Oliver's Real Food Limited
Annual Report 2021

Plain-text annual report

Oliver’s Real Food Limited ANNUAL REPORT 2020/2021 Contents Chairman's Letter CEO's Letter Corporate Directory 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 Shareholder Information 2 4 8 9 23 24 26 27 28 29 65 66 71 1 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT CHAIRMAN'S LETTER The 2020/21 year has proven to be a year of great change for Oliver’s Real Food. Despite the challenges, Oliver’s is now well positioned and very much looking forward to improved trading conditions as we all emerge from the Covid-19 related lockdowns. The most significant challenge faced by the Company and its investors was the suspension from official quotation by the Australian Securities Exchange (ASX). The ASX suspended the Company’s securities on the 26th February 2021 based upon concerns related to the Interim Financial Statements for the half-year ended 31 December 2020. Those statements were issued with an auditor’s disclaimer of review conclusion, as the information supplied and available at the date the interim financial statements were authorised for issue was insufficient to support the Board’s view that the half-year financial statements supported a going concern basis. Subsequently, the Board provided additional evidence to the auditors relating to the use of the going concern assumption and the Company was successful in obtaining reissued consolidated half-year statements which did not contain either a disclaimer of review conclusion or an adverse review conclusion. That additional evidence included details of the restructuring plan forecast to reduce costs by more than $4,000,000 annually, as well as details of a $2,500,000 funding initiative. Unfortunately, the ASX chose not to reinstate the Company’s securities, and then raised further concerns about the level of working capital. I can assure investors that the Board remains committed to a reinstatement of the Company’s securities and is working progressively through initiatives we expect should satisfy the ASX concerns and therefore see trading in the Company’s securities recommence. There were several changes to the Board during the 2020/21 year. I joined the Company as a non-executive Director on the 25th November 2020. Martin Green, as a representative of major shareholder Gelba, was appointed to the Board on the 22nd January 2021. I was subsequently appointed as Chairman on the 4th March 2021. On that date, both Jason and Amanda Gunn resigned from the Board. Finally, Steve Metter continues to serve as a director, providing strong expertise and industry knowledge. It is very appropriate to recognise and thank Jason Gunn for his entrepreneurial vision, energy and Kim Wood Chairman commitment in establishing Oliver’s Real Food. Amanda has similarly made a huge contribution. While there have been many challenges to navigate since the inception of this business, there was no roadmap describing the steps necessary to build a healthy, organic alternative to the fast- food industry. The Gunn’s maintain a significant shareholding in the Company. Oliver’s Real Food has reinvented its operating model during the 2020/21 year. Interested readers can find much more about that in our Chief Executive Officer’s comments in the Annual Report. Suffice it to say that operating costs have been slashed, logistics streamlined, and technology modernised. The Board is extremely pleased and supportive of the new operating model being implemented by CEO Tammie Phillips and her team. We feel confident that the Company has now established the right model to support both the current and future needs of the business. We are pleased with the continuing association with EG partnership and thank them for playing their part in the Oliver’s Real Food story. We know that we need strong partnerships to succeed. Major shareholders, Michael and Suzanne Gregg, and Gelba, took a more active role in 2020/21. The Board has welcomed their interest and appreciates their expertise. Both during the 2021/21 year and more recently, those major shareholders have demonstrated a real commitment to the Company during difficult times by both investing and providing finance as required on more favourable terms than existing arrangements. The Board expects to announce an opportunity for all existing 2 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTinvestors to participate in an attractively priced equity raise in coming months. On behalf of the Board, I would like to thank all of our employees for their dedication and hard work during the 2020/21 year. I know that there have been uncertainties due to the Covid-19 related impact on our stores and employees’ working hours. The Company's changed operating model has created both opportunities and challenges for employees too. I remind us all that we are day by day and week by week seeing the benefits of a better way to do our business. A focus on an agile and nimble model will benefit employees, partners, and investors. We have that model. We have a united Board and a strong management team. We have committed employees. We have great partners. I encourage all of you to stay the course as we rebuild. I am certain that Oliver’s Real Food has a brighter future. Kim Wood Chairman 3 3 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTCEO'S LETTER "The first step towards getting somewhere is to decide that you are not going to stay where you are." Dear Fellow Oliver's Shareholders, With all the challenges that Covid-19 threw at us throughout the year, we took significant steps to make sure Oliver’s weathered the economic impact whilst still progressing the planned changes to the business model. As I write this, I reflect on an immensely challenging and productive year and am pleased we were able to balance three critical components: 1. The successful transformation to a leaner and simpler operating model 2. Minimising cash outflows and utilising government support schemes to reduce the impact of the constant disruptions to trading conditions 3. Investing in growth initiatives and customer feedback As we balanced all these three (3) things, we were ensuring that Oliver’s emerged stronger than ever before. The collective impact of the restructure has ensured that Oliver’s is in the best possible state to generate profits, build the brand and restore the market’s faith in the company. THE FINANCIAL HIGHLIGHTS Trading conditions due to Covid-19 were, and remain, tough and whilst the store network did not get a clear runway for sales throughout the year there were windows of strong performance and a cause for real optimism: • NSW network which was the least impacted (up until the latest June lockdown) was trending to match 2019 (pre-pandemic) sales levels. This bodes well for the future once the lockdowns lift. • 25% of total store revenue was derived from sales from new products and categories introduced over the past 12 months, and the introduction of ‘bundle deals’ resulted in a contribution of 18% to total sales. In March, a new breakfast menu was launched. In the last quarter, sales in the 6am-11am time of day category lifted to 30% of total sales (up from 25% in the previous quarters). This is a significant achievement in QSR-type businesses and we anticipate this trend to continue once lockdowns lift. Tammie Phillips Chief Executive Officer 4 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT• In the EG Channel, we ended the year servicing 153 EG Petrol Stations and opening two new Oliver’s franchises. We also overhauled the service and delivery model in this channel which has now stabilised and is delivering sustainable EBITDA margins, which we expect will continue indefinitely. We ended the financial year with net loss after tax of $4.4m vs net loss after tax $17.5m in FY20. This includes around $1m in (planned) restructuring costs, including redundancies and site closures (mostly our commercial kitchens) and a write back of $2m in impairments. The successful execution of our operating model transformation was completed in June. The highlights of the re-structure included the closure of three production kitchens, three warehouses, in-house logistics as well as a reduction of 40% to Head Office costs, reducing the company’s cost base by circa $4.5m per annum. The full financial impact of this restructure will manifest in the 2022 financial year and beyond. Under our new operating model our store network sales per venue now needs to restore to 2019 pre-pandemic levels to achieve FY22 target EBITDA margin which will see the business get to a break-even EBIT. This target considers the effects of Covid-19 on the first quarter of FY22. THE NEW OPERATING MODEL The New Agile Operating Model The business has now replaced complex in-house operations with strategic partnerships that foster efficiency. In April the business entered a productive relationship with Superior Foods to service all company warehousing and logistics. Under the new partnership Superior Foods own, manage, and distribute our stock. The transition has improved the speed and accuracy of logistics, with fulfilment rates to stores meeting the contractual minimum performance requirement of 98% within 2 weeks of the transition. NEW OPERATING MODEL OLD OPERATING MODEL Oliver's Stores & Franchises Euro Garage Outlets 3PL NSW 3PL VIC PARTNER KITCHENS 3P SPECIALIST FUEL SUPPLY CHAIN PARTNER Oliver's Stores & Franchises Euro Garage Outlets 3PL LOGISTICS LOGISTICS LOGISTICS LOGISTICS VIC WAREHOUSE NSW WAREHOUSE QLD WAREHOUSE VIC KITCHEN NSW ASSEMBLY KITCHEN QLD KITCHEN 5 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTIn the area of food production, the business now collaborates with food and drink bespoke manufacturers to produce our recipes which are delivered into Superior Warehouses for distribution to our store network three times a week. Whilst we retain control of the development and IP of our branded lines, we are already seeing the benefits that collaboration will bring to innovation. Further, cost savings and efficiency improvements from the new operating model enabled us to manage the impact of the continued Covid-19 crisis better ensuring minimised cash outflows during store closures or limited trading periods. OTHER PROGRESS Product Development and Innovation The development of new products has remained a critical element of our business strategy. Our strategic focus throughout the year has been on time-of-day sales, bundling and new category development. OLI has a number of planned initiatives in the pipeline. In October we will launch our Kids Menu Meal Deal which will incorporate packaged healthy menu choices for young OLI customers including a meal, side and drink boxed for under $10. Our forward strategy is to continue to leverage our strong health brand with continuous innovation to gain market share and create long term competitive advantage. Technology In April we successfully rolled out a new point of sale system to all stores. Along with significant cost savings, some of the improved benefits from the new system include: digital menu boards with time of day capabilities; real time live updating to menus and pricing to stores; and significant enhanced analytic data. have contributed to the reduction of 40% in Head Office personnel. Developed solutions for ‘contact free’ ordering and payment include upgraded Self-Service Kiosks, Web Ordering, Ordering via QR code and the new OLI App. These technologies have been in development throughout the year and are rolling into stores from August to November 2021. Marketing and Branding In the second half FY21 the company underwent an extensive review of the Oliver’s brand and marketing function which included discovery and customer surveying across a broad demographic of road trippers, families, retirees, holiday groups and workers/commuters. Through this process we gained an insightful understanding of how Oliver’s can best build on its brand and marketing maturity to derive the most impact. In the areas of Finance, HR and Recipe Development we have transitioned the business away from out-of-date, inefficient software to newer technologies that have improved workplace productivity. Efficiencies gained in these areas Through a lean, highly effective and strategic marketing presence we will transform the brand over two years to reflect a more current, updated image of the business with a consistent brand message and voice with more personality injected. 6 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTEG Partnership The EG Food to Go rollout has continued throughout the year and currently we supply into 162 service stations across QLD, NSW and VIC. Food to Go is one of the fastest growing product categories in the Australian Petrol and Convenience Sector. We are very committed to the opportunity in this sector and the long-term partnership with EG. We continue to look very hard at where we are and where we need to go in this category as we strive to establish ourselves as a leading convenience food brand in the EG Petrol Station network. From September we broaden our relationship with EG into WA and SA with 33 stores planned. THANKS TO OUR STAKEHOLDERS My thanks go to our teams who have been directly affected by business disruptions that have limited operations throughout the year as well as staff cutbacks from the re-structuring. Our teams, their understanding and resilience have made it possible for us to continue to move ahead, to progress and emerge stronger than before. To the Board of Directors, thank you for your leadership and direction and embracing all the necessary changes that we needed to make to steer our way back to profitability in the coming year. To our shareholders, my job is to deal with reality, and I acknowledge that we have asked for a lot of patience from you as we have worked through both the challenges and progress of the past 12 months. This is a long-term effort and I assure you of our commitment to make things right for our shareholders and rebuild trust. LOOKING TO THE FUTURE In closing, we continue to work for a healthier future with a clear vision and strategy, for which I take full accountability for leading. This comprises a simple and lean operating model that enables the business to concentrate on sales growth through innovation and continuous improvement, a relentless focus on customer understanding and value, evolving the brand and respecting our stakeholders. Ultimately, I believe the pandemic has increased scrutiny on health and that this will be an added advantage to our sales recovery. From November, with the greatest certainty we have had for two years in front of us, I see Oliver's as having the trifecta – healthy food that makes you feel good, located in highway locations where people will be travelling in increased numbers and a lean operating model that delivers a solid foundation for long-term profitability. I am confident in the strategy as we strive to become a strong organisation and to create long term value for you and each of our stakeholders. Tammie Phillips CEO tammie.phillips@oliversrealfood.com.au 7 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTOliver's Real Food Limited Corporate directory 30 June 2021 Directors Kimley Wood Martin Green Steven Metter Registered office and Principal Place of Business 10 Amsterdam Circuit Share register Auditor Solicitors Bankers Wyong NSW 2259 Australia (02) 4353 8055 www.investor.oliversrealfood.com.au Boardroom Pty Ltd Level 12, 275 George Street Sydney NSW 2000 1300 737 760 (in Australia) www.boardroomlimited.com.au Bishop Collins Audit Pty Limited 1/1 Pioneer Ave. Tuggerah NSW 2259 Breene and Breene Level 12, 111 Elizabeth 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 Oliver's Real Food Limited shares are listed on the Australian Securities Exchange (ASX code: OLI) Website www.oliversrealfood.com.au www.investor.oliversrealfood.com.au 8 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Directors' report 30 June 2021 The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of Oliver's Real Food Limited (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2021. Directors The following persons were directors of Oliver's Real Food Limited during the whole of the financial year and up to the date of this report, unless otherwise stated: • Jason Gunn - Chairman and Non-Executive Director (Appointed 2 May 2020), previously CEO and Executive Director (Appointed 28 February 2019), (Resigned 4 March 2021) • Amanda Gunn – Non-Executive Director (Appointed 28 February 2019), (resigned 4 March 2021) • David McMahon – Executive Director (Appointed 2 May 2020), (Resigned 19 November 2020). • Kimley Wood -Non-Executive Director (Appointed 25 November 2020), Chairman (Appointed 4 March 2021). • Steven Metter Non-Executive Director (Appointed 11 March 2019). • Ann Brownjohn Non-Executive Director (Appointed 14 October 2020), ( Resigned 19 November 2020). • Martin Green Non-Executive Director (Appointed 22 January 2021). Dividends There were no dividends paid, recommended or declared during the current or previous financial year. Review of operations The loss for the consolidated entity after providing for income tax amounted to $4,412,240 (30 June 2020: $17,506,369). Revenue from ordinary activities Raw materials and consumables used Gross Profit Earnings before interest, taxes, depreciation, amortisation and impairment (EBITDAI) Net (loss) / profit after tax attributable to members Net Assets Net Tangible Assets Cash and Cash equivalent 2021 $ 2020 $ Change $ Change % 28,180,333 (12,294,358) 21,053,387 28,539,653 (8,516,919) 23,255,378 (359,320) (3,777,439) (2,201,991) (1.3%) (30.7%) (9.5%) 118,314 (4,412,240) (6,052,266) (2,071,968) 1,574,649 (69,477) 187,791 (17,506,369) 13,094,129 (1,768,265) 4,847,802 616,346 (4,284,001) (6,919,770) 958,303 (207.2%) (74.8%) 41.3% (70.1%) 64.3% EBITDAI Earnings before interest, tax, depreciation, amortisation and impairment (EBITDAI) is a financial measure which is not prescribed by Australian Accounting Standards. This represents the profit/loss adjusted for specific non-cash and significant items. The directors and management consider EBITDAI to reflect the core earnings of the entity. 