OLDFIELDS HOLDINGS LIMITED — Annual Report 2020

Sep 29, 2020

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2020 Annual Report

Year Ended 30 June 2020

ABN 92 000 307 988

Annual Report Contents

	Page
Directors' Report	2
Auditor's Independent Declaration	10
Financial Statements	11
Directors' Declaration	40
Independent Auditor's Report	41
Corporate Governance Statement	44
Risk Management Statement	52
Shareholder Information	54
Corporate Directory	55

Oldfields Holdings Limited

1

30 June 2020

Directors' Report

Your Directors present their report on the consolidated entity (referred to herein as the "Group") consisting of Oldfields Holdings Limited (referred to hereafter as the "Company" or the "Parent Entity") and its controlled entities for the financial year ended 30 June 2020.

Directors' Details

The names and details of the Directors of the Company during the financial year and until the date of this report are set out below. Directors were in office for this entire period unless otherwise stated.

Richard John Abela

Chief Executive Officer and Managing Director

Mr Abela has more than 20 years experience in senior/managing director roles in finance, sales & marketing and supply chain including a number of years in the building products sector, scaffolding and trade related industries.

Qualifications

Fellow Member of CPA and Master of Business Administration

Other current directorships:

Order of Saint John of Jerusalem, Knights Hospitaller

Previous directorships (last 3 years): None

Interest in shares and options: 201,000 shares held

Jonathan William Doy (Appointed 17 April 2020)

Independent non-executive Director and Interim Chairman

Mr Doy is the CEO of Sparke Helmore Consulting, an allied service company of Sparke Helmore Lawyers. He is an acknowledged specialist in tax as well as in the broader business implications of transactions particularly in the construction and property industry.

Special responsibilities

Chairman of the Audit Committee and Member of the Remuneration Committee

Qualifications

Bachelor of Economics, Member of AICD and Fellow Member of CPA

Other current directorships:

None

Previous directorships (last 3 years):

None

Interest in shares and options: Nil

David John Baird (Appointed 17 April 2020)

Independent non-executive Director

Mr Baird has over 30 years experience in local government, planning and environmental law.

Special responsibilities

Chairman of the Remuneration Committee and Member of the Audit Committee

Qualifications

Bachelor of Arts and Bachelor of Laws

Other current directorships:

None

Previous directorships (last 3 years):

None

Interest in shares and options: 225,000 shares held

Oldfields Holdings Limited

2

30 June 2020

Jie Ma (Appointed 17 April 2020) Non-executive Director

Mr Ma has over 20 years experience in mid and high-rise construction in China and Australia.

Special responsibilities

Member of the Audit Committee and Member of the Remuneration Committee

Qualifications

Bachelor of Industrial and Civil Engineering

Other current directorships: None Previous directorships (last 3 years): None

Interest in shares and options:

85,530,329 shares held

(holds 50% of the units in the EQM Holdings Unit Trust. EQM Holdings Pty Ltd atf the EQM Holdings Unit Trust holds 85,530,329 ordinary shares)

William Lewis Timms (resigned 18 April 2020) Non-executive Director and Chairman

Mr Timms has more than 30 years experience in accounting, taxation, audit, commercial real estate and project management.

Special responsibilities Member of the Audit Committee and Member of the Remuneration Committee

Qualifications Bachelor of Business (Accounting and Audit), Real Estate and Business Agent Other current directorships: None Previous directorships (last 3 years): Non-executive Director of Buderim Ginger Limited (resigned 28 August 2016) Interest in shares and options: 39,384,528 shares held Stephen Charles Hooper (resigned 18 April 2020) Independent non-executive Director

Mr Hooper has more than 20 years experience in senior executive roles in the fast moving consumer goods industry, with a focus on supply chain management Special responsibilities Chairman of the Audit Committee and Chairman of the Remuneration Committee Qualifications Bachelor of Science Other current directorships: None Previous directorships (last 3 years): None Interest in shares and options: 131,534 shares held

Company Secretary

Alan Lee was appointed as Company Secretary on 12 June 2019.

Alan has over 25 years experience in financial reporting and controls, corporate advisory and governance, business valuation, transaction services across a wide range of industries and sectors in Australasia and Asia. He has been Chief Financial Officer of another ASX listed company and a mid-market private equity firm in Australia. Alan has worked in the Financial Advisory division and Assurance division of KPMG, PwC and EY in Sydney and Hong Kong. He holds a Bachelor of Commerce and a Graduate Diploma in Applied Finance and Investment as well as a CPA in Australia and Hong Kong.

Oldfields Holdings Limited 30 June 2020

3

Principal Activities

The principal activities of the Group during the financial year were:

• import and distribution of paint brushes, paint rollers, painter's tools and accessories;

• hire and erection of scaffolding and related products; and

• manufacture and distribution of scaffolding and related equipment.

There were no significant changes in the nature of the Group's principal activities during the financial year. The majority of operations are conducted in Australia.

Review of Operations and Financial Results

Operating Results

Net loss for the Group after providing for income tax amounted to $1,222,000 (2019: $228,000 loss).

The Group's earnings before interest, tax, depreciation and amortisation (EBITDA) of $660,000 reduced by 28% from the prior year of $915,000.

The following table summarises the key reconciling items between profit/(loss) after income tax attributable to the shareholders of the Group and EBITDA. EBITDA is a financial measure which is not prescribed by Australian Accounting Standards ("AAS") and represents the profit under AAS adjusted for specific non cash and significant items. The Directors consider EBITDA to reflect the core earnings/(loss) of the Group.

	2020 (1)	2019	2018	2017	2016
	$'000	$'000	$'000	$'000	$'000
Sales revenue	24,591	24,755	25,898	26,721	28,420
Profit (loss) after income tax	**(1,222) **	**(228) **	1,550	312	(722)
Income tax expense	284	416	309	315	352
Profit (loss) before income tax	(938)	188	1,859	627	(370)
Gain on early redemption of deferred senior loan note	(470)	-	-	-	-
Revaluation of deferred senior loan note	(237)	(508)	(1,936)	287	257
Profit (loss) before income tax, gain on early redemption and
revaluation	(1,645)	(320)	(77)	914	(113)
Interest income	(14)	-	-	-	-
Depreciation and amortisation expense	925	880	912	803	1,434
Depreciation and amortisation of right-of-use assets	1,229	-	-	-	-
Net finance costs	165	349	278	303	377
Unrealised foreign exchange losses	-	6	8	11	(37)
EBITDA	660	915	1,121	2,031	1,661

(1) The Group has applied AASB 16 Leases effective 1 July 2019 using the modified retrospective method, under which the comparative information is not restated. Note 2 outlines the impact of adopting AASB 16 using this method which has resulted in additional rent expense paid of $1,307,248 for the year.

The Group's revenue from continuing operations for the financial year ended 30 June 2020 was $24,591,000 (2019: $24,755,000) which was a decrease of 0.7% over prior year. Consumer division revenue increased $452,000 (10%) while the Scaffold division decreased by $596,000 (3%).

Depreciation and amortisation expense for the year was $925,423 which was an increase of $45,000 (2019: $880,000) which reflects the stable cost from investment in hire fleet to support the growth of the Scaffold division. With the application of AASB 16 Leases, the amortisation of right-of-use assets for the year was $1,229,000.

The Group’s net loss after tax was $1,222,000 (2019: loss of $228,000). This financial year has been a year of change and transformation. The business has strengthened its senior management team and further streamlined processes to lower its operating costs. It is anticipated that the full benefit will be gained in the new financial year. At a macro level, gross profit margins decreased from 46% to 41.6% due to downturn in building industry volumes and the retraction and postponement of work due to the impact of COVID-19 on building sites across Australia. In addition, the lower value of the Australian dollar increased the cost of purchases.

The settlement with EQM Holdings in April of 2020 represents a significant milestone in the recent history of Oldfields. This transaction has allowed prohibitive banking structures to be removed and with it all covenants that restricted the Group's ability to grow. As such, the Group is now in a position to reinvest all cash flows back into the future of the business and seek out opportunities that had not been available to the board in recent years.

Net cash provided by operating activities was $716,000 in 2020 compared to $365,000 in 2019. The Group continues to have a strong focus on working capital management by lowering inventory within the supply chain and improving payment terms for both debtors and creditors.

Oldfields Holdings Limited

4

30 June 2020

Review of Operations

(i) Consumer Products - Paint Applications and Outdoor Storage Solutions

Revenue for the Consumer division increased by 10% ($437,675) in 2020 as compared to the previous period. While there is much work still to do, the increase in sales has translated into improved EBITDA with a lesser loss of $485,000 against a prior year’s loss of $672,000.

The journey back to a strong paint division continues due to new sales channel development and the continual focus on innovation and service. The Group's re-entry into the New Zealand market has been slowed down due to the impact of COVID-19 however a good base is now being built. In addition, great feedback on brush performance in the United Kingdom is providing confidence and impetuous for further investment into potential European markets. Product extensions as well as new innovation continues to drive market share gains, revenue growth and profit growth. Oldfields' latest hero product innovation is its Microfibre rollers which is gaining traction quickly.

Treco storage sales were $54,000 as compared to $195,000 in 2019. Treco will continue to operate as it sells down inventory. The division will be extinguished in the next financial year.

(ii) Scaffolding

The overall Scaffold division revenue decreased by 2.9% ($592,769) in 2020 as compared to the previous period. The Australian Scaffold branches revenue was slightly down on the previous year, mainly due to COVID-19 and the domestic building downturn.

The domestic scaffolding business has invested in new leadership at both the National and Branch level. In addition, greatly improved analytics that has begun to provide the business a much greater level of performance management transparency.

The international export business did demonstrate growth in 2020 with sales revenue increasing by more than 50%. This is as a result of our continuous efforts on developing revenue streams across multiple channels and geographies that is targeted at maintaining revenue equilibrium during various building and economic cycles.

The Scaffolding sales in China had an excellent start, however, the COVID-19 disrupted the sales revenue in the second half of the financial year. COVID19 also impacted our manufacturing facility in China for a short period of time. It was back to full production in March/April. In order to further improve efficiencies and the reduction of lead times, the China factory was relocated from Southern China and Central China in August 2020. The new factory, with increased capacity and new resources, will support the Group's new initiatives in the China domestic market.

Financial Position

The net assets of the Group have increased by $3,549,000 from $4,384,000 at 30 June 2019 to $7,933,000 at 30 June 2020.

A key area of focus for the 2020 financial year will be to continue to trade profitably and further increase the net asset position of the Group.

Significant Changes in State of Affairs

The Company entered into a Subscription Agreement with EQM Holdings Pty Ltd (ACN 635 693 668) as trustee of the EQM Holdings Trust (referred to herein as the "Subscriber") under which the Company agreed to issue the Subscriber with new fully paid ordinary shares equal to 51.00% of the total issued share capital of the Company on a fully diluted basis (referred to herein as "Shares") for an amount equal to $0.06 per share (referred to herein as the "Placement").

The placement was approved by the Company's shareholders at the 2019 Annual General Meeting held on 27 November 2019, the results of which were lodged with ASX that day. The placement was completed on 17 April 2020 with 85,530,329 new ordinary shares issued. A total of $5,131,820 was raised and it was partially used for the repayment of Westpac facilities.

There were no significant changes in the state of affairs during the financial year.

Dividends

Since the start of the financial year, no dividends have been paid or declared by Oldfields Holdings Limited.

Events after the Reporting Period

The Group's scaffold manufacturing facility in Foshan, China has been relocated to XinXiang, China in August 2020.

Future Developments, Prospects and Business Strategies

Growth strategies across both division and new product introductions as well as expanding sales channels both domestically and internationally is providing the Directors confidence for an improvement of financial performance in 2021 financial year. The Paint Applications business has been restructured to return to profitability. Strategies for Scaffolding focus on driving revenue by developing non-cyclical sectors and improve efficiency in each branch.

While the duration of the impacts of the COVID-19 pandemic is uncertain, the Group entered the 2021 financial year in a better financial position. We have a tremendous team and a strong and growing pipeline of projects and are well placed to drive earnings growth and pursue new opportunities as we emerge from the current economic challenges.

Environmental Regulation and Performance

The Group’s operations are not subject to any particular or significant environmental regulation under the law of the Commonwealth or of a State or Territory in Australia. The Group has established procedures whereby compliance with existing environmental regulations and new regulations are monitored continually. This process includes procedures to be followed should an incident adversely impact the environment. The Directors are not aware of any breaches during the period covered by this report.

Oldfields Holdings Limited

5

30 June 2020

Directors' Meetings

The number of meetings of directors (including meetings of committees of directors) held during the year and the number of meetings attended by each director were as follow:

Director's Name	Board	Board	Audit Committee	Audit Committee	Remuneration Committee	Remuneration Committee
	Number Eligible to Attend	Number Attended	Number Eligible to Attend	Number Attended	Number Eligible to Attend	Number Attended
Richard John Abela Jonathan William Doy_(appointed 17 April 2020) David John Baird(appointed 17 April 2020) Jie Ma(appointed 17 April 2020) William Lewis Timms(resigned 18 April 2020) Stephen Charles Hooper(resigned 18 April 2020)_	10 10 2 2 2 2 2 - 8 8 8 6		- - 1 1 1 1 1 - 2 2 2 2		- - 1 1 1 1 1 - 1 1 1 1

Remuneration Report (Audited)

Remuneration Policy

The remuneration policy of the Group has been designed to align key management personnel (KMP) objectives with shareholder and business objectives by providing a fixed remuneration component and offering incentives based on key performance areas affecting the consolidated entity's financial results. The Board believes the remuneration policy to be appropriate and effective in it's ability to attract and retain the high quality KMP to run and manage the Group, as well as create goal congruence between directors, executives and shareholders.

The Board’s policy for determining the nature and amount of remuneration for KMP of the Group is as follows:

• The remuneration policy is to be developed by the Remuneration Committee and approved by the Board after professional advice is sought from independent external consultants when required;

• KMP receive a base salary (which is based on factors such as length of service and experience), superannuation, fringe benefits, and performance incentives;

• Performance incentives are generally only paid once predetermined key performance indicators (KPIs) have been met; and

• The Remuneration Committee reviews KMP packages annually by reference to the Group’s performance, executive performance and comparable information from industry sectors.

The performance of KMP is measured against criteria with each executive and is based predominantly on the forecast growth of the Group’s profits and shareholders’ value. All bonuses and incentives must be linked to predetermined performance criteria. The Board may however exercise its discretion in relation to approving incentives, bonuses and options, and can recommend changes to the Committee’s recommendations. Any change must be justified by reference to measurable performance criteria. The policy is designed to attract high calibre executives and reward them for performance results leading to long-term growth in shareholder wealth.

