Diluted (cents per share)
NOTE 9: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short-term bank deposits
Reconciliation of cash
Cash at the end of the financial year as shown in the statement of cash
flows is reconciled to items in the statement of financial position as follows:
Cash and cash equivalents
(0.03)
(0.03)
0.01
0.01
Note
Consolidated Group
2017
$
2016
$
6,256,466
353,505
87,630
485,093
29
6,344,096
838,598
6,344,096
838,598
6,344,096
838,598
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT NOTE 10: TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Provision for impairment
Other receivables
Amounts receivable from related parties
- associates
Total current trade and other receivables
Non-current
Other receivables
Total non-current trade and other receivables
Credit risk
Consolidated Group
2017
$
2016
$
Note
975,340
587,787
-
-
975,340
587,787
297,872
181,036
-
87,500
1,273,212
856,323
-
-
62,500
62,500
The Group has no significant concentration of credit risk with respect to any single counter party or
group of counter parties other than those receivables specifically provided for and mentioned within
Note 10. The class of assets described as Trade and Other Receivables is considered to be the main
source of credit risk related to the Group.
Past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to
$633,416 as at 30 June 2017 ($239,935 as at 30 June 2016).
The consolidated entity did not consider a credit risk on the aggregate balances after reviewing the
credit terms of customers based on recent collection practices.
The ageing of the past due but not impaired receivables are as follows:
0 to 3 months
3 to 6 months
Over 6 months overdue
50
Consolidated Group
2017
$
2016
$
598,534
127,539
6,925
112,396
27,957
-
633,416
239,935
NOTE 11: INVENTORIES
Current
At cost:
Raw materials and stores
Finished goods
51
Consolidated Group
2017
$
2016
$
Note
1,294,623
865,767
45,858
82,121
1,340,481
947,888
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT NOTE 12: INTERESTS IN SUBSIDIARIES
(a) Information about Principal Subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary shares or ordinary
units which are held directly by the Group. The proportion of ownership interests held equals the
voting rights held by the Group. Each subsidiary’s principal place of business is also its country of
incorporation.
Ownership interest held by the Group
Name of subsidiary
Principal place of business
Coffs Harbour Franchise Pty Ltd
Coonalpyn Properties Pty Ltd
Farm Gate Market Direct Pty Ltd
Fresh Food Services NSW Pty Ltd
Fresh Food Services QLD Pty Ltd
Fresh Food Services VIC Pty Ltd
Gundagai Properties Pty Ltd
Oliver's Albury North Pty Ltd
Oliver's Aratula Pty Ltd
Oliver's Ballarat Pty Ltd
Oliver's Boggabilla Pty Ltd
Oliver's Bulahdelah Pty Ltd
Oliver's Chinderah Franchise Pty Ltd
Oliver's Chinderah Pty Ltd
Oliver's Coffs Pty Ltd
Oliver's Coonalpyn Pty Ltd
Oliver's Corporate Pty Ltd
Oliver's Dubbo West Pty Ltd
Oliver's East-Link Inbound Pty Ltd
Oliver's East-Link Outbound Pty Ltd
Oliver's Euroa Pty Ltd
Oliver's Ferry Park Pty Limited
Oliver's Franchising Pty Ltd
Oliver's Geelong Northbound Pty Ltd
Oliver's Geelong Southbound Pty Ltd
Oliver's Gundagai Pty Ltd
Oliver's Haigslea Pty Ltd
Oliver's Halfway Creek Pty Ltd
Oliver's Hexham Pty Ltd
Oliver's Holbrook Pty Ltd
52
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
2017
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2016
%
-
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
-
100%
100%
100%
100%
100%
100%
100%
-
-
100%
100%
100%
100%
100%
-
100%
-
53
NOTE 12: INTERESTS IN SUBSIDIARIES
(a) Information about Principal Subsidiaries
Oliver's Horsham Pty Ltd
Oliver's Lithgow Pty Ltd
Oliver's Maitland Road Pty Ltd
Oliver's Maryborough Pty Ltd
Oliver's Merino Pty Ltd
Oliver's National Marketing Fund Pty Ltd
Oliver's Officer Inbound Pty Ltd
Oliver's Officer Outbound Pty Ltd
Oliver's Organic Farming Pty Ltd
Oliver's Penn-Link Inbound Pty Ltd
Oliver's Penn-Link Outbound Pty Ltd
Oliver's Port Macquarie Pty Ltd
Oliver's Roma Street Pty Ltd
Oliver's Slacks Creek Pty Ltd
Oliver's Sutton Forest Pty Ltd
Oliver's Wallan Northbound Pty Ltd
Oliver's Wallan Southbound Pty Ltd
Oliver's Westgate Pty Ltd
Oliver's Wyong Northbound Pty Ltd
Oliver's Wyong Southbound Pty Ltd
Retail Technology Services Pty Ltd
Revilo's Pty Ltd
Silver Dog Pty Ltd
Slacks Creek Pty Ltd
The Delicious & Nutritious Food Co Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
75%
-
100%
-
-
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
-
-
76%
-
100%
-
75%
Subsidiary financial statements used in the preparation of these consolidated financial statements
have also been prepared as at the same reporting date as the Group’s financial statements.
(b) Acquisition of Controlled Entities
On 1 December 2016, the company acquired all the equity issued by Revilo’s Pty Limited for total
consideration of $455,416 (including 1,833,330 shares at $0.19 each). Revilo’s Pty Limited is the
holding company of its wholly-owned subsidiaries: a) Coffs Harbour Franchise Pty Ltd which is the
franchisee of the Oliver’s franchised store; and b) Slacks Creek Pty Ltd which is the franchisee of
the Oliver’s Slacks Creek store.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT
NOTE 12: INTERESTS IN SUBSIDIARIES (CONTINUED)
(b) Acquisition of Controlled Entities
Purchase consideration
- Cash
- ordinary shares (i)
Less:
Property, plant and equipment
Other Net Assets
Identifiable assets acquired and liabilities assumed
Gain on Bargain Purchase (ii)
Note
Fair Value
$
107,083
348,333
455,416
612,761
23,024
635,785
(180,369)
(i) The consideration paid to acquire Revilo’s Pty Ltd includes 1,833,333 ordinary shares at $0.19
each issued to the vendors. The fair value of the shares has been determined based on the price of
the shares at the date of acquisition prepared by an independent valuer.
(ii) The values identified in relation to the acquisition of Revilo’s are provisional as at 30 June 2017
as the re-acquired rights intangible asset fair value has yet to be finalised.
For a further understanding of the provisional basis, refer to the business combination accounting
policy which states the following:
Business combinations are initially accounted for on a provisional basis. The acquirer
retrospectively adjusts the provisional amounts recognised and also recognises additional assets
or liabilities during the measurement period, based on new information obtained about the facts
and circumstances that existed at the acquisition-date. The measurement period ends on either
the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the
information possible to determine fair value.
(iii) The Gain on Bargain Purchase arose due to the difference in the issue price ($0.30 each)
and the fair value ($0.19 each) for the scrip consideration (1,833,333 ordinary shares). It has been
included as income in the Statement of Comprehensive Income and will not be assessable for tax
purposes.