9 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Directors' report 30 June 2021 At the end of the reporting period the group operated 24 Oliver’s company owned stores in Australia and continued to supply the ever-increasing OLIVERS FOOD TO GO in 153 (2020: 14) EG Outlets in NSW, VIC and QLD. As is evident, the 2021 financial year has continued to be a challenging one for the group. The significant impact of Covid-19 and the various ever-changing State border closures have had direct and substantial impacts on the business performance. The business has navigated these challenges diligently, having implemented a carefully planned and well executed rolling operational restructure commencing in April 2021 with a strong focus on margin performance and operating expense reductions, which has essentially made the business far leaner, more proactive with far better medium and long term prospects. It is pleasing that, notwithstanding Covid-19, the group has generated a small profit in the 2021 EBITDAI. The impact of Covid-19 saw all venues cease trading for various and differing periods in each of the States during the financial year, complicating management and supply chains. And at date of writing, NSW and VIC remain in lockdown, with some relief in sight once these states reach the designated vaccination levels under the national plan. It is pleasing to note that, notwithstanding the confusion and chaos, Oliver's has experienced a period of stability at all levels – Board, Management and Personnel. We have retained excellent working relationships with suppliers, landlords and other interested parties, and the Board believes that Oliver's is well placed to bounce back once the state borders reopen and remain so. The EG supply agreement is fully operational and well tested during these challenging times, with the partnership having already opened 153 stores at June 2021 with a plan to open a further 79 FOOD TO GO OUTLETS by end of 2022. There is little doubt that the current environment has impacted business sectors differently. Oliver's being retail, tourism, hospitality and located on major interstate highways, has struggled. As a result, management has had to focus on restricting the cash burn rate, which they have successfully achieved, but nonetheless it has been necessary for Oliver's to raise additional short-term capital during, and post, the financial year. This included a capital raising by major shareholders in March and May 2021 which raised $2.7m and the granting of a temporary overdraft of $500k provided by major shareholders in August 2021. The Board will consider an approach to shareholders with a view to undertaking a capital raise in the months ahead, once the Board has clarity on the group’s financial requirements, itself somewhat dependent on the state borders opening and the subsequent conditions of trade. The Board acknowledges previous announcements regarding a possible Share Purchase Plan (SPP), and that this is currently on hold pending final resolution. The ASX suspension of OLI’s shares continues to cause both frustration and disruption. The Board has been in regular contact with the ASX and will continue to do so. OLI has written to the ASX on numerous occasions, providing the ASX with various documents, but we remain suspended, primarily as the ASX has determined that Oliver's level of negative working capital is not acceptable. This position has been caused in part by the application of Accounting Standard AASB16, which dictates that all operating leases be capitalised as a non-current asset, with the outstanding lease obligations reflected as both non-liability and current liability. This addition to current liabilities has in turn created a negative working capital. The ASX is requiring a minimum of $1.5m positive working capital for OLI before the group can be relisted. Significant changes in the state of affairs Other than as noted in the review of operations and matters subsequent to the end of the financial year, there have been no significant changes in the state of affairs of the consolidated entity during the financial year. 10 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTOliver's Real Food Limited Directors' report 30 June 2021 Matters subsequent to the end of the financial year Two of the Company’s major shareholders have provided a temporary overdraft facility for a sum of $500k, unsecured, interest at 4.0% per annum and with a repayment date of 30 September 2021. This facility had secured the approval of the group’s major lenders, PURE Asset Management, who have been working with the group in these challenging times to ensure its survival as both they and the major shareholders remain confident as to Oliver’s financial success once the lockdowns end. The overdraft facility was designed purely to combat the financial losses stemming from the numerous, and extended, lockdowns. As per the OLI announcement on 24 September 2021.The Company is pleased to announce that an agreement has been reached between PURE Asset Management and OLI's two leading shareholders, Michael and Suzanne Gregg and Gelba Pty Ltd (an entity of which OLI Director, Mr Martin Green, is a Director and minority shareholder) for the PURE $5.0m loan facility to be assigned to these two major shareholders. It is expected that the assignment will occur on or around 30 September 2021. Following the assignment, the terms of the loan will be modified as follows: - Amount: Term: Interest Rate: Interest Paid: Covenant: Repayment: $5.0m 24 months from assignment date 6% (linked to the 90 days BBSY) and reviewed quarterly Quarterly in arrears None In full 24 months from assignment date Early repayment will not incur fees As per PURE loan agreement, namely first ranking security over assets of the Company and its subsidiaries. Security: In addition, the same two leading shareholders will provide an additional loan facility Facility: Amount: Term: Interest Rate: Interest Paid Purpose: Covenant: Draw Down: Repayment: Security: Revolving line of Credit $1.5m (note $500k already advanced in August 2021 and currently at 4% interest) 24 months 6% (linked to the 90 days BBSY) and reviewed quarterly Calculated daily and paid monthly To support the Company's working capital requirements due to Covid-19 lockdown restrictions None As funds are needed In full after 24 months Unsecured initially, however, should security be requested, company would require shareholder approval under listing rule 10.1 to grant security. Warrants: There is no change in the 47,500,000 warrants held by Pure Asset Management and approved by shareholders, all terms remain the same. 11 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTOliver's Real Food Limited Directors' report 30 June 2021 Covid-19 Impact on Oliver's Real Food Limited The Covid-19 pandemic has continued unabated through the entire 2021 year, with a significant number of cases, massive media attention, and border closures. Measures taken by various governments to contain the virus have affected economic activity and the Company’s business in various significant ways: ● Due to government measures taken, Oliver's has had to close its entire network of stores, the three warehouses and two kitchens for various periods, depending on the location of the store. At times, some of these stores could reopen, and some could only open for take-away. The negative impact on revenues continued throughout the year as people stayed home and did not, or could not, travel or eat out due to (State) government regulations. ● The reduction of economic activity and the requirement to close our stores meant employees were stood down or had their hours reduced, most at relatively short notice, itself creating a myriad of challenges for management as it negotiated between the various border closures and differing rules in each state. The Company continued its Job Keeper registration until that ceased and during the 2021 year, the Group received further Government subsidies and some rental relief. The group has successfully applied for the more recent NSW State government subsidies which will assist in alleviating the financial strain on the business. As a result of these effects our cumulative revenue for the 2021 financial year was approximately $6m, or 21%, lower l than our 2019 (pre Covid-19) revenues in the same period, with the 2020 revenues being $5m lower, or 17%, compared to 2019. So the impact of Covid-19 has been substantial and the longer the lockdowns continue, the more the current revenue figures will drop. The group's liquidity has been negatively impacted, which required us to obtain additional funding from our major l shareholders by obtaining a temporary overdraft facility of $500k in August 2021 and will be replaced with $1.5m revolving line of credit, referred to above, to enable the Group to meet its future liquidity needs. In the 2020 financial year, and primarily due to the outlook governed by Covid-19, the Group incurred write-offs due to l impairments. In the 2021 financial year however, OLI has turned this around due to a more positive outlook for the Group and has in fact made several write-backs to Impairments. Consequently on its Balance Sheet, Leasehold Improvements had a write-back of $465k (2020: Write-down $1.2m), Plant and Equipment write-back of $219k (2020: write-down $0.5m), Right of Use Assets write-back of $1.6m (2020: write-down $6.1m), and Intangible assets write-back of $Nil (2020: write-down $2.4m). These are not trading losses but asset value write-backs/write-offs in accordance with Accounting Standards, and reflect in the net loss of the group as at 30 June 2021 and 2020. Depending on the duration of the Covid-19 crisis and continued negative impact on economic activity, the Group might l experience further negative results, and liquidity restraints and incur additional impairments on its assets in 2022. The exact impact on our activities in the remainder of 2021 and thereafter cannot be predicted, but based on the National and the NSW and Victorian Covid-19 Roadmaps, Oliver's is not expecting to return to normal operating revenues until December 2021. As a result Oliver's may have to raise further capital from the market. At this time, because the timing of this and the amount likely to be required is uncertain, the Board has not progressed this matter at the date of this report. We also refer to note 1 Going concern. Wyong HO Facility The Wyong Head Office Facility Lease was leased to a 3rd party and the Oliver's lease surrendered effective 1 September 2021. This releases the company of any future liabilities. The Brisbane Kitchen Facility The Brisbane Kitchen Facility has been vacant since 30 June 2021. Management has reached an understanding to lease the building to a 3rd party and the Oliver's lease surrendered. We expect this to be documented and signed by mid October. This will release the company of any future liabilities and in addition over $1.0m of impairments will be written back. No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect, the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years. 12 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTOliver's Real Food Limited Directors' report 30 June 2021 Likely developments and expected results of operations Information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the consolidated entity. Environmental regulation The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State law. Information on directors Name: Title: Experience and expertise: Kimley (Kim) Wood - Chairman Appointed 25 November 2020 Mr Kim Wood concluded his term as the Principal Commissioner of the Queensland Productivity Commission in 2020, having commenced in 2015. Prior to the Productivity Commission, Kim served in CEO roles predominantly in large water and electricity utilities across Australia. He has experience in both the private and government sectors. Kim began his various CEO roles as the Sydney-based Managing Director of GEC Plessey Telecommunications. Kim has also held senior roles with BellSouth Australia and Hewlett- Packard. He originally commenced work as an engineer with the Victorian State Electricity Commission. Kim is interested in business transformation and has experience in hands- on leadership roles. Further, he has had a range of both executive and non-executive directorships. He enjoys a challenge. Other current directorships: Former directorships (last 3 years): Interests in shares: Nil Name: Title: Experience and expertise: Martin Green - Appointed 22 January 2021 Mr Martin Green is Managing Director and CEO and minority shareholder of Gelba Group of Companies, a position held since August 2005. The family business was incorporated in August 1929 and today runs two contract packing manufacturing facilities employing 60 staff supplying portion-controlled products for the retail, catering and hospitality industries. In addition to this activity Gelba has investments in property, listed and unlisted companies. Martin holds an Associate Diploma of Business (Accounting) and is also a Director of The Raw Liquid Sugar Company, Huskee Cups and EHealtheme Pty Ltd t/ as Surgical Partners. Other current directorships: Former directorships (last 3 years): Interests in shares: 37,439,660 Name: Title: Qualifications: Steven Metter - Appointed 11 March 2019 Mr Steven is a qualified Chartered Accountant and a management accountant with a 36 year history as a business recovery specialist. He has extensive successful business interests in hospitality, as a major shareholder in a Melbourne based 400 seat restaurant, and has acted as a financial consultant in Australia, South Africa and the USA. Experience and expertise: Other current directorships: Former directorships (last 3 years): Interests in shares: 6,666,667 13 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Directors' report 30 June 2021 Name: Title: Experience and expertise: David McMahon - Appointed 02 May 2020 - Resigned on 19 November 2020 Mr As a fellow of the Institute of Public Accountants, a Member of the Governance Institute of Australia and also the Institute of Chartered Secretaries and Administrators. Other current directorships: Former directorships (last 3 years): Interests in shares: Interests in options: 33,500 2,000,000 Name: Title: Qualifications: Experience and expertise: Jason Gunn - Non-Executive Director and Chairman - Appointed 28 February 2019 - Resigned 4 March 2021. Mr Jason completed the AICD company directors’ course in 2017. Jason having founded Oliver’s in 2005 and managed its growth as CEO from 2005 - 2018, resigning in April 2018, and then returning as CEO in March 2019. Other current directorships: Former directorships (last 3 years): Interests in shares: Interests in options: 38,387,500 Nil Name: Title: Experience and expertise: Other current directorships: Former directorships (last 3 years): Interests in shares: Interests in options: Name: Title: Experience and expertise: Other current directorships: Former directorships (last 3 years): Interests in shares: Interests in options: Amanda Gunn - Non-Executive Director - Appointed 28 February 2019 - Resigned 4 March 2021 Mrs Amanda worked as Operations Manager in the business for over 10 years. 