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Contents
Chairman Letter
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 LIMITED2018 ANNUAL REPORT
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OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT 6
CHAIRMAN LETTER
Dear Shareholder,
The Directors of Oliver’s Real Food
Limited (“Oliver’s” or the “Company”
or “OLI”) are pleased to present
the 2018 Annual Report for our
first full year as an ASX listed
company.
It has been an incredibly
full year. Oliver’s has been
transformed over this period
by embracing our founder
driven entrepreneurial
organisation, and adding
far stronger governance
and leadership structures, as
expected of a publicly listed
company.
Despite significant growth and
operational challenges, we are pleased
that Oliver’s reported EBITDA has increased
by $5.0 million year on year to a profit of $2.7
million in 2018 from a loss of ($2.3 million) in 2017.
Underlying EBITDA, excluding one-off expenses
and non-recurring items, was $3.4 million.
The result comes at the same time as the
company has opened nine new stores, increased
sales by 75% to $36 million, maintained our core
vision and attracted a highly talented leadership
team.
The biggest single responsibility the Board
has dealt with in this year was the process of
searching for, short listing and finally appointing
Greg Madigan as Oliver’s CEO. During the
international search process, the company
attracted over 30 qualified applicants from
amongst the largest Quick Service Restaurant
and Fast Food brands in the world. Each of these
candidates were attracted to the Oliver’s brand
which has been created by our founder, and
former CEO, Jason Gunn.
The Board is pleased with the manner in which
Jason has welcomed the transition to Greg’s
leadership.
Greg Madigan started on the 9th April 2018 and
has made an immediate positive impact.
He has made internal and external appointments
to create a team of (seven) “Chiefs” (the C-suite),
who have clear and well-defined responsibilities.
Together, Greg, the Board and the C-suite have
put every aspect of the Oliver’s business through
an efficient strategic review. This resulted in the
2019 internal Business Plan, which is owned by
7
the entire company at every
level. Critical elements of
the Business Plan were
disclosed in the
presentation which
accompanies the
Financial Report
in August.
I am absolutely
delighted with
the progress
being made in
implementing
the plan and
look forward to
sharing some of the
specific successes
with shareholders at our
AGM in November.
In Greg’s letter to shareholders,
he will outline some of the key
operational improvements underway.
We are well positioned in the global mega
trend towards healthier eating and sustainable
awareness. Now is the time for Greg and the
C-suite to build on that position.
By providing consistently delicious and nutritious
food, Oliver’s can deliver on its purpose of
empowering customers to live happier and
healthier lives.
I would like to make the observation that your
Board is functioning extremely well. Our second
Board Effectiveness Survey showed improvement
in a number of areas, and the relationship with the
CEO and his leadership team is one that strives to
be exceptional, passionate, ethical and customer
focused at all times.
I can assure all shareholders that, small and
new as we are, we have implemented what we
consider to be best practice strategy, leadership
and governance, that will provide the platform for
Oliver’s to grow and thrive.
Yours Sincerely,
Mark Richardson
Chairman
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT CEO LETTER
Dear Shareholder,
It is always exciting to come in
as a new CEO to an already
established organisation, and
Oliver’s was no exception.
The passion and drive that
existed within the team
under the founder and
former CEO, Jason Gunn
was very evident, but what
a pleasure it has been to
take over, and build upon,
this amazing team, in the
short time I have been with
Oliver’s.
It became evident early that, in
order for us to truly thrive in this
ultra-competitive market, Oliver’s
needed to be internally positioned to
make strategic and operational decisions
that would maintain our position as a leader in
our market segment. For this reason, I set about
building a management structure that was, not
only capable of building the brand for now, but
had the experience and capacity to lead us into
the future.
Our ability to keep investing for the future
depends heavily on delivering today. As we
head into my first full year as CEO, I have built
an internal Business Plan that sets the direction
for the brand in the coming year, as well as
embarks on a program of systemising and
professionalising every aspect of the company.
The Executive team, known as “The Chiefs”,
are fully committed to achieving an aggressive
program that will deliver some results in FY2019,
but place us in an exceptionally strong position
for FY2020 and beyond.
Recently we partnered with the amazing
team at Ripe Solutions. As our specialist Quick
Service Restaurants (QSR) marketing agency,
the team worked with us to validate our brand
positioning and messaging for the future, and
has repositioned our Social Media engagement
through both Facebook and Instagram. This has
been well received by our loyal followers and
social media will play a much larger part in our
communication strategy moving forward.
One challenge facing all QSRs is the significant
consumer trend towards healthy eating,
in particular, towards plant-based (vegan)
consumerism. Whilst
other brands
seemingly struggle
to encapsulate
this growing
market
segment
within
their brand
offering,
Oliver’s is
satisfying
this growing
demand for
plant-based
options from
consumers. The
healthy QSR offering
is our core business
and we are clear leaders in
this area. Our team is focussed
on ensuring we remain influential in
driving this trend and keeping Oliver’s at the
forefront of convenient healthy food.
I would be irresponsible to think that our strong
market position meant that we don’t have room
to improve. I have spent the last few months
listening… listening to my Board of Directors,
listening to my team, listening to our customers.
It is clear that there are amazing opportunities for
us to focus on, and this is the core of our FY2019
Business Plan.
We have a strategy to address our pricing
model, starting with the re-launch of our
signature Pita-Pocket range. Addressing the
consumer value proposition is foremost in my
current focus, reformulating our current product
range; researching, developing and testing new
products that thrill our customers; and ensuring
that our products are priced competitively,
whilst maintaining the high quality that our
customers expect.
We are re-messaging our extensive network of
billboard signage across the Eastern Seaboard.
Consumer research showed that the current
billboard message resonated strongly with
existing customers but wasn’t clear for those
yet to visit an Oliver’s store. The new message
showcases our product offering and clearly
defines the benefits of stopping at Oliver’s.
This initiative is just part of a greatly improved
marketing calendar that includes our first ever
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9
regional television advertising, being broadcast
in the Shepparton market, as well as planned
‘Limited Time Only’ campaigns, Seasonal Menu
promotions, integrated social media campaigns
and a new approach to brand messaging and
in-store promotions.
We have a strategy to drive the evolution of the
customer in-store experience. This is more than
just a refresh of the look of the store. It involves
a review of all customer touch points including
signage, product display, product labelling, staff
appearance, in-store messaging, store décor and
store facilities.
We recently introduced self-ordering kiosks
into the Wyong Northbound store, developed
entirely by our Digital Technology Team. The test
has proven very successful and version 2 of the
kiosk is being developed, which will enhance the
kiosk experience, allowing customers to make
menu choices based on dietary needs, such as
vegetarian, celiac or vegan preferences. The
kiosk trial will be expanded to additional stores
in the coming weeks.
Our fully owned supply chain is truly a valuable
asset for our brand. The supply team are
working hard with both current and new
suppliers to realise supply chain efficiencies
that will contribute greatly to profitability.
A similar process is underway focussed on
service providers and we are confident that the
efficiency of this overall system will be greatly
improved in the coming year.
Part of our Digital Technology and Financial
strategies involves the introduction of the
Netsuite Financial Software. This software will
integrate with our internal OliVerse data and will
bring extensive efficiencies to our accounting,
budgeting, analysis, reporting, payroll and
supply systems. Full integration will bring both
savings and time efficiencies to the organisation.
This project will be completed by December
2018.
One of our most valuable assets are the Oliver’s
team of dedicated and enthusiastic people.
Our entire People Management system is under
review, introducing efficiencies in recruitment,
training and retention. Our people strategy is
as diverse as our amazing workforce, and we
will continue to embrace a team of people that
respond to our purpose, our mission, and most
importantly, to our organisational values.
A significant amount of work is underway with
the Red Dragon Organic beverage brand. Red
Dragon has amazing potential outside of the
Oliver’s brand, and we have recently engaged
an experienced beverage professional to
drive expansion of the Red Dragon business
as its Business Development Manager. We
are exploring additional product lines for the
brand and introducing the products to national
distributors which is producing some exciting
opportunities. It is envisioned that the Red
Dragon brand will play a much more prominent
role in the Oliver’s portfolio in the coming year.