KMP receive at a minimum, a superannuation guarantee contribution required by the government, which is currently 9.5% of the individual's earnings. Individuals may however have chosen to sacrifice part of their salary to increase payments towards their superannuation.

Upon retirement, KMP are paid employee benefit entitlements accrued to the date of retirement.

All remuneration paid to KMP is valued at the cost to the Group and expensed.

The Board's policy is to remunerate non-executive directors at market rates for time, commitment and responsibilities. The Remuneration Committee determines payments to the non-executive directors and reviews their remuneration annually based on, market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting.

Engagement of Remuneration Consultants

During the financial year there were no consultants engaged by the Remuneration Committee to review the elements of KMP remuneration and provide recommendations.

Performance-Based Remuneration

The KPIs are set annually with a certain level of consultation with KMP. The measures are specifically tailored to the area each individual is involved in and has a level of control over. The KPIs target areas the Board believes hold greater potential for the Group's expansion and profit, covering financial and non-financial as well as short and long-term goals. The level set for each KPI is based on budgeted figures for the Group and respective industry standards.

Performance in relation to the KPIs is assessed annually with bonuses being awarded depending on the number and difficulty of the KPIs achieved. Following the assessment, the KPIs are reviewed by the Remuneration Committee in light of the desired and actual outcomes, and their efficiency is assessed in relation to the Group’s goals and shareholder wealth before the KPIs are set for the following year.

In determining whether or not a KPI has been achieved the Group bases the assessment on audited figures, however where the KPI involves comparison of the Group or a division within the Group to the market, independent reports may be sought from organisations such as Standard & Poors.

Oldfields Holdings Limited

6

30 June 2020

Employment Details of Members of Key Management Personnel

The following table provides employment details of persons who were, during the financial year, members of KMP of the Group.

Group Key Management Personnel

Position Held Current Salary / Fees Contract Details:

Richard John Abela Jie Ma_(appointed 17 April 2020) Non-executive Director Duration & termination unspecified $20,556 Independent Non-executive Director Duration & termination unspecified $8,222 Duration & termination unspecified Company Secretary and Chief Financial Officer Duration unspecified. Termination 3 months notice $205,449 William Lewis Timms(resigned 18 April_ 2020) Ka Lung Alan Lee Duration & termination unspecified $269,252 $77,562 $43,090 Executive Director and Chief Executive Officer Non-executive Director Independent Non-executive Director Jonathan William Doy_(appointed 17_ April 2020) David John Baird_(appointed 17 April_ 2020) Independent Non-executive Director Duration & termination unspecified $8,222 Stephen Charles Hooper_(resigned 18_ April 2020) Duration unspecified. Termination 3 months notice

The table below illustrates the proportion of remuneration that was performance related and fixed salary/fees.

	Performance
	Related	Fixed	Total
	%	%	%
Richard John Abela	-	100	100
Jonathan William Doy_(appointed 17 April 2020)_	-	100	100
David John Baird_(appointed 17 April 2020)_	-	100	100
Jie Ma_(appointed 17 April 2020)_	-	100	100
William Lewis Timms_(resigned 18 April 2020)_	-	100	100
Stephen Charles Hooper_(resigned 18 April 2020)_	-	100	100
Ka LungAlan Lee	-	100	100

The employment terms and conditions of all KMP are formalised in contracts of employment.

There are no pre-defined termination benefits payable to key management personnel other than accrued leave entitlements. In addition to the above, the Group is committed to pay the CEO and the CFO up to 6 months of base salary each in the event of a successful takeover offer and their positions are terminated or made effectively redundant.

Remuneration Expenses for Key Management Personnel

The following table of benefits and payments represents the components of the current year and comparative year remuneration expenses for each member of KMP of the Group. Such amounts have been calculated in accordance with Australian Accounting Standards:

	Year	Short-Term Benefits	Long-Term Benefits	Post Employment Benefits	Total
		Cash Salary and Fees Cash Bonuses & Incentives Non- Monetary Benefits Movement in Leave Entitlements $ $ $ $	Leave Entitlements $	Super- annuation $
					$
Executive Directors Richard John Abela
	2020	247,800 - - 4,209 - 21,452 273,461
	2019	240,000 - - - 3,983 - 22,800 258,817
Gregory John Park (resigned 12 June 2019)	2020	11,512 - - (9,482) - 336 2,366
	2019	195,000 - - (5,621) - 18,525 207,904
Ka Lung Alan Lee (appointed 12 June 2019)	2020	187,625 - - 7,842 - 17,824 213,291
	2019	10,563 - - 1,390 - 1,003 12,956
Non-Executive Directors Jonathan William Doy (appointed 17 April 2020)
	2020	8,222 - - - - - 8,222
	2019	- - - - - - -
David John Baird_(appointed 17 April 2020) 2020 (appointed 17 April 2020)_ 2019		8,222 - - - - - 8,222
		- - - - - - -
Jie Ma_(appointed 17 April 2020) 2020 (appointed 17 April 2020)_ 2019		20,556 - - - - - 20,556
		- - - - - - -
William Lewis Timms 2020 (resigned 18 April 2020) 2019		70,833 - - - - 6,729 77,562
		90,000 - - - - 8,550 98,550
Stephen Charles Hooper 2020 (resigned 18 April 2020) 2019		39,352 - - - - 3,738 43,090
		50,000 - - - - 4,750 54,750
2020 Total KMP 2020 2019 Total KMP 2019		594,122 - - 2,569 - 50,079 646,770
		585,563 - - (8,214) - 55,628 632,977

Oldfields Holdings Limited 30 June 2020

7

Securities Received that are not Performance Related

No members of KMP are entitled to receive securities that are not performance-based as part of their remuneration package.

Performance-Related Share-based Payments

There were no performance-related share-based payments made to key management personnel during the year.

Options and Rights Granted as Remuneration

There were no options or rights granted as remuneration during the year.

Shares held by Key Management Personnel

The number of ordinary shares in Oldfields Holdings Limited held during the 2019 financial year by each of the KMP of the Group is as follows:

	Number at Beginning of Year	Granted as Remuneration During the Year	Issued on Exercise of Options During the Year	Other Changes During the Year	Number at End of Year
Richard John Abela Jonathan William Doy David John Baird Jie Ma Alan Lee Total* William Lewis Timms Stephen Charles Hooper Gregory John Park	201,000 - - - 201,000 - - - - - - - - 225,000 225,000 - - - 85,530,329 85,530,329 39,384,528 - - - 39,384,528 131,534 - - - 131,534 - - - - - - - - - -
	39,717,062 - - 85,755,329 125,472,391

• holds 50% of the units in the EQM Holdings Unit Trust. EQM Holdings Pty Ltd atf the EQM Holdings Unit Trust holds 85,530,329 ordinary shares

Other Transactions with Key Management Personnel

There were no other transactions conducted between the Group and KMP or their related parties, other than those disclosed above or in note 31 relating to equity, compensation and loans, that were conducted other than in accordance with normal employee, customer or supplier relationships on terms no more favourable than those reasonably expected under arm’s length dealings with unrelated persons.

(This concludes the Remuneration Report which has been audited)

Indemnifying Officers

During or since the end of the financial year, the Company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay insurance premiums as follows:

• The Company has paid premiums to insure all past, present and future Directors against liabilities for costs and expenses incurred by them in defending legal proceedings arising from their conduct while acting in the capacity of Directors of the Company, other than conduct involving a wilful breach of duty in relation to the Company. The contract of insurance prohibits disclosure of the nature of liability and the amount of the premium.

Proceedings on Behalf of Company

No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.

The Company was not a party to any such proceedings during the year.

Options

At the date of this report, there were no unissued ordinary shares of Oldfields Holdings Limited under options.

Rounding

Oldfields Holdings Limited has applied the relief available to it under ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191. Accordingly, amounts in the financial statements have been rounded to the nearest thousand dollars unless otherwise stated.

Oldfields Holdings Limited

8

30 June 2020

Non-Audit Services

The Board of Directors, in accordance with advice from the Audit Committee, is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

• all non-audit services are reviewed and approved by the Audit Committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and

• the nature of the services provided does not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

Details of the amount paid to the auditors of the Company, BDO Audit Pty Ltd, and its related practices for audit and non-audit services provided during the year are set out in note 30 to the financial statements.

Auditor's Independence Declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporation Act 2001 is set out on the following page.

This Directors' Report is signed in accordance with the resolution of the Board of Directors.

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Richard Abela

Dated: 30 September 2020

Oldfields Holdings Limited

9

30 June 2020

Tel: +61 2 9251 4100 Level 11, 1 Margaret St Fax: +61 2 9240 9821 Sydney NSW 2000 www.bdo.com.au Australia

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DECLARATION OF INDEPENDENCE BY IAN HOOPER TO THE DIRECTORS OF OLDFIELDS HOLDINGS LIMITED

As lead auditor of Oldfields Holdings Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:

1. No contraventions of the auditor independence requirements of the Corporations Act 2001 relation to the audit; and

2. No contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Oldfields Holdings Limited and the entities it controlled during the period.

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Ian Hooper Director

BDO Audit Pty Ltd

Sydney, 30 September 2020

BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.

Financial Statements

	Page
Consolidated Statement of Profit or Loss and Other Comprehensive Income	12
Consolidated Statement of Financial Position	13
Consolidated Statement of Changes in Equity	14
Consolidated Statement of Cash Flows	15
Notes to the Consolidated Financial Statements	16

General Information

The financial report includes the consolidated financial statements for Oldfields Holdings Limited (the ultimate parent entity) and its controlled entities ("Oldfields" or the "Group"). The financial report is presented in Australian dollars, which is Oldfields Holdings Limited's functional and presentation currency. The financial report consists of the financial statements , notes to the financial statements and the directors' declaration. Oldfields Holdings Limited is a listed public company limited by shares, incorporated and domiciled in Australia. It's registered office and principal place of business is: 8 Farrow Road Campbelltown, NSW, 2560, Australia A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is not part of the financial report. The financial report was authorised for issue with a resolution of Directors on 30 September, 2020. The Directors have the power to amend and reissue the financial report.

Oldfields Holdings Limited

11

30 June 2020

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the year ended 30 June 2020

For the year ended 30 June 2020 Other Comprehensive Income
		2020(1)	2019
	Note	$'000	$'000
Sales revenue	5	24,591	24,755
Cost of sales		(13,656)	(12,685)
Gross profit		10,935	12,070
Other income	5	752	28
Expenses:
Depreciation and amortisation expense	6	(925)	(880)
Depreciation and amortisation of right-of-use assets	6	(1,229)	-
Other expenses from ordinary activities:
Sales and distribution expenses		(7,851)	(7,190)
Marketing expenses		(198)	(206)
Occupancy expenses		-	(1,484)
Administrative expenses		(2,775)	(2,309)
Finance costs	6	(354)	(349)
Loss before gain on early redemption and revaluation of derivative financial instruments and income tax		(1,645)	(320)
Gain on early redemption of deferred senior loan note	15	470	-
Revaluation of deferred senior loan note derivative component	15	237	508
(Loss) profit before income tax		(938)	188
Tax expense	7	(284)	(416)
Net loss from continuing operations		(1,222)	(228)
Other comprehensive income:
Items that will not be reclassified subsequently to profit or loss:
Exchange differences on translatingforeign operations,net of tax		(28)	9
Other comprehensive income for theyear, net of tax		(28)	9
Total comprehensive income for theyear		(1,250)	(219)
Net loss for the year attributable to:
Members of the parent entity		(1,461)	(481)
Non-controllinginterest		239	253
Total net loss for theyear		(1,222)	(228)
Comprehensive income attributable to:
Members of the parent entity		(1,489)	(472)
Non-controllinginterest		239	253
Total comprehensive income for theyear		(1,250)	(219)

	Note	Cents	Cents
Earnings per share from continuing operation attributable to members of the parent entity:
Basic profit per share	24	(1.254)	(0.585)
Diluted earningsper share	24	(1.254)	(0.585)

The accompanying notes form part of these financial statements.

(1) The Group has applied AASB 16 Leases effective 1 July 2019 using the modified retrospective method, under which the comparative information is not restated. Note 2 outlines the impact of adopting AASB 16 using this method.

Oldfields Holdings Limited

12

30 June 2020

Consolidated Statement of Financial Position

As at 30 June 2020

As at 30 June 2020
		2020 (1)	2019
	Note	$'000	$'000
ASSETS
CURRENT ASSETS
Cash and cash equivalents	8	1,785	423
Trade and other receivables	9	4,194	3,905
Inventories	10	2,951	2,544
Current tax assets	7	48	-
TOTAL CURRENT ASSETS		8,978	6,872
NON-CURRENT ASSETS
Property, plant and equipment	11	3,920	4,589
Right-of-use asset	12	2,525	-
Intangible assets	13	914	852
TOTAL NON-CURRENT ASSETS		7,359	5,441
TOTAL ASSETS		16,337	12,313
LIABILITIES
CURRENT LIABILITIES
Trade and other payables	14	4,108	2,853
Borrowings	15	310	1,884
Lease liabilities	16	1,015	-
Current tax liabilities	7	-	21
Employees benefit obligations	17	849	763
TOTAL CURRENT LIABILITIES		6,282	5,521
NON-CURRENT LIABILITIES
Borrowings	15	307	1,869
Lease liabilities	16	1,572	-
Deferred tax liabilities	7	170	186
Employees benefit obligations	17	73	116
Derivative financial instruments	18	-	237
TOTAL NON-CURRENT LIABILITIES		2,122	2,408
TOTAL LIABILITIES		8,404	7,929
NET ASSETS		7,933	4,384
EQUITY
Issued capital	21	26,086	21,106
Other reserves	22	19	47
Accumulated loss	25	(18,919)	(17,458)
Parent interest		7,186	3,695
Non-controllinginterest	25	747	689
TOTAL EQUITY		7,933	4,384

The accompanying notes form part of these financial statements.

(1) The Group has applied AASB 16 Leases effective 1 July 2019 using the modified retrospective method, under which the comparative information is not restated. Note 2 outlines the impact of adopting AASB 16 using this method.

