1
Annual
Report
31 March 2021
9 Spokes International Limited and
subsidiary companies
New Zealand company number 3538758
(ARBN 610 518 075)
9 Spokes International LimitedNotes to the Consolidated Financial Statements 9 Spokes International Limited
Table of contents
01
02
03
04
Chairman’s report
Chief Executive’s report
Directors’ report
Consolidated financial statements
p. 15
p. 20
p. 21
p. 22
p. 23
p. 24
Independent Auditor’s Report
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
05
Governance and disclosures
p. 60
p. 65
p. 72
New Zealand Statutory Information
Additional Information for ASX Listed Companies
Company Directory
3
01
Chairman’s
report
9 Spokes International LimitedNotes to the Consolidated Financial Statements 9 Spokes International Limited
Chairman’s report
4
Chairman’s report
2021 in Review
Dear Shareholders,
The 2020/21 financial year was like no other, for our company and for most people around the
world. I must acknowledge upfront the enormous contribution made by our employees for
their flexibility and commitment while working under the strains brought about by COVID-19,
particularly our people in the United Kingdom and North America who have endured weeks —
if not months — of home isolation.
We are extremely grateful too for the support received from shareholders and from the
Government of New Zealand, which has enabled us to continue operating through tough
times. We have maintained a very strong control of costs and ensured that funds were
focused on technology development so that we are ready for the opportunities in a post-
pandemic world.
Our operations for the ‘new normal’ are still evolving and we remain flexible in our day-to-
day management. We have adapted how we operate. Where travel has ceased, we have
extended how we use digital platforms such as Microsoft Teams – for both internal and
external collaboration. We have also rationalized our office accommodation in London and
Auckland to reflect the shift to remote working.
COVID-19 brought about a high level of uncertainty for the financial services sector. We
observed financial institutions (“FIs”) and providers shift their focus to core operations and,
particularly in the United States, the administration of government-backed loan schemes.
While the focus remained on supporting customers through COVID-19, banks we spoke with
were often hesitant to divert attention away from what they deemed essential recovery
and this meant some delay in bringing forward new platforms and innovations. COVID-19
made it difficult to make the connections, have the conversations, and get airtime with FIs
to demonstrate how our product offering can benefit them and their business customers,
which undoubtedly has impacted our FY21 results. Nevertheless, we signed an extremely
important reseller agreement with Visa USA Inc, the world’s biggest FI.
Now, the new normal in the business sector sees customers’ expectations rising for
efficient, online, personalized banking experiences and so the appetite for data-insight
driven services is stronger than ever. As confidence builds, FIs are beginning to re-engage
with technology companies to provide solutions.
The 9Spokes team was extremely busy over the year, refining our technology and products
to enhance how we collect, connect, and interpret business and financial data. We have
built robust data models which can help to solve the challenges faced by FIs and businesses
alike. And in turn, we find that FIs are becoming much more receptive to products based on
9 Spokes International Limited
Chairman’s report
5
‘permissioned’ open data platforms. New opportunities are arising, and we have taken
steps to grasp these by deploying additional business development resources in Europe and
North America.
Later this week we will release a Market Update, which will provide a view of the strategy that
we have taken, the market that we are playing in, and the products we are developing. It is
clear from the day-to-day feedback from the most significant FIs around the world that the
9Spokes proposition continues to be highly relevant and attractive to them in meeting the
needs of their business customers.
During the year we bade farewell to Co-Founder and former CEO Mark Estall as he resigned
from his board position. Having spent the best part of ten years on the journey, Mark felt it
was time to pursue other activities. We thank him for his contribution and wish him well for
the future.
Finally, on behalf of the Board, I would like to thank shareholders and every member of the
9Spokes family for your continued support and commitment.
Approved for and on behalf of the Board on 31 May 2021.
Paul Reynolds
Chairman
6
02
Chief Executive’s
report
9 Spokes International LimitedNotes to the Consolidated Financial Statements 9 Spokes International Limited
Chief Executive’s report
7
Chief Executive’s report
The financial year ended 31 March 2021 has been a year of uncertainty and change. More
recently, the financial sector has entered a phase of cautious optimism.
The impact of COVID-19 has made business planning difficult at best. Our position has been
to operate in a fiscally conservative fashion maintaining our current cost structure, while
working to improve and refine our proposition and operating cadence.
Although COVID-19 has made it difficult to meet our targets, we have had a number of
successes during the year:
• Entered a five-year global strategic partnership with Visa USA Inc.
• Entered distribution agreement with Linear Financial Technologies (formerly
Fundation Group LLC).
• Re-signed our contract with BNZ for a further two years.
• Signed a Framework Services Agreement with Virgin Money UK.
• Certified by the UK’s Financial Conduct Authority, enabling 9Spokes to
support open banking in the UK.
• Delivered our V2 platform, enhancing our technical capability.
• Completed a NZ$10.8 million capital raise.
However, these achievements don’t tell the story of the underlying work that has continued
within the business to develop our platform capability, and move to a position where we can
operate at scale.
Since signing our agreement with Visa USA Inc in July 2020, significant effort has been
applied to building pipeline and operational processes so we can meet the demands of their
sales teams. In addition, the first funds have been received from Visa to assist in developing
the platform and creating added capability.
Financial performance
2021
NZ$ million
2020
NZ$ million
Variance
NZ$ million
Variance
%
Total revenue
Total expenses
Net finance expense
Net loss before income tax
6.6
(11.6)
(0.1)
(5.1)
6.9
(11.2)
(0.6)
(4.9)
(0.3)
(0.4)
0.4
(0.2)
-4%
4%
-74%
5%
9 Spokes International Limited
Chief Executive’s report
8
Revenue
Total income for the year was $6.6 million (2020: $6.9 million). Our reported revenues
comprise of implementation fees, annual platform license fees, development fees, and
other revenue. Implementation fees are invoiced and receipted at the time of deployment
and are then recognised over the initial term of a bank partner’s contract. For the year ended
31 March 2021, recognised implementation revenue was $1.0 million (2020: $1.6 million);
deferred implementation fee revenue was $1.5 million (2020: $2.5 million). Platform access
revenue for the year was $4.2 million (2020: $4.0 million).
Strengthening of the NZD has impacted the revenue recognised during the year ended 31
March 2021. To reduce the flow on effects of this on the cash position, we have utilised the
natural hedge available within the Group by making foreign currency payments from cash
receipts in the corresponding currency where possible.
The Group generated revenue of $0.5 million (2020: $0.2 million) from additional services
provided to existing bank partners and development revenue. Grant income received of $0.7
million (2020 $0.9 million) came mainly from Callaghan Innovation, a Crown entity of New
Zealand, for research and development expenditure.
Expenditure
Total expenditure for the year ended 31 March 2021 was $11.6 million (2020: $11.1 million).
Baseline expenditure has remained unchanged. The increase in expenditure is a result of
foreign currency revaluations. Cost management and control continue to be a key objective
with items such as rent reviewed and adjusted to reflect the post-COVID-19 working world.
Cash flow
Annual net cash outflows from operations were $5.2 million (2020: $2.6 million). The Group
had a 33% decrease in receipts from banking partners and government grants. Payments
to employees and suppliers reduced by $381,000 year-on-year. This was largely due to the
strengthening NZD. The decrease in receipts from banking partners was chiefly due to no
implementation fees being received in the year ended 31 March 2021. Grant income was
down due to a reduction in the claims made under the Callaghan Innovation grant due to
a temporary shift in focus from research and development to refinement of our current
offerings and new app integrations.
The cash flow from financing activities includes the successful capital raise completed in
September and October, which resulted in net cash received of $9.9 million.
Cash at bank as at 31 March 2021 was $8.8 million (2020: $4.7 million).
9 Spokes International Limited
Chief Executive’s report
9
Quarterly operating cash flow – NZ$ millions
Q1
FY21
Q2
FY21
Q3
FY21
Q4
FY21
3
2
1
0
(1)
(2)
(3)
(4)
Operating receipts
Operating net cash burn
Operating expediture
Platform development
Our continued investment in R&D is focused on enhancing our data platforms and building
great apps for business customers and banking partners. Part of this is improving the
business user experience and meeting the core banking needs of our Financial Institutions
(“FI”) partners.
There is a strong correlation between banking digitization and improved customer
acquisition, reduced churn, and higher average deposit base.
Our V2 platform improvements have had a positive impact on our ability to expand our user
base and open up new opportunities for the platform. In the last year we released:
• Banker Access: ‘Banker Access’ was launched as a new FI product providing bank
relationship managers with direct access to permissioned client data.
• Auto-provisioning: We released an auto-provisioning tool to provide a seamless
integration between bank customer records and 9Spokes.
• Visa data integration: Integration with the Visa Network was completed to provide card
spend information for Visa card customers in participating banks.
• Progressive Web App: 9Spokes completed and launched our PWA built on the React
framework and is now available across our platform. Now that we have a PWA
framework, we are progressively working to integrate a native app/PWA framework to
expand capability.
• Multi boards: Introduced multiple boards within Track enabling users to set up
personalized boards by business function or preference. This is part of a bigger
initiative extending the Track use case, where different departments can see data
relevant to their role.
9 Spokes International Limited
Chief Executive’s report
10
• Revenue Forecasting: Using the data on the platform and machine learning, we have
launched a revenue forecasting feature predicting the customers revenue in the
coming months.
• New Data Source: Extended the data connections available with fourteen new
connections across accounting, expense management, HR and payroll, and
company information.
Business outlook
The need for business data is rapidly evolving, accelerated by the disruption caused by
COVID-19. Businesses and organisations are hungry for data-insight driven solutions that
can accommodate new ways of working. As this market evolves, and the pace of challenger
fintechs entering the financial services market quickens, FIs are increasingly receptive to
conversations regarding our open data platform and the benefits this can provide in meeting
changed expectation.
We have continued to evolve our priorities and entered FY22 with distinct areas of focus.
They are:
Partner: Our partnerships with apps, businesses, and service providers make it easy for
businesses to connect their data to the apps and services they want to consume using
our open data platform. We will continue to form partnerships to support our open data
platform and to provide usable insights to businesses through our own apps — delivered
directly or through our FI partners.
Grow: We are a global business with a regional focus. With our six key hubs and global
distribution partners — we are poised for growth.
9 Spokes International Limited
Chief Executive’s report
11
Innovate: To support businesses, we will continue to focus on bringing permissioned data
into our platform, transforming that data into useable information, and providing depth of
insight to turn that information into knowledge. The roadmap for our own apps is focused
on continuing to deliver value to business users, their FIs and our partners.
Perform: A strong focus on fiscal management and bottom-line growth drives us towards
breakeven and pursuing investments that meet ROI and NPS criteria.
While our strategic pillars act as guiding principles as to how we operate our business, our
focus is how we define our market proposition aligned with the entrance of competitors
and emerging market trends. A Market Update will be released later this week, providing a
detailed view of our vision to help businesses build data-driven solutions. It looks at how
we are achieving this through a robust open data platform and our own apps and services
that consume and transform data from our platform into useable and valuable insights to
support businesses.
The executive team and Board believe that we have the technical and leadership structures
required to execute on market opportunities. We stand committed to delivering a leading-
edge technology platform, powered by data, and fused with flexible delivery models to
provide multiple use cases. Together we look forward to this financial year — and hopefully
the opportunity to leave our respective bubbles.