Finally, we will be taking a measured approach
to new store development in FY2019, allowing
the enhancements described previously to be
implemented into the existing store network,
before returning to a more intensive store
expansion program. I look forward to welcoming
Bathurst, Sutton Forrest and our second Coffs
Harbour store to the network in the coming year,
and we will continue to work on our extensive,
development pipeline, in order to achieve a
growing network of premium locations.
These are just some examples of the ways our
FY2019 Strategic Plan is coming to life. We are
well positioned to deliver on all strategies to the
benefit of all our stakeholders.
As we look forward, I’d like to acknowledge the
huge contribution that our dedicated Board of
Directors make to the overall Oliver’s operation.
Their contribution extends far beyond the
routine boardroom, and I take great comfort
from having the unconditional support of Mark
Richardson, Kathy Hatzis, John Diddams, Peter
Rodwell and our Company Secretary, Emma
Lawler. Their guidance and drive throughout my
CEO transition has helped put us in the position
of strength we’re realising today. On behalf of
the management team, we all look forward to
working with our existing Directors in the coming
year, and we are excited and energised to be
building on Oliver’s success and leading it into
the future.
Greg Madigan
Chief Executive Officer
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT 10
11
From left:
Mark Richardson (Chairman),
Emma Lawler (Company Secretary),
Greg Madigan (CEO), and
Non-executive Directors Kathy Hatzis,
Peter Rodwell and John Diddams
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT 1. Maryborough, QLD
11. Wyong Southbound, NSW
21. Eastlink Inbound, VIC
2. Aratula, QLD
3. Coomera, QLD
4. Chinderah, NSW
5. Ferry Park, NSW
12. Lithgow, NSW
13. Dubbo, NSW
14. Goulburn, NSW
15. Gundagai, NSW
6. Coffs Harbour, NSW
16. Euroa, VIC
7. Port Macquarie, NSW
17. Shepparton, VIC
22. Officer Outbound, VIC
23. Officer Inbound, VIC
24. Penlink Outbound, VIC
25. Penlink Inbound, VIC
26. Geelong Southbound, VIC
27. Geelong Northbound, VIC
8. Bulahdelah, NSW
9. Hexham, NSW
18. Wallan Northbound, VIC
28. Ballarat, VIC
19. Wallan Southbound, VIC
10. Wyong Northbound, NSW
20. Eastlink Outbound, VIC
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 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 2018.
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
→ Katherine Hatzis
→ John Flower Diddams
→ Peter Rodwell
→ Jason Antony Gunn - resigned 26 May 2018
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 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, (2017: $Nil)
REVIEW OF OPERATIONS
At the end of the reporting period, the Group operated 28 Oliver’s Company-owned stores in Australia.
Key statutory financial metrics in respect of the current period and the prior financial period are
summarised in the following table:
Revenue from ordinary activities ($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 (dollars)
Net Assets ($m)
Net Tangible Assets ($m)
Cash and cash equivalent ($m)
2018
35.9
(8.5)
27.4
76.4%
2.7
(0.6)
(0.00)
23.7
14.8
2.9
2017
20.7
(6.8)
13.9
67.2%
(2.3)
(2.9)
(0.03)
23.8
17.1
6.3
Change
73.2%
24.7%
96.8%
9.2%
218.4%
79.1%
100.0%
(0.5%)
(13.9%)
(54.9%)
Oliver’s Real Food Limited (Oliver’s) listed on the ASX on 21 June 2017 after raising $15 million by way of
an Initial Public Offering.
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT The Group’s revenues increased by 73.2% to $35.9 million mainly due to the opening of 9 new company
owned stores since the IPO and the buyback of 8 franchised stores.
Same store sales growth was 4.3% for FY2018 when compared to last year, down slightly on prospectus
forecast due to a poor last quarter trading.
The buy back of franchised stores in FY2017 combined with increase in same store revenues and strong
business controls flowed through to increased gross profit for the financial period of $27.4 million with
gross margin increased from 67.2% to 76.4%.
Overhead costs for the year at $5.2 million were higher than anticipated due largely to a number of
one-off unplanned items amounting to $0.4 million and additional staff costs as a result of the change
in CEO and additional people required to prepare the company for growth in the FY2019 year and
beyond.
EBITDA for the year was $2.7 million as compared to a loss of $2.3 million in FY2017, including capital
gains from sale of two parcels of land and buildings which were stores purchased, re-branded and
leased by Oliver’s.
Net profit after tax for the year was a loss of $0.6 million as compared to a loss of $2.9 million in FY2017.
Underlying earnings
The Group's underlying earnings before interest, taxation, depreciation and amortisation ("Underlying
EBITDA") for the year was $3.4 million. It excludes one-off expenses that are not considered to form the
ordinary part of the business.
Net profit after tax - Reported
Tax expenses
Profit before tax
Depreciation and amortisation expenses
Finance costs, net of interest income
Impairment of fixed assets
Impairment of goodwill
EBITDA
One off items
Professional fees (post IPO)
Staff restructuring costs
CEO transition costs
IPO Costs
Underlying EBITDA
2018
$'m
($0.6)
$0.5
($0.1)
$2.3
$0.1
$0.2
$0.2
$2.7
$0.3
$0.1
$0.2
$0.1
$3.4
2017
$'m
($2.9)
($0.7)
($3.6)
$0.9
$0.4
-
-
($2.3)
-
-
-
$0.7
($1.6)
Professional fees (post IPO) includes business acquisition costs, tax expenses related to prior year tax
matters and legal fees for matters not considered ordinary business.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There has been no significant change in the state of affairs of the company during the reporting period.
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15
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL PERIOD
There were no material events that occurred subsequent to the financial year under review.
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.
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 the auditor for non-audit services provided during the year by
the auditor are outlined in Note 7 to the financial statements.
The Directors are satisfied that the provision of non-audit services, during the year, by the auditor,
or by another person or firm on the auditor’s behalf, is compatible with the general standard of
independence for auditor imposed by the Corporations Act 2001 .
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 are reviewed and approved by the audit committee prior to commencement
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 LIMITED2018 ANNUAL REPORT The following fees were paid or payable to RSM Australia for non-audit services provided during the
year ended 30 June 2018:
Taxation Services
Due diligence investigations
Others
$
93,000
10,280
10,775
114,025
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 30 June 2018 has been received and can be
found on page 34 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
Date of Expiry
Exercise Price
Number under Options
11 AUG 2016
21 APR 2017
21 JUN 2017
3 MAY 2017
14 OCT 2019
20 APR 2021
21 JUN 2020
26 FEB 2021
$0.0133
$0.30
$0.30
$0.30
562,500
2,250,000
2,000,000
1,500,000
6,312,500
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
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 LIMITED2018 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 Centers ranging from $25 million
to $400 million in scale.
Interest in Shares
1,590,417 ordinary shares
Interest in Options
750,000 options over ordinary shares
Special Responsibilities Member of Audit and Risk Committee
Chairman of Remuneration and Nomination Committee
Directorships held in other listed
entities during the three years prior
to the current year
None
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 has held senior executive roles in brand, customer marketing, retail
store merchandising and digital for ASX200 companies. This included
strategic planning, customer revenue accountability, brand development,
new product launches, retailing, digital channel management, joint
venture and merger integrations for Optus, St. George, Westpac, ANZ,
and Citibank. Kathy was previously a board member then Deputy Chair of
the Australian Marketing Institute (Marketing’s peak professional body) and
is a co-founder of Oliver’s, being a Director since the company’s inception
in 2003.