Oldfields Holdings Limited

13

30 June 2020

Consolidated Statement of Changes in Equity

For the year ended 30 June 2020

				Note	Issued Capital $'000	Other Reserves $'000	Accumulated Losses(1) $'000	Subtotal $'000	Non- Controlling Interests(1) $'000	Total $'000
21,106 47 (17,458) 3,695 689 4,384 - - (1,461) (1,461) 239 (1,222) 22 - (28) - (28) - (28) Profit (loss) for the year Balance at 1 July 2019 Comprehensive income Other comprehensive income for theyear
- (28) (1,461) (1,489) 239 (1,250) Total comprehensive income for theyear
Transactions with owners in their capacity as owners Issue of share capital 21 4,980 - - 4,980 - 4,980 23 - - - - (181) (181) Dividendsprovided for orpaid
Total transactions with owners and other transfers 4,980 - - 4,980 (181) 4,799
26,086 19 (18,919) 7,186 747 7,933 Balance at 30 June 2020

For the year ended 30 June 2019

				Note	Issued Capital $'000	Other Reserves $'000	Accumulated Losses(1) $'000	Subtotal $'000	Non- Controlling Interests(1) $'000	Total $'000
21,106 38 (16,534) 4,610 728 5,338 Adjustment on initial application of AASB 15 - - (443) (443) (39) (482) Balance at 1 July 2018
Adjusted balance at 1 July 2018 21,106 38 (16,977) 4,167 689 4,856
- - (481) (481) 253 (228) 22 - 9 - 9 - 9 Comprehensive income Profit (loss) for the year Other comprehensive income for theyear
- 9 (481) (472) 253 (219) Total comprehensive income for theyear
Transactions with owners in their capacity as owners 23 - - - - (253) (253) Dividendsprovided for orpaid
- - - - (253) (253) Total transactions with owners and other transfers
21,106 47 (17,458) 3,695 689 4,384 Balance at 30 June 2019

The accompanying notes form part of these financial statements.

(1) The Group has applied AASB 16 Leases effective 1 July 2019 using the modified retrospective method, under which the comparative information is not restated. Note 2 outlines the impact of adopting AASB 16 using this method.

Oldfields Holdings Limited

14

30 June 2020

Consolidated Statement of Cash Flows

For the year ended 30 June 2020

For the year ended 30 June 2020
Note	2020 (1) 2019 $'000 $'000
Interest received Finance costs Income taxpaid OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Other income received	26,732 26,831 (26,234) (25,882)
	498 949 14 - 738 29 (165) (120) (369) (493)
8 Net cashprovided by operating activities	716 365
Payments for intangibles Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment INVESTING ACTIVITIES	407 6 (662) (895) (66) -
Net cash used in investing activities	(321) (889)
21 23 Dividendspaid bycontrolled entities to non-controllinginterests - repayments made - proceeds from borrowings FINANCING ACTIVITIES Proceeds from borrowings Repayment of borrowings Loans from related party Net proceeds from shares issued Lease repayments	539 285 4,980 - (1,724) (394) - 500 (500) - (1,166) - (181) (253)
Net cashprovided by financing activities	1,948 138
Net increase(decrease) in cash and cash equivalents	2,343 (386)
Cash and cash equivalents at beginningof financialyear Net increase (decrease) in cash and cash equivalents	2,343 (386) (558) (172)
Cash and cash equivalents at end of financialyear 8	1,785 (558)

The accompanying notes form part of these financial statements.

(1) The Group has applied AASB 16 Leases effective 1 July 2019 using the modified retrospective method, under which the comparative information is not restated. Note 2 outlines the impact of adopting AASB 16 using this method.

Oldfields Holdings Limited

15

30 June 2020

Notes to the Consolidated Financial Statements

			Page
Note	1	General Information and Statement of Compliance	17
Note	2	Changes in Accounting Policies	17
Note	3	Summary of Significant Accounting Policies	18
Note	4	Segment Information	20
Note	5	Revenue and Other Income	22
Note	6	Expenses	23
Note	7	Income Taxes	23
Note	8	Cash and Cash Equivalents	25
Note	9	Trade and Other Receivables	25
Note	10	Inventories	26
Note	11	Property, Plant and Equipment	27
Note	12	Right -of-Use Assets	28
Note	13	Goodwill and Other Intangible Assets	28
Note	14	Trade and Other Payables	29
Note	15	Borrowings	29
Note	16	Lease Liabilities	30
Note	17	Provisions	30
Note	18	Derivative Financial Instruments	31
Note	19	Financial Risk Management	32
Note	20	Impairment of Non-Financial Assets	34
Note	21	Share Capital	34
Note	22	Reserves	35
Note	23	Dividends	35
Note	24	Earnings per Share	35
Note	25	Accumulated Losses	36
Note	26	Subsidiaries	36
Note	27	Commitments and Contingencies	37
Note	28	Events After the Reporting Period	38
Note	29	Parent Entity Disclosures	38
Note	30	Auditor's Remuneration	39
Note	31	Related Party Transactions	39

Oldfields Holdings Limited

16

30 June 2020

Notes to the Consolidated Financial Statements

1. General Information and Statement of Compliance

These consolidated financial statements and notes represent those of Oldfields Holdings Limited and Controlled Entities (the “Consolidated Group” or “Group”). The separate financial statements of the Parent Entity, Oldfields Holdings Limited, have not been presented within this financial report as permitted by the Corporations Act 2001 .

2. Changes in Accounting Policies

New and Revised Standards that are Effective for these Financial Statements

The following Accounting Standards and Interpretations are most relevant to the consolidated entity:

AASB 16: Leases

The consolidated entity has adopted AASB 16 from 1 July 2019. The standard introduces a single lessee accounting model that eliminates the requirement for leases to be classified as operating or finance leases. The main changes introduced by the new Standard include:

• recognition of a right-to-use asset and liability for all leases (excluding short-term leases with less than 12 months of tenure and leases relating to low-value assets);

• depreciation of right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and unwinding of the liability in principal and interest components;

• variable lease payments that depend on an index or a rate are included in the initial measurement of the lease liability using the index or rate at the commencement date;

• by applying a practical expedient, a lessee is permitted to elect not to separate non-lease components and instead account for all components as a lease; and

• additional disclosure requirements.

The Group has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continued to be reported under IAS 17. The application of AASB 16 does not impact the statement of cash flows.

Impact on financial statements

On transition to AASB 16 on 1 July 2019, the Group recognised a right-of-use asset of $2,525,000 and a lease liability of $2,587,000, recognising the expense of $62,000 in the current year profit and loss due to the immaterial value. The Group has recognised an additional depreciation charge during the period of $1,229,000 in relation to depreciation of the right-of-use asset, and additional finance costs of $329,000 due to interest expense on the lease liability. When measuring the lease liabilities, the Group discounted these lease payments using its incremental borrowing rate at the date of initial application of AASB 16. The rate applied was 4.96%.

	2020	2020	2020
	Applying AASB 16 $'000	Applying AASB 117 $'000	Movement $'000
Consolidated Statement of Profit or Loss Depreciation and amortisation of right-of-use assets Finance expenses Other expenses from ordinary activities Consolidated Statement of Financial Position Right-of-use asset Current lease liabilities Non-current lease liabilities Accumulated losses Consolidated Statement of Cash Flows Cash flows provided by operating activities Cash flowsprovided byfinancingactivities Depreciation and amortisation expense	925 1,229 354 8,670 2,525 (1,015) (1,572) 18,919 716 1,948	925 - 25 10,878 - - - 18,857 (451) 3,115	- 1,229 329 (2,208) 2,525 (1,015) (1,572) 62 1,167 (1,167)

Oldfields Holdings Limited

17

30 June 2020

3. Summary of Significant Accounting Policies

3.1 Statement of Compliance

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 ('IFRS') as issued by the International Accounting Standards Board ('IASB'). Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise.

3.2 Basis of Preparation

The financial statements have been prepared on the historical cost basis except for, where applicable, the revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss, certain classes of property, plant and equipment and derivative financial instruments.

Where applicable, comparative figures are adjusted to conform to changes in classification and presentation for the current financial year.

3.3 Going Concern and Coronavirus (COVID-19) Pandemic

The COVID-19 pandemic has developed rapidly in 2020. The resulting impacts of the virus on the operations and measures taken by the Australian and New Zealand governments to contain the virus have affected the Group's results in the reporting period.

The ongoing pandemic has also increased the estimation uncertainty in preparing these financial statements. These include:

• the extent and duration of the disruption to businesses arising from the actions by federal and local governments, businesses and consumers to contain the spread of the virus;

• the extent and duration of the expected economic downturn which includes increasing unemployment, decline in consumer confidence, reduction in production due to decreased demand, disruption of capital markets and other changes in the market; and

• the effectiveness of government and central bank measures that have and will be put in place to support businesses and consumers

• through this disruption and economic downturn.

Oldfields Group has developed estimates in these preliminary financial statements based on forecasts of economic conditions which reflect expectations and assumptions as at 30 June about future events that the Directors believe are reasonable in the circumstances. There is a considerable degree of judgement involved in preparing these forecasts and the underlying assumptions are subject to uncertainties which are often outside the control of the Group. Accordingly, actual economic conditions are likely to be different from these forecasts since anticipated events frequently do not occur as expected, and the effect of those differences may significantly impact accounting estimates included in these preliminary financial statements.

While COVID-19 has impacted the commencement of jobs in our pipeline the Oldfields’ business has continued to operate largely uninterrupted by closely managing all aspects of our operations. In addition, the Group’s earnings benefit from a diverse pool of customers in the building and paint accessories sectors, located across states in Australia. Trading performance in July continued in line with expectations. August trading was relatively weaker which was due to the impact from the stage 4 restrictions in Victoria and a softer New South Wales market.

The Group entered the 2021 financial year in a better financial position and debt free. We have continued to contain costs, right-size the business, access available relief initiatives and implement cash preservation measures. Although the duration of the impacts of the COVID-19 pandemic is uncertain, management has determined that the actions that it has taken are sufficient to mitigate the uncertainty and has therefore prepared the financial statements on a going concern basis.

3.4 Functional and Presentation Currency

The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the Parent Entity's functional currency.

3.5 Rounding

The parent entity has applied the relief available to it under ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191 . Accordingly, amounts in the financial statements have been rounded to the nearest thousand dollars unless otherwise stated.

3.6 Key Judgements, Estimates and Assumptions

In the process of applying the Group's accounting policies, management has made a number of judgements, applied estimates and assumptions of future events. Judgements, estimates and assumptions which are material to the Group's financial report are discussed below and in the following notes:

• Revenue and other income

• Income taxes

• Trade and other receivables

• Inventories

• Property, plant and equipment

• Goodwill and other intangible assets

• Provisions

• Derivative financial instruments

Oldfields Holdings Limited

18

30 June 2020

3.7 Principles of Consolidation

The consolidated financial statements incorporate all of the assets, liabilities and results of Oldfields Holdings Limited and all of the subsidiaries. Subsidiaries are entities the Parent controls. The Parent controls an entity when it is exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases. Inter-company transactions, balances and unrealised gains or losses on transactions between Group entities are fully eliminated on consolidation. Where necessary, accounting policies of subsidiaries are changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Group.

Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as ‘Non-Controlling Interests’. The Group initially recognises non-controlling interests that are present ownership interests in subsidiaries and are entitled to a proportionate share of the subsidiary’s net assets on liquidation at either fair value or at the non-controlling interests’ proportionate share of the subsidiary’s net assets. Subsequent to initial recognition, non-controlling interests are attributed their share of profit or loss and each component of other comprehensive income. Non-controlling interests are shown separately within the equity section of the statement of financial position and statement of profit or loss and other comprehensive income.

3.8 Business Combinations

Business combinations occur where an acquirer obtains control over one or more businesses.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is obtained, whereby the fair value of the identifiable assets acquired and liabilities assumed, including contingent liabilities, are recognised (subject to certain limited exemptions).

When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.

All transaction costs incurred in relation to business combinations, other than those associated with the issue of a financial instrument, are recognised as expenses in the profit or loss and other comprehensive income statement when incurred.

The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.

3.9 Foreign Currency

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive income to the extent that the underlying gain or loss is recognised in other comprehensive income, otherwise the exchange difference is recognised in the profit or loss. The financial results and position of foreign operations whose functional currency is different from the Group’s presentation currency are translated as (i) assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;

(ii) income and expenses are translated at average exchange rates for the period; and (iii) retained earnings are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised in other comprehensive income and included in the foreign currency translation reserve in the statement of financial position. The cumulative amount of these differences is reclassified into profit or loss in the period in which the operation is disposed of.

3.10 Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

3.11 Leases

Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset (but not the legal ownership) are transferred to entities in the consolidated group, are classified as finance leases.

Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as expenses in the periods in which they are incurred.

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the lease term.

Oldfields Holdings Limited

19

30 June 2020

3.12 Financial Instruments

Initial Recognition and Measurement

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. Financial assets

Classification and Subsequent Measurement

Financial assets that meet the following conditions are measured subsequently at amortised cost:

• Held within a business model whose objective is to hold financial assets in order to collect contractual cash flows;

• • The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI):

• The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the

• • financial assets; The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on
• • the principal amount outstanding.

By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).

As at 30 June 2020, the Group’s financial assets consist of cash and cash equivalents and trade and other receivables which are measured at amortised cost in accordance with the above accounting policy.

Non-derivative financial liabilities are initially measured at fair value and are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial liability is derecognised.

As at 30 June 2020, the Group’s financial liabilities consist of trade and other payables, hire purchase loans and finance lease liabilities which are measured at amortised cost in accordance with the above accounting policy. The derivative element of the Deferred Senior Loan Note is measured at fair value through profit or loss.

3.13 Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from or payable to the ATO is included with other receivables or payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from or payable to the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers.

3.14 Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in it's financial statements, an additional (third) statement of financial position as at the beginning of the preceding period in addition to the minimum comparative financial statement is presented.

3.15 Other Accounting Policies

Significant and other accounting policies that summarise the measurement basis used and are relevant to the understanding of the financial statements are provided throughout the notes to the financial statements.

4. Segment Information

The Group has identified its operating segments based on the internal reports that are reviewed and used by Chief Operating Decision Maker (CODM), being the Board of Directors, in assessing performance and in determining the allocation of resources.

The Group is managed primarily on the basis of product category and service offerings as the diversification of the Group's operations inherently have notably different risk profiles and performance assessment criteria. Operating segments are therefore determined on the same basis.

Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics and are also similar with respect to the following:

• The products sold and/or services provided by the segment; - The manufacturing process;

• The type or class of customer for the products or service; - The distribution method; and

• Any external regulatory requirements.

Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the CODM. The CODM is responsible for the allocation of resources to operating segments and assessing their performance.

Unless stated otherwise, all amounts reported to the Board of Directors, being the CODM with respect to operating segments, are determined in accordance with accounting policies that are consistent with those adopted in the annual financial statements of the Group.

The primary operating segments during the current financial period were:

(i) Consumer Products

The consumer products segment imports, manufactures and distributes paint brushes, paint rollers, painter's tools, garden sheds and outdoor storage systems.

(ii) Scaffolding

The scaffolding segment manufactures and distributes scaffolding and related equipment. In addition, this segment is engaged in hiring scaffold and access solutions to the building maintenance and construction industries.