Adrian Grant
Chief Executive, Co-Founder
12
03
Directors’
report
9 Spokes International LimitedNotes to the Consolidated Financial Statements 9 Spokes International Limited
Directors’ report
13
Directors’ report
The Board of Directors is pleased to present the financial statements for 9 Spokes
International Limited for the year ended 31 March 2021.
The financial statements presented are signed for and on behalf of the Board and were
authorised for issue on 31 May 2021.
Paul Reynolds
Chairman
Adrian Grant
Chief Executive, Co-Founder
14
04
Consolidated
financial
statements
9 Spokes International LimitedNotes to the Consolidated Financial Statements BDO Auckland
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF 9 SPOKES INTERNATIONAL LIMITED
Opinion
We have audited the consolidated financial statements of 9 Spokes International Limited
(“the Company”) and its subsidiaries (together, “the Group”), which comprise the
consolidated statement of financial position as at 31 March 2021, and the consolidated
statement of profit or loss and other comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, and
notes to the consolidated financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all
material respects, the consolidated financial position of the Group as at 31 March 2021,
and its consolidated financial performance and its consolidated cash flows for the year
then ended in accordance with New Zealand equivalents to International Financial
Reporting Standards (“NZ IFRS”).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (New
Zealand) (“ISAs (NZ)”). Our responsibilities under those standards are further described in
the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
section of our report. We are independent of the Group in accordance with Professional
and Ethical Standard 1 International Code of Ethics for Assurance Practitioners (including
International Independence Standards) (New Zealand) issued by the New Zealand Auditing
and Assurance Standards Board, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Other than in our capacity as auditor we have no relationship with, or interests in, the
Company or any of its subsidiaries.
Material Uncertainty Related to Going Concern
We draw attention to Note 2c to the consolidated financial statements, which indicates
that the Group incurred a net loss of $5.1 million and net cash outflows from operating
activities of $5.2 million during the year ended 31 March 2021. As stated in Note 2c, these
events or conditions, along with other matters as set forth in Note 2c, indicate that a
material uncertainty exists that may cast significant doubt on the Group’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
15
BDO Auckland
Other Matter
The reissued financial statements of 9 Spokes International Limited for the year ended 31
March 2020 were audited by another auditor who expressed an unmodified opinion, with
an emphasis of matter on the material uncertainty related to going concern, on those
statements on 15 July 2020.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements of the current period.
These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. In addition to the matter described in the Material
Uncertainty Related to Going Concern section, we have determined the matter described
below to be the key audit matter to be communicated in our report.
Revenue from contracts with customers
Key Audit Matter
The Group receives implementation fees and platform access fees in relation to the
platforms it provides to its enterprise customers. Management has judged that these two
forms of fees represent a single performance obligation, with the fees aggregated and
recognised over the service delivery period on a straight-line basis.
In the current financial year, the Group has entered into contracts with customers for
development fees. These relate to services provided in relation to the development of
additional features, tiles or other items requested by the customer. Management has
judged that there are distinct development performance obligations in respect of these
services. Additionally, management has determined that the revenue from development
fees is recognised at a point in time on completion of the development work and the
functionality being made available to the customer.
Given the significance of the balances, the judgements involved, and the complexity of NZ
IFRS 15 Revenue from Contracts with Customers, revenue from contracts with customers
was considered a key audit matter.
The Group’s revenue recognition accounting policy is disclosed in note 4 to the financial
statements.
16
BDO Auckland
How The Matter Was Addressed in Our Audit
In relation to the Group's platform access and implementation revenue:
• We obtained an understanding of key controls relating to the review and approval
of customer contracts, and the application of the standard.
• We have assessed management’s rationale for concluding the platform access and
implementation fees are one performance obligation against the requirements of
NZ IFRS 15 Revenue from Contracts with Customers.
• We have reviewed management’s revenue recognition assessment for the new
platform agreements entered into during the year to the Group’s existing
accounting policy and the requirements of NZ IFRS 15 Revenue from Contracts with
Customers and the underlying customer contracts. We understood and challenged
the commercial rationale against the underlying contracts.
• We have agreed a sample of the platform access fee revenue recognised to
supporting invoices and bank receipts, ensuring revenue was recognised only from
the date when the customer gained access to the platform.
• We have reviewed the inputs into the implementation fee schedules and reconciled
the expected fee revenue amortisation from the schedule to the general ledger.
In relation to the Group's development fee revenue:
• We have reviewed management’s revenue recognition assessment for the
development fee revenue against the requirements of NZ IFRS 15 Revenue from
Contracts with Customers and the underlying customer contracts. We understood
and challenged the commercial rationale against the underlying contracts.
• We have agreed the development fee revenue to the completed Works Statements
and the amounts received to bank statements.
• We have reviewed the disclosures to the financial statements, including revenue
recognition accounting policy and revenue disaggregation.
17
BDO Auckland
Other Information
The directors are responsible for the other information. The other information comprises
the Appendix 4E Report and Annual Report (which we obtained prior to the date of this
auditor’s report), but does not include the consolidated financial statements and our
auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information
and we do not and will not express any form of audit opinion or assurance conclusion
thereon.
In connection with our audit of the consolidated financial statements, our responsibility is
to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the consolidated financial statements 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.
Directors’ Responsibilities for the Consolidated Financial Statements
The directors are responsible on behalf of the Group for the preparation and fair
presentation of the consolidated financial statements in accordance with NZ IFRS, and for
such internal control as the directors determine is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due
to fraud or error.
In preparing the consolidated financial statements, the directors are responsible on behalf
of the Group for assessing the Group’s ability 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 have no realistic alternative but to do so.
18
BDO Auckland
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated
financial statements as a whole are 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 ISAs (NZ) 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 decisions of users
taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the financial statements is
located at the External Reporting Board’s website at:
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/.
This description forms part of our auditor’s report.
Who we Report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has
been undertaken so that we might state those matters which we are required to state to
them in an auditor’s report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than the Company and the
Company’s shareholders, as a body, for our audit work, for this report or for the opinions
we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is
Chris Neves.
BDO Auckland
Auckland
New Zealand
31 May 2021
19
9 Spokes International Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 March 2021
20
Income
Operating revenue
Other operating income
Total income
Expenses
Operating expenses
Research and development expenses
Sales, marketing and administration expenses
Total expenses
Finance income and expense
Finance income
Finance expense
Notes
2021
$’000
2020
$’000
4a
4b
5a
5b
5c
8
8
5,728
5,882
870
977
6,598
6,859
(1,960)
(1,181)
(3,123)
(4,259)
(6,473)
(5,720)
(11,556)
(11,160)
40
604
(177)
(1,184)
Net loss before income tax
(5,095)
(4,881)
Income tax
-
-
Net loss for the period
(5,095)
(4,881)
Other comprehensive income
Items that may be reclassified to profit or loss:
Foreign exchange translation of international subsidiaries
146
(200)
Other comprehensive income for the period
146
(200)
Total comprehensive income attributable to
shareholders
(4,949)
(5,081)
Earnings per share
Basic and diluted earnings per share
19
($0.0037)
($0.0100)
The above statement should be read in conjunction with the accompanying notes.
9 Spokes International Limited
Consolidated Statement of Changes in Equity
For the year ended 31 March 2021
21
Share
based
payments
reserve
Foreign
currency
translation
reserve
Share
capital
Accumulated
losses
Total
Notes
$’000
$’000
$’000
$’000
$’000
Balance as at 1 April
2020
Proceeds from shares
issued
Costs of capital raise
Share option expense
Total contributions by and
distributions to owners
Other comprehensive
income — foreign
currency translation
59,523
906
(343)
(57,950)
2,136
17
17
18
10,827
(960)
-
-
-
102
-
-
-
-
10,827
-
(960)
-
102
9,867
102
-
-
9,969
-
-
146
-
146
Net loss for the period
-
-
-
(5,095)
(5,095)
Total comprehensive income
for the period
-
-
146
(5,095)
(4,949)
Balance as at 31
March 2021
69,390
1,008
(197)
(63,045)
7,156
Balance as at 1 April 2019
48,984
906
(143)
(53,069)
(3,322)
Proceeds from shares issued
10,470
-
Costs of capital raise
(1,287)
-
Shares issued in settlement of
short-term loan
Total contributions by and
distributions to owners
1,356
-
10,539
-
-
-
-
-
-
10,470
-
(1,287)
-
1,356
-
10,539
Other comprehensive
income — foreign cur-
rency translation
-
-
(200)
-
(200)
Net loss for the period
-
-
-
(4,881)
(4,881)
Total comprehensive income
for the period
-
-
(200)
(4,881)
(5,081)
Balance as at 31
March 2020
59,523
906
(343)
(57,950)
2,136
The above statement should be read in conjunction with the accompanying notes.
9 Spokes International Limited
Consolidated Statement of Financial Position
As at 31 March 2021
22
Assets
Non-current assets
Property, plant and equipment
Right of use asset
Finance lease receivables
Total non-current assets
Current assets
Cash and cash equivalents
Trade and other receivables
Finance lease receivables
Contract assets
Total current assets
Total assets
Equity
Share capital
Share based payments reserve
Foreign currency translation reserve
Accumulated losses
Total equity
Non-current liabilities
Provision for make good
Lease liabilities
Contract liabilities
Total non-current liabilities
Current liabilities
Trade and other payables
Lease liabilities
Contract liabilities
Notes
13
14
14
11
12
14
4a
17
18
14
14
4a
15
14
4a
2021
$’000
98
541
468
Restated
2020
$’000
206
1,398
-
1,107
1,604
8,841
1,331
443
63
4,668
1,056
-
50
10,678
5,774
11,785
7,378
69,390
1,008
(197)
59,523
906
(343)
(63,045)
(57,950)
7,156
2,136
60
963
554
60
1,112
1,490
1,577
2,662
1,174
708
1,170
1,107
486
987
Total current liabilities
3,052
2,580
Total equity and liabilities
11,785
7,378
The above statement should be read in conjunction with the accompanying notes.
9 Spokes International Limited
Consolidated Statement of Cash Flows
For the year ended 31 March 2021
23
Notes
2021
$’000
Restated
2020
$’000
Cash flows from operating activities
Receipts from customers
Receipts from Government grants
5,104
826
7,427
1,423
Payments to employees and suppliers
(10,945)
(11,326)
Interest received
Interest on net investment in lease
Interest paid
Lease interest paid
7
9
(6)
(168)
15
-
(8)
(133)
Net cash (outflows) from operating activities
10
(5,173)
(2,602)
Cash flows from investing activities
Purchase of property, plant and equipment
Disposal of property, plant and equipment
(25)
4
Net cash (outflows) from investing activities
(21)
-
-
-
Cash flows from financing activities
Proceeds from the issue of share capital
Costs of raising capital
Repayment of short-term loan
Payment of principal portion of lease liability
17
17
10,827
(960)
-
(484)
10,470
(1,280)
(2,321)
(500)
Net cash inflows from financing activities
9,383
6,369
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Foreign exchange gain / (loss) on cash and cash equivalents
4,189
4,668
(16)
3,767
935
(34)
Cash and cash equivalents at end of the period
8,841
4,668
The above statement should be read in conjunction with the accompanying notes.