Interest in Shares
23,987,500 ordinary shares
Interest in Options
500,000 options over ordinary shares
Special Responsibilities Member of Audit and Risk Committee
Member of Remuneration and Nomination Committee
Directorships held in other listed
entities during the three years prior
to the current year
None
18
19
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 has served as 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
3,537,500 ordinary shares
Interest in Options
1,062,500 options over ordinary shares
Special Responsibilities Chairman of Audit and Risk Committee
Member of Remuneration and Nomination Committee
Directorships held in other listed
entities during the three years prior
to the current year
Experience Co Limited
Volpara Health Technologies Ltd
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 None
Directorships held in other listed
entities during the three years prior
to the current year
None
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT 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, 18 meetings 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
Katherine Hatzis
John Flower Diddams
Peter Rodwell
Jason Antony Gunn*
18
18
18
18
16
18
18
18
16
16
3
3
3
0
0
2
3
3
0
0
5
5
5
0
0
5
5
5
0
0
* Directorship ceased on 26 MAY 2018
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21
LETTER FROM THE CHAIR OF THE REMUNERATION AND
NOMINATION COMMITTEE
Dear Shareholder,
As Chairman of the Board and of the Remuneration and Nomination Committee (RNC), I am pleased to
present Oliver’s first Remuneration Report.
The Report is for the period ended 30 June 2018 (FY2018) and is designed to provide shareholders with
an understanding of Oliver’s remuneration philosophy and the link between this philosophy and Oliver’s
strategy and performance.
The Report specifically focusses on the remuneration arrangements for FY2018 and the philosophy the
Board has set going forward.
The Board is committed to ensuring that the remuneration practices and policies adopted by Oliver’s
drive a culture of performance to ensure executives are rewarded for the delivery of results and the
achievement of Oliver’s short-term financial objectives and long-term business strategy aimed at
delivering sustainable growth in enterprise value for all Shareholders.
The members of the RNC have the necessary expertise and independence to fulfil their responsibilities
and are able to access independent experts in remuneration for advice should this be required. The
governance processes in relation to remuneration are working effectively.
We look forward to providing further detail on the remuneration and reward framework in future reports
and the linkages this provides with business performance.
Mark Richardson
Chairman of the Remuneration and Nomination Committee
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT REMUNERATION REPORT
This Remuneration Report (Report), which has been audited, describes the Key Management Personnel
(KMP) remuneration arrangements for the period ended 30 JUNE 2018 (FY2018) 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
→ 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
Katherine Hatzis
John Diddams
Peter Rodwell
Chairman and Independent Non-Executive Director
Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Executive Key Management Personnel
Greg Madigan - appointed 9 April 2018
Chief Executive Officer
Jason Gunn - resigned 26 May 2018
Chief Executive Officer
Alan Lee
Chief Financial Officer
22
23
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 are each Non-executive Directors and 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 FY2018, Oliver’s did not engage the services of any external remuneration
consultants.
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.
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.
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT 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 FY2018, 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.
Alan Lee, CFO received a pre-IPO grant of 400,000 Options.
Jason Gunn, ex CEO, received a grant of 1,000,000 Options which were forfeited upon his resignation
as CEO on 26 May 2018
No offer has yet been made to the CEO and no further offer has been made to the CFO or any other
KMP or executive 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.
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
FY2019
FY2018
Proposed
FY2019
FY2018
Proposed
FY2019
FY2018
Greg Madigan*
$340,000
$78,651
$170,000
Jason Gunn**
$0
$460,443
Alan Lee
$250,000
$250,040
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
*Commenced on 9 April 2018
**Resigned on 26 May 2018
24
25
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.
HOW REWARD IS LINKED TO PERFORMANCE
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 four years are shown below:
Revenue $m
EBITDA $m
Net Profit After tax $m
2018
2017
2016
2015
$35.9
$20.7
$17.1
$12.7
$2.7
$(2.3)
$1.8
$1.6
$(0.6)
$(2.9)
$0.6
$0.9
It should be noted that there is no direct link between remuneration and performance in FY2018. There
were no STI payments made in FY2017 and FY2018 to executive KMP and no LTI awards were made. It
should also be noted that no dividend was declared or paid in FY2017 and FY2018
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 Options were made 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.
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT 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.
26
27
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.
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT 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.
28
29
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
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT shareholding level of Directors is detailed in the tables later in this Report.
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 FY2018, 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. For FY2019, the annual base fee to be paid to
the Chairperson (including all Committee fees) is $150,000 with fees payable to other Non-excutive
Directors and other members of the Audit and Risk Committee and the RNC to remain unchanged from
FY2018.
Based on the fees paid in FY2018, the full year of Non-executive Director fees was $350,000 which is
70% of the approved total fee pool of $500,000.
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.
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
Greg Madigan
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 up to 50% of base salary,
subject to meeting KPIs and equity participation as part of a Long Term Incentive Plan
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
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
30
31
KMP REMUNERATION FOR THE YEAR ENDED 30 JUNE 2018
2018
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
Non- Executive Directors
Mark Richardson
Chairman
Katherine Hatzis
John Diddams
Peter Rodwell
Other Executive KMP
Greg Madigan **
Chief Executive Officer
Alan Lee
Chief Financial Officer
$424,694
$18,378
$17,372
$460,443
$120,000
$80,000
$90,000
$60,000
$22,191
$142,191
$14,794
$94,794
$47,779
$137,779
$14,794
$74,794
$73,639
$5,012
$78,651
$229,951
$20,089
$7,647
$257,687
$1,078,284
$43,479
$0
$17,372
$0
$107.205 $1,246,340
* CEO role ceased on 9 April 2018 and Directorship ceased on 26 May 2018 . Cash salary and fees includes termination
payments consistent with the CEO employment contract.
** Commenced on 9 April 2018
KMP REMUNERATION FOR THE YEAR ENDED 30 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
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT 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:
As at 30 June 2017
Mark Richardson, Chairman
Jason Gunn
Katherine Hatzis, Director
John Diddams, Director
Peter Rodwell, Director
Greg Madigan, CEO
Alan Lee, CFO
Balance at Listing
Date or Appointment
Shares received
during the period on
exercise of Options
Additional shares
acquired on market
Balance at the end of
the period
1,233,333
45,262,500
23,987,500
-
-
-
357,084
75,000
1,590,417
45,337,500
-
23,987, 500
2,275,000
562,500
700,000
3,537,500
900,000
-
-
-
-
-
-
-
-
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 OEIP 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:
Opening
balance
Granted
during the
year
Exercised
during the
year
Forfeited
Closing
balance
Date of expiry
Total
Exercisable
Mark Richardson
750,000
Katherine Hatzis
500,000
John Diddams
1,125,000
John Diddams
Peter Rodwell
Alan Lee
500,000
500,000
400,000
Jason Gunn
1,000,000
-
-
-
-
-
-
-
-
-
(562,500)
-
-
-
-
-
-
-
-
-
-
750,000
20/4/2021
375,000
500,000
20/4/2021
250,000
562,500 14/10/2019
-
500,000
20/4/2021
250,000
500,000
20/4/2021
250,000
400,000
26/2/2021
-
-
(1,000,000)
-
26/2/2021
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.
SHARES ISSUED ON THE EXERCISE OF OPTIONS
There were 562,500 ordinary shares of Oliver’s Real Food Limited issued on the exercise of options
during the year ended 30 June 2018 and up to the date of this report.
32
33
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
John Diddams
Director
Dated: 19 September 2018
OLIVER’S REAL FOOD LIMITED2018 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
2018, 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: 19 September 2018
34
35
OLIVER’S REAL FOOD LTD AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE YEAR ENDED 30 JUNE 2018
Continuing operations
Revenue
Other income
Raw materials and consumables used
Employee benefits expense
Administration expense
Occupancy expense
Depreciation and amortisation expense
Finance costs
Impairment of property, plant and equipment
Impairment of goodwill
Other expenses
Loss before income tax
Tax (expense) / benefit
Net Loss for the year
Total other comprehensive income for the year
Total comprehensive (loss) / income for the year
Net loss attributable to:
Owners of the parent entity
Non-controlling interest
Total comprehensive (loss) / income attributable to:
Members of the parent entity
Non-controlling interest
Loss per share
Basic loss per share
Diluted loss per share
Consolidated Group
2017
$
2018
$
35,938,194
20,755,626
1,922,155
398,054
(8,484,671)
(6,805,372)
(15,610,971)
(8,721,549)
(5,159,547)
(4,772,140)
(5,866,724)
(3,033,433)
(2,296,595)
(99,147)
(182,510)
(274,610)
(26,116)
(923,836)
(419,149)
-
-
(97,913)
(140,542)
(3,619,712)
(502,211)
750,863
(642,753)
(2,868,849)
-
-
(642,753)
(2,868,849)
(642,753)
(2,815,208)
-
(53,641)
(642,753)
(2,868,849)
(642,753)
(2,815,208)
-
(53,641)
(642,753)
(2,868,849)
(0.00)
(0.00)
(0.03)
(0.03)
Note
3
3
4
5
4
8
8
The accompanying notes form part of these financial statements.
