SPC GLOBAL HOLDINGS LTD — Annual Report 2021

Aug 29, 2021

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ACN 150 015 446

Appendix 4E

Preliminary Final Report For the year ended 30 June 2021

This Preliminary Final Report is provided to the ASX under ASX Listing Rule 4.3A

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Appendix 4E

Preliminary Final Report

Current reporting period Previous corresponding reporting period (PCP)

1 July 2020 to 30 June 2021 1 July 2019 to 30 June 2020

Results for announcement to the market

esults for announcement to the market
	2021	2020	Change	Change
	$’000	$'000	$	%
Gross Sales	42,013	42,230	-217	-0.5%
Loss for the year	-2,167	-9,613	7,446	77%
Total comprehensive income for the year	-2,061	-9,454	7,393	78%

Dividend information

No dividends are proposed and no dividends were declared or paid during the current or prior year.

Net tangible asset (NTA) backing information

et tangible asset (NTA) backing information
	2021	2020
	Cents	Cents
NTA backing per ordinary share (cents per share)	0.35	0.55

Status of audit

This preliminary final report is based on accounts that are in the process of being audited and there are no areas of likely dispute or audit qualification.

Commentary on results

Highlights

Total Group gross revenue of $42m. Of the $42m total sales, the juice related sales of $40.6m are up 13% on FY20 juice sales of $36m.

EBITDA of positive $1.8m, which is an improvement of $7.3m on the FY20 EBITDA. The improved EBITDA position was driven by a combination of higher GP margin and decreased expenses.

Revenue

Juice related net sales increased by 13% compared with FY20 due mainly to the increase in prices and successful launch of new products into the market.

Due to change in market circumstances, the company cleared all the sanitiser stock in Q1 of FY21, and did not sell sanitiser for the remainder of the financial year.

Gross Profit

Gross margins were significantly improved due to the higher profitability of the product mix and optimal expenses arrangement.

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The Food Revolution Group Limited

Expenses

xpenses
	2021 2020 $ $
Employment costs Administration costs Operating costs Marketing costs Total % Net Revenue	3,527,078 4,442,660 1,128,378 1,065,152 2,966,168 3,161,874 632,386 1,695,133
	8,254,010 10,364,819
	24.26% 30.0%

FOD continues to actively manage its cost base for current and medium- term growth opportunities.

Statutory loss after tax Income tax expense Depreciation, amortisation and write-offs Interest EBITDA	2021 2020 $ $ (2,166,780) (9,613,161) 105,630 158,445 2,723,238 2,699,289 1,173,252 1,295,588
	1,835,340 (5,459,839)

Cash flow

Cash balances at year end increased to $4,410,639, from prior year balance of $2,937,212.

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The Food Revolution Group Limited

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2021

	Note	Consolidated	Group
		2021	2020
		$	$
Net Revenue	3	34,026,091	34,813,988
Cost of sales		(24,331,295)	(29,730,830)
Gross profit		9,694,796	5,083,158
Other income	3	806,754	1,055,596
Employment costs		(3,527,078)	(4,442,660)
Administration expenses		(1,128,378)	(1,065,152)
Marketing costs		(632,386)	(1,695,133)
Operating costs		(2,966,168)	(3,161,874)
Depreciation, amortisation and write-offs		(2,723,238)	(2,699,289)
Finance costs	4	(1,212,252)	(1,295,588)
ASX and ASIC related expenses		(109,884)	(90,754)
Impairment on non-financial assets		(753,822)	(734,513)
Reversal on impairment of financial assets		788,606	268,943
Share-based payments		(298,100)	(677,450)
Loss before income tax		(2,061,150)	(9,454,716)
Income tax expense		(105,630)	(158,445)
Loss for the year		(2,166,780)	(9,613,161)
Other comprehensive income
Items that will be reclassified subsequently to profit or loss when specific		conditions are met:
Gain on revaluation of plant and equipment, net of tax		105,630	158,445
Other comprehensive income for the year		105,630	158,445
Total comprehensive income for the year		(2,061,150)	(9,454,716)
Basic loss per share in cents		(0.27)	(1.49)

The accompanying notes form part of these financial statements.