24
1. General information
9 Spokes International Limited (the “Company” or “9Spokes”) is a company registered
under the New Zealand Companies Act 1993. The Company is listed on the Australian
Securities Exchange (ASX). These financial statements of the Company and its subsidiaries
(together the “Group”) have been prepared in accordance with the ASX Listing Rules and the
requirements of the Financial Reporting Act 2013 and the Companies Act 1993.
9Spokes is a limited liability company incorporated and domiciled in New Zealand. The
registered office of the Company is Level 5, AECOM House, 8 Mahuhu Crescent, Auckland
1010, New Zealand.
9Spokes is an open data platform that aggregates meaningful data across a business, its
apps, and banks.
These audited consolidated financial statements were authorised for issue by the Board of
Directors on 31 May 2021.
2. Summary of Significant Accounting Policies
These are the consolidated financial statements for the Group for the year ended 31
March 2021.
The principal accounting policies applied in the preparation of these financial statements
are set out below. These policies have been consistently applied to all the periods
presented, unless otherwise stated. For the purposes of complying with generally accepted
accounting practices in New Zealand (“NZ GAAP”) the group is a for-profit entity.
a. Basis of preparation
These financial statements have been prepared in accordance with NZ GAAP. They comply
with New Zealand equivalents to International Financial Reporting Standards (“NZ IFRS”) and
International Financial Reporting Standards (“IFRS”).
The consolidated financial statements have been prepared on the historical cost basis.
The financial statements are presented in New Zealand dollars, which is the functional
currency of the Company. All values are rounded to the nearest thousand dollars unless
otherwise stated.
b. Impact of COVID-19
Due to the COVID-19 coronavirus outbreak, management performed an operational risk
assessment and assessed the impact of COVID-19 on the Group.
Employees
9Spokes is a cloud-native company; all employees can operate remotely. Prior to lockdown,
the Group tested its capacity to work from home to ensure no technical or operational
issues presented. To date no issues have occurred, and as lockdown restrictions have eased
in many of the jurisdictions we operate, the Group has put in place policies to support and
facilitate safe return to the office.
9 Spokes International LimitedNotes to the Consolidated Financial Statements 25
Suppliers
As a cloud software provider, 9Spokes relies on other technology companies, mainly for the
provision of hosting services. Based on conversations with these companies, COVID-19 has
not significantly affected their operations, and they continue to operate as usual.
Banking partners
9Spokes has maintained continuous communication with all its banking partners
throughout this period. Earlier on, discussions were held to evaluate and confirm the Group’s
ability to meet the obligations set out in existing contract agreements. Therefore, the
impact of COVID-19 on the Group’s existing revenue is currently considered low.
In the wake of COVID-19, the Group expects that, as small businesses enter a sustained
recovery, the value of a data-driven overview of business performance will continue to
increase. 9Spokes provides this service to small businesses, and to its banking partners
seeking to support their small business customers.
International markets
9Spokes employs people in the main markets in which it operates. It currently remains
unclear when international business travel can recommence. However, off the back of the
Trans-Tasman bubble opening, the Group expects the expenditure towards events, travel
and entertainment to begin to increase throughout FY22. As more regions re-open the
Group expects to further increase the expenditure on events, travel and entertainment.
c. Going concern
The consolidated financial statements have been prepared on a going concern basis, which
assumes that the Group has the intention and ability to continue its operations for the
foreseeable future. The Group incurred a net loss of $5.1 million for the year ended 31 March
2021 and at balance date had cash at bank of $8.84 million. In addition to this, the Group had
$0.43 million held by ASB Bank Limited as a lease guarantee.
The Group’s net cash outflows from operating activities was $5.2 million during the period
(2020: $2.6 million), the higher cash outflows in FY21 were due to no implementation fees
being received. The Group continues to carefully monitor all expenditure which has resulted
in a reduction in payments to employees and suppliers of $0.4m for this period versus the
prior year. Tight controls remain in place over all cash spending; this will continue to be a
priority for the Group over the current financial year ending 31 March 2022.
Management have prepared a forecast for the period 1 May 2021 to 30 September 2022
based on contractual or highly probable revenue and current expenditure levels.
Given available cash and the current cash flow run rate, the Group has sufficient cash for the
foreseeable future period to 31 March 2022. The Group, therefore, will need to secure either
new revenue opportunities or raise additional capital to continue operations beyond the
forecast period. This has been identified as an event/condition that may cast doubt on the
Group’s ability to continue as a going concern.
9 Spokes International LimitedNotes to the Consolidated Financial Statements 26
Over the past year the Group has been able to successfully access capital from the ASX to
meet its short-term capital requirements and has raised $10.8 million from an institutional
placement of securities. The Directors also note that, although existing operations and
customer relationships were not significantly impacted by COVID-19, the Group has
experienced delays in closing some ongoing negotiations with potential customers and
partners. The Group has several revenue opportunities that it is actively progressing.
The requirement to raise additional cash beyond the forecast 10-month period indicates
a material uncertainty that may cast doubt on the Group’s ability to continue as a going
concern. Therefore, the Group may be unable to realise its assets and discharge its liabilities
in the normal course of business.
However, management and the Board believe the Group will be in a position to secure new
revenues. The Board is confident that if the need arises, the Group will be able to raise
additional capital. Therefore, they consider it appropriate to continue to adopt the going
concern basis in preparing these financial statements.
d. Use of estimates and judgements
The preparation of the financial statements in conformity with NZ IFRS requires
management to make judgements, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets, liabilities, income and expenses.
All judgements, estimates and assumptions made are believed to be reasonable based on
the most current set of circumstances available to the Group. Actual results may differ from
these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimates are revised and in
any future periods affected.
Critical accounting policies and estimates in the year are:
• the timing of revenue recognition (note 4a)
• expensing of research and development costs (note 5b)
• the non-recognition of deferred tax assets (note 9).
• the incremental borrowing rate selected for discounting lease liabilities (note 14)
At balance date the Group has no other significant estimates and assumptions that have
a significant risk of causing a material adjustment to the carrying amount of assets and
liabilities within the next financial year.
e. Changes in accounting policies
All significant accounting policies have been applied on a basis consistent with those
used in the audited financial statements of the Group for the year ended 31 March 2020.
9 Spokes International LimitedNotes to the Consolidated Financial Statements 27
Restatement of comparatives
During the process of preparing these consolidated financial statements, the Group has
made adjustments to the Consolidated Statement of Financial Position as at 31 March 2020
and the Consolidated Statement of Cash Flows for the year ended 31 March 2020. This
restatement was a reduction in cash and cash equivalents with a corresponding increase in
trade and other receivables of $425,000. This follows a reassessment of the treatment of the
bank guarantee provided as security over the leased office space located at Level 4 AECOM
House, 8 Mahuhu Crescent, Auckland CBD, Auckland. Due to the nature of this guarantee
and the fact that the Group are unable to draw on the balance secured until the lease
agreement ends in February 2023 or is renegotiated. This is not considered to be cash and
cash equivalents and has instead been reclassified as an other receivable.
The comparative information in note 7 has been reclassified to conform with current period
presentation.
f. Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the functional currencies of the Group’s
companies at exchange rates at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the reporting date are retranslated to the
functional currency at the exchange rate at that date.
The foreign currency gains or losses on monetary items is the difference between amortised
cost in the functional currency at the beginning of the year, adjusted for effective interest
and payments during the year, and the amortised cost in foreign currency translated at the
exchange rate at the end of the year. Foreign exchange gains and losses resulting from the
settlement of foreign currency transactions and from the translation at year end exchange
rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
3. Segment reporting
The Group operates as a single business operating segment, providing an open
data platform.
At an operational level, the chief operating decision makers, consisting of the Chief
Executive Officer and the Finance Manager, currently assess the Group as a whole, with
revenue reported at a geographical level based on the location of the customer. However,
as the Group is investing in regional global hubs in Europe, North America and Asia, future
reporting will include more emphasis on the regional results.
9 Spokes International LimitedNotes to the Consolidated Financial Statements Revenue was sourced from the following geographical locations:
Europe
North America
Asia Pacific
28
2021
$’000
2020
$’000
83
2,663
3,819
1,383
2,696
2,813
Total operating revenue and other income
6,598
6,859
Comprising:
Total operating revenue
Other income
5,728
5,882
870
977
The Group’s non-current assets are in New Zealand.
During the year ended 31 March 2021 the Group had four (2020: four) banking partners.
Revenue from banking partners is currently the Group’s primary source of revenue and
accounted for 82% of the Group’s revenue and other income (2020: 86%). In the year ended
31 March 2021 three of the banking partners each accounted for 11% or more of the Group’s
revenue while one had yet to go-live as at 31 March 2021.
4. Revenue
All revenues and income are stated net of goods and services tax and/or value added tax.
a. Operating revenue from contracts with customers
Implementation revenue
Platform access revenue
Development revenue
Other revenue from customers
2021
$’000
2020
$’000
977
1,646
4,245
4,011
316
-
190
225
Total operating revenue
5,728
5,882
9 Spokes International LimitedNotes to the Consolidated Financial Statements
29
Recognition of operating revenue from contracts with customers
The accounting policy and key judgements are outlined below.
Implementation fees and platform access fees
The Group receives implementation fees and platform access fees in relation to the
platforms it provides to its enterprise customers. Implementation fees are received as part
of the deployment of the 9Spokes’ platform to these customers. Platform access fees are
charged to customers throughout the term of the service.
Together, these fees form most of the Group’s revenue. While there are two forms of fees,
there is only one performance obligation, which is to provide the platform services to the
enterprise customer over the contracted period. The implementation and platform access
fees are aggregated (based on the expected total fees over the expected period of service
including the most probable outcome of variable arrangements) and then recognised as
revenue in the Consolidated Statement of Comprehensive Income on a straight-line basis
over the expected term of the service, starting when the system has been deployed.
Development fees
The Group receives development fees in relation to customized development work and
functionality within the platform it provides to its enterprise customers. These fees are
charged to customers as part of the development and delivery of the bespoke features and
form additional source of revenue for the Group.
The table on the following page provides further information on revenue recognition across
the three main revenue categories in the Group. The revenue streams detailed below
represent 97% of the Group’s total revenue for the year ended 31 March 2021 (2020: 82%).
Revenue type
Description
Key judgements
Outcome
Implementation
Revenue
Deployment
of 9Spokes’
systems.
Determining
whether the
deployment
is a distinct
performance
obligation.
The customer
could not benefit
from deployment
of the system
on its own and
separately from
the platform
access and
as such there
is no distinct
performance
obligation.
Timing of
revenue
recognition
Over time – while
cash is received
on completion of
implementation,
revenue is
recognised on
a straight-line
basis, equally
over the expected
licence period,
once the system
has been
deployed.
9 Spokes International LimitedNotes to the Consolidated Financial Statements 30
Revenue type
Description
Key judgements
Outcome
Platform Access
Revenue
The right to
access 9Spokes’
platform.
As above.
Determining
whether the
platform access
is a distinct
performance
obligation.
Timing of
revenue
recognition
Over time –
recognised
monthly, on a
straight-line
basis, recurring
over the expected
licence period.
Development
Revenue
Development
of additional
features, tiles,
or other items as
requested by the
customer.
Determining
whether the
additional
functionality
is a distinct
performance
obligation.