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT OLIVER’S REAL FOOD LTD AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018
Note
Consolidated Group
2017
$
2018
$
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Total current assets
Non-current assets
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
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
Equity attributable to owners of the parent entity
Non-controlling interest
Total equity
9
10
11
15
13
19
14
15
16
17
18
20
17
18
19
20
21
30
31
2,858,960
659,714
2,095,246
410,679
6,024,599
15,287,023
758,213
8,934,430
406,517
25,386,182
31,410,781
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
3,128,895
2,233,286
374,313
494,089
391,744
252,723
308,756
235,515
4,389,041
3,030,280
1,701,559
203,138
1,011,462
403,579
3,319,738
7,708,779
109,876
158,569
61,247
345,201
674,893
3,705,173
23,702,002
23,820,390
26,149,248
25,215,628
275,128
(2,722,374)
23,702,002
-
121,883
(1,681,237)
23,656,274
164,116
23,702,002
23,820,390
The accompanying notes form part of these financial statements.
36
37
OLIVER’S REAL FOOD LTD AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED
30 JUNE 2018
Share Capital
Ordinary
Retained
Earnings
Reserves
Option
Reserve
Note
$
$
1,795,438
1,200,003
-
-
(2,815,208)
(2,815,208)
Subtotal
$
Non-
controlling
Interests
$
Total
$
2,995,441
118,512
3,113,953
(2,815,208)
(53,641)
(2,868,849)
(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
23,420,190
136,838
121,883
23,678,911
-
-
-
-
-
-
24,681,558
(1,261,368)
174,440
-
84,281
23,678,911
$
-
-
-
-
-
Consolidated Group
Balance at 1 July 2016
Comprehensive income
Loss 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, net of tax
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
Aquisition of non-controlling interest
Total other
-
-
(202,870)
(202,870)
-
-
(202,870)
(202,870)
99,245
99,245
(103,625)
(103,625)
Balance at 30 June 2017
25,215,628
(1,681,237)
121,883
23,656,274
164,116
23,820,390
Balance at 1 July 2017
Comprehensive income
Loss for the year
Total comprehensive income for
the year
Transactions with owners, in their
capacity as owners, and other
transfers
Transaction costs, net of tax
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
25,215,628
(1,681,237)
121,883
23,656,274
164,116
23,820,390
-
-
(642,753)
(642,753)
363,620
7,500
-
-
371,120
-
-
-
-
-
-
-
-
-
-
(642,753)
(642,753)
363,620
7,500
-
153,245
153,245
153,245
524,365
-
-
-
-
-
-
-
(642,753)
(642,753)
363,620
7,500
-
153,245
524,365
Aquisition of non-controlling interest
Total other
562,500
562,500
(398,384)
(398,384)
-
-
164,116
164,116
(164,116)
(164,116)
-
-
Balance at 30 June 2018
26,149,248
(2,722,374)
275,128
23,702,002
-
23,702,002
The accompanying notes form part of these financial statements.
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT OLIVER’S REAL FOOD LTD AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2018
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
$
2018
$
36,451,103
20,506,383
9,924
18,166
6,567
50,401
(34,753,490)
(22,701,339)
(99,147)
(277,969)
(419,149)
(77,376)
Net cash generated by/(used in) operating activities
25a
1,348,587
(2,634,513)
Cash flows from investing activities
Proceeds from disposal of property, plant and equipment
3,871,418
-
Payment for purchase of business, net of cash acquired
Payments for intangible assets
Purchase of property, plant and equipment
Net cash (used in)/generated by investing activities
Cash flows from financing 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
(3,437,234)
(8,107,395)
(250,490)
-
(6,662,975)
(4,065,116)
(6,479,282)
(12,172,511)
-
23,555,000
1,973,555
1,831,712
-
(1,261,368)
7,500
-
(335,496)
1,645,559
24,000
174,440
(4,011,262)
20,312,522
(3,485,136)
5,505,498
6,344,096
838,598
Effect of exchange rates on cash holdings in foreign currencies
-
-
Cash and cash equivalents at end of financial year
9
2,858,960
6,344,096
The accompanying notes form part of these financial statements.
38
39
OLIVER’S REAL FOOD LTD AND CONTROLLED ENTITIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED
30 JUNE 2018
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 17 September 2018 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.
Except for cash flow information, the financial statements have been prepared on an accrual 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 LIMITED2018 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.
40
41
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 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.
A deferred tax liability shall be recognised for all taxable temporary differences, except to the
extent that the deferred tax liability arises from: (a) the initial recognition of goodwill; or (b) the
initial recognition of an asset or liability in a transaction which: (i) is not a business combination;
and (ii) at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).
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
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT 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
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.
Tax consolidation
The company and its wholly-owned Australian resident entities have formed a tax-consolidated
group and are therefore taxed as a single entity from that date. The head entity within the tax-
consolidated group is Oliver's Real Food Ltd.
The members of the tax-consolidated group are identified in Note 12. Tax expense/income,
deferred tax liabilities and deferred tax assets arising from temporary differences of the members
of the tax-consolidated group are recognised in the separate financial statements of the members
of the tax-consolidated group using the “separate taxpayer within group” approach by reference
to the carrying amounts in the separate financial statements of each entity and the tax values
applying under tax consolidation. Current tax liabilities and assets and deferred tax assets arising
from unused tax losses and relevant tax credits of the members of the tax- consolidated group are
recognised by the company (as head entity in the tax-consolidated group). Due to the existence
of a tax funding arrangement between the entities in the tax-consolidated group, amounts
are recognised as payable to or receivable by the company and each member of the group in
relation to the tax contribution amounts paid or payable between the parent entity and the other
members of the tax-consolidated group in accordance with the arrangement.
Current income tax expense (income) and deferred tax liabilities and assets are recognised
in the separate financial statements of members of the tax consolidated group using the
"group allocation" approach. This approach determines the tax obligations of entities based
on a systematic allocation which ensures that all amounts are allocated to the subsidiaries in
compliance with AASB 112 Income Taxes.
Any current tax liabilities (assets) and deferred tax assets arising from unused tax losses of the
subsidiaries are assumed by the head entity in the tax consolidated group and are recognised as
amounts payable (receivable) to (from) other entities in the tax consolidated group. Any difference
between these amounts and amounts payable (receivable) under the tax funding agreement (refer
below) is recognised by the head entity as an equity injection or distribution.
(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
42
43
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 (ie 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 (ie 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
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:
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT
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 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.
(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
44
45
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.
(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, salaries and sick leave. 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, salaries and sick leave
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
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT
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 at grant date 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 amounts are recognised in the option reserve
and statement of profit and loss respectively. 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.
(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
46
47
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.
(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 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.
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT
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 $1,000.
(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.
(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 previous
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
48
49
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 group 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
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
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT
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.
The Group has established an AASB 9 project team and has completed its impact assessment of
AASB 9. Based on a preliminary assessment performed over each line of business and product
type, the effects of AASB 9 are not expected to have a material effect on the Group.
The Group intended to apply the standard commencing on 1 July 2018 without providing
comparable information, adjusting retained earning balances and other equity components as
at 1 July 2018 (the date of the initial application of the standard), if there is any such impact. The
Group also determined the simplified expected credit loss model for trade receivable will be
adopted.
→ AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods
beginning on or after 1 January 2018, as 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 of retrospective application to incomplete contracts on the
date of initial application. There are also enhanced disclosure requirements.