(iv) The acquired entities’ contribution of gross revenue ($0.64 million) and earnings before
interest, tax, depreciation and amortisation (EBITDA) loss ($0.02 million) for the period from 1
December 2016 to 30 June 2017. There is not adequate information available for disclosing the
contribution of gross revenue and EBITDA for the full year.
(c) Transactions with Non-controlling interests in Retail Technology Services Pty Ltd
On 1 May 2017, the company acquired the remaining 24% of the outstanding shares in Retail
Technology Services Pty Ltd for a share consideration at a fair value of $103,625 (i.e. 500,000
ordinary shares at $0.20725 each). This brings the Parent entity interest in Retail Technology
Services Pty Ltd to 100%.
54
NOTE 13: PROPERTY, PLANT AND EQUIPMENT
Land and Buildings
Land and buildings
Total land and buildings
Carrying amount of all buildings had they been carried under the cost model
Plant and Equipment
Plant and equipment:
At cost
Accumulated depreciation
Accumulated impairment losses
Leasehold improvements
At cost
Accumulated amortisation
Motor vehicles
At cost
Accumulated depreciation
Total plant and equipment
Total property, plant and equipment
a) Movements in Carrying Amounts
55
Consolidated Group
2017
$
1,728,642
1,728,642
2016
$
69,958
69,958
5,498,523
2,148,624
(1,050,258)
(618,864)
-
-
4,448,265
1,529,760
4,441,346
2,129,449
(440,149)
(223,569)
4,001,197
1,905,880
819,190
(260,204)
558,986
642,907
(141,801)
501,106
9,008,448
3,936,746
10,737,090
4,006,704
Movements in carrying amounts for each class of property, plant and equipment between the
beginning and the end of the current financial year.
Land & Buildings
$
Leashold
Improvements
$
Plant & Equipment
Motor Vehicles
$
$
Total
$
Consolidated Group:
Balance at 1 July 2015
1,537,822
1,400,433
1,319,090
239,437
4,496,782
Additions
Disposals
1,155,779
(1,467,864)
(502,892)
Depreciation expense
(147,440)
Balance at 30 June 2016
69,958
1,905,880
1,658,684
1,438,850
(97,272)
965,560
(425,174)
(329,715)
1,529,761
1,574,881
(173,817)
325,234
2,446,573
-
(2,395,930)
(63,566)
(540,721)
501,105
4,006,704
185,282
4,857,697
(7,694)
(278,783)
Balance at 30 June 2017
1,728,642
5,193,390
3,256,073
558,985
10,737,090
2,176,869
848,646
3,025,515
(230,937)
(523,398)
(119,708)
(874,043)
Additions
Disposals
Acquisitions through
business combinations
Depreciation expense
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT
NOTE 14: INTANGIBLE ASSETS
Goodwill
Cost
Accumulated impairment losses
Net carrying amount
Patents and trademarks
Cost
Accumulated amortisation and impairment losses
Net carrying amount
Computer software
Cost
Accumulated amortisation and impairment losses
Net carrying amount
Brands and IP
Cost
Accumulated impairment losses
Net carrying amount
Customer relationships
Cost
Accumulated amortisation
Net carrying amount
Total intangible assets
Consolidated Group
2017
$
2016
$
5,743,720
575,556
-
-
5,743,720
575,556
81,855
(52,063)
29,792
1,844
(31)
1,813
81,855
(35,692)
46,163
-
-
-
612,189
110,576
-
-
612,189
110,576
333,830
(44,500)
289,330
6,676,844
333,830
(11,118)
322,712
1,055,007
56
57
NOTE 14: INTANGIBLE ASSETS (CONTINUED)
Consolidated Group
Year ended 30 June
2016
Balance at the
beginning of the year
Additions
Disposals
Amortisation charge
Impairment losses
Closing value at 30
June 2016
Year ended 30 June
2017
Balance at the
beginning of the year
Additions
Acquisition through
business combinations
Disposals
Amortisation charge
Impairment losses
Closing value at 30
June 2017
Goodwill
$
Patents and
Trademarks
$
Computer
Software
$
85,510
62,534
490,046
-
-
-
-
(16,371)
-
575,556
46,163
575,556
46,163
-
-
-
-
-
-
Brands and IP
$
-
Customer
Relationships
$
Total
$
-
148,044
110,576
333,830
934,452
-
-
-
-
(11,118)
(27,489)
-
-
110,576
322,712
1,055,007
110,576
322,712
1,055,007
-
1,845
501,613
503,458
5,168,164
-
-
-
-
5,168,164
(16,371)
(31)
(33,383)
(49,785)
-
5,743,720
29,792
1,814
612,189
289,329
6,676,844
Intangible assets, other than goodwill, Brands and IP, have finite useful lives. The current amortisation
charges for intangible assets are included under depreciation and amortisation expense per the
statement of profit or loss. Goodwill, Brands and IP have an indefinite useful life and are not amortised.
Impairment disclosures
Goodwill is allocated to cash-generating units which are based on the group’s reporting segments.
NSW segment
VIC segment
Upcoming stores segment*
Red Dragon
Total
2017
$
2016
$
4,035,789
85,510
964,785
253,100
-
-
490,046
490,046
5,743,720
575,556
*relates to stores acquired but not yet opened
Brands and IP are allocated to cash-generating units which are based on the group’s reporting
segments.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT NOTE 14: INTANGIBLE ASSETS (CONTINUED)
Oliver’s stores
Red Dragon
Total
2017
$
501,613
110,576
612,189
2016
$
-
110,576
110,576
The recoverable amount of each cash-generating unit above is determined based on value-in-use
calculations. Value in use is calculated based on the present value of cash flow projections over a 5-year
period using an estimated growth rate.
The following key assumptions were used in the value-in-use calculations:
NSW segment
VIC segment
Upcoming store segment
Red Dragon
Growth Rate
Discount Rate
1.25%
7.15%
3.00%
10.27%
15.64%
15.64%
15.64%
15.64%
Management has based the value-in-use calculations on budgets for each reporting segment. These
budgets use historical weighted average growth rates to project revenue. Costs are calculated taking
into account historical gross margins as well as estimated weighted average inflation rates over the
period which are consistent with inflation rates applicable to the locations in which the segments
operate. Discount rates are pre-tax and are adjusted to incorporate risks associated with a particular
segment.
Sensitivity
As disclosed in note 1, the directors have made judgements and estimates in respect of impairment
testing of goodwill, brands and IP. Should these judgements and estimates not occur the resulting
goodwill carrying amount may decrease. The sensitivities are as follows:
Goodwill would need to be impaired if the following key assumptions are increased / (decreased), with
all other assumptions remaining constant:
NSW segment
VIC segment
Upcoming store segment
Red Dragon
Growth Rate
Discount Rate
(10.0%)
(7.1%)
(31.8%)
(28.4%)
40.1%
31.6%
70.1%
39.4%
Management believes that other reasonable changes in the key assumptions on which the recoverable
amount of each cash generating unit’s goodwill is based would not cause the cash-generating unit’s
carrying amount to exceed its recoverable amount.
58
59
NOTE 14: INTANGIBLE ASSETS (CONTINUED)
If there are any negative changes in the key assumptions on which the recoverable amount of goodwill.
is based, this would result in a further impairment charge for the cash generating unit’s goodwill.