The customer
benefits from
the additional
functionality
from the point
of completion of
the development
work.
At a point in time
— on completion
of development
work and the
functionality
being made
available to the
customer.
NZ IFRS 15 requires the disaggregation of revenue from contracts with customers to
be presented in the financial statements to provide clear and meaningful information.
Management concluded that presentation of revenue by revenue stream is
most appropriate.
Platform access revenue for the year was $4.2 million (2020: $4.0 million). The contracted
annual recurring revenue from platform access fees for the year ending 31 March 2022 is
forecast to be $3.8 million, a decrease of $0.9 million compared to the same period last year.
This is largely due to a decrease in the USD/NZD exchange rate. The underlying USD value of
the contracts has remained unchanged, however, the strengthening NZD has resulted in a
decrease in the NZD value of the contracts.
Contract assets
During the implementation process the Group incurs costs directly related to fulfilling its
obligations in the contract and expects to recover these costs against implementation
revenue. These costs are capitalised as contract assets on the Consolidated Statement
of Financial Position and amortised on a straight-line basis over the same period that the
implementation revenues are recognised. The Group had contract assets as at 31 March
2021 of $0.06 million (2020: $0.05 million). $0.03 million of costs included in the contract
assets as at 31 March 2020 was recognised in the Consolidated Statement of Profit or Loss
for the year ended 31 March 2021.
9 Spokes International LimitedNotes to the Consolidated Financial Statements 31
Contract liabilities
Implementation and platform access fees received prior to deployment of the 9Spokes
system are recognised in the Consolidated Statement of Financial Position as contract
liabilities. The Group had contract liabilities as at 31 March 2021 of $1.7 million (2020: $2.5
million). $1.0 million of implementation revenue included in contract liabilities at 31 March
2020 was recognised in the Consolidated Statement of Profit or Loss for the year ended 31
March 2021.
b. Other operating income
Government grants
Other income
Total other operating income
Government grants
2021
$’000
707
163
870
2020
$’000
930
47
977
Grants from the Government are recognised at fair value where there is reasonable
assurance that the grant will be received, and the Group will comply with the grant
conditions. When a grant relates to an expense item, it is recognised as income over the
period necessary to match the grant on a systematic basis to the costs that it is intended to
compensate. The majority of Government grant income recognised relates to research
and development.
Other income
Other income comprises income that is not part of the Group’s normal operating activities.
5. Expenses by nature
The Group operates as a single business operating segment with costs predominately
incurred in New Zealand.
All expenses are stated net of goods and services tax and/or value added tax.
9 Spokes International LimitedNotes to the Consolidated Financial Statements
32
a. Operational expenses
Employee benefit expenses
Other operating expenses
Platform hosting and tools
Third party contractors
Notes
2021
$’000
2020
$’000
7
1,130
731
43
-
522
325
265
125
Total operating expenses
1,960
1,181
Third party contractor costs had an increased allocation to operational expenses and a
decreased allocation to research and development costs due to the nature of the work
being completed being more focused on app integrations and refining of the
product offerings.
The cost of platform hosting and tools has increased in correlation to growth in our platform.
b. Research and development expenses
Amortisation of previously capitalised contract
assets
Depreciation expense
Employee benefit expenses
Other research and development expenses
Third party contractors
Notes
2021
$’000
2020
$’000
4b
28
426
245
378
7
2,327
2,670
408
527
115
258
Total research and development expenses
3,123
4,259
Research expenditure is recognised as the expense is incurred.
Development costs that are directly attributable to the design and testing of an identifiable
product are recognised as intangible assets where they meet the following
recognition criteria:
•
it is technically feasible to complete the software product so that it will be available
for use;
• management intends to complete the software product and use or sell it;
• there is an ability to use or sell the software product;
9 Spokes International LimitedNotes to the Consolidated Financial Statements
33
•
it can be demonstrated how the software product will generate probable future
economic benefits;
• adequate technical, financial and other resources to complete the development and
to use or sell the software product are available; and
• the expenditure attributable to the software product during its development can be
reliably measured.
Identifiable costs incurred in fulfilling contracts with customers are capitalised as a contract
asset and amortised on a systematic basis over the enterprise customer’s initial licence
term. The expenditure capitalised includes payroll expenses, external contractor fees and
overhead costs that are directly attributable to the implementation activities.
c. Sales, marketing and administration expenses
Depreciation expense
Directors’ consultancy services
Directors’ fees
Remuneration of auditors
Employee benefit expenses
Foreign exchange loss / (gain)
Marketing expenses
Professional, office costs and other
administration expenses
Short term lease rental
Travel
Notes
24
24
6
7
2021
$’000
344
20
394
176
2020
$’000
317
5
272
247
3,399
3,526
327
(224)
221
175
1,398
1,000
165
160
29
402
Total sales, marketing and administration
expenses
6,473
5,720
Travel costs have reduced due to global COVID-19 restrictions. Professional, office costs
and other administration expenses increased in the current year largely as a result of the
office move.
Directors’ fees include fees paid to third parties in jurisdictions where a resident director is
required and there is no Group representative available.
9 Spokes International LimitedNotes to the Consolidated Financial Statements
6. Remuneration of auditors
Audit and review of financial statements by BDO
Audit of the annual financial statements FY21
Review of the half year financial statements
Other services performed by BDO
Callaghan Growth Grant review
Total fees paid and payable to BDO
Audit and review of financial statements by PwC
Audit of the annual financial statements FY20
Review of the half year financial statements
Other services performed by PwC
Callaghan Growth Grant review
Tax compliance and advice
Total fees paid and payable to PwC
Total fees paid and payable to auditors
34
2021
$’000
2020
$’000
88
51
8
147
23
-
-
6
29
176
-
-
-
-
102
86
12
47
247
247
On 24 August 2020 the Company notified PwC of its intention to appoint a new auditor.
Following the resignation of PwC, BDO were appointed as auditors on 28 August 2020 and
ratified by shareholders at the Annual Meeting on 25 September 2020.
The Audit and Risk Committee oversees the relationship with the Group’s auditor, BDO,
and considers BDO’s independence as part of this process. The Committee is satisfied that
BDO is currently independent of the Group and the other services have not impaired
their independence.
Audit Fees payable to PwC this year arise from additional work related to re-issued financial
statements for the year ended 31 March 2020.
9 Spokes International LimitedNotes to the Consolidated Financial Statements
35
7. Employee benefit expenses
Short-term employee benefits
Share option expense
Employer contribution to pension schemes
Notes
2021
$’000
6,508
102
246
2020
$’000
6,666
-
261
Total employee benefit expenses
6,856
6,927
Employee benefit expenses were recorded in the following
Consolidated Statement of Profit or Loss captions:
Sales, Marketing and Administration
Operating
Research and Development
3,399
3,526
1,130
731
2,327
2,670
6,856
6,927
In the prior year the allocation of employee benefits to operational expenses was reduced
as a higher portion of the time spent by operational staff was on research and development
projects. In the current year a greater amount of operational staff’s time has been spent on
completing iterative work and refining the current offerings alongside integration of new
apps. By year end the work had shifted back to have a stronger research and development
focus. The overall cost of employee benefits remained largely unchanged.
Liabilities for wages and salaries, including non-monetary benefits and annual leave
expected to be settled within 12 months of the reporting date are recognised in other
payables and are measured at the amounts expected to be paid when the liabilities
are settled.
8. Finance income and expense
Notes
2021
$’000
2020
$’000
Finance income
Fair value gain on loan conversion option
16
-
585
Interest on short term bank deposits
Interest on finance lease receivable
31
19
9
-
Total finance income
40
604
9 Spokes International LimitedNotes to the Consolidated Financial Statements
36
Notes
2021
$’000
2020
$’000
Finance expense
Finance expense on short term loan
-
1,040
Interest on lease liabilities
Finance interest
14
168
133
9
11
Total finance expense
177
1,184
9. Income and deferred tax
Income tax is represented as follows:
Current tax
Total current tax
Deferred tax expense
Origination of temporary timing differences
Tax (income)/deduction of research and development expenses
deferred
Tax losses
Deferred tax assets not recognised
Total deferred tax
Total income tax
2021
$’000
2020
$’000
-
-
165
-
(1,631)
1,466
-
-
-
-
(473)
(23)
(1,017)
1,513
-
-
The tax expense for the year comprises current and deferred tax. Current tax and deferred
tax are recognised in the Profit or Loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity.
The current tax charge is calculated based on the tax laws enacted or subsequently
enacted at balance date.
Deferred tax is recognised on temporary differences between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. Deferred tax is determined
using tax rates and laws that have been enacted or substantively enacted by the balance
9 Spokes International LimitedNotes to the Consolidated Financial Statements
37
date and expected to apply when the related deferred income tax asset or liability is realised
or settled. Deferred 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 tax assets are recognised for deductible temporary differences and unused tax
losses only if it is probable that future taxable amounts will be available to utilise those
temporary differences and losses.
Tax losses
The Company has tax losses available to carry forward at 31 March 2021 of $35.8 million,
subject to shareholder continuity being maintained.
Tax losses available to subsidiary companies of the Group, as disclosed in note 21, are $5.2
million (2020: $4.9 million) of which $0.7 million will expire on the following future dates:
Tax year
Date of expiry
$’000
31 March 2018
31 March 2019
31 March 2020
31 March 2021
31 March 2038
31 March 2039
31 March 2040
31 March 2041
112
188
170
199
669
The deferred tax assets have not been recognised as it is uncertain whether the Group will
maintain shareholder continuity or when it will generate sufficient taxable profits to utilise
these tax losses. There are no imputation credits available, as the Group is yet to generate
taxable profits in New Zealand.
Reconciliation of effective tax rate:
Loss before income tax
Prima facie taxation at 28%
Expenses not deductible for tax purposes
Temporary timing differences
Research & development expenditure deferred (net of income)
Total losses not recognised
Total tax
2021
$’000
2020
$’000
(5,095)
(4,881)
(1,427)
(39)
(165)
-
1,631
(1,367)
(146)
473
23
1,017
-
-
9 Spokes International LimitedNotes to the Consolidated Financial Statements
38
10. Reconciliation of reported loss after income tax with cash flows from
operating activities
2021
$’000
2020
$’000
Net loss for the period
(5,095)
(4,881)
Non-cash items:
Depreciation expense
Share option expense
Foreign exchange differences
Loss on sale of assets
Finance expense on short-term loan
Fair value gain on loan conversion option
Foreign exchange loss on monetary assets
Changes in working capital:
(Increase)/Decrease in trade and other receivables
(Increase)/Decrease in contract assets
Increase/(decrease) in trade and other payables
(Decrease) / increase in contract liabilities
589
102
164
57
-
-
(16)
(275)
(13)
67
(753)
695
-
-
-
1,040
(585)
32
259
425
(578)
991
Net cash flow from operating activities
(5,173)
(2,602)
11. Cash and bank
Cash comprises cash balances and deposits held at call with banks. Cash equivalents are
short-term highly liquid investments that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value.
Cash at bank
Term deposits with maturities of three months or less
2021
$’000
4,841
4,000
Restated
2020
$’000
1,668
3,000
Total cash and bank
8,841
4,668
For details of the restatement, please refer to note 2e.