38,387,500 Nil Ann Brownjohn - Non-Executive Director - Appointed 14 October 2020 - Resigned 19 November 2020 Ms Nil Nil 'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. 'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. Company secretary Mr Robert Lees - Appointed 30 June 2021 Mr Lees is a member of the Chartered Accountants Australia and New Zealand and a Fellow of the Governance Institute of Australia. He is a graduate of the University of Technology, Sydney, holding a Bachelor of Business (Accounting) and a Graduate Diploma in Data Processing. He also holds a Graduate Diploma in Corporate Governance. In the last 18 years he has provided company secretarial services to ASX and NSX listed companies. Boardroom Limited were appointed to manage the Company Secretarial duties on 30 June 2020 and appointed Mr. Julian Rockett on 30 June 2020. He resigned as the Company Secretary on 1 November 2020 and was replaced by Ms. Nyla Bacon on 1 November 2020. Ms. Bacon resigned on 30 June 2021 and Boardroom was terminated as manager of these services. 14 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Directors' report 30 June 2021 Meetings of directors The number of meetings of the company's Board of Directors ('the Board') and of each Board committee held during the year ended 30 June 2021, and the number of meetings attended by each director were: Jason Gunn Amanda Gunn Steven Metter David McMahon Kimley Wood Martin Green Ann Brownjohn Full Board Nomination and Remuneration Committee Audit and Risk Committee Attended Held Attended Held Attended Held 15 15 19 6 15 9 1 15 15 21 6 15 10 1 3 6 6 - 4 - - 3 6 6 - 4 - - 4 2 7 2 4 3 - 4 2 7 2 5 3 - Held: represents the number of meetings held during the time the director held office or was a member of the relevant committee. Remuneration report (audited) The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including all directors. The remuneration report is set out under the following main headings: ● ● ● ● ● Principles used to determine the nature and amount of remuneration Details of remuneration Service agreements Share-based compensation Additional disclosures relating to key management personnel Principles used to determine the nature and amount of remuneration The objective of the consolidated entity's executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward governance practices: ● ● ● ● competitiveness and reasonableness acceptability to shareholders performance linkage / alignment of executive compensation transparency The Nomination and Remuneration Committee is responsible for determining and reviewing remuneration arrangements for its directors and executives. The performance of the consolidated entity depends on the quality of its directors and executives. The remuneration philosophy is to attract, motivate and retain high performance and high quality personnel. The reward framework is designed to align executive reward to shareholders' interests. The Board has considered that it should seek to enhance shareholders' interests by: ● ● having economic profit as a core component of plan design focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value attracting and retaining high calibre executives ● Additionally, the reward framework should seek to enhance executives' interests by: ● ● ● rewarding capability and experience reflecting competitive reward for contribution to growth in shareholder wealth providing a clear structure for earning rewards 15 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Directors' report 30 June 2021 In accordance with best practice corporate governance, the structure of non-executive director and executive director remuneration is separate. Non-executive directors remuneration Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors' fees and payments are reviewed annually by the Nomination and Remuneration Committee. The Nomination and Remuneration Committee may, from time to time, receive advice from independent remuneration consultants to ensure non-executive directors' fees and payments are appropriate and in line with the market. The chairman's fees are determined independently to the fees of other non-executive directors based on comparative roles in the external market. The chairman is not present at any discussions relating to the determination of his own remuneration. ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general meeting. The most recent determination was at the Annual General Meeting held on 29 November 2019, where the shareholders approved a maximum annual aggregate remuneration of $500k. Executive remuneration The consolidated entity aims to reward executives based on their position and responsibility, with a level and mix of remuneration which has both fixed and variable components. The executive remuneration and reward framework has four components: ● ● ● ● base pay and non-monetary benefits short-term performance incentives share-based payments other remuneration such as superannuation and long service leave The combination of these comprises the executive's total remuneration. Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the Nomination and Remuneration Committee based on individual and business unit performance, the overall performance of the consolidated entity and comparable market remunerations. Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits) where it does not create any additional costs to the consolidated entity and provides additional value to the executive. The short-term incentives ('STI') program is designed to align the targets of the business units with the performance hurdles of executives. STI payments are granted to executives based on specific annual targets and key performance indicators ('KPI's') being achieved. KPI's include profit contribution, customer satisfaction, leadership contribution and product management. The long-term incentives ('LTI') include long service leave and share-based payments. Shares are awarded to executives over a period of three years based on long-term incentive measures. These include increase in shareholders value relative to the entire market and the increase compared to the consolidated entity's direct competitors. The Nomination and Remuneration Committee reviewed the long-term equity-linked performance incentives specifically for executives during the year ended 30 June 2021. Consolidated entity performance and link to remuneration Remuneration for certain individuals is directly linked to the performance of the consolidated entity. A portion of cash bonus and incentive payments are dependent on defined earnings per share targets being met. The remaining portion of the cash bonus and incentive payments are at the discretion of the Nomination and Remuneration Committee. Refer to the section '' Details of Remuneration" below for details of the earnings and total shareholders return for the last five years. 16 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTOliver's Real Food Limited Directors' report 30 June 2021 2021 2020 2019 2018 2017 SHARE BASED REMUNERATION Revenue $m EBITDAI $m Net Profit After tax $m 33.35 31.80 35.00 35.90 20.70 0.01 (0.07) (6.52) 2.30 (2.30) (6.82) (17.40) (15.70) (0.60) (2.90) 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. 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. Purpose Eligibility Form of Equity 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. 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. 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. Group performance and link to remuneration Remuneration for certain individuals is directly linked to the performance of the Group. A portion of cash bonus and incentive payments are dependent on defined earnings per share targets being met. The remaining portion of the cash bonus and incentive payments are at the discretion of the Nomination and Remuneration Committee. Refer to the section '' Details of Remuneration" below for details of the earnings and total shareholders return for the last five years. The Nomination and Remuneration Committee is of the opinion that the continued improved results can be attributed in part to the adoption of performance based compensation and is satisfied that this improvement will continue to increase shareholder wealth if maintained over the coming years. Voting and comments made at the company's 22 January 2021 Annual General Meeting ('AGM') At the 22 January 2021 AGM, 56.0% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2020. The company did not receive any specific feedback at the AGM regarding its remuneration practices. Details of remuneration Amounts of remuneration Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables. The key management personnel of the consolidated entity consisted of the following directors of Oliver's Real Food Limited: ● David McMahon - Resigned 19 November 2020 17 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Directors' report 30 June 2021 And the following persons: Tammie Phillips ● Robert Ross-Edwards Appointed 1 December 2020 ● 2021 Non-Executive Directors: Kimley Wood Jason Gunn Amanda Gunn Steven Metter Martin Green Executive Directors: David McMahon - Chief Financial Officer Other Key Management Personnel: Tammie Phillips - Chief Executive Officer Robert Ross-Edwards - Chief Financial Officer 2020 Non-Executive Directors: Nicholas Dower Jason Gunn Amanda Gunn Steven Metter Executive Directors: David McMahon - Chief Financial Officer Other Key Management Personnel: Tammie Phillips - Chief Executive Officer Short-term benefits Post- employment benefits Long-term benefits Share- based payments Cash salary and fees $ Directors Fees $ Non- monetary $ Super- annuation $ Long service leave $ Equity- settled $ Total $ - - - - - 46,662 81,315 54,210 80,004 30,000 147,870 188,077 - - 96,227 432,174 - 292,191 - - - - - - - - - - - - - - 11,016 17,867 9,141 38,024 - - - - - - - - - - - - - - 46,662 81,315 54,210 80,004 30,000 - 158,886 44,362 250,306 - 44,362 105,368 806,751 Short-term benefits Post- employment benefits Long-term benefits Share- based payments Cash salary and fees $ Directors Fees $ Non- monetary $ Super- annuation $ Long service leave $ Equity- settled $ Total $ - 16,698 5,938 - - - - - 277,630 277,630 277,630 277,630 374,298 485,053 371,725 357,634 12,221 820 72,661 214,342 274 35,131 - 4,798 820 1,184,820 1,807,850 1,639 96,668 190,725 88,157 80,004 128,640 2,885 587,079 - - - - - - - - - - - - - - 18 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Directors' report 30 June 2021 Service agreements Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of these agreements are as follows: Name: Title: Agreement commenced: Term of agreement: Details: Name: Title: Agreement commenced: Term of agreement: Details: David McMahon CFO 16 April 2019 - Resigned 19 November 2020 No Fixed Term - Termination - 3 months in writing. The Company may terminate employment without payment in lieu of notice in circumstances involving serious or willful misconduct Annual remuneration including cash salary, superannuation and non-cash benefits $197,100 Incentives - eligible to participate in short-term incentive and equity remuneration plans. Vested in 2,000,000 options at $0.028 per option approved by shareholders the AGM held on 22/1/2021. Tammie Phillips CEO 17 June 2020 No fixed term - Termination - 3 months in writing. The Company may terminate employment without payment in lieu of notice in circumstances involving serious or willful misconduct Annual remuneration including cash salary, superannuation and non-cash benefits of $219,000, in addition supplied with a fully maintained vehicle. Additionally, once the employer has delivered four (4) consecutive quarters of profit EBITDA at any time during the period from 1 July 2020 to 31 December 2021, an entitlement of 2,000,000 share options at $0.05 per option will be granted. The 2,000,000 options were granted on 17/6/2020 at a price of $0.05 and a fair value of $0.037 and remain unvested at 30/6/2021 and expire 31/12/2021. Name: Title: Agreement commenced: Term of agreement: Details: Robert Ross-Edwards CFO 2 December 2020 No Fixed Term - Termination - 3 months in writing. The Company may terminate employment without payment in lieu of notice in circumstances involving serious or willful misconduct Annual remuneration including cash salary, superannuation and non-cash benefits of $198,000. Key management personnel have no entitlement to termination payments in the event of removal for misconduct. Share-based compensation Issue of shares There were no shares issued to directors and other key management personnel as part of compensation during the year ended 30 June 2021. Options The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key management personnel in this financial year or future reporting years are as follows: Grant date 17/06/2020 Vesting date and exercisable date Expiry date Exercise price at grant date 31/12/2021 $0.050 $0.037 Fair value per option Options granted carry no dividend or voting rights. 19 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Directors' report 30 June 2021 The number of options over ordinary shares granted to and vested by directors and other key management personnel as part of compensation during the year ended 30 June 2021 are set out below: Name Nicholas Dower Jason Gunn Amanda Gunn Steven Metter David McMahon Tammie Phillips Number of options granted during the year 2021 Number of options granted during the year 2020 Number of options vested during the year 2021 Number of options vested during the year 2020 - - - - - - 5,000,000 5,000,000 5,000,000 5,000,000 2,000,000 2,000,000 - - - - 2,000,000 - 5,000,000 5,000,000 5,000,000 5,000,000 - - Additional disclosures relating to key management personnel Shareholding The number of 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: Ordinary shares Nicholas Dower Jason Gunn Amanda Gunn * Steven Metter David McMahon Tammie Phillips Martin Green Balance at the start of the year Received as part of remuneration Additions Disposals/ other Balance at the end of the year 5,500,000 45,171,362 - 5,000,000 33,500 1,250,000 17,756,654 74,711,516 - - - - - - - - - - - 1,666,667 - - 19,683,006 21,349,673 (5,500,000) - (6,783,862) 38,387,500 - 6,666,667 33,500 1,250,000 37,439,660 (12,283,862) 83,777,327 - - - - - * * All shares are held indirectly by spouse, Jason Gunn This concludes the remuneration report, which has been audited. Shares under option There were no unissued ordinary shares of Oliver's Real Food Limited under option outstanding at the date of this report. Shares under performance rights There were no unissued ordinary shares of Oliver's Real Food Limited under performance rights outstanding at the date of this report. Shares under retention rights There were no unissued ordinary shares of Oliver's Real Food Limited under retention rights outstanding at the date of this report. Shares issued on the exercise of options There were no ordinary shares of Oliver's Real Food Limited issued on the exercise of options during the year ended 30 June 2020 and up to the date of this report, other than those outlined in the table above. Shares issued on the exercise of performance rights There were no ordinary shares of Oliver's Real Food Limited issued on the exercise of performance rights during the year ended 30 June 2021 and up to the date of this report. 20 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Directors' report 30 June 2021 Shares issued on the exercise of retention rights There were no ordinary shares of Oliver's Real Food Limited issued on the exercise of retention rights during the year ended 30 June 2021 and up to the date of this report. 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. Indemnity and insurance of 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 to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to 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 part of those proceedings. Non-audit services Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined below: Taxation Services: General Advice: Nil (2020: $35,000) Nil (2020: $1,000) The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are of the opinion that the services as disclosed in note 27 to the financial statements do not compromise the external auditor's independence requirements of the Corporations Act 2001 for the following reasons: ● all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risks and rewards. ● Auditor's independence declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report. Auditor Bishop Collins Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001. 