(a) Buy-back of franchised stores
During the year, the Group bought back an additional six franchised stores. It did not acquire
equity in the companies and only acquired the assets in trade of the former franchised stores and
the Purchase Price Allocation for the respective franchise buy-backs are summarised as follows:
Date of acquisition
Consideration
- cash
Eastlink
Inbound
23 Jan 2017
Hexham
22 Feb 2017
Wyong
Northbound
7 Mar 2017
Goulburn
1 May 2017
Wyong
Southbound
30 Jun 2017
Wallan
Northbound
30 Jun 2017
Total
$
$
$
$
$
$
$
375,000
360,000 2,800,000
750,000 1,900,000
900,000 7,085,000
- Debt forgiveness
150,000
-
-
-
- Other consideration
11,388
9,745
-
(385)
-
-
150,000
20,748
Total consideration
Fair value of assets
acquired
Property, plant and
equipment
Goodwill
525,000
371,388
2,809,745
750,000
1,899,615
900,000
7,255,748
326,847
322,165
705,722
148,282
886,730
250,000
2,639,746
198,153
49,223
2,104,023
601,718
1,012,885
650,000 4,616,002
525,000
371,388 2,809,745
750,000
1,899,615
900,000
7,255,748
The above goodwill requires additional allocation of the intangible assets with respect to re-acquired
rights. The valuation exercise for Property, plant & equipment and re-acquired rights is still in progress
and as such the above purchase price allocation is preliminary only. and will be finalised within 12
months from acquisition.
For a further understanding of the provisional basis, refer to the business combination accounting policy
which states the following:
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively
adjusts the provisional amounts recognised and also recognises additional assets or liabilities during
the measurement period, based on new information obtained about the facts and circumstances that
existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from
the date of the acquisition or (ii) when the acquirer receives all the information possible to determine
fair value.
The goodwill is attributable to the sales revenue of the acquired business, the synergies expected to
arise from the acquisition and strengthens the growth platform of the Group. The goodwill will not be
deductible for tax purposes.
The acquired former franchised stores’ contribution of gross revenue of $2.29 million and EBITDA
of $0.28 million for the period from the date of acquisition to 30 June 2017. There is not adequate
information available for disclosing the contribution of gross revenue and EBITDA for the full year.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT NOTE 14: INTANGIBLE ASSETS (CONTINUED)
(b) Acquisition of businesses
Further, the Group acquired four QSR businesses during the year with the intention to convert the
existing businesses into Oliver’s Food branded stores. Summarised below are the Purchase Price
Allocation for the respective businesses acquired:
Date of acquisition
Consideration
- cash
Aratula
Bulahdelah
23 Jan 2017
22 Feb 2017
$
$
Ferry Park
7 Mar 2017
$
Ballarat
1 May 2017
$
Total
$
170,000
175,000
285,000
300,000
930,000
- Other consideration
1,880
5,500
550
7,930
Total consideration
170,000
176,880
290,500
300,550
937,930
Fair value of assets acquired
Property, plant and equipment
Goodwill
52,624
117,376
170,000
41,156
135,724
176,880
108,071
182,429
183,918
116,632
290,500
300,550
385,769
552,161
937,930
The goodwill is attributable to the sales revenue of the acquired business, the synergies expected to be
arise from the acquisition, and strengthens the growth platform of the Group and provides a footprint
from which to grow in these new locations. The goodwill will not be deductible for tax purposes.
60
NOTE 15: OTHER ASSETS
Current
Prepayments
Non-current
Rent receivable
Security deposits and bonds
Other assets
61
Consolidated Group
2017
$
2016
$
153,248
140,708
153,248
140,708
50,910
16,609
326,648
299,920
51,052
51,052
428,610
367,581
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT NOTE 16: TRADE AND OTHER PAYABLES
Current
Unsecured liabilities
Trade payables
Sundry payables and accrued expenses
Consolidated Group
2017
$
2016
$
978,519
1,208,015
1,254,767
615,822
2,233,286
1,823,837
62
NOTE 17: BORROWINGS
Current
Unsecured liabilities
Lease liability
Loan from associated parties
Total current borrowings
Non-current
Unsecured liabilities
Lease liability
Loan from associated parties
Total non-current borrowings
63
Consolidated Group
2017
$
2016
$
Note
47,223
232,227
205,500
1,213,949
252,723
1,446,176
109,876
636,261
-
271,625
109,876
907,886
Total borrowings
29
362,599
2,345,062
As at 30 June 2017, the group has unused bank loan facilities with Commonwealth Bank of Australia for a
total amount of $1,390,000. The facilities expire in December 2019 and are secured over the group’s all
present and after acquired properties.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT NOTE 18: OTHER FINANCIAL LIABILITIES
Current
Insurance Premium Funding Liability
Tax payable
Vendors - former franchised stores
Turnover rent payable
Other
Non-current
Security deposits
Accruals
Consolidated Group
2017
$
-
164,000
119,392
18,218
7,146
308,756
-
158,569
158,569
2016
$
55,117
-
-
-
3,546
58,663
114,587
193,097
307,684
64
NOTE 19: TAX
Current
Income tax payable
Provision for income tax
Non-current
Consolidated Group
Deferred tax liabilities
Prepayments
Rent Receivable
Balance at 30 June 2016
Prepayments
Rent Receivable
Balance at 30 June 2017
Deferred tax assets
Provisions
Employee benefits
provision for future lease expense
Superannuation not paid in financial year
Depreciation on make good
Unwinding of discount
Balance at 30 June 2016
Other
Employee benefits
Provision of future lease expense
Superannuation not paid in financial year
Depreciation on make good
Unwinding of discount
Balance at 30 June 2017
65
Consolidated Group
2017
2016
$
-
-
-
$
-
331,986
331,986
Opening Balance Charged to Income
Closing Balance
$
$
$
20,375
688
21,063
42,212
4,983
47,195
94,110
13,085
33,358
3,051
1,200
144,804
-
39,557
57,929
36,341
7,172
3,030
21,837
4,295
26,132
3,762
10,290
14,052
(54,553)
44,844
2,983
4,121
1,830
(775)
349,149
31,097
(10,359)
47,176
8,843
2,047
42,212
4,983
47,195
45,974
15,273
61,247
-
39,557
57,929
36,341
7,172
3,030
144,029
349,149
70,654
47,570
83,517
16,015
5,077
144,029
427,953
571,982
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT NOTE 20: PROVISIONS
Current
Employee benefits
Opening balance at 1 July 2016
Additional provisions
Amounts used
Balance at 30 June 2017
Non-current
Lease make good
Opening balance at 1 July 2016
Additional provisions
Balance at 30 June 2017
Analysis of Total Provisions
Current
Non-current
Consolidated Group
2017
$
2016
$
131,958
103,557
313,698
-
-
(181,840)
235,515
131,858
Consolidated Group
2017
$
2016
$
250,100
164,000
95,101
86,100
345,201
250,100
Consolidated Group
2017
$
235,515
345,201
580,716
2016
$
131,858
250,100
381,958
Provision for Employee Benefits
Provision for employee benefits represents amounts accrued for annual leave and long service leave.