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The Food Revolution Group Limited

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021

Note ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables 5 Inventories 6 Other assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Plant and equipment 7 Right-of-use assets 8 Deferred tax assets Intangible assets 9 TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables 10 Provisions 11 Borrowings 12 Lease liabilities TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Provisions 11 Deferred tax liabilities Lease liabilities TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Options reserve 14 Revaluation surplus 15 Accumulated losses TOTAL EQUITY	Consolidated Group 2021 2020 $ $ 4,410,639 2,937,212 1,375,458 1,963,518 2,856,564 3,481,746 133,635 129,456
	8,776,296 8,511,932
	14,716,192 16,230,549 6,333,311 6,945,259 3,458,274 4,005,705 6,303,115 6,651,782
	30,810,892 33,833,295
	39,587,188 42,345,227
	6,058,296 12,168,843 524,931 338,144 6,400,447 7,583,762 380,587 329,849
	13,364,261 20,420,598
	2,434 55,480 3,458,274 4,005,705 7,302,777 7,683,860
	10,763,485 11,745,045
	24,127,746 32,165,643
	15,459,442 10,179,584
	53,844,983 46,802,075 848,765 550,665 9,017,833 8,912,203 (48,252,139) (46,085,359)
	15,459,442 10,179,584

The accompanying notes form part of these financial statements.

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The Food Revolution Group Limited

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2021

Balance at 1 July 2019 Cumulative adjustment upon adoption of new accounting standard – AASB 16 Balance at 1 July 2020 restated Comprehensive income Loss for the year Other comprehensive income for the year Total comprehensive income for the year Transactions with owners, and other transfers Issuance of shares Transfer from options reserve on expiry of options Share-based payment transactions Total transactions with owners, and other transfers Balance at 30 June 2020 Comprehensive income Loss for the year Other comprehensive income for the year Total comprehensive income for the year Transactions with owners, and other transfers Issuance of shares Transfer from options reserve on expiry of options Share-based payment transactions Total transactions with owners, and other transfers Balance at 30 June 2021	Issued Capital (Ordinary Shares) Accumulated Losses Revaluation Surplus Options Reserve Total $ $ $ $ $
	41,402,075 (36,473,898) 8,753,758 90,561 13,772,496 - (215,646) - - (215,646)
	41,402,075 (36,689,544) 8,753,758 90,561 13,556,850
	- (9,613,161) - - (9,613,161) - - 158,445 - 158,445
	- (9,613,161) 158,445 - (9,454,716)
	5,400,000 - - - 5,400,000 - 217,346 - (217,346) - - - - 677,450 677,450
	5,400,000 217,346 - 460,104 6,077,450
	46,802,075 (46,085,359) 8,912,203 550,665 10,179,584
	- (2,166,780) - - (2,166,780) - - 105,630 - 105,630
	- (2,166,780) 105,630 - (2,061,150)
	7,042,908 - - 7,042,908 - - - - - - 298,100 298,100
	7,042,908 - - 298,100 7,341,008
	53,844,983 (48,252,139) 9,017,833 848,765 15,459,442

The accompanying notes form part of these financial statements.

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The Food Revolution Group Limited

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2021

Note CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Finance costs Net cash (used in) provided by operating activities 16 CASH FLOWS FROM INVESTING ACTIVITIES Payment for intangible assets Payment for plant and equipment Net cash (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings, net of transaction costs Repayment of borrowings Proceeds from issuance of shares, net of transaction costs Payment of lease liabilities Net cash provided by financing activities Net increase (decrease) in cash held Cash and cash equivalents at beginning of financial year Cash and cash equivalents at end of financial year	Consolidated Group 2021 2020 $ $ 32,404,617 37,572,831 (34,015,294) (38,878,336) 1,266 10,422 (546,895) (714,814)
	(2,156,306) (2,009,897)
	(611,068) (1,600,765) (625,231) (1,045,623)
	(1,236,299) (2,646,388)
	15,147,603 26,606,575 (16,425,918) (26,594,246) 7,042,908 5,400,000 (898,561) (864,410)
	4,866,032 4,547,919
	1,473,427 (108,366) 2,937,212 3,045,578
	4,410,639 2,937,212

The accompanying notes form part of these financial statements.

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The Food Revolution Group Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 1: REPORTING ENTITY

These consolidated financial statements and notes represent those of The Food Revolution Group Limited and Controlled Entities (the “consolidated group” or “group”). The separate financial statements of the parent entity, The Food Revolution Group Limited, have not been presented within this financial report as permitted by the Corporations Act 2001.