AASB 15 establishes a single comprehensive model for entities to use in accounting for revenue
arising from contracts with customers. The Group has established an AASB 15 project team
and is in the process of completing its impact assessment of AASB 15. Based a preliminary
assessment performed over each line of business and product type, the effects of AASB 15 are
not expected to have a material effect on the Group.
The Group intended to apply the standard commencing on 1 July 2018 without providing
comparable information, adjusting retained earning balances and other equity components as at
1 July 2018 (the date of the initial application of the standard), if there is any 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.
50
51
The main changes introduced by the new Standard are as follows:
→ recognition of a right-of-use asset and lease liability for all leases (excluding short-term leases
with a lease term of 12 months or less 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 of retrospective
application as an adjustment to opening equity on the date of initial application.
The Group has established an AASB 16 project team and is in the process of completing its
impact assessment of AASB 16. Based on a preliminary assessment performed over each line of
business and lease type, the effect of AASB 16 is not expected to have a material effect on the
Group. It is impracticable at this stage to provide a reasonable estimate of such impact.
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT
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
2018
$
2017
$
22,010,846
23,428,400
1,843,171
1,367,652
23,854,017
24,796,052
322,478
606,717
929,195
136,127
503,769
639,896
25,573,122
25,215,628
(2,923,429)
(1,181,355)
275,129
121,883
22,924,822
24,156,156
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
Total Profit
(1,763,030)
(611,972)
Total Comprehensive Income
(1,763,030)
(611,972)
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2018 and 30 June 2017
Contractual commitments
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2018
and 30 June 2017
52
53
Note
Consolidated Group
2018
$
2017
$
35,922,123
19,893,812
6,147
855,247
35,928,270
20,749,059
9,924
6,567
35,938,194
20,755,626
1,852,960
18,418
50,777
14,037
203,648
180,369
1,922,155
398,054
NOTE 3: REVENUE AND OTHER INCOME
a. Revenue from continuing operations
Sales Revenue
Revenue from sale of goods
Franchise and royalty revenue
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
Profit before tax from continuing operations includes the following specific expenses:
a. Expenses
Cost of sales
Finance costs
Employee benefit expense
Bad and doubtful debts:
- trade receivables
Occupancy expenses
Depreciation
Amortisation
Share-based payment expenses
Loss on disposal of property, plant and equipment
Note
Consolidated Group
2018
$
2017
$
8,484,671
6,805,372
99,147
419,149
15,610,971
8,721,549
67,252
79,610
5,866,724
3,033,433
1,659,348
874,051
637,244
153,256
26,116
49,785
84,281
97,913
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT 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% (2017:30%)
- consolidated group
Add:
Tax effect of:
Note
Consolidated Group
2018
$
2017
$
496,044
(673,905)
130,210
(226,958)
(496,044)
-
372,001
150,000
502,211
(750,863)
(42,163)
(1,085,914)
- non-deductable depreciation and amortisation
193,856
14,936
- 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
Recoupment of prior year tax losses
Less:
Tax effect of:
- Gain on bargain purchase
Income tax attribute to entity
-
-
-
372,001
13,453
(19,703)
-
-
25,163
150,000
199,063
-
517,444
(696,752)
15,233
54,111
502,211
(750,863)
54
55
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 2018.
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
Termination benefits
Share-based payments
Total KMP compensation
Short-term employee benefits
2018
$
2017
$
1,078,284
594,707
43,479
17,372
-
-
105,389
28,096
1,244,524
622,803
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
- taxation services
- due diligence services
- other taxation services
Consolidated Group
2018
$
2017
$
83,588
129,805
93,000
13,970
10,250
283,250
10,775
46,872
197,613
473,897
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT NOTE 8: LOSS PER SHARE
a. Reconciliation of earnings to profit or loss:
Loss
Profit attributable to non-controlling equity interest
Loss used to calculate basic EPS
Loss used in the calculation of dilutive EPS
b. Weighted average number of ordinary shares outstanding during the year
used in calculating basic EPS
Consolidated Group
2018
$
2017
$
(642,753)
(2,868,849)
-
53,641
(642,753)
(2,815,208)
(642,753)
(2,815,208)
No.
No.
195,817,574
98,733,200
Weighted average number of dilutive options outstanding
6,601,930
-
Weighted average number of ordinary shares outstanding during the year used in
calculating dilutive EPS
202,419,504
98,733,200
EPS
- Basic
- Diluted
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
(0.00)
(0.00)
(0.03)
(0.03)
Note
Consolidated Group
2018
$
2017
$
2,544,723
6,256,466
314,237
87,630
29
2,858,960
6,344,096
2,858,960
6,344,096
2,858,960
6,344,096
56
57
Note
Consolidated Group
2018
$
2017
$
455,666
975,340
-
-
455,666
975,340
204,048
297,872
659,714
1,273,212
NOTE 10: TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Provision for impairment
Other receivables
Total current trade and other receivables
Credit risk
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
$334,527 as at 30 June 2018 ($633,416 as at 30 June 2017).
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
Consolidated Group
2018
$
2017
$
273,003
598,534
-
6,925
61,524
27,957
334,527
633,416
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT NOTE 11: INVENTORIES
Current
At cost:
Raw materials and stores
Finished goods
Note
Consolidated Group
2017
$
2017
$
2,050,921
1,294,623
44,325
45,858
2,095,246
1,340,481
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 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 Bulahdelah Pty Ltd
Oliver's Calcoffs Pty Ltd
Oliver's Chinderah Pty Ltd
Oliver's Coffs Pty Ltd
Oliver's Coomera 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
58
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
2018
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2017
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
NOTE 12: INTERESTS IN SUBSIDIARIES (CONTINUED)
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 Halfway Creek Pty Ltd
Oliver's Hexham Pty Ltd
Oliver's Holbrook Pty Ltd
Oliver's Horsham Pty Ltd
Oliver's Kelso 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 Shepparton 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
OSC (Qld) 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
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
59
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%
100%
100%
100%
100%
100%
100%
75%
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%
100%
0%
100%
100%
100%
100%
100%
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT NOTE 12: INTERESTS IN SUBSIDIARIES (CONTINUED)
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 (1,833,330 @ $0.19 each). The values identified in relation to the
acquisition of Revilo’s were provisional as at 30 June 2017 as the re-acquired rights intangible asset
fair value were yet to be finalised.
The valuation of the re-acquired rights is now finalised and the details of the acquisition are as
follows:
Purchase consideration
- Cash
- ordinary shares (i)
Less:
Property, plant and equipment
Reacquired rights
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
50,000
23,024
685,785
(230,369)
(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 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). The increase of
$50,000 in gain on bargain purchase was related to the re- acquired rights identified in the final
purchase price allocation. It has been included as income in the Statement of Comprehensive
Income and will not be assessable for tax purposes.
(iii) The acquired entities' contribution of gross revenue ($1.0 million) and earnings before interest,
tax, depreciation and amortisation (EBITDA) ($0.05 million) for the year to 30 June 2018.
(c) Transactions with Non-controlling interests in The Delicious & Nutritious Food Co Pty Ltd
On 7 July 2017, the company acquired the remaining 25% of the outstanding shares in The Delicious
& Nutritious Food Co Pty Ltd for a share consideration at a fair value of $562,500 (i.e. 1,875,000
ordinary shares at $0.30 each). This brings the Parent entity interest in The Delicious & Nutritious
Food Co Pty Ltd to 100%.
60
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
Accumulated impairment losses
Motor vehicles:
At cost
Accumulated depreciation
Total plant and equipment
Total property, plant and equipment
a) Movements in Carrying Amounts
61
Consolidated Group
2018
$
2017
$
1,028,338
1,728,642
1,028,338
1,728,642
7,344,891
5,457,235
(1,949,781)
(1,050,258)
(123,767)
-
5,271,343
4,406,977
9,148,819
4,482,634
(1,000,182)
(440,149)
(58,743)
-
8,089,894
4,042,485
1,289,184
819,190
(391,736)
(260,204)
897,448
558,986
14,285,685
9,008,448
15,287,023
10,737,090
Movements in carrying amounts for each class of property, plant and equipment between the
beginning and the end of the current financial year.