The current portion for this provision includes the total amount accrued for annual leave entitlements
and the amounts accrued for long service leave entitlements that have vested due to employees having
completed the required period of service. Based on past experience, the Group does not expect the
full amount of annual leave or long service leave balances classified as current liabilities to be settled
within the next 12 months. However, these amounts must be classified as current liabilities since the
Group does not have an unconditional right to defer the settlement of these amounts in the event
employees wish to use their leave entitlement.
Provision for Make Good
A provision has been made for the present value of anticipated costs for future restoration of leased
premises. Refer to Note 1 (v) (ix) for further details.
66
NOTE 21: ISSUED CAPITAL
211,522,581 (2016: 10,409) fully paid ordinary shares
(a) Ordinary Shares
67
Consolidated Group
2017
$
2016
$
25,215,628
1,795,438
25,215,628
1,795,438
Consolidated Group
2017
No.
2017
$
2016
No.
2016
$
At the beginning of the reporting period
10,409
1,795,438
10,000
1,008,900
Shares issued during the year
- 7 Jul 2015 (issue price: $1,923.08 per share)
409
786,538
- 14 Nov 2016 (1:7500 shares split)
78,057,091
- Nov 2016 ($0.30 per share for cash)
3,000,001
900,000
- Nov 2016 ($0.19 per share for non-cash)
1,833,330
348,333
- Dec 2016 ($0.16 per share for cash)
3,062,500
490,000
- Feb 2017 ($0.16 per share for cash)
45,531,250
7,285,000
- May 2017 ($0.20725 per share for non-cash)
500,000
103,625
- Jun 2017 ($0.20 per share for non-cash)
2,500,000
500,000
- Jun 2017 ($0.20 per share for non-cash)
153,000
30,600
- Jun 2017 ($0.20 per share for non-cash)
75,000,000
15,000,000
- Jun 2017 (exercise of options)
1,875,000
24,000
Transaction costs on raising capital
(1,261,368)
At the end of the reporting period
211,522,581
25,215,628
10,409
1,795,438
In November 2016, a total of 3,000,001 ordinary shares were issued to new shareholders at $0.30
each. A further 1,833,333 ordinary shares were issued at a fair value of $0.19 for the acquisition of
100% equity interest in Revilo’s Pty Ltd.
In December 2016, a total of 3,062,500 ordinary shares were issued to new shareholders at $0.16
each.
In February 2017, a total of 45,531,250 ordinary shares were issued to new shareholders at $0.16
each.
In May 2017, a total of 500,000 ordinary shares were issued at a fair value of $0.20725 each for the
acquisition of 24% equity interest in Retail Technology Services Pty Ltd.
In June 2017, a total of 2,500,000 ordinary shares were issued at $0.20 each for the acquisition of
the intellectual properties of Oliver’s from Taonga Nui Holdings Limited.
In June 2017, a total of 153,000 ordinary shares were issued at $0.20 each to employees under the
employee share scheme for the IPO
In June 2017, a total of 75,000,000 ordinary shares were issued at $0.20 each under the IPO.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT NOTE 21: ISSUED CAPITAL (CONTINUED)
In June 2017, 1,875,000 ordinary shares were issued upon the exercise of the options held by John
Diddams, a non-executive director.
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up
of the company in proportion to the number of and amounts paid on the shares held. The fully paid
ordinary shares have no par value and the company does not have a limited amount of authorised
capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote
and upon a poll each share shall have one vote.
(b) Options
(i) For information relating to the Oliver’s Real Food Ltd employee option plan, including details of
options issued, exercised and lapsed during the financial year and the options outstanding at year-
end. Refer to the Director’s Report and Note 26: Share-based Payments.
(ii) For information relating to share options issued to key management personnel during the
financial year. Refer to the Director’s Report and Note 26: Share-based Payments.
(c) Capital Management
Management controls the capital of the Group in order to maintain a sustainable debt to equity
ratio, generate long-term shareholder value and ensure that the Group can fund its operations and
continue as a going concern.
The Group’s debt and capital include ordinary share capital and financial liabilities, supported by
financial assets.
The Group is not subject to any externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks
and adjusting its capital structure in response to changes in these risks and in the market. These
responses include the management of debt levels, distributions to shareholders and share issues.
68
69
NOTE 22: CAPITAL AND LEASING COMMITMENTS
(a) Finance Lease Commitments
Payable - minimum lease payments
- not later than 12 months
- between 12 months and 5 years
- later than 5 years
Minimum lease payments
Less future finaance charges
Present value of minimum lease payments
(b) Operating Lease Commitments
Non-cancellable operating leases contracted for but not
recognised in the financial statements
Payable - minimum lease payments
- not later than 12 months
- between 12 months and 5 years
- later than 5 years
(c) Operating Lease Commitments - Sub-lease
Non-cancellable operating leases contracted for but not
recognised in the financial statements
Payable - minimum lease payments
- not later than 12 months
- between 12 months and 5 years
- later than 5 years
Note
Consolidated Group
2017
$
2016
$
-
-
-
-
-
-
286,099
731,822
1,017,921
(149,493)
868,488
Consolidated Group
2017
$
2016
$
17
Note
2,500,174
2,249,813
9,507,758
9,406,422
15,237,745
18,202,282
27,245,677
29,858,517
Note
Consolidated Group
2017
$
2016
$
466,393
468,003
191,450
364,168
441,968
1,125,846
806,136
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT NOTE 23: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Contingent Liabilities
The consolidated entity has given bank guarantees as at 30 June 2017 of $435,853 (2016: $162,188) to
various landlords.
NOTE 24: OPERATING SEGMENTS
General Information
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and
used by the board of directors (chief operating decision makers) in assessing performance and in
determining the allocation of resources.
The Group operates exclusively in the Quick Service Restaurant segment in Australia.
70
71
NOTE 25: CASH FLOW INFORMATION
(a) Reconciliation of Cash Flows from Operating Activities
with Profit after Income Tax
Profit after income tax
Payable - minimum lease payments
Consolidated Group
2017
$
2016
$
(2,868,849)
624,339
Non-cash flows in profit Depreciation & Amortisation
923,836
577,279
Share option expenses
Net (gain)/loss on disposal of property, plant and equipment
Changes in assets and liabilities, net of the effects of purchase and disposal
of subsidiaries:
83,878
83,876
(2,560,974)
- (Increase)/decrease in trade and term receivables
(242,676)
(684,745)
- (Increase)/decrease in prepayments
- (Increase)/decrease in inventories
- (Increase)/decrease other operating assets
- Increase/(decrease) in trade payables and accruals
(12,540)
(392,593)
(61,030)
(229,496)
(72,793)
(91,894)
(14,314)
119,679
- Increase/(decrease) in income taxes payable
(443,698)
206,295
- Increase/(decrease) in deferred taxes payable
- (Increase)/decrease in deferred taxes receivable
- Increase/(decrease) in provisions
- Increase/(decrease) in accruals
- Increase/(decrease) in other operating liabilities
14,052
(427,953)
164,228
540,688
233,764
26,132
775
(95,740)
(3,144)
590,759
Cash flows from operating activities
(2,634,513)
(1,378,346)
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT NOTE 26: SHARE-BASED PAYMENTS
(a) Directors Share Option Plan
On 21 April 2017, 2,250,000 share options were granted to Non-Executive Directors under the
Oliver’s Employee Incentive Plan to take up ordinary shares at an exercise price of $0.30 each. The
options are exercisable on or before 20 April 2021. The options hold no voting or dividend rights
and are not transferable.