21 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Directors' report 30 June 2021 This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001. On behalf of the directors ___________________________ Kimley Wood Chairman 30 September 2021 22 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Auditor's independence declaration [This page has intentionally been left blank for the insertion of the auditor's independence declaration] 16 23 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Contents 30 June 2021 Statement of profit or loss and other comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to the financial statements Directors' declaration Independent auditor's report to the members of Oliver's Real Food Limited Shareholder information General information 25 26 27 28 29 65 66 72 The financial statements cover Oliver's Real Food Limited as a consolidated entity consisting of Oliver's Real Food Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Oliver's Real Food Limited's functional and presentation currency. Oliver's Real Food Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: 10 Amsterdam Circuit Wyong NSW 2259 Australia (02) 4353 8055 www.investor.oliversrealfood.com.au A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report, which is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of directors, on 30 September 2021. The directors have the power to amend and reissue the financial statements. 17 24 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Statement of profit or loss and other comprehensive income For the year ended 30 June 2021 Revenue Other income Total revenue Expenses Raw materials and consumables used Employee benefits expense Depreciation and amortisation expense Impairment of assets Loss on disposal of assets Administration expenses Restructure Costs Other expenses Finance costs Occupancy Total expenses Loss before income tax expense Note Consolidated 2021 $ 2020 $ 4 5 28,180,333 28,539,653 5,367,402 3,232,644 33,547,735 31,772,297 (12,294,358) (15,004,115) (5,034,145) 2,274,070 (179,748) (3,498,530) (625,346) 11 (1,806,215) (1,791,599) (37,959,975) (8,516,919) (17,285,423) (5,753,681) (10,234,134) (140,673) (3,831,886) - (3,516) (1,358,742) (2,063,357) (49,188,331) (4,412,240) (17,416,034) Income tax expense 6 - (90,335) Loss after income tax expense for the year attributable to the owners of Oliver's Real Food Limited Other comprehensive income for the year, net of tax Total comprehensive income for the year attributable to the owners of Oliver's Real Food Limited (4,412,240) (17,506,369) - - (4,412,240) (17,506,369) Cents Cents Basic earnings per share Diluted earnings per share 35 35 (1.54) (1.35) (6.47) (6.47) The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes 18 25 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Statement of financial position As at 30 June 2021 Assets Current assets Cash and cash equivalents Trade and other receivables Inventories Other Total current assets Non-current assets Other financial assets Property, plant and equipment Right-of-use assets Intangibles Other Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Borrowings Lease liabilities Employee benefits Other liabilities Total current liabilities Non-current liabilities Borrowings Lease liabilities Employee benefits Provisions Total non-current liabilities Total liabilities Net liabilities Equity Issued capital Reserves Accumulated losses Total deficiency in equity Note Consolidated 2021 $ 2020 $ 7 8 9 11 12 13 10 14 11 15 16 17 18 20 16 17 18 19 1,574,649 1,088,774 560,652 210,190 3,434,265 958,303 979,176 1,291,248 277,238 3,505,965 571,531 5,101,927 288,095 6,132,097 21,009,391 20,330,195 2,635,769 124,005 28,868,451 29,510,161 2,037,697 147,905 32,302,716 33,016,126 4,732,585 480,606 2,575,444 430,328 60,525 5,890,117 1,512,355 3,572,852 681,504 102,719 8,279,488 11,759,547 5,057,329 875,000 24,451,942 24,069,582 85,102 510,896 30,075,494 25,540,580 107,683 458,540 38,354,982 37,300,127 (6,052,266) (4,284,001) 21 22 34,061,382 31,361,382 173,046 (35,818,429) 117,022 (40,230,670) (6,052,266) (4,284,001) The above statement of financial position should be read in conjunction with the accompanying notes 19 26 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Statement of changes in equity For the year ended 30 June 2021 Consolidated Issued capital $ Reserves $ Accumulated losses $ Non- controlling interest $ Total deficiency in equity $ Balance at 1 July 2019 29,810,861 293,724 (18,513,611) Loss after income tax expense for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Transactions with owners in their capacity as owners: Share-based payments (note 36) Payments for share options Transfer on exercise of options Cancelled expired share options - - - - - - (17,506,369) - (17,506,369) - 440,000 1,110,521 - 1,191,394 - (1,110,521) (201,551) - - - 201,551 Balance at 30 June 2020 31,361,382 173,046 (35,818,429) - - - - - - - - - 11,590,974 (17,506,369) - (17,506,369) 1,191,394 440,000 - - (4,284,001) Consolidated Issued capital $ Reserves $ Accumulated losses $ Non- controlling interest $ Total deficiency in equity $ Balance at 1 July 2020 31,361,382 173,046 (35,818,429) Loss after income tax expense for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 21) Share-based payments (note 36) Cancelled expired share options - - - - - - (4,412,240) - (4,412,240) 2,700,000 - - - 51,524 (107,549) - - - Balance at 30 June 2021 34,061,382 117,021 (40,230,669) - - - - - - - - (4,284,001) (4,412,240) - (4,412,240) 2,700,000 51,524 (107,549) (6,052,266) The above statement of changes in equity should be read in conjunction with the accompanying notes 20 27 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Statement of cash flows For the year ended 30 June 2021 Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers (inclusive of GST) Interest received Other income Interest and other finance costs paid Government Grants and Subsidies License fee income received (inclusive of GST) Consolidated Note 2021 $ 2020 $ 30,986,163 30,759,626 (36,976,319) (32,014,120) (6,216,693) 2,353 - (1,781,471) 5,167,402 - (1,027,957) 4,197 231,049 (1,086,133) 1,276,000 550,000 Net cash used in operating activities 34 (2,828,409) (52,844) Cash flows from investing activities Payments for property, plant and equipment Payments for intangible assets Payments for security deposits Proceeds from disposal of property, plant and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Proceeds from borrowings Repayments of finance leases Repayment of borrowings Net cash from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year 13 14 21 (133,391) (133,769) (307,336) 385,559 (189,182) (40,866) - 227,500 (188,937) (2,548) 2,700,000 5,068,404 (2,222,718) (1,410,488) 440,000 710,849 (1,618,032) (63,226) 4,135,198 (530,409) 1,117,852 456,797 (585,801) 1,042,598 Cash and cash equivalents at the end of the financial year 7 1,574,649 456,797 The above statement of cash flows should be read in conjunction with the accompanying notes 21 28 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 1. Significant accounting policies New or amended Accounting Standards and Interpretations adopted The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The following new or amended accounting standards have been adopted by the Group: AASB 2020-4 – Amendments to Australian Accounting Standards – Covid-19-Related Rent Concessions As a result of the coronavirus (Covid-19) pandemic, rent concessions have been granted to lessees. The AASB issued amendments outlining an optional practical expedient where lessees benefiting from these rent concessions may account for them as variable lease payments in the periods in which they are granted. This Standard applies to annual periods beginning on or after 1 June 2020 and is available for early adoption to annual periods beginning before 1 June 2020. The Group have early adopted this standard and in line with the practical expedient accounted for all rent concessions as variable lease payments in the periods in which they are granted. The Group have recognised an income of $690,785 ($496,846 - 2020) in the statement of profit or loss and other comprehensive income reflecting the changes in lease payments that have arisen from rent concessions to which the Group has applied the practical expedient. The following new or amended accounting standards have been adopted by the Group: AASB 2018-7 - Amendments to Australian Accounting Standards – Definition of Material The AASB has made amendments to AASB 101 Presentation of Financial Statements and AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors and consequential amendments to other Australian Accounting Standards (AAS) which: i) use a consistent definition of materiality throughout AAS and the Conceptual Framework for Financial Reporting; ii) clarify when information is material; and iii) incorporate some of the guidance in AASB 101 about immaterial information. These amendments are applicable to annual reporting periods beginning on or after 1 January 2020. The adoption of these amendments did not significantly impact the disclosures in the financial report of the Group. The following new or amended accounting standards have not been adopted by the Group AASB 2020-1 - Classification of liabilities as current or non-current The AASB issued a narrow-scope amendment to AASB 101 Presentation of Financial Statements to clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. This amendment is applicable to annual reporting periods beginning on or after 1 January 2022. The adoption of this amendment will not impact classification of liabilities of the Group. 22 29 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTOliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 1. Significant accounting policies (continued) Going concern Oliver's Real Food Limited Notes to the financial statements The financial statements have also been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and the discharge of liabilities in the normal course of business. 30 June 2021 As disclosed in the Preliminary Financial Results, the consolidated entity has experienced operating losses of $4,412,070 (after taking into account $2,214,070 of impairment writebacks, with an decrease in cash flows from Note 1. Significant accounting policies (continued) operating activities of $2,828,409. As at 30 June 2021, the consolidated statement of financial position reflected an excess of current liabilities current Going concern assets of $4,845,223. over These factors, indicate a material uncertainty which may cast significant doubt as to whether the Group will continue as The financial statements have also been prepared on a going concern basis, which contemplates continuity of normal a going concern, and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business activities and the realisation of assets and the discharge of liabilities in the normal course of business. business and at the amounts in the financial report. As disclosed in the Preliminary Financial Results, the consolidated entity has experienced operating losses of Oliver's Real Food Limited $4,412,070 (after taking into account $2,214,070 of impairment writebacks, with an decrease in cash flows from The directors believe that the consolidated entity will be able to continue as a going concern, consideration of the Directors' report operating activities of $2,828,409. following factors: 30 June 2021 As at 30 June 2021, the consolidated statement of financial position reflected an excess of current liabilities current Restructured Funding assets of $4,845,223. Matters subsequent to the end of the financial year Two of the Company’s major shareholders have provided a temporary overdraft facility for a sum of unsecured, interest at Two of the Company’s major shareholders have provided a temporary overdraft facility for a sum of $500k, unsecured, These factors, indicate a material uncertainty which may cast significant doubt as to whether the Group will continue as 4.0% per annum and with a repayment date of 30 September 2021. This facility had secured the approval of the Group’s interest at 4.0% per annum and with a repayment date of 30 September 2021. This facility had secured the approval of the a going concern, and therefore whether it will realise its assets and extinguish its liabilities in the normal course of major lenders, PURE Asset Management, who have been working with the Group in challenging times to ensure its survival group’s major lenders, PURE Asset Management, who have been working with the group in these challenging times to business and at the amounts in the financial report. as both they and the major shareholders remain confident Oliver’s financial success once the lockdowns end. The overdraft ensure its survival as both they and the major shareholders remain confident as to Oliver’s financial success once the facility was designed purely to combat the financial losses stemming from the numerous and extended lockdowns. The directors believe that the consolidated entity will be able to continue as a going concern, consideration of the lockdowns end. The overdraft facility was designed purely to combat the financial losses stemming from the numerous, following factors: and extended, lockdowns. As per the OLI announcement on 24 September 2021, the Company is pleased to announce that an agreement has been reached between PURE Asset Management and OLI's two leading shareholders, Michael & Suzanne Gregg and Gelba Pty Restructured Funding As per the OLI announcement on 24 September 2021.The Company is pleased to announce that an agreement Ltd (an entity of which OLI Director, Mr Martin Green, is a Director and minority shareholder). Two of the Company’s major shareholders have provided a temporary overdraft facility for a sum of unsecured, interest at has been reached between PURE Asset Management and OLI's two leading shareholders, Michael and Suzanne Gregg 4.0% per annum and with a repayment date of 30 September 2021. This facility had secured the approval of the Group’s PURE $5.0m loan facility to be assigned to these two major shareholders. It is expected that the assignment will occur and Gelba Pty Ltd (an entity of which OLI Director, Mr Martin Green, is a Director and minority shareholder) for the major lenders, PURE Asset Management, who have been working with the Group in challenging times to ensure its survival on or around 30 September 2021. PURE $5.0m loan facility to be assigned to these two major shareholders. It is expected that the assignment will occur as both they and the major shareholders remain confident Oliver’s financial success once the lockdowns end. The overdraft on or around 30 September 2021. facility was designed purely to combat the financial losses stemming from the numerous and extended lockdowns. Following the assignment, the terms of the loan will be modified as follows: - As per the OLI announcement on 24 September 2021, the Company is pleased to announce that an agreement has been Amount: $5.0m reached between PURE Asset Management and OLI's two leading shareholders, Michael & Suzanne Gregg and Gelba Pty Term: 24 months from assignment date Ltd (an entity of which OLI Director, Mr Martin Green, is a Director and minority shareholder). 