Consolidated Group:
Balance at 1 July 2016
Additions
Disposals
Acquisitions through
business combinations
Depreciation expense
Land & Buildings
$
Leashold
Improvements
$
Plant & Equipment
Motor Vehicles
$
$
Total
$
69,958
1,905,880
1,529,761
501,106
4,006,705
1,658,684
-
-
-
1,616,169
(97,273)
1,397,561
(173,816)
185,282
4,857,696
(7,694)
(278,783)
848,646
2,176,869
-
3,025,515
(230,937)
(523,398)
(119,708)
(874,043)
Balance at 30 June 2017
1,728,642
4,042,485
4,406,977
558,986
10,737,090
Additions
Disposals
Acquisitions through
business combinations
Depreciation expense
Impairment of fixed assets
7,173
2,969,277
(2,026,239)
-
1,926,317
(213,931)
1,318,761
1,696,759
243,683
469,995
5,372,762
-
-
(2,240,170)
3,259,203
-
-
(559,884)
(967,935)
(131,533)
(1,659,352)
(58,743)
(123,767)
-
(182,510)
Balance at 30 June 2018
1,028,337
8,089,894
5,271,344
897,448
15,287,023
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT
Consolidated Group
2018
$
2017
$
4,937,638
(274,610)
5,743,720
-
4,663,028
5,743,720
190,576
(107,399)
83,177
381,580
(403)
381,177
81,855
(52,063)
29,792
1,844
(31)
1,813
691,256
612,189
-
-
691,256
612,189
333,830
(77,884)
255,946
333,830
(44,500)
289,330
3,408,000
(548,154)
2,859,846
8,934,430
-
-
-
6,676,844
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 amortisation and impairment losses
Net carrying amount
Customer relationships
Cost
Accumulated amortisation
Net carrying amount
Reacquired rights
Cost
Accumulated amortisation
Net carrying amount
Total intangible assets
62
63
NOTE 14: INTANGIBLE ASSETS (CONTINUED)
Consolidated Group
Goodwill
$
Reacquired
Rights
$
Patents and
Trademarks
$
Computer
Software
$
Brands and IP
$
Customer
Relationships
$
Total
$
Year ended 30 June 2017
Balance at the beginning
of the year
Additions
Acquisition through business
combinations
Disposals
Amortisation charge
Impairment losses
575,556
-
5,168,164
-
-
Closing value at 30 June 2017
5,743,720
Year ended 30 June 2018
Balance at the beginning
of the year
Additions
5,743,720
-
Acquisition through business
combinations
2,601,918
-
-
-
-
-
-
-
-
-
-
(3,408,000) 3,408,000
Reallocation
Disposals
Amortisation charge
46,163
-
110,576
322,712
1,055,007
-
-
-
(16,371)
-
1,845
501,613
-
-
(31)
-
-
-
-
-
-
-
-
503,458
5,168,164
-
(33,383)
(49,785)
-
-
29,792
1,814
612,189
289,329
6,676,844
29,792
1,814
612,189
289,329
6,676,844
108,720
379,732
79,067
-
-
-
-
-
-
-
-
-
(548,154)
(55,335)
(369)
-
-
-
-
567,519
2,601,918
-
-
(33,383)
(637,241)
-
(274,610)
-
-
-
-
-
Impairment losses
(274,610)
-
-
-
Closing value at 30 June 2018 4,663,028
2,859,846
83,177
381,177
691,256
255,946 8,934,430
Intangible assets, other than goodwill, brand 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 group of cash-generating units which are based on the group’s reporting
segments.
NSW segment
VIC segment
QLD segment
Red Dragon
Total
2018
$
2017
$
2,262,916
4,035,789
2,034,466
964,785
-
253,100
365,646
490,046
4,663,028
5,743,720
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT NOTE 14: INTANGIBLE ASSETS (CONTINUED)
Brands and IP are allocated to group of cash-generating units which are based on the group’s reporting
segments.
Oliver’s stores
Red Dragon
Total
2018
$
580,680
110,576
691,256
2017
$
501,613
110,576
612,189
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
QLD segment
Red Dragon
Growth Rate
Discount Rate
5.63%
7.72%
38.06%
19.31%
20.75%
20.75%
20.75%
20.75%
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
QLD segment
Red Dragon
64
Growth Rate
Discount Rate
(9.9%)
(2.9%)
0.0%
0.0%
34.5%
9.7%
0.0%
0.0%
65
NOTE 14: INTANGIBLE ASSETS (CONTINUED)
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.
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
23 JAN 2017 22 FEB 2017
Eastlink
Inbound
Hexham
Wyong
Northbound
7 MAR 2017
Goulburn
1 MAY 2017
Wyong
Southbound
30 JUN 2017
Wallan
Northbound
30 JUN 2017
Eastlink
Outbound
1 AUG 2017
Total
$
$
$
$
$
$
$
$
Consideration
- cash
375,000
360,000 2,800,000
750,000 1,900,000
900,000
800,000 7,885,000
- Debt forgiveness
150,000
-
- Other consideration
-
11,388
17,618
9,745
-
-
-
-
-
167,618
8,963
4,984
5,455
40,535
Total consideration
525,000
371,388
2,827,363
750,000 1,908,963
904,984
805,455 8,093,153
Fair value of assets
acquired
Property, plant and
equipment
326,847
322,165
705,722
148,282
716,869
532,764
296,608 3,049,257
Reacquired rights
50,000
50,000
1,712,000
505,000
941,000
50,000
50,000 3,358,000
Goodwill
148,153
(777)
409,641
96,718
251,094
322,220
458,847
1,685,896
525,000
371,388 2,827,363
750,000 1,908,963
904,984
805,455 8,093,153
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.
For the former franchised stores acquired in FY2017, their contribution of gross revenue and EBIDTA for
the year to 30 June 2018 were $13.7 million and $3.3 million respectively.
For the former franchised store acquired during the year, its contribution of gross revenue and EBIDTA
for the year to 30 June 2018 were $1.1 million and $0.18 million respectively. There is not adequate
information available for disclosing the contribution of gross revenue and EBITDA for the full year
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT NOTE 14: INTANGIBLE ASSETS (CONTINUED)
(b) Acquisition of businesses
Further, the Group acquired two 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
- Other consideration
Total consideration
Fair value of assets acquired
Property, plant and equipment
Goodwill
Maryborough
Euroa
31 AUG 2017
21 SEP 2017
$
$
Total
$
1,000,000
1,600,000
2,600,000
15,025
16,850
31,875
1,015,025
1,616,850
2,631,875
857,696
157,329
673,235
943,615
1,530,931
1,100,944
1,015,025
1,616,850
2,631,875
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.
NOTE 15: OTHER ASSETS
Current
Prepayments
Non-current
Rent receivable
Security deposits and bonds
Other assets
66
Consolidated Group
2018
$
2017
$
410,679
153,248
410,679
153,248
-
50,910
327,668
326,648
78,849
51,052
406,517
428,610
NOTE 16: TRADE AND OTHER PAYABLES
Current
Unsecured liabilities
Trade payables
Sundry payables and accrued expenses
67
Consolidated Group
2018
2017
$
-
$
-
1,851,473
978,519
1,277,423
1,254,767
3,128,895
2,233,286
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT NOTE 17: BORROWINGS
Current
Unsecured liabilities
Lease liability
Loan from associated parties
Total current borrowings
Non-current
Unsecured liabilities
Lease liability
Secured liabilities
Bank loans
Total non-current borrowings
Note
Consolidated Group
2018
$
2017
$
22
174,313
47,223
200,000
205,500
374,313
252,723
22
311,559
109,876
17a,c
1,390,000
-
1,701,559
109,876
Total borrowings
29
2,075,872
362,599
a. Total current and non-current secured liabilities
Bank loan
Consolidated Group
Note
2018
$
1,390,000
1,390,000
2017
$
-
-
The nominal interest rate is 1.81% per annum and the year of maturity is December 2019. The loans are
secured over the group's all present and after acquired properties. Covenants imposed by the bank
require EBITDA of $460,000 for each 6 months period and $920,000 for each 12 months period.