Oldfields Holdings Limited 30 June 2020

20

4.1 Operating Segment Performance

Year ended 30 June 2020 Consumer Products $'000	Scaffolding $'000	Intersegment Eliminations/ Unallocated $'000	Total $'000
Revenue Sale of goods 4,878 Hire and erection revenue -	3,562 16,165	(14) -	8,426 16,165
Total segment revenue 4,878	19,727	(14)	24,591
Government grants and subsidies - Interest income 14 Other income 20	- - 5	713 - -	713 14 25
Total other revenue 34	5	713	752
Total revenue and other income 4,912	19,732	699	25,343
Adjusted segment EBITDA (485) Depreciation and amortisation expense (27) Depreciation and amortisation of right-of-use assets - Interest income 14 Net finance costs -	(283) (882) - - -	1,428 (16) (1,229) - (165)	660 (925) (1,229) 14 (165)
Loss before revaluation of derivative financial instruments and income tax (498) Gain on early redemption of deferred senior loan note - Revaluation of deferred senior loan note derivative component -	(1,165) -	18 (1,645) 470 470 237 237
Profit (loss) before income tax (498) Income tax expense -	(1,165) (284)	725 -	(938) (284)
Profit(loss) after income tax (498)	(1,449)	725	(1,222)

Year ended 30 June 2019 Consumer Products $'000	Scaffolding $'000	Intersegment Eliminations/ Unallocated $'000	Total $'000
Revenue Sale of goods 4,441 3,946 (5) 8,382 Hire and erection revenue - 16,373 - 16,373
Total segment revenue 4,441 20,319 (5) 24,755
Other revenue 19 9 - 28
Total other revenue 19 9 - 28
Total revenue and other income 4,460 20,328 (5) 24,783
Adjusted segment EBITDA (672) 1,751 (164) 915 Depreciation and amortisation expense (22) (838) (20) (880) Finance costs - - (349) (349) Unrealised foreign exchange loss - - (6) (6)
Profit (loss) before revaluation of derivative financial instruments and income tax (694) 913 (539) (320) Fair value adjustment to DSLN - - 508 508
Profit (loss) before income tax (694) 913 (31) 188 Income tax expense - (416) - (416)
Profit(loss) after income tax (694) 497 (31) (228)

All inter-segment transactions are eliminated on consolidation of the Group's financial statements.

Corporate charges are allocated to reporting segments based on the segment's overall proportion of revenue generation within the Group. The Board of Directors believes this is representative of likely consumption of head office expenditure that should be used in assessing segment performance and cost recoveries.

Adjusted segment EBITDA excludes discontinued operations and the effects of individually significant expenditure, such as restructuring costs, legal expenses, and impairments when the impairment is the result of an isolated non-recurring event. It also excludes the effects of equity-settled sharebased payments when applicable and unrealised gains or losses on financial instruments.

Interest revenue and finance cost are not allocated to segments as this type of activity is driven by the central treasury function which manages the cash position of the Group.

Oldfields Holdings Limited

21

30 June 2020

4.2 Operating Segment Assets and Liabilities

As at 30 June 2020 Consumer Products $'000	Scaffolding $'000	Intersegment Eliminations/ Unallocated $'000	Total $'000
Segment assets 2,866 Segment liabilities (3,505)	13,439 (570)	32 (4,329)	16,337 (8,404)
Segment net assets (639)	12,869	(4,297)	7,933
As at 30 June 2019 Consumer Products Scaffolding Intersegment Eliminations/ Unallocated Total $'000 $'000 $'000 $'000
Segment assets 2,079 14,102 (3,868) 12,313 Segment liabilities (2,220) (1,566) (4,143) (7,929)
Segment net assets (141) 12,536 (8,011) 4,384

Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of the economic value from the asset. In most instances segment assets are clearly identifiable on the basis of their nature and physical location.

Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.

Inter-segment loans payable and receivable are initially recognised at the consideration received/to be received net of transaction costs. If intersegment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on market interest rates.

5. Revenue and Other Income

The Group derives the following types of revenue:

	2020	2019
	$'000	$'000
Sales revenue
Sale of goods	8,426	8,382
Hire and erection revenue	16,165	16,373
Total sales revenue	24,591	24,755
Other income
Government grants and subsidies	713	-
Interest income	14	-
Other income	25	28
Total other income	752	28
Total revenue and other income from continuing operations	25,343	24,783

5.1 Recognition and Measurement

Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and rebates payables. When the inflow of consideration is deferred it is treated as the provision of financing and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue. Revenue is stated net of the amount of goods and services tax.

Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods.

Revenue from hire of equipment is recognised when the service is provided.

Interest revenue is recognised using the effective interest method.

5.2 Key Judgements, Estimates and Assumptions: Revenue Recognition

Hire and Erection Revenue

Revenue recognition relating to the provision of hire equipment services is determined with reference to the stage of completion of the transaction at the end of the reporting period where outcome of the contract can be estimated reliably. Stage of completion is determined with reference to the services performed to date as a percentage of total anticipated services to be performed. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent that related expenditure is recoverable.

Oldfields Holdings Limited

22

30 June 2020

6. Expenses

Profit before income tax includes the following specific expenses by nature:

Note	2020 2019 $'000 $'000
11 12 13 Finance costs: 31 Interest on operating leases 7. Income Taxes Income tax expense recognised in the income statement Inventory recognised as an expense during the year Expected credit losses Interest paid to related parties Hire purchase charges Unwinding of discount on deferred senior loan note Amortisation expense Employee benefits expense Depreciation expense on property, plant and equipment Depreciation expense on right-of-use assets Rental expense on operating leases Interest paid to unrelated parties	14,355 3,830 921 874 1,229 - 4 6 10,659 9,705 - 197 - 1,105 15 10 123 81 27 29 - 229 189 -
	354 349
	2020 2019 $'000 $'000
Current tax Adjustments for current tax ofpriorperiods Current tax on profits for the year	281 311 - 94
Total current tax expense	281 405
Deferred income tax Decrease in deferred tax liabilities Decrease (Increase) in deferred tax assets	(14) (10) 17 21
Total deferred tax expense	3 11
Total income tax expense	284 416
Tax reconciliation	2020 2019 $'000 $'000
Non-allowable items Net tax effect profit from overseas operations Currentyear tax loss not brought to account Less tax effect of: Under/(over) provision for income tax in prior year Tax at the Australian tax rate of 30% (2019: 30%) Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Unwinding of discount on DSLN not deductible Revaluation of derivative element of DSLN not deductible (Loss) profit before income tax expense	(938) 188
	(281) 56 2 1 - 94 - 68 (71) (152)
	(350) 67 27 10 607 339
Income tax expense	284 416
Unrecognised tax assets	2020 2019 $'000 $'000
Capital losses Tax losses for which no deferred tax asset has been recognised Operating losses Tax losses	13,632 11,609 273 273
Potential tax benefit@ 27.5%(2019: 27.5%)	3,824 3,268

Oldfields Holdings Limited

23

30 June 2020

7. Income Taxes (continued)

	2020	2019
Current tax assets	$'000	$'000
Income tax assets	48	-
Total current tax assets	48	-
Current tax liabilities	$'000	$'000
Income tax liabilities	-	21
Total current tax liabilities	-	21
	2020	2019
Deferred tax liability in the statement of financial position	$'000	$'000
Employee benefits	(34)	(34)
Provision for impairment of trade receivables	43	14
Fixed assets	(211)	(198)
Other	32	32
Net deferred tax liabilities	(170)	(186)

7.1 Recognition and Measurement

The income tax expense for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Deferred income tax is provided in full using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates and laws that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Tax Consolidation

Oldfields Holdings Limited and its wholly-owned subsidiaries have implemented the tax consolidation legislation. As a consequence these entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set off in the consolidated financial statements.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity respectively.

7.2 Key Judgements, Estimates and Assumptions: Unrecognised Deferred Tax Benefits

The Group has unrecognised benefits relating to carried forward losses. The unused tax losses were incurred by the Australian tax consolidated group. The losses are currently not recognised as it is not sufficiently probable that the Group will generate taxable income in the foreseeable future that will allow the losses to be utilised.

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30 June 2020

8. Cash and Cash Equivalents

		2020	2019
		$'000	$'000
Cash on hand		2	1
Cash at bank		1,535	422
Short term deposits		248	-
Total cash and cash equivalents		1,785	423
Reconciliation to statement of cash flows		2020	2019
	Note	$'000	$'000
Cash and cash equivalents		1,785	423
Bank overdrafts	15	-	(981)
Balancesper statement of cash flows		1,785	(558)

Reconciliation of cash flow from operating activities with loss after income tax	2020	2019
	$'000	$'000
Loss after income tax	(1,222)	(228)
Adjustment for non cash items:
Depreciation and amortisation	2,156	880
Net (gains) losses on disposal of property, plant and equipment	-	(8)
Unwinding of discount on deferred senior loan note	-	229
Gain on early redemption of deferred senior loan note	(470)	-
Revaluation of deferred senior loan note to fair value through profit or loss	(237)	(508)
Stock adjustments	-	275
Changes in operating assets and liabilities:
(Increase) decrease in trade and other receivables	(289)	(363)
(Increase) decrease in inventories	(435)	142
Increase (decrease) in trade payables and accruals	1,255	104
Increase (decrease) in income taxes payable	(69)	(54)
Increase (decrease) in deferred taxes payable	(16)	(22)
Increase(decrease)inprovisions	43	(82)
Cash flow from operating activities	716	365

8.1 Recognition and Measurement

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 and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities in the statement of financial position, but included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

8.2 Acquisition Through Finance Lease

During the year the Group acquired plant and equipment with an aggregate value of $227,000 (2019: $107,000) by means of financial leases. These acquisitions are not reflected in the statement of cash flow.

9. Trade and Other Receivables

9. Trade and Other Receivables
	2020	2019
	$'000	$'000
CURRENT
Trade receivables	3,793	3,555
Expected credit losses	(520)	(194)
Net trade receivables	3,273	3,361
Other receivables	492	118
Prepayments	429	426
Total current trade and other receivables	4,194	3,905
	2020	2019
Trade receivables past due but not impaired	$'000	$'000
Up to 3 months	225	148
3 to 6 months	408	27
Over 6 months	123	13
Total	756	188

Amounts are considered as ‘past due’ when the debt has not been settled with the terms and conditions agreed between the Group and the customer or counter party to the transaction. Receivables that are past due are assessed for expected credit loss by ascertaining solvency of the debtors and are provided for where there are specific circumstances indicating that the debt may not be fully repaid to the Group. Trade receivables that were past due relate to a number of independent customers for whom there is no recent history of default.

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30 June 2020

9.1 Expected Credit Loss and Risk Exposure

9.1 Expected Credit Loss and Risk Exposure
	2020	2019
Ageing analysis of expected credit loss	$'000	$'000
1 to 3 months	278	123
4 to 6 months	183	43
Over 6 months	59	28
Total	520	194
	2020	2019
Movement in expected credit losses	$'000	$'000
Opening balances	194	96
Expected credit losses recognised during the year	354	129
Receivables written off duringtheyear as uncollectable	(28)	(31)
Closing balance	520	194

Other Receivables

These amounts generally arise from transactions outside the usual operating activities of the Group. Collateral is not normally obtained.

Credit Risk

The Group has no significant concentration of credit risk with respect to any single counter party or group of counter parties other than those receivables specifically provided for and mentioned within note 9. The class of assets described as Trade and Other Receivables is considered to be the main source of credit risk related to the Group.

9.2 Recognition and Measurement

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.

9.3 Key Judgements, Estimates and Assumptions: Provision for Impairment of Receivables

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.

10. Inventories

	2020	2019
	$'000	$'000
Raw materials - at cost	267	278
Work in progress - at cost	98	165
Finished goods - at net realisable value	2,166	1,814
Goods in transit - at cost	420	287
Total inventories	2,951	2,544

10.1 Recognition and Measurement

Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials, direct labour and an appropriate proportion of variable and fixed overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs.

10.2 Key Judgements, Estimates and Assumptions: Provision for Impairment of Inventories

The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of provision is assessed by taking into account the recent sales experience, the ageing of the inventories, and other factors that affect inventory obsolescence.

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30 June 2020

11. Property, Plant and Equipment

Year ended 30 June 2020 Hire Equipment Note $'000	Plant and Equipment $'000	Leasehold Improve- ments $'000	Motor Vehicles $'000	Total $'000
Cost 8,534 Accumulated depreciation (5,080)	2,278 (2,177)	420 (405)	2,006 (1,656)	13,238 (9,318)
Net book amount 3,454	101	15	350	3,920
Opening net book amount 4,043 Exchange differences - Additions 492 Disposals and impairment (409) Depreciation expense 6 (672)	122 (3) 23 - (41)	28 2 8 (1) (22)	396 3 137 - (186)	4,589 2 660 (410) (921)
Closing net book amount 3,454	101	15	350	3,920

Year ended 30 June 2019				Leasehold
		Hire	Plant and	Improve-	Motor
		Equipment	Equipment	ments	Vehicles	Total
	Note	$'000	$'000	$'000	$'000	$'000
Cost		8,375	2,265	414	2,001	13,055
Accumulated depreciation		(4,332)	(2,143)	(386)	(1,605)	(8,466)
Net book amount		4,043	122	28	396	4,589
Opening net book amount		4,291	157	53	340	4,841
Exchange differences		-	1	1	-	2
Additions		665	18	-	212	895
Disposals and impairment		(275)	-	-	-	(275)
Depreciation expense	6	(638)	(54)	(26)	(156)	(874)
Closing net book amount		4,043	122	28	396	4,589

11.1 Recognition and Measurement

All property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. Repairs and maintenance costs are recognised as expenses in profit or loss during the financial period in which they are incurred.

The depreciable amount of all fixed assets, including capitalised lease assets, are depreciated on a straight-line basis over the asset's useful life to the Group commencing from the time the asset is held ready for use. The estimated useful lives in the current period is as follows:

Hire equipment	5-20 years
Plant and equipment	3-15 years
Leasehold improvements	shorter of lease term or useful life
Motor vehicles	5 years

The assets’ residual values and useful lives are reviewed and adjusted if appropriate at the end of each reporting period.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are recognised in profit or loss in the period in which they arise.

11.2 Key Judgements, Estimates and Assumptions: Estimation of Useful Lives of Assets

The Group determined the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and definite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or down.

Hire equipment is depreciated on a straight line basis over its estimated useful life, taking into account its realisable value at the end of its life. Hire equipment is constantly maintained and refurbished throughout its useful life resulting in the depreciation to be minimal on certain pieces of equipment. The Group has assessed the useful life of hire equipment to be up to 20 years. All reconditioning costs of hire equipment are expensed as incurred and are not taken into account in the carrying value of hire equipment.