9 Spokes International LimitedNotes to the Consolidated Financial Statements
12. Trade and other receivables
Trade receivables
Prepayments
Accrued income
Lease guarantee
Other receivables
39
2021
$’000
377
188
222
432
112
Restated
2020
$’000
166
100
315
425
50
Total trade and other receivables
1,331
1,056
As at 31 March 2021, the Company continues to provide a guarantee of $0.43 million (2020:
$0.43 million) for the operating lease on its Auckland premises, held by ASB Bank Limited.
Trade and other receivables are initially recognised at the fair value of the amounts to be
received, plus transaction costs (if any). They are subsequently measured at amortised
cost (using the effective interest method) less expected credit losses. The Group applies
the NZ IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables and contract assets.
Customer invoices are paid on terms ranging from 20 to 30 days.
For details of the restatement, please refer to note 2e.
13. Property, plant and equipment
2021
2021
2021
2020
2020
2020
Office and
computer
equipment
Leasehold
improve-
ments
Office and
computer
equipment
Leasehold
improve-
ments
Total
Total
$’000
$’000
$’000
$’000
$’000
$’000
Carrying amount
at start of year
Additions
Disposals
Depreciation
expense
Depreciation on
disposals
Carrying amount
at end of year
104
29
(17)
102
206
157
189
346
-
-
29
(17)
-
(27)
-
-
-
(27)
(28)
(92)
(120)
(52)
(87)
(139)
-
88
-
10
-
98
26
-
26
104
102
206
9 Spokes International LimitedNotes to the Consolidated Financial Statements
40
2021
2021
2021
2020
2020
2020
Office and
computer
equipment
Leasehold
improve-
ments
Office and
computer
equipment
Leasehold
improve-
ments
Total
Total
$’000
$’000
$’000
$’000
$’000
$’000
417
383
800
405
383
788
(329)
(373)
(702)
(301)
(281)
(582)
88
10
98
104
102
206
At cost at the
end of year
Accumulated
depreciation at
the end of year
Carrying amount
at end of year
Recognition and measurement
Property, plant and equipment are stated at historical cost less accumulated depreciation
and accumulated impairment losses.
Significant leasehold improvements undertaken over the term of the lease contract, that
are expected to have significant economic benefit for the Group, are recognised at cost
and include decommissioning or similar costs if the lease contract requires the property
to be returned at the end of the lease in its original state. Gains and losses on disposals
are determined by comparing proceeds with carrying amounts and are recognised in the
Consolidated Statement of Profit or Loss.
Depreciation
Depreciation is recognised in profit or loss on a diminishing value basis over the estimated
useful life of each component of an item of property, plant and equipment, with the
exception of leasehold improvements which are depreciated on a straight-line basis over the
term of the lease.
The estimated useful lives for the current and comparative years of significant items of
property, plant and equipment are as follows:
Office and computer equipment
2-10 years
Leasehold improvements
Over the term of the lease
Depreciation methods, useful lives and residual values are reviewed at each financial year-
end and adjusted if appropriate.
14. Right of use assets and lease liabilities
The Group has identified three contracts containing leases:
•
leased office premises in Auckland, New Zealand, 6-year term
•
leased office premises in Auckland, New Zealand, 3-year term
•
leased office premises in London, United Kingdom, 1-year term.
9 Spokes International LimitedNotes to the Consolidated Financial Statements
41
Lease terms are negotiated on an individual basis and contain a wide range of different
terms and conditions. The lease agreements do not impose any covenants, but leased
assets may not be used as security for borrowing purposes.
Lease as a lessee
Right of use assets
Leased assets are measured at cost comprising the initial measurement of lease liability
less any lease incentives received and make good provisions. The right of use asset is
subsequently depreciated using the straight-line method from the commencement date to
the earlier of the end of the useful life of the right of use asset or the end of the lease term.
Key movements during the period, relating to right of use assets are presented below:
Opening balance
Additions due to first-time adoption of NZ IFRS 16
Remeasurement during the year
Additions during the year
Derecognition of subleased asset
Depreciation expense
2021
$’000
2020
$’000
1,398
-
-
-
556
(945)
1,043
911
-
-
(468)
(556)
Closing balance
541
1,398
Remeasurement
During the year ended 31 March 2020 the Group adjusted its estimate related to the term
of the lease, which was a direct result of not exercising an early termination clause with
regards to the Auckland lease premises. As this was a change in accounting estimate, it was
applied prospectively and resulted in an increase of the lease liability of $0.9 million with
corresponding increase in the cost of the right of use asset.
Lease liabilities
Under NZ IFRS 16: Leases, the Group is required to recognise lease liabilities for contracts
identified as containing a lease, except when the lease is for 12 months or less or the
underlying asset is of low value. Payments associated with short-term leases have been
recognised on a straight-line basis as an expense in the Consolidated Statement of Profit or
Loss. The expense relating to short-term leases for the year ended 31 March 2021 was $0.2
million (2020: $0.2 million).
9 Spokes International LimitedNotes to the Consolidated Financial Statements
42
Lease liabilities are initially measured at the present value of the remaining lease payments,
which include:
• fixed payments less any incentives receivable, and
• payments of penalties for terminating the lease, if the lease term reflects the lessee
exercising that option.
In assessing the discount rate, the Group first considered whether there was an inherent
rate present in the lease. As there was no inherent rate, the lease payments are discounted
using the Group’s incremental borrowing rate, being the rate that the lessee would have to
pay to borrow the funds necessary to obtain an asset of similar value in a similar economic
environment with similar terms and conditions. For recognition of the lease liabilities in
February 2021 an incremental borrowing rate of 5.5% has been applied. Subsequently the
carrying value of the liability is adjusted to reflect interest and lease payments made.
The maturity of the lease liabilities is as follows:
Less than one year
One to five years
2021
$’000
2020
$’000
708
486
963
1,112
Total lease liabilities
1,671
1,598
Key movements during the period, relating to lease liability are presented below:
Opening balance as at 1 April
Recognition due to first-time adoption of NZ IFRS 16
Remeasurement during the year
Additional leases entered into during the year
Interest expense
Repayments
2021
$’000
1,598
-
-
556
168
(651)
2020
$’000
-
1,187
911
-
133
(633)
Closing balance as at 31 March
1,671
1,598
9 Spokes International LimitedNotes to the Consolidated Financial Statements
43
Rent concessions
Due to COVID-19 lockdowns in New Zealand the landlord of the Auckland lease provided
rent relief in the form of a 30% rent reduction for the period 25 March 2020 to 13 May 2020.
The Group has elected to apply the practical expedient introduced by the amendments
to NZ IFRS 16 to all rent concessions that satisfy the criteria. Substantially all of the
rent concessions entered into during the year satisfy the criteria to apply the practical
expedient. The application of the practical expedient has resulted in the reduction of total
lease liabilities of $35,350. The effect of this reduction has been recorded in profit or loss in
the period in which the event or condition that triggers those payments occurred, being the
year ended March 2021.
Make good provision
The Company is required, at the expiry of the lease, to make good on the condition of its
leased premises. The provision is based on estimates obtained from third-parties for the
expected work required.
Finance lease as a lessor
Current
Non-current
2021
$’000
443
468
2020
$’000
-
-
Total lease receivable
911
-
During the year, the Group has sub-leased buildings that have been presented as part of
a right of use asset. When assets are leased out customers under a finance lease, the
present value of the minimum lease payment is recognised as a receivable. Lease income is
recognised over the term of the lease using the net investment method, which reflects an
actuarial periodic rate of return.
An assets’ carrying amount is written down immediately to its recoverable amount if the
asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses
on disposals are determined by comparing proceeds with the carrying amount. These are
included in the profit and loss component of the Consolidated Statement of Profit or Loss.
9 Spokes International LimitedNotes to the Consolidated Financial Statements
44
15. Trade and other payables
Trade payables
Other payables and accruals
Other deferred income
2021
$’000
254
872
48
2020
$’000
136
728
243
Total trade and other payables
1,174
1,107
The Group recognises trade and other payables initially at fair value and subsequently
measured at amortised cost using the effective interest method. Trade and other payables
are unsecured, non-interest bearing and are usually paid within 45 days of recognition.
Included in trade payables and other payables and accruals are amounts owing to related
parties (refer to note 23).
16. Short-term loan and fair value of conversion option
Items presented with A$ represent Australian dollars.
During the year ended 31 March 2019, the Company entered into a short-term funding facility
to provide the Company with working capital to allow time to conclude a capital raise.
The terms of the facility included a conversion option, which entitled the lenders to
convert any portion of the loan to ordinary shares, which under certain conditions could be
exercised at a discount to the current market price of the shares. As a result, at 31 March
2019, the loan was accounted for as two separate components, pure debt portion and the
loan conversion option.
Settlement of the short-term loan
Following completion of an entitlement offer and placement on 24 May 2019 (note 17), the
loan including fees and interest was settled on that date, discharged by the payment of $2.3
million and the issue of 80.1 million shares at the offer price of A$0.016 per share. This repaid
the outstanding amount and the lenders security was released.
Finance expense of the debt portion
The finance expense is made up of interest plus completion and work fees over the life of
the loan. The finance expense is accounted for using the amortised cost basis method and
recognised in the Consolidated Statement of Profit or Loss as finance expense on short-
term loan.
9 Spokes International LimitedNotes to the Consolidated Financial Statements
45
Derivative conversion option
On the date of settlement of the loan, the lenders opted to exercise a portion of the loan at
the offer price of A$0.016 per share. There was no discount on the issue of these shares, so
the conversion option was not exercised. As a result, the fair value of the conversion option
was revalued to $nil and recognised in the Consolidated Statement of Profit or Loss as fair
value gain on loan conversion option.
17. Share capital
Items presented with A$ represent Australian dollars.
On 28 August 2020, the Company announced a successful capital raise of A$10.0 million via
placement to sophisticated and institutional investors through the issue of 277.8 million new
ordinary shares at an issue price of A$0.036 per share.
The placement was completed in two tranches:
• Tranche 1, completed on 4 September 2020 and consisting of 166.0 million shares
issued within the Company’s placement capacity,
• Tranche 2, completed on 1 October 2020 and consisting of a further 111.8 million
shares at additional capacity, following Shareholder approval at the Annual Meeting of
Shareholders held on 25th September 2020.
Authorised,
issued and
fully paid
shares
Share capital
Notes
$’000
000’s
Balance at 1 April 2020
59,523
1,215,560
Shares issued for cash at A$0.036 per share ($0.039)
10,827
277,778
Costs of capital raise
(960)
-
Balance at 31 March 2021
69,390
1,493,338
Balance as at 1 April 2019
48,984
495,271
Shares issued for cash at A$0.016 per share ($0.017)
6,310
373,548
Shares issued for cash at A$0.015 per share ($0.016)
4,160
266,667
Shares issued as partial settlement of short term
loan at A$0.016 ($0.017)
Costs of capital raise
16
1,356
80,074
(1,287)
-
Balance at 31 March 2020
59,523
1,215,560
9 Spokes International LimitedNotes to the Consolidated Financial Statements
46
The Company holds one class of ordinary shares, the shares have no par value. There are
no restrictions on the distribution of dividends, nor the repayment of capital. All shares
have equal dividend and voting rights and upon winding up rank equally with regards to the
Company’s residual assets.