68
NOTE 18: OTHER FINANCIAL LIABILITIES
Current
Tax payable
Vendors - former franchised stores
Turnover rent payable
Other
Non-current
Accruals
69
2018
$
-
-
446,581
47,508
494,089
203,138
203,138
Consolidated Group
2017
$
164,000
119,392
18,218
7,146
308,756
158,569
158,569
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT 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 2017
Prepayments
Rent Receivable
Amortised intangibles
Balance at 30 June 2018
Deferred tax assets
Other
Employee benefits
Provision for future lease expense
Superannuation not paid in financial year
Depreciation on make good
Unwinding of discount
Balance at 30 June 2017
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 2018
70
Consolidated Group
2018
2017
$
-
-
-
$
-
-
-
Opening
Balance
Charged to
Income
Additions
through
business
combinations
Charged to
Equity
Closing
Balance
$
$
$
$
42,212
3,762
4,983
10,290
47,195
14,052
45,974
5,364
15,273
(15,273)
-
-
-
-
-
-
(62,276)
1,022,400
61,247
(72,185)
1,022,400
-
349,149
39,557
31,097
57,929
(10,359)
36,341
7,172
3,030
47,176
8,843
2,047
144,029
427,953
349,149
(385,770)
70,654
46,869
47,570
83,517
16,015
5,077
13,371
25,478
78,735
18,922
571,982
(202,395)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
45,974
15,273
61,247
51,338
-
960,124
1,011,462
349,149
70,654
47,570
83,517
16,015
5,077
571,982
388,626
352,005
-
-
-
-
-
117,523
60,941
108,995
94,750
23,999
388,626
758,213
NOTE 20: PROVISIONS
Current
Employee benefits
Opening balance at 1 July 2017
Additional provisions - net
Balance at 30 June 2018
Non-current
Lease make good
Opening balance at 1 July 2017
Additional provisions
Balance at 30 June 2018
Analysis of Total Provisions
Current
Non-current
71
Consolidated Group
2018
$
2017
$
235,515
156,229
391,744
131,958
103,557
235,515
Consolidated Group
2018
$
2017
$
345,201
250,100
58,378
95,101
403,579
345,201
Consolidated Group
2018
$
391,744
403,579
795,323
2017
$
235,515
345,201
580,716
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.
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT NOTE 21: ISSUED CAPITAL
213,960,081 (2017: 211,522,581) fully paid ordinary shares
Consolidated Group
2018
$
2017
$
26,149,248
25,215,628
26,149,248
25,215,628
(a) Ordinary Shares
At the beginning of the reporting period
211,522,581
25,215,628
10,409
1,795,438
2018
No.
2018
$
2017
No.
2017
$
Consolidated Group
Shares issued during the year
- 14 NOV 2016 (1:7500 shares split)
- NOV 2016 ($0.30 per share for cash)
- NOV 2016 ($0.19 per share for non-cash)
- DEC 2016 ($0.16 per share for cash)
- FEB 2017 ($0.16 per share for cash)
- MAY 2017 ($0.20725 per share for non-cash)
- JUN 2017 ($0.20 per share for non-cash)
- JUN 2017 ($0.20 per share for non-cash)
- JUN 2017 ($0.20 per share for non-cash)
- JUN 2017 (exercise of options)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
78,057,091
-
3,000,001
900,000
1,833,330
348,333
3,062,500
490,000
45,531,250
7,285,000
500,000
103,625
2,500,000
500,000
153,000
30,600
75,000,000
15,000,000
1,875,000
24,000
- JUL 2017 ($0.30 per share for non-cash)
1,875,000
562,500
- JUN 2018 (exercise of options)
562,500
7,500
Transaction costs on raising capital
-
363,620
-
-
-
-
-
(1,261,368)
At the end of the reporting period
213,960,081
26,149,248
211,522,581
25,215,628
In July 2017, a total of 1,875,000 ordinary shares were issued at a fair value of $0.30 each for the
acquisition of 25% equity interest in The Delicious & Nutritious Food Co Pty Ltd.
In June 2018, 562,500 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.
72
73
NOTE 21: ISSUED CAPITAL (CONTINUED)
(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: 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: 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.
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
Note
17
Note
Consolidated Group
2018
$
2017
$
190,940
348,782
-
539,722
(69,824)
469,897
-
-
-
-
-
-
Consolidated Group
2018
$
2017
$
3,470,270
2,500,174
13,407,039
9,507,758
18,954,174
15,237,745
35,831,483
27,245,677
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT
NOTE 22: CAPITAL AND LEASING COMMITMENTS (CONTINUED)
(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
(d) Lessor Commitments - Sub-lease
Minimum lease commitments receivable but not recognised in the
financial statements
- not later than 12 months
- between 12 months and 5 years
- later than 5 years
Note
Consolidated Group
2018
$
2017
$
561,485
2,256,915
101,964
466,393
468,003
191,450
2,920,363
1,125,846
Note
Consolidated Group
2018
$
2017
$
88,010
317,636
663,119
1,0368,765
-
-
-
-
NOTE 23: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Contingent Liabilities
The consolidated entity has given bank guarantees as at 30 June 2018 of $606,680 (2017: $435,853) to
various landlords to support QSR leases.
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.
74
75
NOTE 25: CASH FLOW INFORMATION
(a) Operating Activities with Profit after Income Tax
Profit after income tax
Non-cash flows in profit
Depreciation & Amortisation
Net (gain)/loss on disposal of property, plant and equipment
Impairment of property, plant and equipment
Impairment of goodwill
Share option expenses
Changes in assets and liabilities, net of the effects of purchase and disposal
of subsidiaries:
- decrease/(Increase) in trade and term receivables
- (Increase)/decrease in prepayments
- (Increase)/decrease in inventories
- decrease/(Increase) other operating assets
- Increase/(decrease) in trade payables
- Increase/(decrease) in income taxes payable
- Increase/(decrease) in deferred taxes payable
- (Increase)/decrease in deferred taxes receivable
- Increase/(decrease) in provisions
- decrease/(Increase) in accruals
- Increase/(decrease) in other operating liabilities
Consolidated Group
2018
$
2017
$
(642,753)
(2,868,849)
2,296,595
(1,826,844)
-
274,610
153,256
522,833
(257,430)
923,836
83,876
-
-
83,878
(167,231)
(12,540)
(754,765)
(392,593)
22,092
(61,030)
872,954
(229,496)
90,665
(443,698)
149,604
(19,394)
259,179
(238,439)
446,426
14,052
(427,953)
164,228
540,688
233,764
Cash flows from operating activities
1,348,587
(2,634,513)
OLIVER’S REAL FOOD LIMITED2018 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 years period. Vesting is subject to continuous service as Director
until the vesting date.
Set out below are summaries of options granted under the plan:
2018
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 1,125,000 options exercisable at the end of the financial year: The weighted average share
price during the financial year was $0.187.
The weighted average remaining contractual life of options outstanding at the end of the financial year
was 2.77 years.
(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.
2018
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
-
-
(2,200,000)
1,500,000
Weighted average
exercise price
$0.30
There were no options exercisable at the end of the financial year:
A total of 2,200,000 options were forfeited as a result of the executives left the company during
the financial year The weighted average share price during the financial year was $0.187.
The weighted average remaining contractual life of options outstanding at the end of the financial
year was 2.80 years.
76
77
NOTE 26: SHARE-BASED PAYMENTS (CONTINUED)
(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:
2018
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
There were 1,000,000 options exercisable at the end of the financial year: The weighted average
share price during the financial year was $0.187.
The weighted average remaining contractual life of options outstanding at the end of the financial
year was 1.97 years.
(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
periods. The options were restructured after the Company undertook 7500:1 share split on 11
November 2016, resulting in a option over 3,000,000 ordinary shares with a corresponding
reduction in the exercise price. At the date of the report, there were 562,500 options on issue,
after exercise of a further 562,500 prior to the year end.
Set out below are summaries of options granted under the plan:
2018
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
1,125,000
-
(562,500)
-
562,500
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 $0.187.