6% (linked to the 90 days BBSY) and reviewed quarterly Interest Rate: PURE $5.0m loan facility to be assigned to these two major shareholders. It is expected that the assignment will occur Interest Paid: Quarterly in arrears on or around 30 September 2021. Covenant: None In full 24 months from assignment date Repayment: Early repayment will not incur fees As per PURE loan agreement, namely first ranking security over assets of the Company and its subsidiaries. Security: In addition, the same two leading shareholders will provide an additional loan facility after over $500k, these as to after for $500k, the these as to for the Facility: Amount: Term: Interest Rate: Interest Paid Purpose: Covenant: This change in facilities provides the business with effectively $2m in additional working capital and reduced interest Draw Down: rate by approximately 45%. Repayment: The reduced interest rate will increase profitability by over $150k per annum including the additional facilities. This will Security: also effect future impairments, as the effect of the interest rate reduction on WACC (Weighted Average Cost of Capital) will be reduced by 2% per annum, which will increase the present value of cashflows, which will further reduce impairments by as much $800k. Warrants: Revolving line of Credit $1.5m (note $500k already advanced in August 2021 and currently at 4% interest) 24 months 6% (linked to the 90 days BBSY) and reviewed quarterly Calculated daily and paid monthly To support the Company's working capital requirements due to Covid-19 lockdown restrictions None As funds are needed In full after 24 months Unsecured initially, however, should security be requested, company would require shareholder approval under listing rule 10.1 to grant security. There is no change in the 47,500,000 warrants held by Pure Asset Management and approved by shareholders, all terms remain the same. This change in facilities provides the business with effectively $2m in additional working capital and reduced interest 23 rate by approximately 45%. The reduced interest rate will increase profitability by over $150k per annum including the additional facilities. This will also effect future impairments, as the effect of the interest rate reduction on WACC (Weighted Average Cost of Capital) will be reduced by 2% per annum, which will increase the present value of cashflows, which will further reduce impairments by as much $800k. 23 30 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTOliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 1. Significant accounting policies (continued) Government Grants Oliver's Real Food Limited has qualified NSW Job Saver Payments were received in September and with rental relief payments which will assist funding operations. for NSW government Small Business Hardship Grant and Forecast and Restructure Model Cash flow forecasts prepared by management demonstrate the Group’s on-going ability to generate a positive cash inflow from operating activities. The structural changes made to the business in 2020-21, which has reduced overheads by over $4m per annum, should allow the business post Covid-19 to generate profit and cash. The exact impact on our activities for the remainder of 2021 and thereafter cannot be predicted, but based on the rest of the world opening up, the National and the NSW and Victorian Covid-19 Roadmaps, Oliver's is forecasting not to return to normal operating revenues until December 2021. The 2022 year is about building growth in the stores, with a variety of programs for improving the customer experience, new menus and marketing programs, as customers return to the roads. The impacts of Covid-19 on the Group have resulted in using these road maps to model the carrying values in all cash generating units impairment were also challenged by sensitivity testing. Refer Note 24. inherently captures probable and possible impacts of Covid-19 experienced by the Group, these the scenario modelling used (CGU’s). Whilst testing for Covid-19 Impact on Oliver's Real Food Limited The Covid-19 pandemic has continued unabated through the entire 2021 year, with a significant number of cases, massive media attention, and border closures. Measures taken by various governments to contain the virus have affected economic activity and the Company’s business in various significant ways: ● Due to government measures taken, Oliver's has had to close its majority of stores, depending on the location of the store. At times, some of these stores could open, and then some could only open for take-away. The negative impact on revenues continued throughout the year as people stayed home and did not or could not travel or eat out due to (State) government regulations. ● The reduction of economic activity and the requirement to close our stores meant employees were stood down or had their hours reduced, most at relatively short notice, itself creating a myriad of challenges for management as it negotiated between the various border closures and differing rules in each State. The Company continued its Job Keeper registration until that ceased and during the 2021 year, the Group received further Government subsidies and some rental relief. The Group has successfully applied for the more recent NSW State government subsidies which will assist in alleviating the financial strain on the business. l As a result of these effects our cumulative revenue for the 2021 financial year was approximately $6m, or 21%, lower than our 2019 (pre Covid-19) revenues in the same period, with the 2020 revenues being $5m lower, or 17%, compared to 2019. So the impact of Covid-19 has been substantial. l The Group’s liquidity has been negatively impacted, which required us to obtain additional funding from our major shareholders by obtaining a temporary overdraft facility of $500k in August 2021 and the $1.5m revolving line of credit, referred to above, to enable the Group to meet its future liquidity needs. The revolving line of credit replaces the temporary overdraft. l In the 2020 financial year, and primarily due to the outlook governed by Covid-19, the Group incurred write-offs due to impairments. In the 2021 financial year however, OLI has turned this around due to a more positive outlook for the Group and has Sheet, Leasehold Improvements had a write-back of $465k (2020: Write-down $1.2m), Plant and Equipment write-back of $219k (2020: write-down $0.5m), Right of Use Assets write-back of $1.6m (2020: write-down $6.1m), and Intangible assets write-back of $Nil (2020: write-down $2.4m). These are not trading losses but asset value write-backs/write-offs in accordance with Accounting Standards, and reflect in the net loss of the Group as at 30 June 2021 and 2020. fact made several write-backs Impairments. Consequently on its Balance to in l Due to the Covid-19, the exact impact on our activities for the remainder of 2021 and thereafter cannot be predicted, but based on the National and the NSW and Victorian Covid-19 Roadmaps, Oliver's has allowed in its forecast not to return to normal operating revenues until December 2021. As a result Oliver's may have to raise further capital from the market. At this time, because the timing of this and the amount likely to be required is uncertain, the Board has not progressed this matter at the date of this report. 24 31 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTOliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 1. Significant accounting policies (continued) Basis of preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB'). Historical cost convention The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other comprehensive income, investment properties, certain classes of property, plant and equipment and derivative financial instruments. Critical accounting estimates The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2. Parent entity information In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 31. Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Oliver's Real Food Limited ('company' or 'parent entity') as at 30 June 2021 and the results of all subsidiaries for the year then ended. Oliver's Real Food Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'. Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity 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 to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent. Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss. Operating segments Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance. 25 32 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 1. Significant accounting policies (continued) Revenue recognition The consolidated entity recognises revenue as follows: e that reflects is recognised at an amount the consolidated entity to be entitled in exchange for transferring goods or services to a customer. For each contract with contract with a Revenue from contracts with customers Revenue is expected identifies a customer, the consolidated entity: performance obligations contract; determines the estimates of variable consideration and the time value of money; allocates the transaction price separate performance obligations on good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised. th transaction price which takes into account the the relative stand-alone selling price of each distinct the consideration the basis of customer; to which identifies the the to in Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle are recognised as a refund liability. Sale of goods Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is generally at the time of delivery. 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. Income tax The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset. The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset. Current and non-current classification Assets and liabilities are presented in the statement of financial position based on current and non-current classification. An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current. A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current. Deferred tax assets and liabilities are always classified as non-current. 33 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTOliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 1. Significant accounting policies (continued) Cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on the statement of financial position. 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 allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days. The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue. Other receivables are recognised at amortised cost, less any allowance for expected credit losses. Inventories 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. Stock on hand 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. Investments and other financial assets Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting mismatch is being avoided. Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, it's carrying value is written off. Financial assets at amortised cost A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial asset represent contractual cash flows that are solely payments of principal and interest. Impairment of financial assets The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain. Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate. 27 34 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 1. Significant accounting policies (continued) For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss allowance reduces the asset's carrying value with a corresponding expense through profit or loss. Property, 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. Land is not depreciated. 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: Buildings Leasehold improvements Plant and equipment Plant & Equipment under lease 40 years 3-15 years 3-7 years 2-5 years The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date. Leasehold improvements 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. Right-of-use assets A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset. Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities. The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred. Intangible assets Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition 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. Goodwill Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is 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 goodwill are taken to profit or loss and are not subsequently reversed. 28 35 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 1. Significant accounting policies (continued) Intellectual property Significant costs associated with intellectual property are deferred and amortised on a straight-line basis over the period of their expected benefit, being their finite life of 10 years. 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 10 years. 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. Impairment of non-financial 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. Trade and other payables These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition. Borrowings Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method. Lease liabilities A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred. Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down. Finance costs Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred. 29 36 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 1. Significant accounting policies (continued) 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. Employee benefits Short-term employee benefits Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled. Other long-term employee benefits The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured at the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Share-based payments Equity-settled and cash-settled share-based compensation benefits are provided to employees. Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price. The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using the Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions. The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods. The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows: ● during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period. from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date. ● All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability. Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied. 30 37 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 1. Significant accounting policies (continued) If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification. If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited. If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification. Fair value measurement When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market. Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. Issued capital Ordinary shares are classified as equity. Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to the owners of Oliver's Real Food Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. Goods and Services Tax ('GST') and other similar taxes Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense. 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 tax authority is included in other receivables or other payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority. 31 38 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 1. Significant accounting policies (continued) New Accounting Standards and Interpretations not yet mandatory or early adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2021. The consolidated entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations. Note 2. Critical accounting judgements, estimates and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below. Share-based payment transactions The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity. Allowance for expected credit losses The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate for each Group. These assumptions include recent sales experience and historical collection rates. 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. The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models. These include discounted cash flow analysis or the use of observable inputs that require significant adjustments based on unobservable inputs. Estimation of useful lives of assets The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down. Goodwill and other indefinite life intangible assets The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill and other indefinite life intangible assets have suffered any impairment, in accordance with the accounting policy stated in note 1. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of assumptions, including estimated discount rates based on the current cost of capital and growth rates of the estimated future cash flows. Refer Note 24. 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. 32 39 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 2. Critical accounting judgements, estimates and assumptions (continued) Recovery of deferred tax assets Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it probable that future taxable amounts will be available to utilise those temporary differences and losses. Employee benefits provision As discussed in note 1, 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. Lease make good provision A provision has been made for the present value of anticipated costs for future restoration of leased premises. 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. Government Stimulus Measures In response to the Covid-19 pandemic, the Group assessed its eligibility for and applied to the Federal Government to receive available stimulus measures. These measures were received during and after the financial year. Where eligible, the Group continues to apply for eligible stimulus relief measures. In respect of future measures, as these are announced by the Australian Government management will assess the Group eligibility and consideration will be given to the potential benefit from accessing these measures. These measures may have a material financial effect on the financial report should the assumptions underpinning the eligibility change or in the unlikely event of an independent review refuting the Group’s entitlement to these measures. At the date the financial report is authorised for issue, the Board considers the Group eligible for the stimulus measures and accordingly the assets of the Group recoverable in the ordinary course of business. is The Sales forecast and store re-openings Refer to Note 1, Going Concern and Notes 24 and 33. Note 3. Operating segments Identification of reportable operating segments During the year a thorough review was undertaken by senior management on the ongoing structure of the business. As a result of that review it was decided that the Food To Go was a valuable part of the Quick Service Restaurants (QSR) that operates in Oliver's 24 stores and also sold to EG Fuels. As a result of the restructure the Group will no longer be selling directly to EG Fuels, but controls the product selection, recipes, product quality and branding under strict contractual arrangements. Accordingly there is one operating segment.As a result Oliver's Real Foods receive a royalty. This is based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources. Therefore it is included in the QSR segment in the current year and in future years. The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements. The information reported to the CODM is on a monthly basis. 