These options vest over a two year period. Vesting is subject to continuous service as director
until the vesting date.
Set out below are summaries of options granted under the plan:
2017
Grant Date
Expiry Date Exercise Price
Balance at
start of the
year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of the
year
21/4/2017
20/4/2021
$0.30
-
2,250,000
-
-
2,250,000
Weighted average
exercise price
$0.30
There were no options exercisable at the end of the financial year
The weighted average share price during the financial year was $0.266.
The weighted average remaining contractual life of options outstanding at the end of the financial
year was 3.77 years.
For the options granted during the current financial year, the valuation model inputs used to
determine the fair value at the grant date, are as follows:
2017
Tranche 1
Tranche 2
Grant Date
Expiry Date
Share proce
at grant date
Exercise price
Expected
volatility
Dividend
yield
Risk-free
interest rate
Fair value at
grant date
21/4/2017
20/4/2021
$0.2075
21/4/2017
20/4/2021
$0.2075
$0.30
$0.30
50.00%
50.00%
0.00%
0.00%
1.77%
1.93%
$0.0432
$0.0502
(b) Executive Share Option Plan
On 3 May 2017, 3,700,000 share options were granted to Executives under the Oliver’s Employee
Incentive Plan to take up ordinary shares at an exercise price of $0.30 each. The options are
exercisable on or before 26 February 2021. The options hold no voting or dividend rights and are
not transferable.
These options vest over a three year period. Vesting is subject to performance conditions
pertaining to earnings forecast and relative total shareholder return (TSR) being met and the
executive is still employed at the end of the vesting period. The options lapse when an executive
ceases his/her employment with the group.
2017
Grant Date
Expiry Date Exercise Price
Balance at
start of the
year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of the
year
3/05/2017 26/02/2021
$0.30
-
3,700,000
-
-
3,700,000
Weighted average
exercise price
$0.30
72
73
NOTE 26: SHARE-BASED PAYMENTS (CONTINUED)
There were no options exercisable at the end of the financial year
The weighted average share price during the financial year was $0.266.
The weighted average remaining contractual life of options outstanding at the end of the financial
year was 3.80 years.
For the options granted during the current financial year, the valuation model inputs used to
determine the fair value at the grant date, are as follows:
2017
Tranche 1
Tranche 2
Tranche 2
Grant Date
Expiry Date
Share proce
at grant date
Exercise price
Expected
volatility
Dividend
yield
Risk-free
interest rate
Fair value at
grant date
3/05/2017 26/02/2021
$0.2075
3/05/2017 26/02/2021
$0.2075
3/05/2017 26/02/2021
$0.2075
$0.30
$0.30
$0.30
50.00%
50.00%
0.00%
0.00%
1.80%
1.80%
$0.0488
$0.0550
50.00%
0.00%
1.80%
$0.0550
(c) Veritas Share Option
On 21 April 2017, 2,000,000 share options were granted to Veritas Securities Limited under
the Letter of Appointment as Corporate Adviser and Lead Manager for the group’s initial public
offering. The options are exercisable on or before 20 June 2020 with an exercise price of $0.30
each. The options hold no voting or dividend rights and are not transferable.
These options vest over a two year period and with no other vesting conditions.
Set out below are summaries of options granted under the plan:
2017
Grant Date
Expiry Date Exercise Price
Balance at
start of the
year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of the
year
21/4/2017
20/6/2020
$0.30
-
2,000,000
-
-
2,000,000
Weighted average
exercise price
$0.30
None of these options were exercisable at the end of the financial year.
The weighted average share price during the financial year was $0.266.
The weighted average remaining contractual life of options outstanding at the end of the financial
year was 2.97 years.
For the options granted during the current financial year, the valuation model inputs used to
determine the fair value at the grant date, are as follows:
2017
Grant Date
Expiry Date
Share proce
at grant date
Exercise price
Expected
volatility
Dividend
yield
Risk-free
interest rate
Fair value at
grant date
Tranche 1
Tranche 2
21/04/2017 20/06/2020
$0.2075
21/04/2017 20/06/2020
$0.2075
$0.30
$0.30
50.00%
50.00%
0.00%
0.00%
1.76%
1.76%
$0.0233
$0.0288
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT
NOTE 26: SHARE-BASED PAYMENTS (CONTINUED)
(d) Whitfield Share Option
On 11 August 2016, Whitfield Investments Pty Ltd, a company associated with John Diddams, a
director of the Company, was granted an option over 400 ordinary shares at an exercise price of
$100 each, subject to certain vesting conditions, including the Company listing on ASX before 30
September 2017 and John Diddams remaining as a director of the Company for the vesting period.
The options were restructured after the Company undertook a 7500:1 share split on 11 November
2016, resulting in an option over 3,000,000 ordinary shares with a corresponding reduction in the
exercise price. At the date of the report, there were 1,125,000 options on issue, after exercise of
1,875,000 prior to the year end.
Set out below are summaries of options granted under the plan:
2017
Grant Date
Expiry Date Exercise Price
Balance at
start of the
year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of the
year
11/08/2016
14/10/2019
$0.01393
-
3,000,000 (1,875,000)
-
1,125,000
Weighted average
exercise price
$0.01393
There were no options exercisable at the end of the financial year.
The weighted average share price during the financial year was $0.266.
The weighted average remaining contractual life of options outstanding at the end of the financial
year was 2.29 years.
For the options granted during the current financial year, the valuation model inputs used to
determine the fair value at the grant date, are as follows:
Grant Date
Expiry Date
Share price at
grant date
Exercise price
Expected
volatility
Dividend yield
Risk-free interest
rate
Fair value at grant
date
11/08/2016
14/10/2019
$0.0856
$0.0133
50.00%
0.00%
1.38%
$0.0730
74
75
NOTE 27: EVENTS AFTER THE REPORTING PERIOD
Other than the following, the directors are not aware of any significant events since the end of the
reporting period.
1. On 7 July 2017, the company acquired the remaining 25% equity interest in The Delicious &
Nutritious Co Pty Ltd (the owner of the intellectual property and the business known as Red
Dragon), which the company already held 75% equity interest.
2. On 13 July 2017, the Group opened a new store at Aratula on the Cunningham Highway in
Queensland
3. On 1 August 2017, the company acquired the remaining Oliver’s franchised store from the
franchisee at Eastlink Outbound in Victoria.
4. On 10 August 2017, the company entered into a contract to acquire a QSR business located
at Euroa in Victoria, which is expected to be completed during September 2017. This site is
scheduled to be developed into an Oliver’s Real Food Restaurant during 2017.