NOTE 2: STATEMENT OF COMPLIANCE

These general purpose financial statements have been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board and International Financial Reporting Standards as issued by the International Accounting Standards Board. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards.

Basis of preparation

Except for cash flow information, the financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

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The Food Revolution Group Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 2: STATEMENT OF COMPLIANCE

Significant accounting policies

Significant accounting policies will be disclosed in the group’s annual financial report for the year ended 30 June 2021.

Segment reporting

The group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (Chief Operating Decision Makers) in assessing performance and determining the allocation of resources. The Directors have considered the requirements of AASB 8 – Operating Segments, and have concluded that at this time there are no separately identifiable reportable segments, however with the completion and commissioning of the cleanroom assets in August 2020, it is expected the group would have two separate reporting segments going forward.

NOTE 3: REVENUE AND OTHER INCOME

a. Revenue Gross sales Less: volume rebates and trading terms Revenue b. Other income Research and development funding Rent income Interest income Sundry income Total other income NOTE 4: EXPENSES a. ASX and ASIC related costs b. Finance costs Interest expenses Other finance charges Interest expense on lease liabilities Total finance costs	Consolidated Group 2021 2020 $ $ 42,012,782 42,230,176 (7,986,691) (7,416,187)
	34,026,091 34,813,988
	- - 805,488 1,041,174 1,266 10,422 - 4,000
	806,754 1,055,596
	109,884 90,754 528,864 679,571 113,031 35,242 570,357 580,774
	1,212,252 1,295,587

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The Food Revolution Group Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 5: TRADE AND OTHER RECEIVABLES

NOTE 5: TRADE AND OTHER RECEIVABLES
CURRENT Trade receivables Other receivables Less: provision for impairment TOTAL TRADE AND OTHER RECEIVABLES	Consolidated Group 2021 2020 $ $ 1,375,458 3,654,650 - 1,727,209 - (3,418,341)
	1,375,458 1,963,518

NOTE 6: INVENTORIES

CURRENT Work in progress Raw materials Finished goods TOTAL INVENTORIES	Consolidated Group 2021 2020 $ $ 726,208 574,165 1,289,964 2,161,065 840,392 746,516 2,856,564 3,481,746

NOTE 7: PLANT AND EQUIPMENT

NOTE 7: PLANT AND EQUIPMENT
Plant and equipment – at cost Less: accumulated depreciation Office equipment – at cost Less: accumulated depreciation TOTAL PLANT AND EQUIPMENT	Consolidated Group 2021 2020 $ $ 21,021,343 20,628,696 (6,370,266) (4,466,852)
	14,651,077 16,161,844
	327,370 327,130 (262,255) (258,426)
	65,115 68,705
	14,716,192 16,230,549

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The Food Revolution Group Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 8: RIGHT-OF-USE ASSETS

NOTE 8: RIGHT-OF-USE ASSETS
Lease buildings Less: accumulated depreciation Leased equipment Less: accumulated depreciation TOTAL RIGHT-OF-USE ASSETS	Consolidated Group 2021 2020 $ $ 7,747,079 7,746,445 (1,636,461) (1,119,990)
	6,110,618 6,626,455
	468,879 468,879 (246,186) (150,075)
	222,693 318,804
	6,333,311 6,945,259

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The Food Revolution Group Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 9: INTANGIBLE ASSETS

NOTE 9: INTANGIBLE ASSETS
	Consolidated	Group
	2021	2020
	$	$
Intellectual property – at cost	278,059	266,101
Less: Accumulated amortisation	(198,656)	(195,195)
	79,403	70,906
Product development costs – at cost	2,361,744	2,371,781
Less: Accumulated amortisation and impairment losses	(1,755,301)	(1,409,266)
	606,443	962,515
Formation expenses	-	1,095
Brands - at costs	7,915,001	7,914,998
Less: Accumulated impairment	(2,297,732)	(2,297,732)
TOTAL INTANGIBLE ASSETS	6,303,115	6,651,782

NOTE 10: TRADE AND OTHER PAYABLES

Trade payables Other payables and accruals TOTAL TRADE AND OTHER PAYABLES NOTE 11: PROVISIONS CURRENT Employee benefits NON-CURRENT Employee benefits TOTAL PROVISIONS	Consolidated Group 2021 2020 $ $ 4,320,119 8,780,947 1,738,177 3,387,896
	6,058,296 12,168,843
	Consolidated Group 2021 2020 $ $ 524,931 338,144
	2,434 55,480
	527,365 393,624

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The Food Revolution Group Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 12: BORROWINGS

NOTE 12: BORROWINGS
CURRENT Secured loan (a) TOTAL BORROWINGS	Consolidated Group 2021 2020 $ $ 6,400,447 7,583,762
	6,400,447 7,583,762

• (a) The total drawn down amount of the facility from Greensill as at the date of this report is $6.4 million, net of transaction costs.