18. Share-based payments
Items presented with A$ represent Australian dollars.
Share-based payments reserve at the beginning of the year
Note
Share option expense
CEO Options (October 2020)
Employee Options (March 2021)
Total share option expense
7
Share-based payments reserve at the end of the year
2021
$’000
906
35
67
102
1,008
2020
$’000
906
-
-
0
906
The fair value of share options issued as part of the share-based payment arrangement is
measured at grant date and expensed over the vesting period. At the end of each reporting
period, the Company revises its estimates of the number of options that are expected to
vest. Revisions to original estimates, if any, are recognised in the Consolidated Statement of
Profit or Loss, with a corresponding adjustment to equity.
a) Pre-IPO employee share options (December 2015)
In December 2015, the Board approved an employee share option scheme to issue options to
selected employees. One-third of the options granted to an employee vest to the employee
on each of the first three anniversaries of continuous employment with the Group. The
vested options can be exercised at any time up to 21 December 2025. Each option entitles
the holder on payment of the exercise price ($0.16) to one ordinary share in the capital of
the Group. If employment ceases, the options automatically terminate unless the Board
determines otherwise. Payment must be made in full for all options exercised on the dates
they are exercised. No further options were issued.
The fair value of each option was calculated to be $0.08 on the grant date. This was
expensed in previous years, fully expensed by December 2018.
The weighted average contractual life of the options at 31 March 2021 is 56 months
(2020: 68 months).
At 31 March 2021, there were 1,476,968 options on issue, all of which have vested.
9 Spokes International LimitedNotes to the Consolidated Financial Statements
47
b) IPO advisors share options (June 2016)
In June 2016, the Company issued additional options to its advisors over an aggregate
8,750,000 shares, at an exercise price of A$0.20 per share treated as share-based payments.
The options were not exercised by 30 June 2019 so under the terms of issue, they expired.
c) Current Employee share options plan
Effective from 10 May 2016, the Company adopted a new employee share option plan (ESOP)
which replaces the Pre IPO employee share option scheme. The ESOP has no impact on the
Pre IPO employee share options.
Key provisions of the ESOP include:
a) the options are to vest in accordance with the employee’s letter of offer;
b) the expiry date of the options will be as set out in the employee’s letter of offer;
and
c) should the relevant employee cease to be employed by the Company, all options
not yet vested will be cancelled and, all options vested must be exercised within
three months following the relevant employee’s leaving date, unless the Board
determines otherwise.
(i) Employee share options (August 2017)
On the 6 June 2017 the Board approved the offer of options under the ESOP to employees on
the following terms:
• an exercise price of A$0.20 per share;
• the options vest in full on the date of issue; and
• the expiry date of the options will be five years after date of issue.
The weighted average of the fair value of each option is A$0.037 under the Black Scholes
valuation model resulting in a charge to the Company of A$101,478 ($109,980) at the time
they were granted. The significant inputs into the model were a share price of A$0.12 at the
grant date, exercise price A$0.20, volatility of 50%, no dividend, expected option life of five
years and a risk-free interest rate of 2.17%. These options were issued in August 2017.
The weighted average contractual life of the options at 31 March 2021 is 17 months
(2020: 29 months).
At 31 March 2021, there were 1,007,035 options on issue, all of which have vested.
(ii) Non-Executive Directors (NEDs) share options (September 2017)
At the Annual Meeting of Shareholders held on 12 September 2017 the shareholders
approved the issue of options under the ESOP to the NEDs on the following terms:
• an exercise price of A$0.225 per share;
• the options vest on the price of the quoted shares reaching A$0.30 per share,
calculated on a 10-trading day volume average weighted price; and
• the expiry date of the options will be five years after the date of issue.
9 Spokes International LimitedNotes to the Consolidated Financial Statements
48
The weighted average of the fair value of each option is A$0.023 under the Black Scholes
valuation model resulting in a charge to the Company of A$40,268 ($44,383) at the time they
were granted. The significant inputs into the model were a share price of A$0.10 at the grant
date, exercise price A$0.225, volatility of 50%, no dividend, expected option life of five years
and a risk-free interest rate of 2.19%. These options were issued in September 2017.
The weighted average contractual life of the options at 31 March 2021 is 17 months
(2020: 29 months).
As at 31 March 2021, there were 1,143,413 options on issue, all of which have vested.
d) CEO share options (October 2020)
At the Annual Meeting of Shareholders held on 25 September 2020 the shareholders
approved the issue of 8,455,613 options under the ESOP to the CEO on the following terms:
• an exercise price of A$0.036 per share;
• one-third of the Director Options shall each vest on 31 March 2023, 31 March 2024 and
31 March 2025, subject to Adrian Grant remaining CEO at time of vesting; and
• the expiry date of the options will be five years after date of issue.
The fair value of each option is A$0.025 under the Black Scholes valuation model resulting
in a charge to the Company of A$211,833 ($230,728) which will be expensed over the vesting
period through to 31 March 2025. The significant inputs into the model were a share price
of A$0.032 at the grant date, exercise price A$0.036, volatility of 113%, based on daily share
price movements since the Company listed on 9 July 2016, no dividend, expected option life
of five years and a risk-free interest rate of 0.334%. These options were issued in 12
October 2020.
The weighted average contractual life of the options at 31 March 2021 is 54 months.
As at 31 March 2021, all 8,455,613 options on issue were unvested.
e) Employee share options (March 2021)
On the 1 March 2021 the Board approved the offer of 5,210,000 options under the ESOP to
employees on the following terms:
• 70% of the options (3,647,000) with an exercise price of A$0.032 per share and 30% of
the options (1,563,000) with an exercise price of A$0.05 per share;
• the options vest in three equal instalments: on issue, on 31 March 2021 and on 31
March 2022.
• 70% of each instalment will be at the exercise price of A$0.032 per share and 30% will
be at an exercise price of A$0.05 per share; and
• the expiry date of the options will be five years after date of issue.
The weighted average fair value of the options is A$0.017 under the Black Scholes valuation
model resulting in a charge to the Company of A$89,298 ($97,264) which will be expensed
over the vesting period through to 31 March 2022. The significant inputs into the model were
a share price of A$0.023 at the grant date, exercise prices of A$0.032 and A$0.05, volatility
9 Spokes International LimitedNotes to the Consolidated Financial Statements
49
of 112%, based on daily share price movements since the Company listed on 9 July 2016, no
dividend, expected option life of five years and a risk-free interest rate of 0.697%. These
options were issued in 2 March 2021.
The weighted average contractual life of the options at 21 March 2021 is 54 months.
As at 31 March 2021, there are 3,647,000 A$0.032 options on issue of which 2,431,334 have
vested and 1,563,000 A$0.05 options on issue of which 1,042,000 have vested.
Movements in the number of share options outstanding and their related weighted average
exercise prices are as follows:
Pre-IPO
em-
ployee
share
options
IPO
advisor
share
options
Dec
2015
Jan
2016
Em-
ployee
ESOPs
Aug
2017
NEDs
ESOPs
CEO
Options
Employee
Options
Employee
Options
Total
Sep
2017
Oct
2020
Mar
2021
Mar
2021
NZ$0.16
A$0.20
A$0.20 A$0.225 A$0.036 AU$0.032
AU$0.05
000’s
000’s
000’s
000’s
000’s
000’s
000’s
000’s
Weighted
average
exercise
price
$ per
option
1,477
-
-
-
-
-
1,123
1,143
-
-
3,743
0.20
-
(116)
-
-
8,456
3,647
1,563
13,666
-
-
(116)
0.04
0.22
1,477
-
1,007
1,143
8,456
3,647
1,563
17,293
0.07
1,477
-
1,007
-
-
2,431
1,042
5,957
0.10
Exercise
price
Balance
outstand-
ing at 1
April 2020
Granted
Forfeited
Balance
outstand-
ing at 31
March 2021
Balance
exercisable
at 31 March
2021
Balance
outstand-
ing at 1
April 2019
1,533
8,750
1,352
1,143
Forfeited
(56)
-
(229)
Expired
-
(8,750)
-
-
-
-
-
-
-
-
12,778
0.21
-
-
-
-
(285)
(8,750)
0.21
0.21
Balance
outstand-
ing at 31
March 2020
Balance
exercisable
at 31 March
2020
1,477
-
1,123
1,143
-
-
-
3,743
0.20
1,477
-
1,123
-
-
-
-
2,600
0.20
9 Spokes International LimitedNotes to the Consolidated Financial Statements
50
19. Earnings per share
Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary
shareholders of the Group by the weighted average number of ordinary shares on issue
during the year.
Diluted earnings per share is determined by adjusting the profit or loss attributable to
ordinary shareholders and the weighted average number of ordinary shares on issue for
the effects of all dilutive potential ordinary shares, which comprise share options. Potential
ordinary shares are treated as dilutive when, and only when, their conversion to ordinary
shares would decrease earnings per share or increase loss per share.
Potential ordinary shares deriving from the exercise of share options (note 17) are anti-
dilutive in nature. The diluted earnings per share is therefore the same as the undiluted
earnings per share.
2021
‘000
2020
‘000
Total loss attributable to shareholders
Ordinary number of shares
($5,095)
($4,881)
1,493,338
1,215,559
Weighted average number of shares on issue
1,365,998
921,198
Basic and diluted earnings per share
($0.0037)
($0.0053)
20. Financial instruments and financial risk management
Financial instruments are recognised in the statement of financial position when the Group
becomes party to a financial contract. They include cash and cash equivalents, trade and
other receivables, term deposits, trade and other payables and lease liabilities.
Financial assets and liabilities are classified into the following categories:
Financial assets held at amortised cost
A financial asset is measured at amortised cost if it meets both of the following conditions,
and is not designated as at fair value through Profit or Loss (FVTPL):
• The asset is held within a business model whose objective is to hold assets to collect
contractual cash flows; and
• 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 amounts outstanding.
Financial assets held at amortised cost are initially measured at the transaction price and
are subsequently measured at amortised cost using the effective interest method. The
amortised cost is reduced by impairment losses. Interest income, foreign exchange gains
and losses and impairment are recognised in Consolidated Statement of Profit or Loss. Any
gain or loss on derecognition is recognised in Consolidated Statement of Profit or Loss.
9 Spokes International LimitedNotes to the Consolidated Financial Statements
51
Financial assets held at amortised cost comprise: cash and cash equivalents, trade and
other receivables and term deposits.
Financial liabilities held at amortised cost
Financial liabilities not designated as at FVTPL on initial recognition are classified as at
amortised cost. Financial liabilities at amortised cost are subsequently measured at
amortised cost using the effective interest method. Interest expense and foreign exchange
gains and losses are recognised in Consolidated Statement of Profit or Loss. Any gain or loss
on derecognition is recognised in Consolidated Statement of Profit or Loss.
Financial liabilities held at amortised cost comprise: trade and other payables and
lease liabilities.
Impairment – financial assets
The Group recognises loss allowances for expected credit losses (ECLs) on financial assets
measured at amortised cost.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as
the present value of all cash shortfalls (i.e. the difference between the cash flows due to
the entity in accordance with the contract and the cash flows that the Group expects
to receive).
The gross carrying amount of a financial asset is written off when the Group has no
reasonable expectations of recovering a financial asset in its entirety or a portion thereof.