33 40 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTOliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 4. Revenue Revenue from contracts with customers Revenue from sale of goods Other revenue Rent Interest received Other revenue Revenue Note 5. Other income Government concessions Olivers Food to Go Licence Fee Rent concessions Miscellaneous income* Other income Consolidated 2021 $ 2020 $ 28,096,223 28,520,885 7,200 2,353 74,557 84,110 7,800 4,198 6,770 18,768 28,180,333 28,539,653 Consolidated 2021 $ 2020 $ 4,433,773 - 690,785 242,844 2,004,750 500,000 496,846 231,048 5,367,402 3,232,644 * In 2021 included a writeback of a loan of $200,000 that was considered Statute Barred, as no contact for over 6 years (refer Note 16). In 2020 included receipt of recovery of $175,000 of funds that had been previously misappropriated. Note 6. Income tax expense Income tax expense Adjustment recognised for prior periods Aggregate income tax expense Numerical reconciliation of income tax expense and tax at the statutory rate Loss before income tax expense Tax at the statutory tax rate of 26% (2020: 27.5%) Adjustment recognised for prior periods Current year tax losses and temporary differences not recognised Income tax expense Consolidated 2021 $ 2020 $ - - 90,335 90,335 (4,412,240) (17,416,034) (1,147,182) (4,789,409) - 1,147,182 90,335 4,789,409 - 90,335 34 41 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 7. Cash and cash equivalents Current assets Cash on hand Cash at bank Reconciliation to cash and cash equivalents at the end of the financial year The above figures are reconciled to cash and cash equivalents at the end of the financial year as shown in the statement of cash flows as follows: Balances as above Bank overdraft (note 16) Balance as per statement of cash flows Note 8. Trade and other receivables Current assets Trade receivables Less: Allowance for expected credit losses Other receivables* Consolidated 2021 $ 2020 $ 123,062 1,451,587 18,620 939,683 1,574,649 958,303 1,574,649 - 958,303 (501,506) 1,574,649 456,797 Consolidated 2021 $ 2020 $ 969,934 (49,900) 920,034 177,716 (45,273) 132,443 168,740 846,733 1,088,774 979,176 * In 2021 Other receivables was made up of sale of equipment to suppliers on terms of 12 and 24 months. In 2020 Other receivable was made up of outstanding Jobkeeper payments. Allowance for expected credit losses The ageing of the receivables and allowance for expected credit losses provided for above are as follows: Consolidated Not overdue 0 to 3 months overdue 3 to 6 months overdue Over 6 months overdue Carrying amount 2020 $ 2021 $ Allowance for expected credit losses 2021 $ 2020 $ 691,215 143,213 210,387 93,859 925,475 4,791 26,469 67,714 - - - 49,900 - - - 45,273 1,138,674 1,024,449 49,900 45,273 35 42 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 9. Inventories Current assets Stock in transit - at cost Stock on hand - at cost Note 10. Right-of-use assets Non-current assets Motor vehicles - right-of-use Less: Accumulated depreciation Commercial Leases - right-of-use Less: Accumulated depreciation Less: Impairment Equipment - right-of-use Less: Accumulated depreciation Consolidated 2021 $ 2020 $ - 560,652 1,192 1,290,056 560,652 1,291,248 Consolidated 2021 $ 2020 $ 61,355 (21,091) 40,264 888,409 (212,923) 675,486 31,254,067 28,904,714 (3,182,631) (6,107,334) 20,969,127 19,614,749 (5,766,988) (4,517,952) - - - 53,408 (13,448) 39,960 21,009,391 20,330,195 Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: Consolidated Balance at 1 July 2019 Transfers In from PPE Initial recognition on adoption of AASB 16 Adjustments Impairment of assets Re-measurement of leases Depreciation expense Balance at 30 June 2020 Transfers In from PPE Disposals Impairment of assets Re-measurement of leases Depreciation expense Commercial Leases Motor Vehicles $ $ Equipment Hire $ Total $ - 510,896 32,845,475 (95,566) (6,107,333) (4,249,286) (3,289,437) 19,614,749 - - 1,589,382 2,736,325 (2,971,329) - 788,630 - - - - (113,144) 675,486 (9,047) (504,363) - - (121,812) - - - 1,299,526 53,407 32,898,882 (95,566) (6,107,333) (4,249,286) (3,416,028) - - - (13,447) 39,960 20,330,195 4,943 13,990 (541,141) (36,778) 1,589,382 - 2,736,325 - (3,110,313) (17,172) Balance at 30 June 2021 20,969,127 40,264 - 21,009,391 36 43 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 11. Other Current assets Prepayments Other current assets Non-current assets Rental bonds Note 12. Other financial assets Non-current assets Term deposits Note 13. Property, plant and equipment Non-current assets Land - at cost Leasehold improvements - at cost Less: Accumulated depreciation Less: Impairment Plant and equipment - at cost Less: Accumulated depreciation Less: Impairment Motor vehicles - at cost Less: Accumulated depreciation Consolidated 2021 $ 2020 $ 210,190 - 271,875 5,363 210,190 277,238 147,905 124,005 358,095 401,243 Consolidated 2021 $ 2020 $ 571,531 288,095 Consolidated 2021 $ 2020 $ 426,955 426,955 7,190,824 (2,262,921) (1,892,945) 3,034,958 7,755,802 (1,760,338) (2,841,730) 3,153,734 5,708,257 (2,823,422) (1,269,061) 1,615,744 6,807,816 (3,056,681) (1,637,065) 2,114,070 69,621 (45,381) 24,240 955,419 (518,081) 437,338 5,101,927 6,132,097 37 44 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTOliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 13. Property, plant and equipment (continued) Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: Consolidated Balance at 1 July 2019 Additions Disposals Reclassification of assets Impairment of assets Transfers out Depreciation expense Balance at 30 June 2020 Additions Disposals Impairment of assets Transfers out Depreciation expense Land & Buildings Leasehold Improvements Plant & Equipment Motor Vehicles $ $ $ $ Total $ 496,913 - (69,958) - - - - 426,955 - - - - - 5,308,522 2,495 (193,018) 10,502 (1,179,202) (241,822) (553,743) 3,153,734 14,916 (56,563) 465,552 - (542,681) 3,149,615 186,687 (95,204) 40,152 (452,147) - (715,033) 2,114,070 118,475 (260,661) 219,137 - (575,247) 1,366,326 10,321,376 189,182 (368,173) - (1,631,349) (1,030,455) (1,348,484) - (9,993) (50,654) - (788,633) (79,708) 437,338 - (348,083) - 9,047 (74,062) 6,132,097 133,391 (665,307) 684,689 9,047 (1,191,990) Balance at 30 June 2021 426,955 3,034,958 1,615,774 24,240 5,101,927 Land and buildings stated under the historical cost convention If land and buildings were stated under the historical cost convention, the amounts would be as follows: Land - at cost Consolidated 2021 $ 2020 $ 426,955 426,955 426,955 426,955 38 45 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 14. Intangibles Non-current assets Goodwill - at cost Less: Impairment Intellectual property - at cost Less: Impairment Patents and trademarks - at cost Less: Accumulated amortisation Less: Impairment Customer contracts - at cost Less: Accumulated amortisation Less: Impairment Software - at cost Less: Accumulated amortisation Reacquired Rights - at cost Less: Accumulated amortisation Consolidated 2021 $ 2020 $ 2,133,516 (2,133,516) - 2,133,516 (2,133,516) - 610,576 (110,576) 500,000 610,576 (110,576) 500,000 190,575 (139,523) (51,052) - 333,830 (133,522) (200,308) - 190,575 (139,523) (51,052) - 333,830 (133,522) (200,308) - 984,882 (669,688) 315,194 851,113 (420,894) 430,219 3,258,000 (2,035,497) 1,222,503 3,258,000 (1,552,450) 1,705,550 2,037,697 2,635,769 Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: Goodwill Patents & Trademarks Computer Software Customer Relationshi p Brands & IP Reacquired Rights Consolidated $ $ $ $ $ $ Total $ Balance at 1 July 2019 Additions Impairment of assets Write off of assets Amortisation expense 2,133,516 - (2,133,516) - - 66,200 - (51,052) - (15,148) 764,318 40,866 - (18,181) (356,784) 610,576 - (110,576) - - 233,690 2,289,401 6,097,701 - 40,866 - (2,495,452) (18,181) - (989,165) (583,851) - (200,308) - (33,382) Balance at 30 June 2020 Additions Amortisation expense Balance at 30 June 2021 - - - - - - - - 430,219 133,769 (248,794) 500,000 - - - 1,705,550 2,635,769 133,769 - - (731,841) (483,047) - 315,194 500,000 - 1,222,503 2,037,697 39 46 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 15. Trade and other payables Current liabilities Trade payables Accrued Expenses GST payable Other payables Refer to note 25 for further information on financial instruments. Note 16. Borrowings Current liabilities Bank overdraft Bank loans Loan from third party ** Safety Factor Aviation Pty L:td (Previously related party loan) * Insurance premium funding *** Non-current liabilities Bank loans Loan - Pure Asset Management. Pure Asset Management Borrowing Costs Consolidated 2021 $ 2020 $ 1,959,458 576,093 513,258 1,683,776 2,219,075 767,727 720,411 2,182,904 4,732,585 5,890,117 Consolidated 2021 $ 2020 $ - - - 337,202 143,404 501,506 100,000 200,000 481,630 229,219 480,606 1,512,355 - 5,132,329 (75,000) 875,000 - - 5,057,329 875,000 5,537,935 2,387,355 Refer to note 25 for further information on financial instruments. * Safety Factor Aviation Pty Ltd is 100% owned by Jason Gunn (who resigned as chairman on 3 March 2021. Accordingly, from this date it is no longer a related party). The terms and conditions of the loan are - Interest is at 6% per annum. Repayment is only permitted on following conditions: (i) the repayment occurs on or after 1 July 2021; (ii) the Debtor has recorded a positive net profit after tax during the two calendar quarters prior to the quarter in which the repayment is to be made; and (iii) no Default or Review Event (as those terms are defined in the Senior Facility Agreement) is continuing or expected to occur (in the opinion of the Senior Creditor, acting reasonably); (iv) all payment made must have the prior written consent of the Senior Creditor, being Pure Asset Management. ** Loan from third party is interest free and has no specific repayment date. Following legal advice the loan was written to Other Income as the loan was considered Statute Barred, as no contact for over 6 years. *** Premium Funding is payable in monthly installments and carries an interest rate of 3.59%. 40 47 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 16. Borrowings (continued) Financing arrangements Total facilities Bank overdraft Bank loans Bank Guarantee facility Loan - Pure Asset Management. Used at the reporting date Bank overdraft Bank loans Bank Guarantee facility Loan - Pure Asset Management. Unused at the reporting date Bank overdraft Bank loans Bank Guarantee facility Loan - Pure Asset Management. Consolidated 2021 $ 2020 $ - - - 5,132,329 5,132,329 501,506 975,000 400,000 - 1,876,506 - - - 5,132,329 5,132,329 501,506 975,000 383,728 - 1,860,234 - - - - - - - 16,272 - 16,272 * The nominal interest rate on the market rate loan of $1,000,000 (balance as at the date of this report $975,000) was 3.89% per annum and the year of maturity is July 2021. The loans were secured over the Group's all present and after acquired properties. These loans were fully repaid in September 2020. The Bank overdraft of $500,000 was put in place as a result of the Group eligibility for JobKeeper and as such having to cover wages liabilities through the period before receiving the JobKeeper subsidy from the Government. This was a temporary overdraft and was repaid. The interest rate was 7.68% p.a. Note 17. Lease liabilities Current liabilities Lease liability Non-current liabilities Lease liability Refer to note 25 for further information on financial instruments. Lease interest expense (included in finance costs) amounted to $1,308,349. Consolidated 2021 $ 2020 $ 2,575,444 3,572,852 24,451,942 24,069,582 27,027,386 27,642,434 41 48 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 18. Employee benefits Current liabilities Annual leave Non-current liabilities Long service leave Consolidated 2021 $ 2020 $ 430,328 681,504 107,683 85,102 538,011 766,606 Amounts not expected to be settled within the next 12 months The current provision for employee benefits includes all unconditional entitlements where employees have completed the required period of service and also those where employees are entitled to pro-rata payments in certain circumstances. The entire amount is presented as current, since the consolidated entity does not have an unconditional right to defer settlement. However, based on past experience, the consolidated entity does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. The following amounts reflect leave that is not expected to be taken within the next 12 months: Employee benefits obligation expected to be settled after 12 months 107,683 187,330 Consolidated 2021 $ 2020 $ Note 19. Provisions Non-current liabilities Lease make good Consolidated 2021 $ 2020 $ 458,540 510,896 Lease make good The provision represents the present value of the estimated costs to make good the premises leased by the consolidated entity at the end of the respective lease terms. Movements in provisions Movements in each class of provision during the current financial year, other than employee benefits, are set out below: Consolidated - 2021 Carrying amount at the start of the year Amounts used Carrying amount at the end of the year Lease Make Good $ 510,896 (52,356) 458,540 42 49 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 20. Other liabilities Current liabilities Provision for variable rent payable Note 21. Issued capital Consolidated 2021 $ 2020 $ 60,525 102,719 Consolidated 2021 Shares 2020 Shares 2021 $ 2020 $ Ordinary shares - fully paid 360,731,917 270,731,917 34,061,382 31,361,382 Movements in ordinary share capital Details Date Shares $ Balance Issue of shares on exercise of options Transfer of share based payment reserve Balance Issue of shares via share placement Issue of shares via share placement 1 July 2019 09 March 2020 250,731,917 29,810,861 440,000 20,000,000 1,110,521 - 30 June 2020 18 March 2021 24 May 2021 270,731,917 31,361,382 1,200,000 40,000,000 1,500,000 50,000,000 Balance 30 June 2021 360,731,917 34,061,382 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. Share Warrants The Group has granted two warrant certificates and approved by shareholders to subscribe for shares over two tranches, the first being for 37,500,000 shares and the second for a further 10,000,000 shares at a warrant exercise price of $0.12 per share. Capital risk management The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital. Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents. The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the current company's share price at the time of the investment. The consolidated entity is not actively pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies. 43 50 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 22. Reserves Share-based payments reserve Consolidated 2021 $ 2020 $ 117,022 173,046 Share-based payments reserve The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and other parties as part of their compensation for services. Amounts are transferred out of the reserve and into issued share capital when the options are vested and exercised. Movements in reserves Movements in each class of reserve during the current and previous financial year are set out below: Consolidated Balance at 1 July 2019 Share based payments expense Transfer on exercise of option Expired share options Balance at 30 June 2020 Share based payments expense Expired share options Balance at 30 June 2021 Share based payment reserve $ Total $ 293,724 1,191,394 (1,110,521) (201,551) 293,724 1,191,394 (1,110,521) (201,551) 173,046 51,524 (107,548) 173,046 51,524 (107,548) 117,022 117,022 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 and exercised. Further information about the share based payments to employees is set out in note 36. Note 23. Dividends There were no dividends paid, recommended or declared during the current or previous financial year. 44 51 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 24. Non financial Assets Impairment IMPAIRMENT NOTE: During FY21, impairment writebacks totaling $2.274m have been restored in respect of the cash generating units within the Business. Key Assumptions used for calculating impairment losses Sales Growth used for Victorian CGU’s Year 2 and thereafter is 3%. Sales Growth used for QLD CGU’s Year 2 and thereafter is 3%. Sales Growth used for NSW CGU’s Year 2 and thereafter is 3%, with the exception of: Bulahdelah being 15% in year 2, 10% in year 3 and 3% thereafter due to strong sales performances in 2020 and 2021, therefore accelerating future growth more than other stores. Chinderah with 20% Year 2 and 3% thereafter, due to prolonged QLD border shuts in 2020 and 2021, which will bring sales up to expected levels. A terminal growth rate of 3% has been used in the calculations. Cost of sales used in all stores was 36% based on current actual results. Employment costs used for all CGU’s year 2 and thereafter is 3%. Future cash flow and profit projections were based on the revised FY22 forecast which was effectively reduced by 1.5% less than 2021 Covid-19 effective year and 20% less than 2019 the last non Covid-19 effected year. This has resulted in 14 CGU’s with writeback of impairments of $4,500,875 and impairment of 3 CGU's of $1,177,959. In addition an impairment of the QLD kitchen of $1,048,847 as the operations of the kitchen has now closed and the facility is currently being marketed for lease. We have an offer on the facility, should this be successful, this impairment will be written back. Non-store assets were reviewed based on a QSR segment basis. Uncertainty: There still remains some uncertainty regarding how the Covid-19 pandemic will evolve, however with the rest of the world opening up and the roadmaps for opening set by both Australian federal and state governments this is very different circumstances to 2020. The impacts of Covid-19 on the Group have resulted in using these road maps to model the carrying values in all cash generating units (CGU’s). Whilst the scenario modelling used for impairment testing inherently captures probable and possible impacts of Covid-19 experienced by the Group, additional temporary store closures and reduced revenues from extended trading restrictions could result in the revised carrying values of CGU’s reducing further and therefore resulting in further impairment write – offs. In 2019, the Group recognised significant impairment write offs amounting to $6.558m and in 2020 the Group recognised further impairment of $10.234m. This reduction in carrying values prior to 2021 year has lowered the sensitivity of the respective CGU’s carrying values, and the quantum of potential intangible asset impairments in future periods. Notwithstanding the above, the carrying values in respect of those CGU’s against which an impairment loss has been recognised continue to be sensitive to a range of assumptions, in particular the growth rates in the cash flow forecasts. Right of Use Assets A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset. Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any re-measurement of lease liabilities. The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred. For each financial period, the Company is required to assess the carrying value of these assets and this review has resulted in the writeback of $1.6m of impairment leaving $4.5m of impairment losses relating to Commercial leases. 52 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTOliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 24. Non financial Assets Impairment (continued) Property Plant & 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 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: years years years years Buildings 40 Leasehold improvements 3-15 Plant and equipment 3-7 Plant & Equipment under lease 2-5 The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date. Leasehold improvements 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. As part of the recognition of Impaired assets, and based on the above assumptions, an impairment writeback for Property, Plant & Equipment of $1.32m was posted. This is broken down into the following categories of assets: Leasehold Improvements $0.95m $0.37m Plant & Equipment Intangibles Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition 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. Goodwill Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is 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 goodwill are taken to profit or loss and are not subsequently reversed. Following a review of the business and its current financial position, it was tested for impairment at the QSR segment level which resulted in no change as the asset is fully impaired. 46 53 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 24. Non financial Assets Impairment (continued) Intellectual property Significant costs associated with intellectual property are deferred and amortised on a straight-line basis over the period of their expected benefit, being their finite life of 10 years. The $0.5m IP amount reflected on the FY20 results relates solely to the Oliver's stores. 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 10 years. Following a review of the business and its current financial position, the asset remains fully impaired. 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. With the pending replacement of the current POS, the Group has accelerated the depreciation on this asset so as the WDV will be NIL at the time it is replaced. Customer Relationship The carrying value of Customer Relationships has been reviewed and remains fully impaired. Impairment of non-financial 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. Sensitivity As a result of the uncertainty surrounding the current trading situation with border closures and trading restrictions, the Company performed some sensitivity analysis on the impairment calculations presented in this report. In the event the stores trading number improved by 10%, the reduction in the impairment calculated amounts to $1.3m, however, should there be a further decline in revenue to the extent of 10%, there would be the need to further impair an additional $2.2m. This would be distributed proportionally between Property, plant & equipment 40%, and Right of Use assets 60%, however this may vary depending on the particular stores involved. Note 25. Financial instruments Financial risk management objectives The consolidated entity'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 consolidated entity'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. The consolidated entity uses derivative financial instruments such as forward foreign exchange contracts to hedge certain risk exposures. Derivatives are exclusively used for hedging purposes, i.e. not as trading or other speculative instruments. The consolidated entity uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks, ageing analysis for credit risk and beta analysis in respect of investment portfolios to determine market risk. 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, evaluates and hedges financial risks within the consolidated entity's operating units. Finance reports to the Board on a monthly basis. Market risk The consolidated entity is not exposed to any significant foreign currency risk. 47 54 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTOliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 25. Financial instruments (continued) Price risk The consolidated entity is not exposed to any significant price risk. Interest rate risk 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 interest rate risk. For the consolidated entity loans from PURE Asset Management outstanding were $5,132,329 are interest only payment loans with monthly cash outlays of $44,908 to service the interest payments. (Bank Loans - 2020: $1,476,506 outstanding, they were principal and interest. Monthly cash outlays of approximately $6,500 per month are required to service the interest payments. The PURE Asset Management Loans are Fixed at 10.5%. An official increase/decrease in interest rates of 100 basis points (2020: 100 basis points) would have an adverse/favourable effect on profit before tax of $14,750 (2020: $14,750) per annum, the percentage change is based on the expected volatility of interest rates using market data and analysts forecasts. Credit risk 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 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. The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative across all customers of the consolidated entity based on recent sales experience, historical collection rates and forward-looking information that is available. Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a period greater than 1 year. Liquidity risk 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 consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities. Financing arrangements Unused borrowing facilities at the reporting date: Bank Guarantee facility Consolidated 2021 $ 2020 $ - 16,272 48 55 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTOliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 25. Financial instruments (continued) Remaining contractual maturities The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position. Consolidated - 2021 Non-derivatives Non-interest bearing Trade payables Other payables Interest-bearing - variable Other loans Premium Funding Interest-bearing - fixed rate Pure Asset Management loan Lease liability Total non-derivatives Consolidated - 2020 Non-derivatives Non-interest bearing Trade payables Other payables Other loans Interest-bearing - variable Bank overdraft Bank loans Other loans Premium Funding Interest-bearing - fixed rate Lease liability Total non-derivatives Weighted average interest rate % 1 year or less $ Between 1 and 2 years $ Between 2 and 5 years $ Over 5 years $ Remaining contractual maturities $ - - 1,959,458 2,723,127 6.00% 3.59% 337,202 143,404 - - - - - - - - - - - - 1,959,458 2,723,127 337,202 143,404 10.50% 3.69% - 2,450,730 7,613,921 5,132,329 2,465,196 7,597,525 - 5,132,329 5,796,593 15,205,920 25,918,439 5,796,593 15,205,920 36,213,959 - Weighted average interest rate % 1 year or less $ Between 1 and 2 years $ Between 2 and 5 years $ Over 5 years $ Remaining contractual maturities $ - - - 2,219,075 3,671,042 200,000 - - - 7.68% 3.69% 6.00% 3.59% 501,506 130,000 503,275 229,219 - 882,000 - - - - - - - - - - - - - - - - 2,219,075 3,671,042 200,000 501,506 1,012,000 503,275 229,219 3.69% 3,615,822 11,069,939 3,478,034 4,360,034 8,523,025 18,859,151 34,476,032 8,523,025 18,859,151 42,812,149 The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above. Fair value of financial instruments Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. Note 26. Key management personnel disclosures 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 20201 49 56 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 26. Key management personnel disclosures (continued) Compensation The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out below: Short-term employee benefits Post-employment benefits Long-term benefits Share-based payments Consolidated 2021 $ 2020 $ 724,365 38,024 - 44,362 587,079 35,131 820 1,184,820 806,751 1,807,850 Short-term employee benefits 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 27. Remuneration of auditors During the financial year the following fees were paid or payable for services provided by Bishop Collins Audit Pty Ltd, the auditor of the company: Audit services - Bishop Collins Audit Pty Ltd Audit or review of the financial statements Other services - Bishop Collins Audit Pty Ltd Other services Other services - Bishop Collins Pty Ltd Taxation return General advice Consolidated 2021 $ 2020 $ 185,000 205,000 - - - - - 16,000 - 35,000 1,000 52,000 185,000 257,000 Note 28. Contingent liabilities The consolidated entity has given bank guarantees as at 30 June 2021 of $571,531 (2020: $383,728) to various landlords. 50 57 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 29. Commitments Capital commitments Committed at the reporting date but not recognised as liabilities, payable: Intangible assets Note 30. Related party transactions Parent entity Oliver's Real Food Limited is the parent entity. Subsidiaries Interests in subsidiaries are set out in note 32. Consolidated 2021 $ 2020 $ - 88,430 Key management personnel Disclosures relating to key management personnel are set out in note 26 and the remuneration report included in the directors' report. Transactions with related parties The following transactions occurred with related parties: Payment for other expenses: Interest paid to other related party Consolidated 2021 $ 2020 $ 24,843 31,470 Receivable from and payable to related parties There were no trade receivables from or trade payables to related parties at the current and previous reporting date. Loans to/from related parties The following balances are outstanding at the reporting date in relation to loans with related parties: Current borrowings: Loan from other related party * Consolidated 2021 $ 2020 $ 337,202 481,630 * The Group has a loan of $337,202 from Safety Factor Aviation Pty Ltd, a Company solely owned by Mr. Jason Gunn. The terms of this loan are set out in Note 16. The loan is secured. On 4 March 2021 Jason Gunn resigned as chairman and is no longer is a related party. Terms and conditions All transactions were made on normal commercial terms and conditions and at market rates. 51 58 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 31. Parent entity information Set out below is the supplementary information about the parent entity. In 2021 due to the restructure the parent company Oliver's Real Food Limited has become the operating company for the entire business, thus the dramatic change from 2020 where we had over 30 operating companies.- Statement of profit or loss and other comprehensive income Loss after income tax Total comprehensive income Statement of financial position Total current assets Total assets Total current liabilities Total liabilities Equity Issued capital Share-based payments reserve Accumulated losses Total equity (deficiency - in equity) Parent 2021 $ 2020 $ (4,412,240) (3,020,699) (4,412,240) (3,020,699) Parent 2021 $ 2020 $ 3,434,265 864,188 32,302,716 28,301,732 8,279,488 6,692,477 38,354,982 7,174,107 34,061,382 117,022 (40,230,670) 30,340,964 173,046 (9,386,385) (6,052,266) (21,127,625) Guarantees entered into by the parent entity in relation to the debts of its subsidiaries The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2021 and 30 June 2020. Contingent liabilities The consolidated entity has given bank guarantees as at 30 June 2021 of $383,728 (2020: $383728) to various landlords Capital commitments - Property, plant and equipment The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021 and 30 June 2020. Significant accounting policies The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except for the following: ● ● ● Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity. Investments in associates are accounted for at cost, less any impairment, in the parent entity. Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator of an impairment of the investment. 