5. On 17 August 2017, the Group opened a new store at Horsham in Victoria.
6. On 1 September 2017, the company acquired the land and buildings as well as a QSR business
located at Maryborough in Queensland. This site is scheduled to be developed into an Oliver’s
Real Food Restaurant during 2017
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT NOTE 28: RELATED PARTY TRANSACTIONS
Related Parties
(a) The Group’s main related parties are as follows:
i. Entities exercising control over the Group:
The ultimate parent entity that exercises control over the Group is Oliver’s Real Food Ltd, which is
incorporated in Australia.
ii. Key Management Personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including any director (whether executive or
otherwise) of that entity are considered key management personnel.
iii. Entities subject to significant influence by the Group:
An entity that has the power to participate in the financial and operating policy decisions of an
entity, but does not have control over those policies, is an entity that holds significant influence.
Significant influence may be gained by share ownership, statute or agreement.
iv. Other Related Parties
Other related parties include entities controlled by the ultimate parent entity and entities over
which key management personnel have joint control.
→ Taonga Nui Holdings Limited is a company incorporated in New Zealand of which both Jason
Gunn and Katherine Hatzis hold equity.
→ Gunn-arr Pty Limited is a company incorporated in Australia of which Jason Gunn holds equity.
→ Graham Andrew Darroch is the owner of 25% equity interest in The Delicious & Nutritious Food
Co Pty Ltd.
(b) Transactions with related parties:
Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
The following transactions occurred with related parties:
Consolidated Group
2017
$
2016
$
Associates
Royalty payment to Taonga Nui Holdings Limited
201,243
206,898
Consulting fees paid to Taonga Nui Holdings Limited
337,424
360,000
In June 2017, the Group acquired the global intellectual property of ‘Oliver’s’ for a share
consideration of $500,000, settled by way of the issue of 2,500,000 shares, from Taonga Nui
Holdings Limited, a company associated with two directors of the company.
76
NOTE 28: RELATED PARTY TRANSACTIONS (CONTINUED)
(c) Amounts outstanding from related parties
Trade and Other Receivables
Taonga Nui Holdings Limited
(d) Amounts payable to related parties
i. Trade and Other Payables
Taonga Nui Holdings Limited
ii. Loans from Associates
Gunn-arr Pty Ltd
Graham Andrew Darroch
77
Consolidated Group
2017
$
2016
$
8,855
206,898
Consolidated Group
2017
$
-
Consolidated Group
2017
$
-
-
2016
$
24,278
2016
$
606,449
116,000
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT NOTE 29: FINANCIAL RISK MANAGEMENT
The Group’s financial instruments consist mainly of deposits with banks, accounts receivable and
payable, loans to and from subsidiaries and leases.
The totals for each category of financial instruments, measured in accordance with AASB 139: Financial
Instruments: Recognition and Measurement as detailed in the accounting policies to these financial
statements, are as follows:
Financial Assets
Cash and cash equivalents
Loans and receivables
Total Financial Assets
Financial Liabilities
Financial liabilities at amortised cost
Trade and other payables
Borrowings
Total Financial Liabilities
Financial Risk Management Policies
Note
9
10
16
17
Consolidated Group
2017
$
2016
$
6,344,096
838,598
1,273,212
918,823
7,617,308
1,757,421
2,233,286
1,823,837
362,599
2,354,062
2,595,885
4,177,899
The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency
risk, price risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management
program focuses on the unpredictability of financial markets and seeks to minimise potential adverse
effects on the financial performance of the consolidated entity.
Risk management is carried out by senior finance executives (‘finance’) under policies approved by the
Board of Directors (‘the Board’). These policies include identification and analysis of the risk exposure
of the consolidated entity and appropriate procedures, controls and risk limits. Finance identifies and
evaluates financial risks within the consolidated entity’s operating units. Finance reports to the Board on
a monthly basis.
Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and
market risk consisting of interest rate risk, foreign currency risk and other price risk (commodity and
equity price risk). There have been no substantive changes in the types of risks the Group is exposed
to, how these risks arise, or the Board’s objectives, policies and processes for managing or measuring
the risks from the previous period.
78
79
NOTE 29: FINANCIAL RISK MANAGEMENT (CONTINUED)
(a). Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by
counterparties of contract obligations that could lead to a financial loss to the Group.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting
in financial loss to the consolidated entity. The consolidated entity has a strict code of credit,
including obtaining agency credit information, confirming references and setting appropriate
credit limits. The consolidated entity obtains guarantees where appropriate to mitigate credit
risk. The maximum exposure to credit risk at the reporting date to recognised financial assets
is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the
statement of financial position and notes to the financial statements. The consolidated entity does
not hold any collateral.
(b). Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its
debts or otherwise meeting its obligations related to financial liabilities. Vigilant liquidity risk
management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and
cash equivalents) and available borrowing facilities to be able to pay debts as and when they
become due and payable.
The table below reflects an undiscounted contractual maturity analysis for financial liabilities.
Cash flows realised from financial assets reflect management’s expectation as to the timing
of realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows
presented in the table to settle financial liabilities reflect the earliest contractual settlement dates
and do not reflect management’s expectations that banking facilities will be rolled forward.
Financial liability and financial asset maturity analysis
Consolidated Group
Financial liabilities
due for payment
Within 1 Year
1 to 5 years
Over 5 years
2017
$
2016
$
2017
$
2016
$
2017
$
2016
$
2017
$
Total
2016
$
Trade and other payables
2,233,286
1,823,837
Amounts payable to
related parties
Amounts payable to
associated parties
606,449
205,500
607,500
116,000
155,625
Finance lease liabilities
47,223
232,227
109,876
636,261
Total contractual
outflows
2,486,009
3,270,013
109,876
907,886
Total expected outflows
2,486,009
3,270,013
109,876
907,886
2,233,286
1,823,837
-
722,449
205,500
763,125
157,099
868,488
-
-
-
-
2,595,885
4,177,899
2,595,885
4,177,899
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT NOTE 29: FINANCIAL RISK MANAGEMENT (CONTINUED)
Consolidated Group
Financial Assets - cash
flows realisable
Cash and cash
equivalents
Trade, term and loans
receivables
Within 1
Year
2017
$
1 to 5 years
Over 5 years
2016
$
2017
$
2016
$
2017
$
2016
$
Total
2017
$
2016
$
6,344,096
838,598
6,344,096
838,598
1,273,212
856,323
62,500
1,273,212
918,823
Total anticipated inflows
7,617,308
1,694,921
-
62,500
7,617,308
1,757,421
Net (outflow) / inflow on
financial instruments
(c). Market Risk
5,131,299 (1,575,092)
(109,876)
(845,386)
-
-
5,021,423 (2,420,478)
Interest rate risk
i.
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end
of the reporting period whereby a future change in interest rates will affect future cash flows or
the fair value of fixed rate financial instruments. The Group is also exposed to earnings volatility on
floating rate instruments. The financial instruments that primarily expose the Group to interest rate
risk are borrowings, and cash and cash equivalents.
The consolidated entity’s main interest rate risk arises from long-term borrowings. Borrowings
obtained at variable rates expose the consolidated entity to interest rate risk. Borrowings
obtained at fixed rates expose the consolidated entity to fair value risk. The policy is to maintain
approximately 60% of current borrowings at fixed rates using interest rate swaps to achieve this
when necessary.
ii. Foreign currency risk
Exposure to foreign currency risk may result in the fair value or future cash flows of a financial
instrument fluctuating due to movement in foreign exchange rates of currencies in which the
Group holds financial instruments which are other than the AUD functional currency of the Group.