There has been no impairment of financial assets and there were no past due not impaired
financial assets as at 31 March 2021.
Financial risk management
The Board of Directors has overall responsibility for the establishment and oversight of
the Group’s risk management framework. The Board of Directors has established an Audit
and Risk Committee, which is responsible for developing and monitoring the Group’s risk
management policies. The Committee reports regularly to the Board of Directors on
its activities.
The Group’s risk management policies are established to identify and analyse the risks
faced by the Group, to set appropriate risk limits and controls and to monitor risks and
adherence to limits. Risk management policies and systems are reviewed regularly to reflect
changes in market conditions and the Group’s activities. The Group, through its training and
management standards and procedures, aims to maintain a disciplined and constructive
control environment in which all employees understand their roles and obligations.
The Audit and Risk Committee oversees how management monitors compliance with the
Group’s risk management policies and procedures and reviews the adequacy of the risk
management framework in relation to the risks faced by the Group.
9 Spokes International LimitedNotes to the Consolidated Financial Statements 52
As a result of the Group’s operations and sources of finance, it is exposed to credit risk,
liquidity risk and foreign exchange risk. These risks are described below:
Credit risk
Credit risk is the risk of financial loss to the Group if a counterparty fails to meet its
contractual obligations and arises principally from the Group’s receivables from customers
and cash and cash equivalents held with financial institutions.
Financial instruments which potentially subject the Group to credit risk, principally consist of:
1. Trade receivables – the maximum exposure to credit risk at balance date to recognised
financial assets is the carrying amount, net of any credit losses for impairment of those
assets, as disclosed in the statement of financial position. These predominantly relate
to trade receivables and the lease guarantee. As at 31 March 2021, the Group had trade
receivables and lease guarantees of $809,000 (2020: $591,000). Refer to note 12 for
further details.
2. Cash and cash equivalents – the maximum potential exposure to credit risk at balance
date is $8.8million (2020: $4.7 million). The Group monitors the credit quality of its major
financial institutions that are counterparties to its financial statements and does not
anticipate non-performance by the counter-parties.
The Group has not provided collateral and has no securities registered against it. Note 12 of
these Financial Statements provides details of guarantees held by its financial institutions.
The Group does not have any significant concentrations of credit risk apart from its deposits
with large and reputable banks.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations
associated with its financial liabilities that are settled by delivering cash or another financial
asset. Management and the Board monitor cash forecasts of the Group’s liquidity reserve on
the basis of expected cash flow, to enable the Board to determine the funding needs and to
ensure the Group meets its future operating requirements.
The contractual cash flows of the Group’s financial liabilities are as follows:
Contractual maturities of financial
liabilities as at 31 March 2021
Trade and other payables
Lease liabilities
Up to
1 year
$’000
1,174
708
Between
1 and 2 years
Between
2 and 3 years
$’000
$’000
-
-
754
209
Total
1,882
754
209
9 Spokes International LimitedNotes to the Consolidated Financial Statements
53
Contractual maturities of financial
liabilities as at 31 March 2020
Trade and other payables
Lease liabilities
Up to
1 year
$’000
1,107
486
Between
1 and 2 years
Between
2 and 3 years
$’000
$’000
-
-
569
543
Total
1,593
569
543
The amounts disclosed in the table are the contractual undiscounted cash flows.
Foreign exchange risk
Foreign exchange risk is the risk that cash flows or fair values of assets and liabilities will
change as a result of exchange rate movements. The Group is exposed to foreign exchange
risk currently arising as a result of commercial transactions involving the AUD, GBP, CAD,
SGD and USD. The policy requires the Group to manage foreign exchange risk within
set parameters.
The Group’s exposure to monetary foreign currency financial instruments (in currencies
other than each entity’s functional currency) is outlined below in New Zealand dollars.
As at 31 March 2021, a movement of 10% in the New Zealand dollar would impact the
Consolidated Statement of Comprehensive Income and Consolidated Statement of
Changes in Equity as detailed in the table below:
10% decrease
10% increase
2021
2020
2021
2020
0
2
0
(7)
0
0
2
0
(7)
0
0
(2)
0
7
0
0
(2)
0
7
0
Impact on net loss before income tax:
Balances in GBP (net)
Balances in AUD (net)
Balances in CAD (net)
Balances in USD (net)
Balances in SGD (net)
Capital risk management
The capital structure of the Group consists of equity raised by the issue of ordinary shares
in the Company.
The Group’s aim is to maintain a sufficient cash position to sustain future growth and
development of the business and to maintain investor and creditor confidence.
The Group’s strategy in respect of capital management is reviewed regularly by the Board of
Directors. There has been no material change in the Group’s management of capital during
the year.
9 Spokes International LimitedNotes to the Consolidated Financial Statements
54
Fair values
The fair value of the Group’s financial assets and liabilities approximates their carrying
amount.
21. Consolidation
The Group had the following subsidiaries as at 31 March 2021:
Country of
incorporation
and place of
business
% of
ordinary
shares held
by parent
Date of
incorporation
Nature of business
Singapore
Trading operation
100%
2 April 2019
Australia
Trading operation
100%
10 April 2014
Canada
Trading operation
100%
16 August 2017
New Zealand
Holder of provisional
patent
100%
5 May 2015
New Zealand
Trading operation
100%
1 September
2020
New Zealand
Non-trading
100%
16 July 2015
Name
9 Spokes Asia Pte
Limited
9 Spokes Australia Pty
Limited
9 Spokes Canada
Limited
9 Spokes Knowledge
Limited
9 Spokes Operations
Limited
9 Spokes Trustee
Limited
9 Spokes UK Limited
United Kingdom Trading operation
100%
21 December
2015
9 Spokes US Holdings
Limited
New Zealand
Holding Company
100%
12 November 2014
9 Spokes US, Inc.
United States
Non-trading
100%
11 May 2017
9 Spokes International LimitedNotes to the Consolidated Financial Statements
55
The Group had the following subsidiaries as at 31 March 2020:
Country of
incorporation
and place of
business
% of
ordinary
shares held
by parent
Date of
incorporation
Nature of business
Singapore
Trading operation
100%
2 April 2019
Australia
Trading operation
100%
10 April 2014
Canada
Trading operation
100%
16 August 2017
New Zealand
Holder of provisional
patent
100%
5 May 2015
New Zealand
Non-trading
100%
16 July 2015
Name
9 Spokes Asia Pte
Limited
9 Spokes Australia Pty
Limited
9 Spokes Canada
Limited
9 Spokes Knowledge
Limited
9 Spokes Trustee
Limited
9 Spokes UK Limited
United Kingdom Trading operation
100%
21 December
2015
9 Spokes US Holdings
Limited
New Zealand
Holding Company
100%
12 November 2014
9 Spokes US, Inc.
United States
Non-trading
100%
11 May 2017
Subsidiary companies
Subsidiaries are all entities (including structured entities) over which the Group has control.
The Group controls an entity when the Group 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. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. To date, all Subsidiaries have been established by the Group, no
acquisitions of existing Subsidiaries has occurred.
The Group applies the acquisition method to account for business combinations.
The consideration transferred for the acquisition of a subsidiary is the fair values of the
assets transferred, the liabilities incurred to the former owners of the acquiree and the
equity interests issued by the Group.
Inter-company transactions, balances and unrealised gains and losses on transactions
between Group companies are eliminated. All subsidiaries conform to Group
accounting policies.
9 Spokes International LimitedNotes to the Consolidated Financial Statements 56
The Group
The results and financial position of all Group entities (none of which have the currency of a
hyper-inflationary economy) that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
1. assets and liabilities for each statement of financial position presented are translated at
the closing rate at the date of that statement of financial position;
2.
income and expenses for each statement of profit or loss and statement of changes in
equity, are translated at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates,
in which case income and expenses are translated at the rate on the dates of the
transactions); and
3. all resulting exchange differences are recognised in other comprehensive income.
The ultimate holding company of the Group is 9 Spokes International Limited.
22. Contingencies
Repayment of remuneration
During the period September 2018 to May 2019, the Directors and members of the executive
team at that time took a voluntary reduction in their remuneration recognising the cash
constraints of the Company at that time. The total amount of the reduction amounted to
approximately $0.52 million with breakdown provided below:
Directors
Paul Reynolds
Thomas Power
Mark Estall (Resigned 30 September 2020)
Adrian Grant
Executive employees
$’000
103
53
103
106
154
Total amount of contingency
519
As at balance date, the Company did not make any recommendation with regards to the
repayment plan and therefore has not recognised this arrangement as a liability. It is
currently uncertain when and if the repayment will happen. As the Group works towards
achieving breakeven, it will re-evaluate the suitability of repayment based on latest cash
forecasts. Any repayment will be subject to Board approval.
9 Spokes International LimitedNotes to the Consolidated Financial Statements
57
23. Key management personnel
Key management personnel are defined as those persons having authority and
responsibility for planning, directing and controlling the activities of the Group, directly or
indirectly and include the Directors and the Chief Executive Officer, and his direct reports.
The following table summarises remuneration paid to key management personnel:
Wages and salaries
Employee contribution to pension schemes
Directors’ fees
Share based payments
2021
$’000
2020
$’000
1,838
2,347
124
109
385
272
81
-
Total employee benefit expenses
2,428
2,728
Short-term employee benefits relate to salaries and other benefits paid to the
executive team.
24. Related party transactions and balances
a. Transactions with related parties during the year
Name of related party
Nature of
relationship
Transaction
2021
$’000
2020
$’000
Paul Reynolds
Director
Directors’ fees
(170)
(155)
Tightline Advisory Limited (1)
Director
Director services
-
(5)
Director
Director
Directors’ fees
(95)
(44)
Directors’ fees
(80)
(40)
Shelley Ruha
Thomas Power
Mark Estall (resigned 30
September 2020)
Director
Directors’ fees
Te Arai Advisory Limited (2)
Director
Consultancy
Mint Recruitment Limited (3)
Family member
of Director
Provision of
recruitment
services
(40)
(20)
-
-
(151)
(71)
1. Non-executive Director, Paul Reynolds is a Director and shareholder of Tightline Advisory Limited.
2. Non-executive Director, Mark Estall is a Director and shareholder of Te Arai Advisory
3. A member of Executive Director, Adrian Grant’s family is a Director and shareholder of Mint Recruitment Limited.
9 Spokes International LimitedNotes to the Consolidated Financial Statements
58
b. Amounts owed by the Group to related parties
Name of related party
Nature of
relationship
Balance type
2021
$’000
2020
$’000
Mint Recruitment Limited
Family member
of Director
Trade and other
payables
18
-
Net amounts owed to
related parties
18
-
Balances payable to related parties as at 31 March were payable on the 20th of the
following month.
25. Events after the reporting period
There have been no reportable events arising after the end of the reporting period.