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30 June 2020

12. Right of Use Assets

2020 2019 $'000 $'000	2020 2019 $'000 $'000	2020 2019 $'000 $'000
3,754 - (1,229) - Land and buildings - right of use Accumulated depreciation
2,525 - Total right-of-use assets
Amount on transition Additions Disposals 6 Accumulated depreciation	3,754 - - (1,229)	- - -
Closing net book amount	2,525	-

Additions to the right-of-use assets during the year were $3,754,000.

The consolidated entity leases land and buildings for its offices, warehouses and retail outlets under agreements of between five to fifteen years with, in some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated. The consolidated entity also leases plant and equipment under agreements of between three to seven years.

12.1 Recognition and Measurement

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.

13. Goodwill and Other Intangible Assets

Year ended 30 June 2020	Note	Goodwill $'000	Patents, Trademarks & Licences $'000	Software & Other $'000	Total $'000
Cost 838 Accumulated amortisation and impairment -			249 (176)	390 (387)	1,477 (563)
Net book amount 838			73	3	914
Opening net book amount 838 Additions - Disposals - Amortisation charge 6 -			14 62 - (3)	- 4 - (1)	852 66 - (4)
Balance at 30 June 2020 838			73	3	914

Year ended 30 June 2019			Patents,
			Trademarks	Software &
		Goodwill	& Licences	Other	Total
	Note	$'000	$'000	$'000	$'000
Cost		838	187	386	1,411
Accumulated amortisation and impairment		-	(173)	(386)	(559)
Net book amount		838	14	-	852
Opening net book amount		838	17	3	858
Additions		-		-	-
Disposals		-	-	-	-
Amortisation charge	6	-	(3)	(3)	(6)
Balance at 30 June 2019		838	14	-	852

Goodwill is allocated to the Group's cash-generating units (CGUs). A CGU level summary of the goodwill allocation is presented below.

	2020	2019
	$'000	$'000
South and Western Australian scaffold branches	838	838

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30 June 2020

13.1 Recognition and Measurement

Goodwill

Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum of:

(i) the consideration transferred;

(ii) any non-controlling interest (determined under either the full goodwill or proportionate interest method); and

(iii) the acquisition date fair value of any previously held equity interest;

over the acquisition date fair value of net identifiable assets acquired.

Intangible Assets

Intangible assets acquired are measured on initial recognition at cost. Intangible assets other than goodwill have finite useful lives. The current amortisation charges for intangible assets are included under depreciation and amortisation expense per the statement of profit or loss.

Patents, trademarks and licences are recognised at cost of acquisition. They have a finite life and are carried at cost less any accumulated amortisation and any impairment losses. Patents and trademarks are amortised over their useful lives ranging from 5 to 10 years.

13.2 Key Judgements, Estimates and Assumptions: Goodwill and Other Indefinite Life Intangible Assets

The Group tests annually, or more frequently if changes in circumstances indicate impairment, whether goodwill and other indefinite life intangible assets have suffered impairment. Recoverable amounts of cash generating units have been determined based on value-in use calculations using assumptions including discount rates based on the current cost of capital and growth rates of estimated future cash flows.

14. Trade and Other Payables

	2020	2019
	$'000	$'000
CURRENT
Unsecured liabilities
Trade payables	2,813	1,458
Sundry payables and accrued expenses	816	806
Deferred revenue	308	409
Net GSTpayables	171	180
Total trade and otherpayables	4,108	2,853

14.1 Recognition and Measurement

Trade and other payables represent the liabilities for goods and services received by the Group that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid between 7 and 60 days of recognition of the liability.

The carrying amounts of trade and other payables are assumed to be the same as their fair values due to their short-term nature.

15. Borrowings

		2020	2019
	Note	$'000	$'000
CURRENT
Secured liabilities
Bank overdrafts *		-	981
Bank loans *		-	167
Shareholder loan		-	500
Other financing liabilities		122	123
Hirepurchase liabilities		188	113
Total current borrowings		310	1,884
NON-CURRENT
Secured liabilities
Hire purchase liabilities		307	215
Debt element of deferred senior loan note *	18	-	1,654
Total non-current borrowings		307	1,869
Total borrowings		617	3,753
		2020	2019
		$'000	$'000
Bank overdraft *		-	981
Bank loan *		-	167
Shareholder loan		-	500
Other financing liabilities		122	123
Hire purchase liabilities		495	328
Debt element of deferred senior loan note *		-	1,654
Total current and non-current secured liabilities		617	3,753

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30 June 2020

15. Borrowings (continued)

*As detailed in Note 21, the Company entered into a Subscription Agreement with EQM Holdings Pty Ltd (ACN 635 693 668) as trustee of the EQM Holdings Trust under which the Company agreed to issue the subscriber with new fully paid ordinary shares equal to 51% of the total issued share capital of the Company on a fully diluted basis, raising $5,131,820. An initial instalment of the subscription amount of $3,000,000 was received by the Company and was used to repay all outstanding debts owed by the Company to Westpac on 17 December 2019. The outstanding debts repaid include the bank overdraft, bank loan and debt element of the deferred senior loan note. As a result of the DSLN debt being settled prior to maturity, a discount was applied to the balance payable. The Group has recognised a revaluation gain on the deferred senior loan note derivative component of $237,000 and a gain on early redemption of the deferred senior loan note of $470,000 for the year ended 30 June 2020 within the Statement of Profit or Loss and Other Comprehensive Income.

15.1 Recognition and Measurement

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 rate method.

Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting date, the loans or borrowings are classified as non-current.

15.2 Shareholder Loan

Transactions between related parties (as disclosed in Note 29) are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

16. Lease Liabilities

16. Lease Liabilities
	2020	2019
	$'000	$'000
CURRENT
Lease liability	1,015	-
Total current lease liabilities	1,015	-
NON-CURRENT
Lease liability	1,572	-
Total non-current lease liabilities	1,572	-
Total lease liabilities	2,587	-
	2020	2019
Maturity Analysis	$'000	$'000
Contractual undiscounted cash flows
Within one year	1,015	-
Later than one year but not later than five years	1,572	-
Later than fiveyears	-	-
Total contractual undiscounted cash flows	2,587	-

16.1 Recognition and Measurement

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.

17. Provisions

17. Provisions
	2020	2019
	$'000	$'000
CURRENT
Employee leave obligations	849	763
Total currentprovisions	849	763
NON-CURRENT
Employee leave obligations	73	116
Total non-currentprovisions	73	116
Totalprovisions	922	879
	2020	2019
Amounts not expected to be settled within the next 12 months	$'000	$'000
Current leave obligations expected to be settled after 12 months	321	280

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30 June 2020

17.1 Recognition and Measurement

Provisions

Provisions are recognised when the Group has a legal or constructive obligation as a result of past events for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.

Short-Term Employee Benefits

Provision is made for the Group’s obligation for short-term employee benefits. Short-term employee benefits are benefits (other than termination benefits) that are expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related service, including wages, salaries and sick leave. Short-term employee benefits are measured at the undiscounted amounts expected to be paid when the obligation is settled.

Other Long-Term Employee Benefits

Provision is made for employees’ long service leave and annual leave entitlements not expected to be settled wholly within 12 months after the end of the annual reporting period in which the employees render the related service. Other long-term employee benefits are measured at the present value of the expected future payments to be made to employees.

Expected future payments incorporate anticipated future wage and salary levels, durations of service and employee departures and are discounted at rates determined by reference to market yields at the end of the reporting period on government bonds that have maturity dates that approximate the terms of the obligations. Any remeasurements for changes in assumptions of obligations for other long-term employee benefits are recognised in profit or loss in the periods in which the changes occur.

17.2 Key Estimate: Employee Entitlement Provisions - Long Service Leave

The liability for long service leave is 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 have been taken into account.

18. Derivative Financial Instruments

The Group measures and recognises the following assets and liabilities at fair value on a recurring basis after initial recognition:

• Derivative financial instruments

The Group does not subsequently measure any liabilities at fair value on a non-recurring basis.

Fair Value Hierarchy

AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair value measurements into one of three possible levels based on the lowest level input that is significant to the measurement categorised as follows:

Level 1	Level 2	Level 3
Measurements based onquotedprices	Measurements based on inputs other thanquoted	Measurements based on unobservable

The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more significant inputs are not based on observable market data, the asset or liability is included in Level 3.

The following tables provide the fair values of the Group’s assets and liabilities measured and recognised on a recurring basis after initial recognition and their categorisation within the fair value hierarchy.

	2020	2019
	Level 2	Level 2
Recurring fair value measurements	$'000	$'000
Derivative element of DSLN	-	237
Total liabilities recognised at fair value	-	237

There were no transfers between levels for assets or liabilities measured at fair value on a recurring basis during the reporting period (2019: no transfers).

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19. Financial Risk Management

19.1 Categories of Financial Assets and Liabilities

The Group’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and payable, loans to and from related parties, bills, leases, and derivatives.

The totals for each category of financial instruments, measured in accordance with AASB 9 as detailed in the accounting policies to these financial statements, are as follows:

statements, are as follows:
		2020	2019
	Note	$'000	$'000
Financial Assets
Cash at bank	8	1,535	422
Short term deposits	8	248	-
Net trade receivables	9	3,273	3,361
Total financial assets		5,056	3,783
Financial Liabilities
Financial liabilities at amortised cost
Trade and other payables	14	3,292	2,047
Borrowings	15	617	3,753
Lease liabilities	16	2,587	-
Financial liabilities at fair value through profit and loss
Derivative instruments	18	-	237
Total financial liabilities		6,496	6,037

19.2 Financial Risk Management Policies

The Board of Directors are responsible for managing financial risk policies and exposures of the Group. It also reviews the effectiveness of internal controls relating to commodity price risk, counterparty credit risk, currency risk, liquidity risk and interest rate risk.

The overall risk management strategy seeks to assist the Group in meeting its financial targets while minimising potential adverse effects on financial performance. This includes the review of the use of hedging derivative instruments, credit risk policies and future cash flow requirements.

19.3 Specific Financial Risk Exposures and Management

The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk and foreign currency risk. There have been no substantive changes in the types of risks the Group is exposed to, how these risks arise, or the Board’s objectives, policies and processes for managing or measuring the risks from the previous period.

(a) Credit Risk

Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group.

Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for the approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring of the financial stability of significant customers and counterparties), ensuring to the extent possible, that customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for impairment. Depending on the division within the Group, credit terms are generally 30 days from the end of month after invoice date.

Collateral held by the Group securing receivables is detailed in note 9.

The Group has no significant concentration of credit risk with any single counterparty or group of counterparties. Details with respect to credit risk of trade and other receivables is provided in note 9.

Trade and other receivables that are neither past due or impaired are considered to be of high credit quality. Aggregates of such amounts are as detailed at note 9.

(b) Liquidity Risk

Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms:

• preparing forward-looking cash flow analyses in relation to its operating, investing and financing activities;

• maintaining a reputable credit profile; and

• managing credit risk related to financial assets.

The following table details the Group's remaining contractual maturity for its financial instrument liabilities. The table has 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 table includes 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.

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30 June 2020

19.3 Specific Financial Risk Exposures and Management (continued)

(b) Liquidity Risk (continued)

Financial asset and financial liability maturity analysis	Within 1 Year	Within 1 Year	1 to 5 Years	1 to 5 Years	Over 5 Years	Over 5 Years	Total	Total
	2020 $'000	2019 $'000	2020 $'000	2019 $'000	2020 $'000	2019 $'000	2020 $'000	2019 $'000
Financial assets - cash flows realisable Cash at bank Short term deposits Trade and other receivables	1,535 422 - - - - 1,535 422 248 - - - - - 248 - 3,273 3,361 - - - - 3,273 3,361
Total anticipated inflows	5,056 3,783 - - - - 5,056 3,783
Financial liabilities due for payment Bank overdrafts and bank loans Debt element of DSLN Derivative element of DSLN* Trade and other payables Shareholder loan Other financing liabilities Hire purchase liabilities Lease liabilities	- 1,148 - - - - 1,148 - - - 2,370 - - - 2,370 - - - 237 - - - 237 3,292 2,047 - - - - 3,292 2,047 - 500 - - - - - 500 122 123 - - - - 122 123 188 113 307 215 - - 495 328 1,015 - 1,572 - - - 2,587 -
Total expected outflows	4,617 3,931 1,879 2,822 - - 6,496 6,753
Net (outflow) / inflow on financial instruments	439 (148) (1,879) (2,822) - - (1,440) (2,970)

*The debt element of the DSLN has been shown at the face value of the DSLN payable on maturity or early repayment as discussed in note 16.

**The derivative element of the DSLN has been shown at the fair value recognised at balance date.

Financial Assets Pledged as Collateral

Certain financial assets have been pledged as security for debt and their realisation into cash may be restricted subject to terms and conditions attached to the relevant debt contracts. Refer to note 16 for further details.

(c) Market Risk

• (i) Interest rate risk

Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments.

• (ii) Foreign exchange risk

The Board and senior management regularly monitor foreign currency movements and has undertaken to use hedging contracts where appropriate to the value of up to 100% of its US dollar requirements over a maximum 6 month period.

Sensitivity Analysis

As at the end of the reporting period, the Group had the following variable rate borrowings:

	2020	2020	2020	2019	2019	2019
	Weighted Average Interest Rate	Balance	% of Total Loans	Weighted Average Interest Rate	Balance	% of Total Loans
Bank overdrafts and bank loans	- - -			12.64% 1,148 19%

The following table illustrates sensitivities to the Group’s exposures to changes in interest rates, exchange rates and commodity and equity prices. The table indicates the impact on how profit and equity values reported at the end of the reporting period would have been affected by changes in the relevant risk variable that management considers to be reasonably possible.

These sensitivities assume that the movement in a particular variable is independent of other variables.

	Profit	Profit	Equity	Equity
	2020	2019 $'000	2020	2019 $'000
	$'000		$'000
+/- 2% in interest rates	8 13 8 13

There have been no changes in any of the methods or assumptions used to prepare the above sensitivity analysis from the prior year.

Fair Value Estimation

The fair values of the Group's financial assets and financial liabilities included in the Statement of Financial Position are carried at amounts that approximate net fair values.

Oldfields Holdings Limited

33

30 June 2020

20. Impairment of Non-Financial Assets

At the end of each reporting period the Group assesses whether there is any indication that an asset may be impaired. The assessment will include the consideration of external and internal sources of information including dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with the standard (e.g. in accordance with the revaluation model in AASB 116: Property, Plant and Equipment). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with the standard (AASB 116).

Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible assets not yet available for use.

The Group tests whether goodwill has suffered any impairment on an annual basis. The recoverable amount of a cash generating unit (CGU) is determined based on value-in-use calculations which require the use of assumptions. The calculations use cash flow projections based on a one-year budget and four-year projections approved by management. Cash flows beyond the one-year budget period are extrapolated using the estimated growth rates stated below. The growth rates for the terminal period do not exceed the long-term average growth rates for the industry in which each CGU operates.

Sensitivity

The calculation of value-in-use is most sensitive to changes in the discount rate. The Directors have made judgements and estimates in respect of impairment testing of goodwill and intangible assets. Should these estimates not occur, the resulting goodwill and intangible assets may vary in carrying amount. If the discount rate was to increase by 3%, goodwill would not need to be impaired with all other assumptions remaining constant, for scaffold division.

20.1 Key Judgements, Estimates and Assumptions: Impairment

The Group assesses impairment at the end of each reporting period by evaluating conditions and events specific to the Group that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations which incorporate various key assumptions.

The following key assumptions were used in the value-in-use calculations:

The following key assumptions were used in the value-in-use calculations:
	Growth Rate		Terminal Period Growth Rate	Discount Rate
	Year 1	Year 2-5
2020 South and Western Australian scaffold branches	5% 5% 3% 16%
2019 South and Western Australian scaffold branches	8% 5% 0% 19%

Management has based the value-in-use calculations on budgets for each reporting segment. These budgets use historical weighted average growth rates to project revenue. Costs are calculated taking into account historical gross margins as well as estimated weighted average inflation rates over the period which are consistent with inflation rates applicable to the locations in which the segments operate. Discount rates are pre-tax and are adjusted to incorporate risks associated with a particular segment.

21. Share Capital

	2020	2020	2019	2019
	Number	$'000	Number	$'000
Share capital at the beginning of the reporting period	82,176,198	21,106	82,176,198	21,106
Shares issued during the year
- April 2020 (placement)	85,530,329	5,132	-	-
Transaction costs on raisingcapital	-	(152)	-	-
Share capital at the end of the reporting period	167,706,527	26,086	82,176,198	21,106

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Capital Management

Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate long-term shareholder value and ensure that the Group can fund its operations and continue as a going concern.

The Group’s debt and capital include ordinary share capital and financial liabilities, supported by financial assets.

The Group is subject to financing covenants as detailed in note 15.

Management effectively manages the Group’s capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.

There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year. This strategy is to identify opportunities to reduce the Group's gearing ratio. The gearing ratios for the year ended 30 June 2020 and 30 June 2019 are as follows:

Oldfields Holdings Limited

34

30 June 2020

21. Share Capital (continued)

There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year. This strategy is to identify opportunities to reduce the Group's gearing ratio. The gearing ratios for the year ended 30 June 2020 and 30 June 2019 are as follows:

		2020	2019
	Note	$'000	$'000
Total borrowings	14	617	3,753
Add: Derivative financial instruments	16	-	237
Less: Cash and cash equivalents	8	(1,785)	(423)
Net debt and derivative financial instruments		(1,168)	3,567
Total equity		7,933	4,384
Total capital		6,765	7,951
Gearing ratio		-17%	45%

22. Reserves

	2020	2019
	$'000	$'000
Foreign currencytranslation	19	47
Total reserves	19	47

Foreign currency translation reserve

The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled subsidiary.

23. Dividends

Since the start of the financial year, no dividends have been paid or declared by the Parent Entity.

During the year $181,000 (2019: $253,333) of fully franked dividends were paid to a related party of the Group by Adelaide Scaffold Solutions Pty Limited to Sibley Investments Pty Limited. Sibley Investments Pty Limited is the minority interest holder in the Group. Adelaide Scaffold Solutions Pty Limited is a controlled entity of Oldfields Holdings Limited.

Franking account balance	Parent Entity
	2020 2019 $'000 $'000
The amount of the franking credits available for subsequent reporting periods are: Balance at the end of the reporting period Frankingcredits that will arise from thepayment of the amount ofprovision for income tax	1,086 1,077 - 9
Franking credits available for subsequent reporting periods based on a tax rate of 30%	1,086 1,086

23.1 Recognition and Measurement

Dividends are recognised when declared during the financial year and are then no longer at the discretion of the Company.

24. Earnings per Share

	2020	2019
	$'000	$'000
a) Reconciliation of earnings to profit or loss
Loss for the year	(1,222)	(228)
Less: Profit attributable to non-controllingequityinterest	(239)	(253)
Earnings used to calculate basic EPS	(1,461)	(481)
	2020	2019
	Number	Number
b) Weighted average number of ordinary shares outstanding
during theyear used in calculating basic and diluted EPS	116,542,192	82,176,198
	2020	2019
	Cents	Cents
c) Profitper share	(1.254)	(0.585)

Oldfields Holdings Limited

35

30 June 2020

24.1 Calculation of Earnings per Share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to the owners of Oldfields Holdings 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.

25. Accumulated Losses

		2020	2019
	Note	$'000	$'000
Movements in accumulated losses were as follows:
Opening balance at 1 July		(16,769)	(15,806)
Adjustment on initial application of AASB 15		-	(482)
Net profit for the year		(1,222)	(228)
Dividendspaid	21	(181)	(253)
Closing balance at 30 June		(18,172)	(16,769)
Accumulated losses attributable to:
Members of the parent entity		(18,919)	(17,458)
Non-controllinginterest		747	689
Total accumulated losses at 30 June		(18,172)	(16,769)

26. Subsidiaries

The subsidiaries listed below have share capital consisting solely of ordinary shares or ordinary units which are held directly by the Group. The proportion of ownership interests held equals the voting rights held by the Group. Each subsidiary’s principal place of business is also its country of incorporation.

Name of Subsidiary Principal Place of Business	Ownership Interest	Non-Controlling Interests
	2020 % 2019 % 2020 % 2019 %
Subsidiaries of Oldfields Holdings Limited: Oldfields Pty Limited Australia Oldfields Advance Scaffold Pty Limited Australia Oldfields Administration Pty Limited Australia Oldfields International Pty Limited Australia Advance Scaffold Solutions Pty Limited Australia Oldfields Supply Chain Solutions Pty Ltd Australia Oldfields Finance Solutions Pty Ltd Australia Oldfields Funds Management Pty Ltd Australia Subsidiaries of Oldfields Advance Scaffold Pty Limited: Adelaide Scaffold Solutions Pty Limited Australia Subsidiaries of Oldfields Administration Pty Limited: National Office Service Trust Australia Subsidiaries of Oldfields International Pty Limited: Oldfields (NZ) Limited New Zealand Oldfields Paint Applications (NZ) Limited New Zealand Oldfields USA Incorporated USA Foshan Advcorp Scaffold Limited China Subsidiaries of Oldfields Supply Chain Solutions Pty Ltd: Oldfields FinancingPtyLtd Australia	100% 100% 0% 0% 100% 100% 0% 0% 100% 100% 0% 0% 100% 100% 0% 0% 100% 100% 0% 0% 100% 0% 0% 0% 100% 0% 0% 0% 100% 0% 0% 0% 60% 60% 40% 40% 100% 100% 0% 0% 100% 100% 0% 0% 100% 100% 0% 0% 100% 100% 0% 0% 100% 100% 0% 0% 100% 0% 0% 0%

Oldfields Holdings Limited

36

30 June 2020

26. Subsidiaries (continued)

Subsidiary financial statements used in the preparation of these consolidated financial statements have also been prepared as at the same reporting date as the Group’s financial statements.

Set out below is the summarised financial information for Adelaide Scaffold Solutions Pty Ltd that has non-controlling interests that are material to the Group, before any intra-group eliminations. The entity's principal place of business is 5-7 Peekarra Street, Regency Park, South Australia.

	2020	2019
Summarised financial information of subsidiaries with material non-controlling interests	$'000	$'000
Summarised financial position - Adelaide Scaffold Solutions Pty Ltd
Current assets	1,559	1,122
Non-current assets	2,299	2,251
Current liabilities	(734)	(465)
Non-current liabilities	(427)	(356)
Net assets	2,697	2,552
Carrying amount of non-controlling interests	747	648
Summarised financial performance - Adelaide Scaffold Solutions Pty Ltd
Revenue	5,930	5,792
Profit after tax	597	632
Other comprehensive income after tax	-	-
Total comprehensive income	597	632
Profit attributable to non-controlling interests	239	253
	2020	2019
Summarised financial information of subsidiaries with material non-controlling interests	$'000	$'000
Summarised cash flow information - Adelaide Scaffold Solutions Pty Ltd
Net cash from operating activities	1,439	782
Net cash used in investing activities	(327)	(482)
Net cash used in financingactivities	(303)	(474)
Net increase(decrease) in cash and cash equivalents	809	(174)
Distributions paid to non-controlling interests	181	253

26.1 Recognition and Measurement

The consolidated financial statements incorporate the assets and liabilities of all entities controlled by the Group as at 30 June 2020 and the results of all controlled entities for the year then ended. Control exists when the consolidated entity has the power to govern the financial and operating policies of an entity so as to obtain benefit from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. Where control of an entity is obtained during a financial year, its results are included in the consolidated income statement from the date on which control commences. Where control of an entity ceases during a financial year its results are included for that part of the year during which control exists.

27. Commitments and Contingencies

27.1 Capital Commitments

The Group does not have any capital expenditure commitments at reporting date.

27.2 Lease Commitments

		2020	2019
Finance lease commitments	Note	$'000	$'000
Payable — minimum lease payments
Within one year		215	143
Later than one year but not later than five years		327	226
Later than fiveyears		-	-
		542	369
Less future finance charges		(47)	(41)
Present value of minimum leasepayments	15	495	328

Included in finance lease commitments are hire purchase liabili�es that are secured by a charge over the hire purchase assets.

Oldfields Holdings Limited

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30 June 2020

27.2 Lease Commitments (continued)

The property leases are non-cancellable leases with 1-5 year terms, with rent payable monthly in advance. Contingent rental provisions within the lease agreement require that minimum lease payments shall be increased by the lower of the change in the consumer price index or 3-5% per annum. Options exist to renew certain leases at the end of the term for an additional term of 1-5 years. On renewal the terms of the leases are renegotiated.

	2020	2019
Non-cancellable operating lease commitments	$'000	$'000
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:
Within one year	-	1,115
Later than oneyear but not later than fiveyears	-	2,352
Total operating lease commitments	-	3,467

27.3 Contingencies

The Group does not have any significant contingent liabilities or contingent assets as 30 June 2020 or 30 June 2019.

28. Events After the Reporting Period

The Group's scaffold manufacturing facility in Foshan, China has been relocated to XinXiang, China in August 2020.

29. Parent Entity Disclosures

The following information has been extracted from the books and records of the parent and has been prepared in accordance with Australian Accounting Standards.

	2020	2019
	$'000	$'000
Statement of Financial Position
ASSETS
Current assets	3,834	1,237
Non-current assets	4,520	2,136
TOTAL ASSETS	8,354	3,373
LIABILITIES
Current liabilities	6,112	6,286
Non-current liabilities	2,125	2,638
TOTAL LIABILITIES	8,237	8,924
NET ASSETS(LIABILITIES)	117	(5,551)
EQUITY
Issued capital	26,086	21,106
Accumulated losses	(25,969)	(26,657)
TOTAL EQUITY	117	(5,551)
Statement of Profit or Loss and Other Comprehensive Income
Profit(loss) before tax	688	(31)
Total comprehensiveprofit(loss)	688	(31)

Guarantees

Oldfields Holdings Limited and it's Australian wholly-owned entities have entered into a deed of cross guarantee under which the Company and its subsidiaries guarantee the debts of each other.

Contingent liabilities

The Parent Entity did not have any contingent liabilities as at 30 June 2020 or 30 June 2019.

Contractual commitments

The Parent Entity did not have any contractual commitments as at 30 June 2020 or 30 June 2019.

Oldfields Holdings Limited

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30 June 2020

30. Auditors’ Remuneration

During the year the following fees were paid or payable for services provided by the auditor of the Parent Entity, its related practices and non-related audit firms:

	2020	2019
	$	$
BDO* and related network firms
Audit services
Audit and review of financial statements	123,600	136,000
Non-audit services
Taxation compliance services	18,000	18,000
Other services	-	19,000
	18,000	37,000
Total auditors’ remuneration	141,600	173,000

• The BDO entity performing the audit of the group transitioned from BDO East Coast Partnership to BDO Audit Pty Ltd on 1 August 2020. The disclosures include amounts received or due and receivable by BDO East Coast Partnership, BDO Audit Pty Ltd and their respective related entities.

31. Related Party Transactions

Ultimate controlling entity

Oldfields Holdings Limited (incorporated in Australia).

Key management personnel

Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity are considered key management personnel. The following were key management personnel (KMP) at the end of the reporting period:

Richard John Abela	Chief Executive Officer
Jonathan William Doy_(appointed 17 April 2020)_	Non-executive Director
David John Baird_(appointed 17 April 2020)_	Non-executive Director
Jie Ma_(appointed 17 April 2020)_	Non-executive Director
William Lewis Timms_(resigned 18 April 2020)_	Non-executive Director
Stephen Charles Hooper_(resigned 18 April 2020)_	Non-executive Director
Ka Lung Alan Lee	Chief Financial Officer and Company Secretary

	2020	2019
Details of remuneration	$'000	$'000
Short-term employee benefits	597	577
Post-employment benefits	50	56
Total KMP compensation	647	633
	2020	2019
Transactions with related parties	$'000	$'000
The following transactions occurred with related parties:
Dividends paid to Sibley Investments Pty Ltd, holder of minority interest in Adelaide Scaffold Solutions Pty Ltd	181	253
Interest paid to WL& CJ Timms, being a related party of WilliamLewis Timms (non-executive director)	15	10
	2020	2019
Loans from related parties	$'000	$'000
Loan payable to WL & CJ Timms, being a related party of William Lewis Timms (non-executive director)
Beginning of the year	-	-
Loan received	-	500
Loan repayments made	(500)	-
Interest charged	15	10
Interestpaid	(15)	(10)
End of theyear	(500)	500

There is no allowance account for impaired receivables in relation to any outstanding balances, and no expense has been recognised in respect of impaired receivables due from related parties.

Terms and conditions

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

Oldfields Holdings Limited

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30 June 2020

Directors' Declaration

In accordance with a resolution of the Directors of Oldfields Holdings Limited, the Directors of the Company declare that:

1. the financial statements and notes are in accordance with the Corporations Act 2001 and:

2. (a) comply with Australian Accounting Standards, which, as stated in accounting policy note 3 to the financial statements, constitutes compliance with International Financial Reporting Standards (IFRS); and

3. (b) give a true and fair view of the financial position as at 30 June 2020 and of the performance for the year ended on that date of the consolidated entity;

4. in the Directors' opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become

5. the Directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer.