The consolidated entity is not exposed to any significant foreign currency risk.
iii. Other price risk
Other price risk relates to the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market prices largely due to demand and supply factors (other
than those arising from interest rate risk or foreign currency risk) for commodities.
The consolidated entity is not exposed to any significant price risk.
Fair Values
Fair value estimation
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
80
81
NOTE 30: RESERVES
Option Reserve
The option reserve arises on the grant of share options to Directors and executives in accordance
with the provisions of Oliver’s Employee Incentive Plan. Amounts are transferred out of the reserve
and into issued share capital when the options are vested. Further information about the share-
based payments to employees is set out in Note 26.
NOTE 31: EQUITY - NON-CONTROLLING INTEREST
Issued capital
Reserve
Retained earnings
2017
$
200
-
163,916
164,116
2016
$
300
-
118,212
118,512
Non-controlling interests have a 25.0% (2016: 25.0%) equity holding in Delicious and Nutritious Food Co
Pty Ltd
Non-controlling interests have a 0% (2016: 24.0%) equity holding in Retail Technology Services Pty Ltd
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT
OLIVER’S REAL FOOD LTD ABN: 33 166 495 441 AND CONTROLLED
ENTITIES DIRECTORS’ DECLARATION
The directors of the company declare that, in the opinion of the directors:
(a) The attached financial statements and notes thereto are in accordance with the
Corporations Act 2001; and
(i) give a true and fair view of the financial position and performance of the consolidated
entity; and
(ii) comply with Australian Accounting Standards, including the Interpretations and
Corporations Regulations 2001;
(b) the financial statements and notes thereto also comply with International Financial
Reporting Standards, as disclosed in Note 1;
(c) the directors have been given the declarations required by s.295A of the Corporations Act
2001; and
(d) there are reasonable grounds to believe that the company will be able to pay its debts as
and when they become due and payable.
Signed in accordance with a resolution of the directors made pursuant to S.295(5) of the
Corporations Act 2001.
On behalf of the Directors:
Mark Richardson
Chairman
Jason Gunn
Chief Executive Officer
Dated: 21 September 2017
82
83
INDEPENDENT AUDITOR’S REPORT
To the Members of Oliver’s Real Food Limited
Opinion
We have audited the financial report of Oliver’s Real Food Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity
and the consolidated statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies, and the directors' declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
i)
ii)
giving a true and fair view of the Group's financial position as at 30 June 2017 and of its financial
performance for the year then ended; and
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 Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT
Key Audit Matter
How our audit addressed this matter
Business combinations
Refer to Notes 12 and 14 in the financial statements
The group has undertaken several business
combinations related to the acquisition of retail
stores during the year. These are considered to
be a key audit matter due to the size of the
transaction, the complexity of applying AASB 3
Business Combinations, and the exercise of
management judgment involved.
As a result of
the business combinations,
$5,168,164 of additional goodwill has been
recognised during the year. As permitted by
AASB 3, and detailed in Notes 12 and 14, several
business combinations have been accounted for
provisionally, with the final acquisition accounting
to be determined in the following year.
The business combinations involved significant
judgments. These included the determination of
the fair value of consideration paid, and the
the
assets and
identifiable
identification of any separately
intangible assets.
liabilities acquired, and
Impairment of goodwill and intangible assets
Refer to Note 14 in the financial statements
The Group has goodwill of $6.7m as a result of its
various acquisitions. Goodwill is not amortised,
and is subject to an annual impairment test, which
is based on a discounted cash flow model.
The Group’s assessment of
impairment of
goodwill and intangible assets is considered to be
a key audit matter as a result of the significant
judgment involved in performing the impairment
test. These included:
the
the group’s cash
generating units (“CGUs”), and the allocation
of goodwill between them;
identification of
estimates concerning the forecast future cash
flows associated with the CGUs to which the
goodwill is allocated; and
determining the appropriate discount rates
and the growth rate of revenue and costs to
be applied in determining the recoverable
amount for each CGU.
84
Our audit procedures in relation to the acquisitions were
as follows:
we have obtained
relevant purchase
the
agreements, and have ensured that the acquisitions
have been accounted for in accordance with the
requirements of AASB 3 Business Combinations;
where management has relied on external experts to
determine the fair value of assets and liabilities
acquired, we have assessed their competency and
objectivity, and the appropriateness of the valuation
methodology and assumptions used;
assessing management’s determination of the fair
value of consideration paid; and
assessing
the appropriateness of
the Group’s
disclosures in respect of the acquisitions.
Our audit procedures in relation to management’s
impairment assessment included:
assessing management’s identification of CGUs,
and its allocation of the goodwill between them,
based on the nature of the Group’s business and the
manner in which results are monitored and reported;
assessing the valuation methodology used, and the
mechanics of the impairment model prepared by
management;
challenging
the key assumptions used by
management in the impairment models including the
cash flow projections for revenue and expenses, and
growth rates, our understanding of the business;
to assess
using our valuation specialists
the
appropriateness of the discount rate used, based on
market rates, and the Group cost of capital; and
we have also assessed the adequacy of the
disclosures included within the financial statements
for impairment testing, including the assumptions to
which the outcome of the impairment test is most
sensitive, being those that have the most significant
effect on the determination of the recoverable
amount of goodwill.
85
Share-based payment charges
Refer to Note 26 in the financial statements
The Group has issued share options to directors
during the year. These were equity-settled
options, which management valued using a Black
Scholes model.
Share-based payments may be a complex
accounting area and was considered a key audit
matter due to the risk that amounts are incorrectly
recognised and/or appropriately disclosed in the
financial statements.
We made inquiries of the directors to understand the
share-based payment schemes established in the year.
For equity settled options we used our own specialist
valuation knowledge to challenge the key assumptions
used in determining the fair value of the share options at
grant date, being the estimated future share price
volatility, and the number of options expected to vest.
We recalculated the estimated charge which reflected
the best estimate of the number of options to vest.
We considered the adequacy of the Group’s disclosures
in respect of the judgments taken in the valuation
models.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2017, 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 on 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 Company are responsible for the preparation of the 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 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 ability of the Group 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 Group or to cease operations, or has no realistic
alternative but to do so.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
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 the 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.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 17 to 27 of the directors' report for the year ended
30 June 2017.
In our opinion, the Remuneration Report of Oliver’s Real Food Limited, for the year ended 30 June 2017, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
David Talbot
Partner
RSM Australia Partners
Sydney 21 September 2017
86
87
ADDITIONAL SHAREHOLDER INFORMATION
Additional information required by the Australian Securities Exchange (ASX) and not
shown elsewhere in this report is as follows. The information is current at 31 August
2017.
Substantial Shareholders as advised to the ASX
Name
Number of Shares
Current Interest
Hauraki Trustee Company Limited ATF Hauraki Trust
Oliver’s Real Food Limited
Butof Holdings Pty Ltd
Grahger Retail Securities Pty Ltd
Challenger Limited and its entities
NovaPort Capital Pty Ltd
45,262,500
41,866,373*
23,987,500
11,200,000
6,941,081
6,941,081
21.4%
19.79%
11.34%
5.295%
5.04%
5.04%
Note: Number of shares and % is as disclosed to the ASX in substantial shareholder notices.