• The interest rate is 7.75% p.a.

• The loan is secured over all the Group’s current and future assets.

(b) Additional/Proposed NAB facility:

The company has secured a bank facility from NAB which includes:

1. a $6.5m equipment finance loan at an improved fixed 4.2% interest. This facility is to replace the existing Greensill facility. The equipment finance loan is secured over all of the company’s assets and will be over a 5-year term.

2. $1.0m invoice finance facility at 6.22% interest secured over all of the company’s assets and reviewed by annually on an ongoing basis. This facility will be used for working capital.

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The Food Revolution Group Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 13: INCOME TAX BENEFIT

Deferred tax expense Total income tax expense	Consolidated Group 2021 2020 $ $ 105,630 158,445 105,630 158,445

NOTE 14: OPTIONS RESERVE

NOTE 14: OPTIONS RESERVE
	Consolidated	Group
	2021	2020
	$	$
Options reserve	848,765	550,665

The options reserve records items recognised as expenses on valuation of employee share options or options issued as share based payments.

NOTE 15: REVALUATION RESERVE

NOTE 15: REVALUATION RESERVE
	Consolidated	Group
	2021	2020
	$	$
Revaluation of plant and equipment	9,017,833	8,912,203

The revaluation surplus records revaluations of non-current assets. Under certain circumstances dividends can be declared from this surplus.

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The Food Revolution Group Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 16: CASH FLOW INFORMATION

Reconciliation of Cash Flow from Operations with Loss after Income Tax Loss after income tax Depreciation, amortisation and write-offs Gain on disposal of plant and equipment Reversal (impairment) of financial assets Impairment of non-financial assets Share-based payments Finance Costs Changes in operating assets and liabilities: - Trade and other receivables - Trade and other payables - Inventories - Other assets - Provisions - Deferred tax assets and liabilities

Consolidated Group 2021 2020 $ $ (2,166,780) (9,613,161) 2,723,238 2,699,289 - - (788,606) (268,943) 753,822 734,513 298,100 677,450 665,357 580,774 587,809 1,713,669 (5,089,621) 2,227,178 625,182 (866,225) (4,179) (41,631) 133,742 (11,257) 105,630 158,447 (2,156,306) (2,009,897)

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The Food Revolution Group Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 17: CONTROLLED ENTITIES

OTE 17: CONTROLLED ENTITIES
		Percentage	Owned (%)
	Country of Incorporation	2021	2020
Parent Entity:
The Food Revolution Group Limited	Australia
Subsidiaries of The Food Revolution Group Limited:
LangTech International Pty Ltd	Australia	100	100
LangTech Citrus Pty Ltd	Australia	100	100
LangTech Bottling Pty Ltd	Australia	100	100
Thirsty Brothers Pty Ltd	Australia	100	100
New Age Beverages Pty Ltd	Australia	100	100
Allure Australia Pty Ltd	Australia	100	100

NOTE 18: CONTINGENT ASSETS AND LIABILITIES

There are no other contingent assets and liabilities at balance date.

NOTE 19: COMPANY DETAILS

The registered office and principal place of business of the company is: 20 Heaths Court

Mill Park VIC 3082

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The Food Revolution Group Limited

DIRECTORS’ COMPLIANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2021

1. This Appendix 4E has been prepared in accordance with the recognition and measurement requirements of the Australian Accounting Standards, Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

2. This Appendix 4E uses the same accounting policies which will be adopted in the full financial report.

3. This Appendix 4E is based on financial statements which are in the process of being audited and is not likely to be subject to audit dispute or qualification.

4. In the directors’ opinion, there are reasonable grounds to believe the group will be able to pay its debts as and when they become due and payable.

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Norman Li Dated: 30 August 2021

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