Oldfields Holdings Limited and its Australian wholly-owned entities have entered into a deed of cross guarantee under which the Company and it's subsidiaries guarantee the debts of each other.

At the date of this declaration, there are reasonable grounds to believe that the companies which are party to this deed of cross guarantee will be able to meet any obligations or liabilities to which they are, or may become, subject to by virtue of the deed.

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Richard Abela

Dated:

30 September 2020

Oldfields Holdings Limited

40

30 June 2020

Tel: +61 2 9251 4100 Level 11, 1 Margaret St Fax: +61 2 9240 9821 Sydney NSW 2000 www.bdo.com.au Australia

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INDEPENDENT AUDITOR'S REPORT

To the members of Oldfields Holdings Limited

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Oldfields Holdings Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors’ declaration.

In our opinion the accompanying financial report of the Group, is in accordance with the Corporations Act 2001 , including:

• (i) Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial performance for the year ended on that date; and

• (ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001 .

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.

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Scaffolding Hire and Erection Revenue Recognition

Key audit matter As disclosed in Note 5, recognition of scaffolding and erection revenue is determined as an area of key estimate and judgement on the basis of the following:

• Management recognise revenue based on the performance obligations identified within the individual contracts; and

• Scaffolding hire and erection revenue is recognised with reference to the stage of completion of the contract and there is judgment associated with determining the stage of completion.

Due to the nature of the key estimates and judgements, this has been determined as a key audit matter.

How the matter was addressed in our audit

Our procedures included, amongst others:

• Reviewing the appropriateness of management’s judgements associated with the fair value consideration expected to be received by reference to the terms of individual contracts;

• Evaluating the accuracy of management’s judgements associated with the stage of completion of individual contracts by testing the accuracy of assumptions in relation to services performed at period end against the expected total services to be provided under the contracts; and

• Assessing the recognition of scaffolding hire and erection revenue under individual contracts by reference to the assessment of the performance obligations satisfied and the impact on related revenue recognition under AASB 15 Revenue from Contracts with Customers .

Other information

The directors are responsible for the other information. The other information comprises the information in the Group’s annual report for the year ended 30 June 2020, but does not include the financial report and the auditor’s report thereon.

Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

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In preparing the financial report, the directors are responsible for assessing the ability of the group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:

https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf

This description forms part of our auditor’s report.

Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2020.

In our opinion, the Remuneration Report of Oldfields Holdings Limited, for the year ended 30 June 2020, complies with section 300A of the Corporations Act 2001 .

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

BDO Audit Pty Ltd

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Ian Hooper Director

Sydney, 30 September 2020

Corporate Governance Statement

The Board of Directors of Oldfields Holdings Limited is committed to high standards of corporate governance and adopts wherever possible the principles outlined in the Corporate Governance Principles and Best Practice Recommendations, 3[rd] Edition published by the ASX Corporate Governance Council in March 2014.

The recommendations are written in a principles based fashion and individual boards are able to choose whether to follow the recommended practices or to adopt other practices that are better suited to the individual circumstances of the Group. Given the size and specific circumstances of Oldfields Holdings Limited, the Board recognises that some of the best practice recommendations are not suited to obtaining the best shareholder outcomes at the present time. This situation is monitored by the Board and the recommendations will be adopted as and when the Group’s circumstances allow. The Board also noted the new Corporate Governance Principles and Best Practice Recommendations, 4[th] Edition published by the ASX Corporate Governance Council in February 2019 which will become effective from 1 January 2020.

All relevant best practice recommendations of the ASX Corporate Governance Council have been applied for the reporting period unless specifically disclosed below. Where a recommended practice has not been followed a detailed description of the practices adopted is provided together with a commentary on how the risks of non-adoption of the recommended practice are mitigated.

Recommendation	Recommended Practice	Oldfields’ Practice
Recommendation 1.1	Establish functions reserved for the board and for senior management	The recommended practice is adopted
Recommendation 1.2	Undertake appropriate checks prior to appointing as director	The recommended practice is adopted
Recommendation 1.3	Written agreements in place with directors and senior executives	The recommended practice is adopted
Recommendation 1.4	Company secretary accountable to board through the chair	The recommended practice is adopted
Recommendation 1.5	Have a measurable diversity policy	The recommended practice is partially adopted, refer below for variation to recommendation
Recommendation 1.6	Establish a process for evaluating performance of the board	This recommendation has not yet been adopted
Recommendation 1.7	Have a process for periodically evaluating performance of senior executives	The recommended practice is adopted
Recommendation 2.1	The board should have a nomination committee	Nominations are considered by the whole board
Recommendation 2.2	Have a board skills matrix	The recommended practice is adopted
Recommendation 2.3	Have a list of directors who are deemed to be independent	The recommended practice is adopted
Recommendation 2.4	Majority of the board should be independent directors	The majority of the Board is not independent and the risk management process is disclosed
Recommendation 2.5	The chair of the board should be independent and not the CEO	The recommended practice is adopted
Recommendation 2.6	Have a program for inducting new directors	The recommended practice is adopted
Recommendation 3.1	Establish and disclose a code of conduct	The recommended practice is adopted
Recommendation 4.1	The board should establish an audit committee	The recommended practice is adopted
Recommendation 4.2	Prior to approving financial statements the board receive from the CFO and CEO declaration of properly maintained records and compliance with accounting standards	The recommended practice is adopted
Recommendation 4.3	External auditor attends AGM	The recommended practice is adopted
Recommendation 5.1	Establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies	The recommended practice is adopted

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Recommendation		Oldfields’ Practice
	Recommended Practice
Recommendation 6.1	Provide information about itself and its governance via its website	The recommended practice is adopted
Recommendation 6.2	Design and implement investor relations program for communication with investors	The recommended practice is adopted
Recommendation 6.3	Policies and processes in place to encourage security holder participation	The recommended practice is adopted
Recommendation 6.4	Provide security holders option to receive communication electronically	This recommended practice is adopted
Recommendation 7.1	Establish policies for the oversight and management of material business risks and disclose a summary of those policies	The recommended practice is adopted. The Risk Management Statement is disclosed
Recommendation 7.2	Board to review risk management framework annually	The recommended practice is adopted
Recommendation 7.3	Disclosure of internal audit function	The recommended practice is adopted
Recommendation 7.4	Disclose material exposure to economic, environmental and social sustainability risks	The indicated information is provided
Recommendation 8.1	The board should establish a remuneration committee	The recommended practice is adopted
Recommendation 8.2	Disclosure of policies and practices of remuneration of non-executive and executive directors	The recommended practice is adopted
Recommendation 8.3	Policy on equity based remuneration scheme	No equity based scheme in place, recommendation will be adopted when implemented

Current information is available on the Group’s website which contains a clearly marked Corporate Governance section.

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Principle 1. LAY SOLID FOUNDATIONS FOR MANAGEMENT & OVERSIGHT

Recommendation 1.1 – Establish functions reserved for the board and for senior management and disclose those functions.

The Board of Directors is accountable to the shareholders for the performance of the Group. The Board sets the strategic direction and delegate’s responsibility for the management of the Group to the Chief Executive Officer.

A copy of the Board Charter, which promotes a culture within the Group of accountability, integrity and transparency, is available on the Group’s website.

Each Board Member must at all times act honestly, fairly and diligently in all respects in accordance with the Group’s Code of Conduct and all laws that apply to the Group.

Key matters reserved for the Board include:

• Oversight of the Group, including its control, accountability and compliance systems;

• Appointment, monitoring, managing performance and if necessary removal of the Chief Executive Officer, Chief Financial Officer and Company Secretary;

• Input, assessment, appraisal and final approval of management’s development of corporate strategy and performance objectives;

• Monitoring risk management;

• Approving and monitoring the progress of major capital expenditure, capital management and acquisitions and divestitures;

• Approval and monitoring financial and other reporting;

• Ensuring the market and shareholders are fully informed of material developments; and

• Recognising the legitimate interests of stakeholders.

The expectations of directors are outlined in a formal Letter of Appointment which details the term of appointment, fees, power and duties and other information pertinent to their roles.

Responsibility for the day-to-day management of the Group and its operations is delegated to senior executive management. The expectations of senior executive management are outlined in Board decisions which are communicated to the Chief Executive Officer and recorded in the board minutes and also in the position descriptions and KPI’s for each senior executive role.

The Board holds a minimum of six formal meetings a year, but usually twelve. Additional meetings are held as required.

Details of current members of the Board are disclosed in the Directors’ Report.

Recommendation 1.2 – Undertake appropriate checks before appointing or putting forward to security holders a candidate for election as a director

Details are provided on a candidate for director. These will be provided to security holders prior to any election of new Directors.

Recommendation 1.3 – Written agreements in place with directors and senior executives

Detailed service contracts are in place for all senior managers and directors, these are established prior to commencement of employment

Recommendation 1.4 – Company secretary accountable to the board through the chair

The CFO/Company Secretary has clear lines of accountability with the CFO responsibilities reporting directly through to the CEO and all company secretarial functions reporting through to the Chair.

Recommendation 1.5 – Measurable diversity policy

A detailed diversity policy is in place, and available on the Company’s webpage. In addition to this, the Company’s workplace gender equality report is available to view. Whilst the policy diverges from some of the recommendations made, key areas in the recommendation are included in the policy, including the requirement that for all jobs advertised, it is stated that the Company is an equal opportunity employer, that at least one female applicant is included in the final shortlist of candidates for the role, and shortlisted candidates are interviewed by a female as well as a male member of staff prior to a final decision on employment where possible. Specific targets of women in senior positions within the organisation have not been set, as the company will select the best person for the role.

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Recommendation 1.6 – Process for evaluation of the performance of the board

The Board has not completed a formal evaluation process within the period. The Chairman performs an informal evaluation of individual Directors and also of each Board Meeting. The Board will be considering obtaining independent advice.

Recommendation 1.7 – Have a process for periodically evaluating the performance of senior management

Senior executive management is evaluated each year on their performance against stated objectives, goals and key performance indicators (KPI’s).

Overall performance is reviewed by the particular senior executive’s direct supervisor and ultimately by the Chief Executive Officer and/or Board of Directors.

Principle 2. STRUCTURE THE BOARD TO ADD VALUE

The Board currently has four directors, comprising two independent non-executive directors, including the Chairman, one nonexecutive director and one executive director.

The Board has adopted the following principles:

• The same individual should not exercise the roles of Chairman and Chief Executive Officer;

• The Board should not comprise a majority of executive directors; and

• The Board should comprise persons with a broad range of skills and experience appropriate to the needs of the Group.

Recommendation 2.1 – The board should have a nomination committee

Nominations are considered by the Board as a whole, and are only accepted if the candidate has the relevant skills required to assist the business in achieving its strategic objectives. Given the size and requirements of the Group, the Board has decided that a nomination committee is not required at this point in time.

Recommendation 2.2 – Have a board skills matrix

This has been established.

Recommendation 2.3 – Have a list of directors that are deemed to be independent

The Company has two independent directors and this is disclosed in the annual report.

Recommendation 2.4 – Majority of the board should be independent directors

Independent directors are those who are independent of management and free of any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and independent judgment.

In assessing the independence of directors, an independent director is a non-executive director and:

• Is not a substantial shareholder, as defined in section 9 of the Corporations Act, of the Group or an officer of, or otherwise associated directly with, a substantial shareholder of the Group;

• Has not within the last three years been employed in an executive capacity by the Group or another Group member, and there has been a period of at least three years between ceasing such employment and serving on the Board;

• Has not within the last three years been a principal of a material professional advisor or a material consultant to the Group or another Group member, or an employee materially associated with the service provided; and

• Is not a material supplier or customer of the Group or other Group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer;

At the date of this report there were two independent directors.

The following Directors do not meet the independence criteria listed above:

• Jie Ma: currently a non-executive director and substantial shareholder; and

• Richard John Abela: currently an executive director and shareholder.

The Board manages the risk of having a majority of non-independent directors through restrictions on trading in shares, restrictions on related party transactions, and a close relationship with the principal provider of debt funding and a strong independent auditor with a focus on controls.

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Recommendation 2.5 – The chair of the board should be independent and not the CEO

The Chair is an independent non-executive director.

Recommendation 2.6 – Have a program for inducting new directors and ensuring appropriate professional development opportunities to develop and maintain the skills required to perform their role as directors

There is an appropriate level of induction for new Directors ensuring they understand the business needs and requirements. The Board discusses from time to time requirements to ensure continuous development of skills for the performance of their role as Director.

Principle 3. PROMOTE ETHICAL AND RESPONSIBLE DECISION – MAKING

Recommendation 3.1 – Establish and disclose a Code of Conduct and disclose the code or a summary of the code as to the practices necessary to maintain confidence in the company’s integrity, the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders and the responsibility and accountability of individuals for reporting and investigating reports of unethical practices

The Board has a code of conduct for Directors and Group, Officers and employees. The key elements of the code are:

• Conflicts of interest;

• Corporate opportunities;

• Confidentiality;

• Fair dealing;

• Protection of assets;

• Compliance with laws and regulations; and

• Promotion of ethical and lawful behavior.

The policy is available on the Company’s webpage.

Principle 4. SAFEGUARD INTEGRITY IN FINANCIAL REPORTING

The Chief Executive Officer and the Chief Financial Officer state, in writing, to the Board that the Group’s financial reports present a true and fair view, in all material respects, of the Group’s financial position and operational results and are in accordance with relevant accounting standards.

Recommendation 4.1 – the board should establish an audit committee

• The Board has an Audit Committee, which:

• Has three members who are Non-Executive Directors;

• Has a written charter which can be obtained from the Corporate Governance section of the Group’s website; and

• Includes members who are all financially literate.

Details of the members are disclosed in the Director’s Report.

The Board recognises that an independent audit committee is an important feature of good corporate governance.

The Audit Committee:

• consists of three non-executive directors comprising two independent non-executive directors and one non-executive director;

• is chaired by an independent chairman, who is also the Chair of the Board;

• has three members. Given the size and structure of the Board, as discussed in Recommendation 2.1, the Board feels that three members all of whom are financially literate, is sufficient at this time.

The risk with a small committee is that the members will lack the diversity to raise and recognise issues. Risk is managed through specific working arrangements with the auditors having access to the full Board at any time upon their request and through ensuring that the Chairman of the Audit Committee is a well-qualified independent director. It is intended to review this arrangement and adopt the recommended practice if and when the Board composition changes.