The weighted average remaining contractual life of options outstanding at the end of the financial
year was 2.11 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
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT
NOTE 27: EVENTS AFTER THE REPORTING PERIOD
The Directors are not aware of any significant events since the end of the reporting period.
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.
→ Jason Gunn was the Chief Executive Officer of the company and resigned on 26 May 2018.
Amanda Gunn (nee Robson), the Project Director, is the wife of Jason Gunn. Amanda resigned
on 29 May 2018.
→ 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.
(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:
Associates
Royalty payment to Taonga Nui Holdings Limited
Consulting fees paid to Taonga Nui Holdings Limited
2018
$
-
-
Salary and Superannuation paid to Amanda Gunn
180,000
Consolidated Group
2017
$
201,243
337,424
-
78
NOTE 28: RELATED PARTY TRANSACTIONS (CONTINUED)
(c) Amounts outstanding from related parties
Trade and Other Receivables
Taonga Nui Holdings Limited
Jason Gunn
79
2018
$
-
2,500
Consolidated Group
2017
$
24,278
-
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
$
2017
$
2,858,960
6,344,096
659,714
1,273,212
3,518,674
7,617,308
3,128,895
2,233,286
2,075,872
362,599
5,204,767
2,595,885
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.
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT
NOTE 29: FINANCIAL RISK MANAGEMENT (CONTINUED)
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.
(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
2018
Financial liabilities
due for payment
Bank overdrafts and loans
$
-
Within 1 Year
1 to 5 years
Over 5 years
2017
$
2018
$
2017
$
2018
$
2017
$
2018
$
-
1,390,000
1,390,000
Total
2017
$
-
Trade and other payables
3,128,895
2,233,286
Amounts payable to
related parties
200,000
205,500
-
-
-
-
Finance lease liabilities
174,313
47,223
311,559
109,876
Total expected outflows
3,503,208 2,486,009
1,701,559
109,876
-
-
-
-
-
-
-
-
3,128,895
2,233,286
200,000
205,500
485,872
157,100
5,204,767
2,595,886
80
NOTE 29: FINANCIAL RISK MANAGEMENT (CONTINUED)
81
Within 1 Year
1 to 5 years
Over 5 years
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
2018
$
Total
2017
$
Consolidated Group
Financial Assets - cash
flows realisable
Cash and cash
equivalents
Trade, term and loans
receivables
2,858,960
6,344,096
659,714
1,273,212
-
-
-
-
-
-
Total anticipated inflows
3,518,674
7,617,308
Net (outflow) / inflow on
financial instruments
15,466
5,131,299 (1,701,559)
(109,876)
(c). Market Risk
-
-
-
-
-
-
-
-
2,858,960 6,344,096
659,714
1,273,212
3,518,674
7,617,308
(1,686,093)
5,021,422
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.
The following sensitivity analysis shows the impact that a reasonable possible change in interest
rates would have on Group profit after tax and equity. The impact is determined by assessing the
effect that such a reasonable possible change in interest rates would have had on the interest
income/(expense) and the impact on financial instrument fair values.
If interest rates had moved by 100 basis points and with all other variables held constant, profit
after tax and equity would be affected as follows:
Interest rates - increase by 100 basis points
Interest rates - decrease by 100 basis points
Impact on profit after tax
2018
$
(9,730)
9,730
2017
$
-
-
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.
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT NOTE 29: FINANCIAL RISK MANAGEMENT (CONTINUED)
Fair Values
Fair value estimation
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
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
2018
$
-
-
-
-
2017
$
200
-
163,916
164,116
Non-controlling interests have a 0% (2017: 25.0%) equity holding in Delicious and Nutritious Food Co
Pty Ltd
82
83
OLIVER’S REAL FOOD LTD 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
John Diddams
Non-executive Director
Dated: 19 September 2018
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT
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 2018, 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 2018 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.
84
85
Key Audit Matter
How our audit addressed this matter
Business combinations
Refer to Notes 12 and 14 in the financial statements
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.
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,
$2,601,918 of additional goodwill has been
recognised during the year. As permitted by
AASB 3, and detailed in Notes 12 and 14, several
previously
combinations
business
accounted
final
the
for provisionally, with
acquisition accounting to be determined in the
current year.
were
The business combinations involved significant
judgments. These included the determination of
the fair value of consideration paid, and the
the
assets and
identification of any separately
identifiable
intangible assets.
liabilities acquired, and
Impairment of goodwill and intangible assets
Refer to Note 14 in the financial statements
The Group has goodwill of $4.7m 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.
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; 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.
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT
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 2018, 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.
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 22 to 33 of the directors' report for the year ended
30 June 2018.
In our opinion, the Remuneration Report of Oliver’s Real Food Limited, for the year ended 30 June 2018, complies
with section 300A of the Corporations Act 2001.
86
87
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 19 September 2018
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT
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 17 August 2018.
Substantial Shareholders as advised to the ASX
Name
Hauraki Trustee Company Limited ATF Hauraki Trust
Butof Holdings Pty Ltd
IOOF Holdings Ltd
Distribution of Shareholders
Number of Shares
Current Interest %
45,262,500
23,987,500
16,162,723
21.40
11.34
7.554
There are 2,102 holders of 213,960,081 ordinary shares. There are no other classes of equity securities
on issue.
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Totals
Holders
Total Units
%
25
430
351
1,120
176
2,102
7,788
1,456,618
2,742,123
35,198,470
174,555,082
213,960,081
0.004
0.681
1.282
16.451
81.583
100.00
There are 342 shareholders (919,123 shares) holding less than a marketable parcel (11.5c).
88
89
Top Twenty Shareholders
Name
Hauraki Trust Company Limited
Butof Holdings Pty Ltd
National Nominees Limited
BNP Paribas Noms Pty Ltd
Citicorp Nominees Pty Limited
Truebell Capital Pty Ltd
OAH Holdings Pty Ltd
Kator Pty Ltd
Safari Capital Pty Ltd
Taonga Nui Holdings NZ Limited
Whitfield Investments Pty Ltd
JJA91535 Superannuation Fund Pty Limited
Mr Graham Andrew Darroch
Budleaf Pty Ltd
Pounamu Capital Pty Limited
Gabriella Nominees Pty Ltd
Patagorang Pty Ltd
Boucaut Enterprises Pty Ltd
Marko Polo Pty Ltd
Mr Mark Kelly & Ms Terese Annette Kelly
Number of Shares
Current Interest %
43,387,500
23,362,500
13,837,680
12,132,545
5,615,499
4,762,869
3,316,994
3,124,995
3,029,079
2,500,000
2,437,500
2,145,000
2,070,000
2,000,000
1,562,499
1,400,000
1,249,999
1,249,998
1,233,333
1,127,065
20.278
10.919
6.467
5.670
2.625
2.226
1.550
1.461%
1.416%
1.168%
1.139%
1.003%
0.967%
0.935%
0.730%
0.654%
0.584%
0.584%
0.576%
0.527%
Total Securities of Top 20 Holdings
Total of Securities
131,545,055
61.481%
213,960,081
On-Market Buy Back
There is no current on-market buy back.
Voting Rights
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.
Unquoted equity securities
Oliver’s has 6,312,500 unquoted options on issue to 17 holders. 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
Number of Options
2,000,000
562,500
OLIVER’S REAL FOOD LIMITED2018 ANNUAL REPORT
Securities subject to Escrow and Restricted Securities
Period escrow/restriction ends
Escrowed Securities
Number of securities subject to
escrow/restriction
Voluntary escrow until release of FY18 financial statements
2,033,333 Shares
Restricted Securities
24 months from quotation (release date - 21 June 2019)
(562,500 of these shares are under voluntary escrow from 21 June to 28 June 2018)
24 months from quotation
Use of Cash and Assets
71,687,500 Shares
4,812,500 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
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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CORPORATE DIRECTORY
DIRECTORS
Mr Mark Richardson
Chairman and Independent Non-Executive Director
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
Norton Rose Fulbright
Level 18, 225 George Street, Sydney NSW 2000
Mills Oakley
Level 12, 400 George Street Sydney, New South Wales 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 LIMITED2018 ANNUAL REPORT 92