52 59 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTOliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 32. Interests in subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1: Name Coffs Harbour Franchise Pty Ltd (Deregistered) Coonalpyn Properties Pty Ltd (Deregistered) Farm Gate Market Direct Pty Ltd (Deregistered) Fresh Food Services NSW Pty Ltd Fresh Food Services QLD Pty Ltd Fresh Food Services VIC Pty Ltd Gundagai Properties Pty Ltd Oliver's North Albury Pty Ltd (In Liquidation) Oliver's Aratula Pty Ltd (Deregistered) Oliver's Ballarat Pty Ltd Oliver's Bulahdelah Pty Ltd Oliver's Calcoffs Pty Ltd (Deregistered) on 19 May 2021 Oliver's Chinderah Pty Ltd Oliver's Coffs Pty Ltd Oliver's Coomera Pty Ltd (Liquidated 20.04.2020) Oliver's Coonalpyn Pty Ltd (Deregistered) Oliver's Corporate Pty Ltd Oliver's Dubbo West Pty Ltd (In Liquidation) Oliver's East-Link Inbound Pty Ltd Oliver's East-Link Outbound Pty Ltd Oliver's Euroa Pty Ltd Oliver's Ferry Park Pty Ltd Oliver's Franchising Pty Ltd (Deregistered) 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 (Deregistered) Oliver's Horshan Pty Ltd (In Liquidation) Oliver's Kelso Pty Ltd (Deregistered) 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 Pty Ltd (Deregistered) Oliver's Officer Inbound Pty Ltd Oliver's Officer Outbound Pty Ltd Oliver's Organic Farming Pty Ltd (Deregistered) 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 (Deregistered) Oliver's Shepparton Pty Ltd (Deregistered) Oliver's Sutton Forest Pty Ltd (Deregistered) Oliver's Wallan Northbound Pty Ltd Oliver's Wallan Southbound Pty Ltd Oliver's Westgate Pty Ltd (Deregistered) Oliver's Wyong Northbound Pty Ltd Oliver's Wyong Northbound Pty Ltd Retail Technology Services Pty Ltd Principal place of business / Country of incorporation Ownership interest 2020 2021 % % - - - 100.00% 100.00% 100.00% 100.00% 100.00% - 100.00% 100.00% - 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% 100.00% 100.00% - 100.00% - 100.00% 100.00% 100.00% 100.00% - 100.00% 100.00% - 100.00% 100.00% 100.00% - - - 100.00% 100.00% - 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 53 60 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 32. Interests in subsidiaries (continued) Name Revilo's Pty Ltd (Deregistered) Silver Dog Pty Ltd Slacks Creek Pty Ltd (Deregistered) The Delicious & Nutritcious Food Co Pty Ltd (Deregistered) Note 33. Events after the reporting period Principal place of business / Country of incorporation Ownership interest 2020 2021 % % - 100.00% - - 100.00% 100.00% 100.00% 100.00% Two of the Company’s major shareholders have provided a temporary overdraft facility for a sum of $500k, unsecured, interest at 4.0% per annum and with a repayment date of 30 September 2021. This facility had secured the approval of the Group’s major lenders, PURE Asset Management, who have been working with the Group in these challenging times to ensure its survival as both they and the major shareholders remain confident as to Oliver’s financial success once the lockdowns end. The overdraft facility was designed purely to combat the financial losses stemming from the numerous and extended lockdowns. As per the OLI announcement on 24 September 2021, the Company is pleased to announce that an in-principle agreement has been reached between PURE Asset Management and OLI's two leading shareholders, Michael & Suzanne Gregg and Gelba Pty Ltd (an entity of which OLI Director, Mr Martin Green, is a Director and minority shareholder) for the PURE A$5.0m loan facility to be assigned to these two major shareholders. It is expected that the assignment will occur on or around 30 September 2021. Following the assignment, the terms of the loan will be modified as follows: - Amount: Term: Interest Rate: Interest Paid: Covenant: Repayment: Draw Down: Security: $5.0m 24 months from assignment date 6% (linked to the 90 days BBSY) and reviewed quarterly Quarterly in arrears None In full 24 months from assignment date Early repayment will not incur fees As funds are needed As per PURE loan agreement, namely first ranking security over assets of the Company and its subsidiaries. In addition, the same two leading shareholders will provide an additional loan facility Facility: Amount: Term: Interest Rate: Interest Paid Purpose: Covenant: Security: Warrants: Revolving line of Credit $1.5m (note $500k already advanced in August 2021 and currently at 4% interest) 24 months 6% (linked to the 90 days BBSY) and reviewed quarterly Calculated daily and paid monthly To support the Company's working capital requirements due to Covid-19 lockdown restrictions None Unsecured initially, however, should security be requested, company would require shareholder approval under listing rule 10.1 to grant security. There is no change in the 47,500,000 warrants held by Pure Asset Management and approved by shareholders, all terms remain the same. 54 61 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 33. Events after the reporting period (continued) Covid-19 Impact on Oliver's Real Food Limited The Covid-19 pandemic has continued unabated through the entire 2021 year, with a significant number of cases, massive media attention, and border closures. Measures taken by various governments to contain the virus have affected economic activity and the Company’s business in various significant ways: ● Due to government measures taken, Oliver's has had to close its entire network of stores, the three warehouses and two kitchens for various periods, depending on the location of the store. At times, some of these stores could open, and then some could only open for take-away. The negative impact on revenues continued throughout the year as people stayed home and did not or could not travel or eat out due to (State) government regulations. ● The reduction of economic activity and the requirement to close our stores meant employees were stood down or had their hours reduced, most at relatively short notice, itself creating a myriad of challenges for management as it negotiated between the various border closures and differing rules in each State. The Company continued its Job Keeper registration until that ceased and during the 2021 year, the Group received further Government subsidies and some rental relief. The Group has successfully applied for the more recent NSW State government subsidies which will assist in alleviating the financial strain on the business. l As a result of these effects our cumulative revenue for the 2021 financial year was approximately $6m, or 21% lower, than our 2019 (pre Covid-19) revenues in the same period, with the 2020 revenues being $5m, lower or 17%, compared to 2019. So the impact of Covid-19 has been substantial and the longer the lockdowns endure, the more the current revenue figures will drop. l The Group’s liquidity has been negatively impacted, which required us to obtain additional funding from our major shareholders by obtaining a temporary overdraft facility of $500k in August 2021 and the $1.5m revolving line of credit, referred to above, to enable the Group to meet its future liquidity needs. l In the 2020 financial year, and primarily due to the outlook governed by Covid-19, the Group incurred write-offs due to impairments. In the 2021 financial year however, OLI has turned this around due to a more positive outlook for the Group and has in fact made several write-backs to Impairments. Consequently on its Balance Sheet, Leasehold Improvements had a write-back of $465k (2020: Write-down $1.2m), Plant and Equipment write-back of $219k (2020: write- down $0.5m), Right of Use Assets write-back of $1.6m (2020: write-down $6.1m), and Intangible assets write-back of $Nil (2020: write-down $2.4m). These are not trading losses but asset value write-backs/write-offs in accordance with Accounting Standards, and reflect in the net loss of the Group as at 30 June 2021 and 2020. l Depending on the duration of the Covid-19 crisis and continued negative impact on economic activity, the Group might experience further negative results, and liquidity restraints and incur additional impairments on its assets in 2022. The exact impact on our activities in the remainder of 2021 and thereafter cannot be predicted, but based on the to normal National and the NSW and Victorian Covid-19 Roadmaps, Oliver's operating revenues until December 2021. As a result Oliver's may have to raise further capital from the market. At this time, because the timing of this and the amount likely to be required is uncertain, the Board has not progressed this matter at the date of this report. We also refer to note 1 Going concern. is not expecting return to Wyong HO Facility The Wyong Head Office Facility Lease was leased to a 3rd party and the Oliver's lease surrendered effective 1 September 2021. This releases the company from any future liabilities in relation to the lease. The Brisbane Kitchen Facility The Brisbane Kitchen Facility has been vacant since 30 June 2021. Management has reached an understanding to lease the building to a third party and the Oliver's lease surrendered. We expect this to documented and signed by mid October 2021. This will release the company from any future liabilities and in addition over $1.0m of impairments will be written back. 55 62 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORTOliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 33. Events after the reporting period (continued) No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years. Note 34. Reconciliation of loss after income tax to net cash used in operating activities Loss after income tax expense for the year (4,412,240) (17,506,369) Consolidated 2021 $ 2020 $ Adjustments for: Depreciation and amortisation Impairment of property, plant and equipment Impairment of goodwill Impairment of intangibles Net loss on disposal of property, plant and equipment Share-based payments Other Income - lease concessions (non-cash) Impairment of right of use assets Vendor loan statute barred Other Change in operating assets and liabilities: Increase in trade and other receivables Increase in trade and other receivables Decrease in inventories Decrease in inventories Decrease/(increase) in prepayments Decrease/(increase) in prepayments Decrease in other operating assets Decrease in other operating assets Increase/(decrease) in trade and other payables Increase/(decrease) in trade and other payables Increase/(decrease) in employee benefits Increase in employee benefits Decrease in other operating liabilities Increase/(decrease) in other operating liabilities Net cash used in operating activities Note 35. Loss per share 5,034,145 (684,689) - - 179,747 (56,023) - (1,589,382) (200,000) 5,753,681 1,631,349 2,133,516 361,936 140,673 1,191,394 (495,841) 6,107,333 - - 30,821 (109,598) 730,595 67,048 (307,335) (1,157,532) (228,595) (94,550) (807,256) 351,058 (137,893) 43,127 1,382,047 262,742 (495,162) (2,828,409) (52,844) Consolidated 2021 $ 2020 $ Loss after income tax attributable to the owners of Oliver's Real Food Limited (4,412,240) (17,506,369) Weighted average number of ordinary shares used in calculating basic earnings per share Adjustments for calculation of diluted earnings per share: Options over ordinary shares Warrants Number Number 287,385,469 270,731,917 4,000,000 47,500,000 - - Weighted average number of ordinary shares used in calculating diluted earnings per share 338,885,469 270,731,917 Basic earnings per share Diluted earnings per share Cents Cents (1.54) (1.30) (6.47) (6.47) 63 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Notes to the financial statements 30 June 2021 Note 36. Share-based payments 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. Set out below are summaries of options granted under the plan: Number of options 2021 Weighted average exercise price 2021 Number of options 2020 Weighted average exercise price 2020 Outstanding at the beginning of the financial year Forfeited Expired Granted 22 January 2021 300,000 - (300,000) 2,000,000 $0.000 $0.000 $0.000 $0.028 500,000 (200,000) - - $0.300 $0.300 $0.000 $0.000 Outstanding at the end of the financial year 2,000,000 $0.000 300,000 $0.300 Grant date 3 May 2017 Expiry date 26 February 2021 A total of 300,000 options expired.. 2021 Grant date Expiry date price Exercise Balance at the start of the year Granted Exercised Expired/ forfeited/ other Balance at the end of the year 16/06/2020 31/12/2021 $0.028 - - 2,000,000 2,000,000 - - - - 2,000,000 2,000,000 The options granted to Directors (20,000,000) had the following terms & conditions attached: The share price doubled for the $0.022 to $0.044, and There were 2 consecutive quarters of positive EBITDA 57 64 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Directors' declaration 30 June 2021 In the directors' opinion: ● ● ● ● the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 1 to the financial statements; the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30 June 2021 and of its performance for the financial year ended on that date; and there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. The directors have been given the declarations required by section 295A of the Corporations Act 2001. Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001. On behalf of the directors ___________________________ Kimley Wood Chairman 30 September 2021 58 65 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Independent auditor's report to the members of Oliver's Real Food Limited [This page has intentionally been left blank for the insertion of page one of the independent auditor's report] 59 66 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Independent auditor's report to the members of Oliver's Real Food Limited [This page has intentionally been left blank for the insertion of page two of the independent auditor's report] 60 67 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Independent auditor's report to the members of Oliver's Real Food Limited [This page has intentionally been left blank for the insertion of page three of the independent auditor's report] 61 68 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Independent auditor's report to the members of Oliver's Real Food Limited [This page has intentionally been left blank for the insertion of page four of the independent auditor's report] 62 69 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Independent auditor's report to the members of Oliver's Real Food Limited [This page has intentionally been left blank for the insertion of page five of the independent auditor's report] 63 70 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT Oliver's Real Food Limited Shareholder information 30 June 2021 The shareholder information set out below was applicable as at 23 September 2020. Distribution of equitable securities Analysis of number of equitable security holders by size of holding: Ordinary shares % of total Options over ordinary shares % of total Number of holders shares issued Number of holders shares issued 1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and over 42 281 301 1,237 260 - 0.26 0.63 11.20 87.91 2,121 100.00 Holding less than a marketable parcel 520 0.62 Equity security holders Twenty largest quoted equity security holders The names of the twenty largest security holders of quoted equity securities are listed below: - - - - - - - - - - - - - - MR MICHAEL JOHN GREGG & MRS SUZANNE JANE GREGG GELBA PTY LIMITED HAURAKI TRUST COMPANY LIMITED BUTOF HOLDINGS PTY LTD J P MORGAN NOMINEES AUSTRALIA PTY LIMITED ZANYA NOMINEES PTY LTD (JLS SUPERANNUATION A/C) SWEET AS DEVELOPMENTS PTY LTD (SWEETMAN MCNICKLE FAMILY A/C) MR JASON ANTONY GUNN TWENTY SECOND SEPELDA PTY LTD (THE METTER FAMILY A/C) CUSTODIAL SERVICES LIMITED (BENEFICIARIES HOLDING A/C) HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED EVACAP PTY LTD (EVANS FAMILY A/C) MS ANNE LOUISE MATTHEWS WR SIMPSON NOMINEES PTY LTD (SIMPSON SUPER FUND A/C) WOLRAM INVESTMENTS PTY LTD (WOLRAM A/C) GAZELLE BICYCLES AUSTRALIA PTY LTD (GAZELLE BICYCLE AUS SBF A/C) MR MICHAEL JOHN GREGG MFA CAPITAL PTY LTD (T & J ADAMS SUPER FUND A/C) GOLD RETIREMENT PTY LTD (GOLD RETIREMENT FUND A/C) MRS PAMELA ELIZABETH BROWN Ordinary shares % of total Number held 51,327,516 37,439,660 28,387,500 20,785,318 20,250,000 11,666,667 11,288,572 10,000,000 6,666,667 5,420,155 4,103,091 4,066,666 3,500,000 3,253,025 3,000,000 2,888,363 2,000,000 1,800,000 1,750,000 1,750,000 shares issued 14.23 10.38 7.87 5.76 5.61 3.23 3.13 2.77 1.85 1.50 1.14 1.13 0.97 0.90 0.83 0.80 0.55 0.50 0.49 0.49 231,343,200 64.13 65 71 OLIVER’S REAL FOOD LIMITED2020/2021 ANNUAL REPORT OLIVER'S LOCATIONS NSW Bankstown Bass Hill Belmont Berkshire Park Blacktown Bowral Brookvale Bulahdelah Bulli Campbelltown Campbelltown Mall Cardiff Charlestown Chatswood East Chester Hill Chipping Norton Chullora Coffs Harbour Cranbrook Dural Edgeworth Emu Heights Emu Plains Fairymeadow Ferry Park Glenrose Gosford Goulburn Goulburn South Granville Greenacre Gregory Hills Gundagai Hexham Katoomba Kellyvile Ridge Kingswood Kogarah Lake Munmorah Lansvale Leichhardt Lisarow Lithgow Liverpool North Maitland Marayong Marrickville Minto Miranda Moss Vale Mt Annan Narellan Newport North Liverpool North Narrabeen Orange North Port Macquarie Prestons Redfern Rockdale Roselands Rutherford Silverwater Spring Farm Strathfield Tuggerah North Turramurra Umina Vineyard Werrington West Ryde Windsor Wollongong West Woolooware Wyong North Wyong South ACT Belconnen Canberra Airport Canberra Gateway Conder Dickson Gungahlin Hume Jerrabomberra Tuggeranong VIC Abbotsford (Fitzroy) Altona Meadows Ballarat Balwyn Bayswater North Berwick Braeside Bulleen Camberwell South Carrum Downs Clayton Coburg Craigieburn Highlands Cranbourne Doncaster East Eastlink Inbound Eastlink Outbound Euroa Frankston Frankston North Geelong North Geelong South Kennington Keysborough Kilsyth Laverton North Lucas Maribynong (Highpoint) Melton Gateway Melton South Mernda Monbulk Murrumbeena Noble Park North Melbourne Ocean Grove Ocean Grove North Officer Officer Inbound Officer Outbound Pascoe Vale Peninsularlink Inbound Peninsularlink Outbound Ringwood (Eastland) Rosebud West Rowville Rye Seville Springvale St Helena St. Kilda Sunbury Tarniet Gardens Torquay Wallan North Wallan South Wantirna Watervale Werribee Winter Valley QLD Australia Fair (Southport) Birkdale Bowen Hills Browns Plains West Calamvale Capalaba Chinderah Cornubia Enoggera Flagstone Goodna Greenbank Gympie Gympie South Helensvale Holmview Hope Island Kallangur Karalee Kenmore Kingston MacGregor Mango Hill Maryborough Meadowbrook Mitchelton Moorooka Mt Cotton Northgate Ormeau Oxley Park Ridge Robina Runaway Bay Slacks Creek Springfield Tingalpa Underwood Victoria Point Warner Woodridge WA Ellenbrook Maddington West Warnbro Bold denotes restaurant location OLIVER’S REAL FOOD LIMITED 2020/2021 ANNUAL REPORT 72 

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