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The Audit Committee has a formal charter, the key elements of the charter are:

• Role of the Committee;

• Membership;

• Meetings;

• Responsibilities;

• Authority;

• Independence; and

• Non-audit work.

The Board and Audit Committee closely monitor the independence of the external auditor. The Audit Committee meets a minimum of twice a year. The Committee may also meets in private, with management without the external auditor and, at a separate time, with the external auditor without management where considered necessary.

Recommendation 4.2 – Prior to approving financial statements the board receive from the CFO and CEO a declaration of properly maintained records and compliance with accounting standards

The Chief Executive Officer and the Chief Financial Officer state, in writing, to the Board that the Group’s financial reports present a true and fair view, in all material respects, of the Group’s financial position and operational results and are in accordance with relevant accounting standards.

The members of the Audit Committee are:

• Jonathan William Doy (Chairman);

• David John Baird; and

• Jie Ma.

The details of the qualifications of the Audit Committee members are disclosed in the Directors’ Report.

The details of the number of Audit Committee Meetings held are contained in the Directors’ Report.

Departures from recommendations included in Principle 4 have been disclosed in the discussion of the relevant recommendations.

Recommendation 4.3 – External auditor attends AGM

The lead partner from the Company’s auditors always attends the Company’s AGM.

Principle 5. MAKE TIMELY AND BALANCED DISCLOSURE

Recommendation 5.1 – Establish policy on ASX Listing Rule disclosure requirements and ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies

The Group has established procedures to ensure compliance with ASX Listing Rules which require that when an entity becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity’s securities, the entity must immediately tell ASX that information.

A Continuous Disclosure Policy and Procedure has been prepared and is available from the Corporate Governance section of the Group’s website.

Principle 6. RESPECT THE RIGHTS OF SHAREHOLDERS

Recommendation 6.1 – Provide information about itself and its governance via its website

The Company has a comprehensive website for security holders, included in this website are full governance policies.

Recommendation 6.2 – Design and implement investor relations program for communications with investors

The Group has developed and implemented a shareholder communication strategy. The Group promotes effective communication with shareholders and encourages effective participation at the Group’s general meetings.

Shareholders and other parties will be able to access the following information from the Group’s website:

• Copies of all announcements given to the ASX;

• Press releases and copies of letters to shareholders;

• Copies of annual and half year financial reports; and

• Details of notices of shareholders meetings including information on general meetings.

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The requirements of continuous disclosure ensure that the Group discloses relevant information to the shareholders and the market in a timely and full manner.

The Shareholder Communication Strategy is available on the Oldfields website.

Recommendation 6.3 – Disclose policies and processes in place to encourage shareholder meeting participation

Security holders who are unable to attend meetings are given the opportunity in shareholder communications to ask questions of the Directors and responses are provided to them.

Recommendation 6.4 – Provide security holders the option to receive communications electronically

The Company’s share registry provider provides this option to all security holders.

Principle 7. RECOGNISE AND MANAGE RISK

Recommendation 7.1 – Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies

The Board recognises that there are a number of complex operational, commercial, financial and legal risks and has in place procedures to safeguard the Group’s assets and interests.

A Work Health and Safety Committee has been established to monitor and recommend changes to safe working practices and a safe working environment. The Chairman is not a Director, and the committee comprises of senior executive officers and employee representatives.

The Board has developed a risk management policy the purpose of which is:

• Identify, access, monitor and manage risk;

• Inform investors of material changes to the Group’s risk profile;

• Enhance the environment for capitalising on value creation opportunities;

• Ensure compliance with the Corporations Act;

• Consider the reasonable expectations of its stakeholders;

• The measures and procedures in place to comply with these regulations; and

• How compliance with those measures and procedures will be monitored.

A summary of these policies is contained in the Risk Management Statement which is disclosed on the Oldfields website.

Recommendation 7.2 – The board should review the risk management framework annually

The Group’s risk management policy is designed and implemented by the Board of Directors’ which meet regularly to identify all major risks, ensure appropriate risk management plans are in place and to monitor the effectiveness of the implementation of the risk management plans.

The Chief Executive Officer and the Chief Financial Officer are required to state in writing to the Board that the Group’s risk management and internal compliance and control system is operating effectively and efficiently in all material aspects.

Recommendation 7.3 – The board should disclose whether it has an internal audit function, how the function is structured and what role it performs

From time to time and as required, the Board will outsource the internal audit function to a company that specialises in this work. The company will review certain areas of controls and compliance and report back to the Chief Executive Officer and/or Chief Financial Officer and manager of the area. This report when finalised with comments from management along with timelines for compliance are provided to the Board for review.

Recommendation 7.4 – Disclose material exposure to material exposure to economic, environmental and social sustainability risk

The business is exposed to various risks, in particular economic and social sustainability risk. The Board is fully aware of these and these risks are mitigated wherever possible. In terms of social sustainability risk, the Company is a party to the packaging covenant agreement and reviews product packaging for sustainability and recyclability.

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Principle 8. REMUNERATE FAIRLY AND RESPONSIBLY

Recommendation 8.1 – The board should establish a remuneration committee

The Board has established a Remuneration Committee. The Remuneration Committee is responsible for developing and recommending to the Board:

• Remuneration policies for Non-Executive Directors;

• Remuneration policies for the Chief Executive Officer and Chief Financial Officer;

• Remuneration policies for executive management;

• All aspects of any executive share option or acquisition scheme;

• Superannuation policies;

• Policies which motivate senior executives to pursue the long term growth and success of the Group; and

• • Policies which show a clear relationship between senior executives’ performance and remuneration.

The Board has a remuneration committee which has three members, comprising two independent non-executive directors, including the Chair, and one non-executive director. It has a documented charter and the members and qualification of the Remuneration Committee are disclosed in the Directors’ Report.

The remuneration of Non-Executive Directors is by way of director’s fees in the form of cash, non-cash benefits and superannuation benefits.

The total annual remuneration paid to Non-Executive Directors may not exceed the limit set by shareholders at the Annual General Meeting.

Non-Executive Directors do not receive options unless approved by shareholders.

Recommendation 8.2 – Disclosure of policies and practices of remuneration of non-executive and executive directors

The Group has clearly differentiated the remuneration structure of Executive and Non-Executive Directors. The key elements of the remuneration philosophy are disclosed in the Remuneration Committee Charter which is available on the Oldfields website.

Recommendation 8.3 – Policy on equity based remuneration scheme

The Company currently does not have an equity based remuneration scheme. Prior to one being implemented and approved by security holders a policy will be established for security holders to review.

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Risk Management Statement

1. Introduction

This statement provides an overview of the Group's risk management policies and internal compliance and control systems in accordance with Principle 7 of the ASX Principles of Good Corporate Governance.

2. Responsibility

The Board of Directors are responsible for oversight on a regular basis of the Group's procedures and risk management policies. The responsibility of the Board is codified under the Board Charter, which is available on the Group’s website. The Group also has an audit committee, the responsibilities of which are documented in the Audit Committee Charter which is also available on the Group’s website.

3. Risk Management Monitoring

The Board has implemented a combination of internal policies and procedures and use of external audits to monitor risk management and its effectiveness.

3.1. Standard Operating Procedures (SOP's)

The Board has implemented risk management policies covering areas of business risk such as:

• Work health and safety;

• Finance and treasury;

• Human resources;

• Asset protection (insurance); and

• Codes of conduct.

The policies referred to are regularly reviewed and an internal mechanism exists whereby the Board and Committee members have access to these reports on an internal intranet site. The Board manages these risks appropriately with reference to identification, implementation and review of these risks and procedures.

3.2. External Audits

The external audit of the Group is conducted annually. There is also a formal review at least once every year. Both the audit and review are conducted by an external auditor.

The Group has a Work Health and Safety Committee which has received training and certification by external OH&S providers.

The Group engages with qualified external advisors annually in relation to asset protection. Where possible the Board adopts the most practical and affordable insurance policies suitable to protect major assets of the Group.

In general an external qualified auditor and or valuers are engaged by the Board in determining large asset values on acquisition of assets. An external valuation is obtained to determine and verify carrying values of investment property by an external independent registered property valuer at least every three years where applicable.

3.3. Risk Management Statements

The integrity of the Group's financial reports relies on sound business and risk control systems.

Annually, the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) are required to sign a Risk Management Statement that is provided to the audit committee in writing.

The CEO and CFO sign a statement regarding the adequacy of financial controls in accordance with section 295a of the Corporations Act 2001.

The Board requires management to report on the key business risks for each area of the business at each board meeting.

3.4. Internal Audit

Given the Group's size, an internal auditor is not practical. In addition, the presence of an executive director on the Board allows for detailed oversight of risks within each business by managers who are familiar with the risk environment but not directly involved in the management of that particular business. In addition to this the Company from time to time may utilise the services of an internal auditing company to provide oversight of certain aspects of the business.

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3.5. External Covenants

The Group has voluntarily associated itself with the following self-regulated authorities:

• WGE (Workplace Gender Equality Act): The Group reports annually on targets and policy to an external agency in regards to Equal Opportunity Guidelines and Policy within the work force. The Board receives and reviews this annually; and

• Australian Packaging Covenant: The Group sets targets to reduce packaging waste and environmental impact of packaging waste. Targets are set and guidelines adopted and where possible administered by management. The Board reviews these targets annually.

4. Formal Risk Management Practices

The Group operates a formal process for risk management which includes:

• Risk identification;

• Risk analysis;

• Risk evaluation;

• Risk mitigation;

• Risk monitoring and reporting; and

• Risk communication.

The risk management process meets appropriate professional standards and is reviewed annually by the Board of Directors. The process meets, but is not limited to the requirements of Principle 7 of the ASX Principles for Good Corporate Governance.

5. Risk Reporting and Communication

Risks are reported and their monitoring and management are communicated in accordance with the diagram below:

Material Risks	General Reporting	Accountabilities
	Board of Directors
Direct risk response or accept material risk	Review and approve risk mitigation strategies or accept risk	Oversight of framework and sufficiency of reporting
	Chief Executive Officer (CEO)
Implement risk response or escalate to Board of Directors	Review and approve risk reporting and mitigation strategies	Oversight of corporate risks and adequacy of framework
	Chief Financial Officer (CFO)
Recommend material risk escalation to CEO or Board of Directors	Consolidate risk assessments and prepare summary reporting	Implement and monitor ERM framework and ERM system
	Finance Department
Identify and report material risks as they arise	Prepare risk assessments in accordance with ERM framework	Operationally manage risks and escalate issues

Communication

Effective risk management is reliant on the timely and open communication of actual or potential risk events across the organisation. Free and frank communication is at the heart of the Group's risk management approach, and where the processes and accountabilities described in these standards may not support a suitably rapid response to any risk, then communication should be undertaken using whatever means to achieve the best outcome for the Group.

For the avoidance of doubt, Oldfields Holdings Limited has a whistle-blower policy in place and encourages all staff to report risks of which they are aware.

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Shareholder Information

The shareholder information set below was applicable as at 24 September 2020.

A. Substantial Shareholders

The number of substantial shareholders and their associates are set out below:

A. Substantial Shareholders The number of substantial shareholders and their associates are set out below:
Shareholder	Ordinary Shares
	Number Held Percentage of Issued Shares
EQM Holdings Pty Ltd Mr Williams Lewis Timms & Mrs Carolyn Jane Timms	85,530,329 51.000% 39,384,528 23.484%

B. Distribution of Equitable Security Holders

B. Distribution of Equitable Security Holders
Holding	Ordinary Shares
	Shares Options
1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over	69 - 77 - 15 - 61 - 48 -
	270 -

There were 23 holders of less than a marketable parcel of ordinary shares.

C. Equity Security Holders

The names of twenty largest quoted equity security holders are listed below:

C. Equity Security Holders The names of twenty largest quoted equity security holders are listed below:
Shareholder	Ordinary Shares
	Number Held Percentage of Issued Shares
1 EQM Holdings Pty Ltd 2 Mr Williams Lewis Timms & Mrs Carolyn Jane Timms 3 Benger Superannuation Pty Limited 4 Dixson Trust Pty Limited 5 Mr Rodney Boyce Hass 6 Shandora One Pty Ltd 7 Lymgrange Pty Limited 8 Hext Family Investments Pty Ltd 9 Mr Orlando Berardino Di Julio & Ms Catharina Maria Koopman 10 Starball Pty Ltd 11 Oceanridge Limited 12 Dr Gordon Bradley Elkington 13 Precision Superannuation Pty Limited 14 Mr Brian Garfield Benger 15 Mr Paul John Simpson 16 Man Investments (NSW) Pty Ltd 17 Seven Bob Investments Pty Ltd 18 Toveken Properties Pty Ltd 19 Maparily Pty Ltd 20 Bond Street Custodians Limited	85,530,329 51.000% 39,384,528 23.484% 4,500,000 2.683% 4,000,000 2.385% 3,616,054 2.156% 2,268,000 1.352% 2,205,500 1.315% 2,205,500 1.315% 2,179,887 1.300% 1,782,486 1.063% 1,650,000 0.984% 1,527,108 0.911% 1,511,951 0.902% 1,220,000 0.727% 1,200,000 0.716% 715,096 0.426% 693,000 0.413% 584,394 0.348% 573,962 0.342% 500,627 0.299%
	157,848,422 192.085%

D. Unquoted Equity Securities

There are no unquoted or unissued securities as at the end of the reporting period.

E. Voting Rights

The voting rights attaching to each class of equity securities are set out below:

Ordinary shares: 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.

Options: No voting rights.

F. On-Market Buy Back

There is no current on-market buy back.

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Corporate Directory

Directors

Mr Richard John Abela Executive Director, CEO Mr Jonathan William Doy Independent Non-Executive Director Mr David John Baird Independent Non-Executive Director Mr Jie Ma Non-Executive Director

Share Register

Boardroom Pty Ltd

Level 12, 225 George Street Sydney NSW 2000 1300 737 760 (in Australia) www.boardroomlimited.com.au

Stock Exchange Listing

Oldfields Holdings Limited (ASX Code: OLH)

Company Secretary Mr Ka Lung Alan Lee

Notice of Annual General Meeting

The date, time and place of the Annual General Meeting of Oldfields Holdings Limited is to be confirmed.

Banker

Westpac Banking Corporation Level 12, 55 Market Street Sydney NSW 2000

Bank of Sydney Limited

219-223 Castlereagh Street Sydney NSW 2000

Registered Office and Principal Place of Business

8 Farrow Road Campbelltown NSW 2560 02 4645 0700

Auditor

BDO Audit Pty Ltd Level 11, 1 Margaret Street Sydney NSW 2000

Website

www.oldfields.com.au

Oldfields Holdings Limited

55

30 June 2020