*Represents the voluntary escrow shares
Distribution of Shareholders
There are 1,758 holders of 213,397,581 ordinary shares. There are no other classes of equity securities
on issue.
1-1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
Total
Ordinary Shares
Number of Holders
Number of Shares
9
284
209
1,010
246
1,758
4,261
853,176
1,598,627
29,091,923
181,849,594
213,397,581
There are 99 shareholders (162,851 shares) holding less than a marketable parcel.
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT Top Twenty Shareholders
Name
Hauraki Trust Company Limited
Butof Holdings Pty Ltd
Grahger Retail Securities Pty Ltd
OAH Holdings Pty Ltd
Buttonwood Nominees Pty Ltd
Citicorp Nominees Pty Limited
Kator Pty Ltd
National Nominees Limited
Holdex Nominees Pty Ltd
HSBC Custody Nominees (Australia) Limited
DS Capital Growth Fund
Taonga Nui Holdings Nz Limited
JJA91535 Superannuation Pty Ltd
Mr Graham Andrew Darroch
Whitfield Investments Pty Ltd
Mrs Ellen Jane Gray
Pounamu Capital Pty Limited
Truebell Capital Pty Ltd
Gleneagle Asset Management
Patagorang Pty Ltd
Total for Top 20
Remaining Holders
Total Issued Capital
On-Market Buy Back
There is no current on-market buy back.
Voting Rights
Number of Shares
Current Interest
43,387,500
23,362,500
9,700,000
5,357,850
4,862,517
4,556,585
3,124,995
2,892,591
2,689,539
2,672,809
2,561,611
2,500,000
2,145,000
2,070,000
1,875,000
1,874,996
1,562,499
1,500,000
1,280,806
1,249,999
121,226,797
92,170,784
213,397,581
20.33
10.95
4.55
2.51
2.28
2.14
1.46
1.36
1.26
1.25
1.20
1.17
1.01
0.97
0.88
0.88
0.73
0.70
0.60
0.59
56.81
43.19
100.00
The voting rights attached to ordinary shares are set out below:
On a show of hands every member present at a meeting in person or by proxy shall have one vote and
upon a poll each fully paid share shall have one vote.
There are no other classes of equity securities.
88
89
Unquoted equity securities
Oliver’s has 9,075,000 unquoted options on issue. All of these options were issued pursuant to the
Oliver’s Equity Incentive Plan except for those listed below.
Option Holder
Veritas Securities Limited
Whitfield Investments Pty Ltd
Securities subject to Escrow and Restricted Securities
Period escrow/restriction ends
Voluntary Escrow
21 September 2017
Number of Options
2,000,000
1,125,000
Number of securities subject to
escrow/restriction
39,833,040 Shares
On the date on which Oliver’s releases its financial results to ASX for the FY18 period
2,033,333 Shares
Restricted Securities
12 months from the date of issue of the shares
(release date - 30 November 2017)
12 months from the date of issue (release date - 31 March 2018)
To 21 June 2018
24 months from quotation (release date - 21 June 2019)
24 months from quotation
Total of Escrowed Shares
Total of Restricted Shares
Total of Restricted Options
Use of Cash and Assets
2,166,664 Shares
500,000 Shares
1,875,000 Shares
71,125,000 Shares
6,375,000 Options
41,866,373 Shares
75,666,664 Shares
6,375,000 Options
Oliver’s has used the cash and assets in a form readily convertible to cash at the time of admission to
the ASX in a way consistent with its business objectives as stated in its Prospectus.
Stock Exchange Listing
Oliver’s securities are only listed on the ASX.
Corporate Governance Statement
The Board plays a key role in overseeing the policies, performance and strategies of Oliver’s Real
Food Limited and its subsidiaries (Oliver’s or the Group or the Company). It is accountable to Oliver’s
Shareholders as a whole and must act in the best interests of Oliver’s. The Board monitors the
operational and financial position and performance of the Company and oversees its business strategy,
including approving the strategic objectives, plans and budgets of Oliver’s. The Board is committed
to maximising performance, generating appropriate levels of Shareholder value and financial return,
and sustaining the growth and success of Oliver’s. In conducting Oliver’s business in line with these
objectives, the Board seeks to ensure that Oliver’s is properly managed to protect and enhance
Shareholder interests and that Oliver’s, its Directors, officers and personnel operate in an appropriate
environment of corporate governance.
The Board has created a framework for managing Oliver’s, including adopting relevant internal controls,
risk management processes and corporate governance policies and practices, which it believes are
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT appropriate for Oliver’s business, and which are designed to promote the responsible management and
conduct of Oliver’s. The Board sets the cultural and ethical tone.
The main policies and practices adopted by Oliver’s are summarised in this Corporate Governance
Statement (Statement).
Each of the charters and policies referred to in this Statement are available on Oliver’s website at
http://www.investor.oliversrealfood.com.au/.
Oliver’s was admitted to the Official List of ASX Limited on 21 June 2017 and this Statement details the
corporate governance policies practices in place on listing and any developments since that time.
This Statement reports against the 3rd edition of the ASX Corporate Governance Council’s Principles
and Recommendations (ASX Principles) and the practices detailed in this Corporate Governance
Statement are current as at 15 September 2017. It has been approved by the Board and is available on
Oliver’s website at http://www.investor.oliversrealfood.com.au/.
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91
CORPORATE DIRECTORY
DIRECTORS
Mr Mark Richardson
Chairman and Independent Non-Executive Director
Mr Jason Gunn
Executive Director and Chief Executive Officer
Ms Katherine Hatzis
Non-executive Director
Mr John Diddams
Independent Non-executive Director
Mr Peter Rodwell
Independent Non-executive Director
COMPANY SECRETARY
Ms Emma Lawler
REGISTERED OFFICE AND
PRINCIPAL PLACE OF
BUSINESS
10 Amsterdam Circuit
Wyong NSW 2259
Australia
(02) 4353 8055
www.investor.oliversrealfood.com.au
SHARE REGISTRY
SOLICITORS
AUDITORS
BANKERS
Boardroom Pty Limited
Level 12, 275 George Street, Sydney NSW 2000
1300 737 760 (in Australia)
www.boardroomlimited.com.au
Breene and Breene
Level 12, 111 Elizabeth Street, Sydney NSW 2000
Baybridge Lawyers
Level 1, 109 Pitt Street, Sydney NSW 2000
Norton Rose Fulbright
Level 18, 225 George Street, Sydney NSW 2000
RSM Australia Partners
Level 13, 60 Castlereagh Street, Sydney NSW 2000
Commonwealth Bank of Australia
Level 19, 111 Pacific Highway, North Sydney NSW 2060
National Australia Bank
Level 13, Tower B, 799 Pacific Highway, Chatswood NSW 2067
STOCK EXCHANGE
LISTING CODE
WEBSITE
Oliver’s Real Food Limited (ASX: OLI)
www.oliversrealfood.com.au
www.investor.oliversrealfood.com.au
OLIVER’S REAL FOOD LIMITED2017 ANNUAL REPORT Fresh. Natural. Organic.
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