9 Spokes International LimitedNotes to the Consolidated Financial Statements
59
05
Governance and
disclosures
9 Spokes International LimitedNotes to the Consolidated Financial Statements 9 Spokes International Limited
New Zealand Statutory Information
As at 31 March 2021
60
1. Board of Directors and sub-committees
The Directors in office at the date of this Annual Report were:
Name
Position
Date appointed to the board
Paul Reynolds
Independent, Non-Executive Chairman
10 September 2014
Shelley Ruha
Independent, Non-Executive Director
14 October 2019
Thomas Power
Independent, Non-Executive Director
7 October 2014
Adrian Grant
Executive Director and Chief Executive Officer
17 August 2017
a) Board meetings
The Board met formally 20 times during the financial year ended 31 March 2021. Normally
the Board would meet up to 10 times a year during which meetings the Board considers key
financial and operational information, as well as matters of strategic importance. Additional
meetings were held during the year ended 31 March 2021 to consider matters relating to
capital raising and the COVID-19 outbreak.
Name
Position
Paul Reynolds
Independent, Non-Executive Chairman
Shelley Ruha
Independent, Non-Executive Director
Thomas Power
Independent, Non-Executive Director
Adrian Grant
Executive Director and Chief Executive Officer
Mark Estall
Non-Executive Director
Number of
meetings
eligible to
attend
Number of
meetings
attended
20
20
20
20
14
19
19
19
19
9
Mark Estall resigned as Non-Executive Director on 30 September 2020.
b) Board committees
The Board currently has two committees to perform certain functions of the Board and to
provide the Board with recommendations and advice, namely the Audit and Risk Committee
and the Remuneration and Nomination Committee. The Charters for each committee are
available on the Company’s website at: 9spokes.com/corporate-governance
c) Audit and Risk Committee
The role of the Audit and Risk Committee is to assist the Board to meet its oversight
responsibilities in relation to the Company’s financial reporting systems, the systems of
internal control and risk management and internal and external audit functions. In fulfilling
these roles, the Audit and Risk Committee is responsible for maintaining free and open
communication between the Board, management, and auditors.
9 Spokes International Limited
New Zealand Statutory Information
As at 31 March 2021
61
The Audit and Risk Committee provides advice to the Board and reports on the status and
management of the risks to the Company. The purpose of the Committee’s risk management
process is to assist the Board in relation to risk management policies, procedures and
systems and ensure that risks are identified, assessed, and appropriately managed.
During the financial year, the Audit and Risk Committee met four times to review the Interim
and Annual Financial Reports prior to release and the Delegated Authorities policy. Other risk
matters were dealt with either at Board meetings or through direct communications with
Committee members.
The members of the Committee at the date of this Annual Report are Shelly Ruha (Chair),
Paul Reynolds and Thomas Power.
d) Remuneration and Nomination Committee
The role of the Remuneration and Nomination Committee is to review and make
recommendations to the Board on remuneration packages and policies related to the
Directors and senior executives and to ensure that the remuneration policies and practices
are consistent with the Group’s strategic goals and human resources objectives. The
Remuneration and Nomination Committee is also responsible for reviewing and making
recommendations in relation to the composition and performance of the Board and its
Committees and ensuring that adequate succession plans are in place (including for the
recruitment and appointment of Directors and senior management). Independent advice will
be sought where appropriate.
The Remuneration and Nomination Committee meet three times during the financial year to
review the committee Charter, executive remuneration and share options. The members of
the Committee at the date of this Annual Report are Paul Reynolds (Chair), Thomas Power
and Shelley Ruha.
2. Shareholdings of Directors
Adrian Grant
Paul Reynolds
Thomas Power
Shelley Ruha
2021
Shares
2020
Shares
66,680,151
66,680,151
4,423,625
4,423,625
1,843,784
1,843,784
1,120,000
1,120,000
3. Entries recorded in the Directors’ Interests Register
The Company maintains an interest register in accordance with Companies Act 1993
(New Zealand).
The Company’s Directors disclosed the following relevant interest, or cessation of interest
during the year ended 31 March 2021:
9 Spokes International Limited
New Zealand Statutory Information
As at 31 March 2021
Director/Entity
Paul Reynolds
62
Relationship
9 Spokes International Limited
Chairman, Director & Shareholder
9 Spokes UK Limited
Computershare Limited
STV Group PLC
Tightline Advisory Limited
Tosca IOM Limited
Talk Talk Telecom Group PLC
Shelley Ruha
9 Spokes International Limited
Analey Holdings Limited
Analey Investments Limited
Heartland Bank
Hobson Wealth Holding Limited
IT & Business Consulting Limited
New Zealand Rural Land Management Limited
Partner Group Holdings Limited
Partner Life Limited
Thomas Power
9 Spokes International Limited
Digital Entrepreneur Limited
Electric Dog Limited
SA Vortex Limited
Social Power (Surrey) Limited
Teamblockchain Limited
The Business Café Limited
Adrian Grant
9 Spokes Asia Pte Limited
9 Spokes Australia Pty Limited
9 Spokes Canada Limited
9 Spokes International Limited
9 Spokes Operations Limited
9 Spokes US, Inc.
Aminoex Property Fund No 1 Limited
DWDA Holdings Limited
Franc Holdings Limited
Director
Director
Director, appointed Chair April 2021
Director & Shareholder
Director
Ceased to be a Director March 2021
Director & Shareholder
Director & Shareholder
Director & Shareholder
Director
Director
Director
Director
Director
Director
Director & Shareholder
Shareholder. Ceased to be a Director
Shareholder. Ceased to be a Director
Director & Shareholder
Director & Shareholder
Shareholder. Ceased to be a Director
Director & Shareholder
Director
Director
Director
Director & Shareholder
Director
Director
Director & Shareholder
Shareholder
Director & Shareholder
9 Spokes International Limited
New Zealand Statutory Information
As at 31 March 2021
63
Director/Entity
RewardPay (Aus) Limited
Relationship
Shareholder
Mark Estall (resigned 30 September 2020)
9 Spokes Asia Pte Limited
9 Spokes Australia Pty Limited
9 Spokes Canada Limited
9 Spokes International Limited
9 Spokes Knowledge Limited
9 Spokes Trustee Limited
9 Spokes UK Limited
9 Spokes US Holdings Limited
9 Spokes US, Inc.
Franc Holdings Limited
M & M No.1 Limited
Te Arai Coast Lodge Limited
Waiere Limited
4. Donations
Ceased to be a Director
Ceased to be a Director
Ceased to be a Director
Shareholder. Ceased to be a Director
Ceased to be a Director
Ceased to be a Director
Ceased to be a Director
Ceased to be a Director
Ceased to be a Director
Director & Shareholder
Director & Shareholder
Director & Shareholder
Director & Shareholder
The total value of donations made by the Group during the year ended 31 March 2021 was $nil
(2020: $nil).
5. Directors’ remuneration
The remuneration receivable by Directors in office during the financial year ended 31 March
2021 was:
Adrian Grant
Paul Reynolds
Shelley Ruha
Thomas Power
Mark Estall
Directors’
fees
Directors’
consultancy
Employment
remuneration
Short term
incentive
Share based
payments
$’000
$’000
-
170
95
80
40
385
-
-
-
-
20
20
$’000
420
-
-
-
-
420
$’000
$’000
72
-
-
-
-
72
35
-
-
-
-
35
9 Spokes International Limited
New Zealand Statutory Information
As at 31 March 2021
64
6. Employee remuneration
The number of employees or former employees, not being Directors of the Group, who
received remuneration and other benefits in their capacity as employees, the value of which
exceeds $100,000 is set out below:
$100,000 - $109,999
$110,000 - $119,999
$120,000 - $129,999
$130,000 - $139,999
$140,000 - $149,999
$150,000 - $159,999
$160,000 - $169,000
$170,000 - $179,999
$180,000 - $189,999
$200,000 - $209,999
$210,000 - $219,999
$220,000 - $229,999
$250,000 - $259,999
$280,000 - $289,999
$300,000+
2021
No.
6
5
10
1
-
1
1
-
1
1
1
-
1
-
4
2020
No.
5
7
5
-
1
1
-
1
-
1
-
1
-
3
-
The following information is current as at 30 April 2021 and is included for the benefit of
shareholders and for compliance with the Australian Securities Exchange (ASX)
Listing Rules.
7. Amounts payable to auditors
Refer to note 6 of the Consolidated Financial Statements.
9 Spokes International Limited
Additional Information for ASX Listed Companies
As at 30 April 2021
65
1. Corporate Governance Statement
In accordance with ASX Listing Rule 4.10.3, a copy of the Company’s Corporate Governance
Statement can be obtained on the Company’s website:
9spokes.com/corporate-governance.
2. Substantial Holders
The Financial Markets Conduct Act 2013 (NZ) (FMCA) includes substantial holder disclosure
requirements for persons with a 5% or more holding in a New Zealand listed company. These
requirements are similar to those under the Corporations Act 2001 (Cth) (Corporations Act),
which is applicable in Australia. However, the FMCA requirements are not applicable to the
Company because the Company is not listed on a New Zealand Exchange.
Furthermore, Chapter 6C of the Corporations Act does not apply to the Company. However,
the Company is aware of the following information regarding substantial shareholdings in
the Company:
Shareholders
Number of
Ordinary Shares
Voting Power
HSBC Custody Nominees (Australia) Limited - A/C 2
J P Morgan Nominees Australia Pty Limited
Harrogate Trustee Limited
159,838,669
101,723,370
92,311,270
10.70%
6.81%
6.18%
3. Number of Holders in each Class of Equity Security
Class of Equity Security
Number of Holders
Fully Paid Ordinary Shares (quoted)
2,472
Options over Fully Paid Ordinary Shares (unquoted), see 12 below
Voting Rights Attaching to each Class
The voting rights attaching to the fully paid ordinary shares is that each share is entitled
to one vote when a poll is called, otherwise each member present (or represented by their
proxy, attorney or other representative) has one vote on a show of hands.
No voting rights attach to any of the options over the fully paid ordinary shares.
9 Spokes International Limited
Additional Information for ASX Listed Companies
As at 30 April 2021
66
4. Distribution Schedules
Items presented with A$ represent Australian dollars.
a) Ordinary Shares
The distribution schedule for fully-paid ordinary shares is as follows:
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Holders
Total Units
5,608
153,362
892,538
37,485,968
33
39
105
811
693
%
0.00%
0.01%
0.07%
3.08%
1,177,021,979
96.83%
Totals
1,681
1,215,559,455
100.00%
b) Unquoted Share Options
Pre-IPO Employee Share Options:
Originally issued in December 2015, the distribution schedule for options over fully paid
ordinary shares issued to employees, under the Pre-IPO Employee Share Option Scheme
(the details of which are set out in the Company’s Replacement Prospectus dated 17 May
2016), is as follows:
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-99,999,999,999
Totals
All options have vested.
Holders
Total Units
%
0
0
0
1
3
4
0
0
0
63,505
0.00%
0.00%
0.00%
4.30%
1,413,463
95.70%
1,476,968
100.00%
Employee Share Options (August 2017):
Originally issued in August 2017, the distribution schedule for options over fully paid ordinary
shares issued to employees under the Company’s current ESOP, each with an exercise price
of A$0.20, is as follows:
9 Spokes International Limited
Additional Information for ASX Listed Companies
As at 30 April 2021
67
Holdings Ranges
Holders
Total Units
%
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-99,999,999,999
0
0
1
6
5
0
0
6,294
183,207
817,534
0.00%
0.00%
0.63%
18.19%
81.18%
Totals
12
1,007,035
100.00%
Non-Executive Directors Share Options:
Originally issued in September 2017, the distribution schedule for options over fully paid
ordinary shares issued to NEDs under the Company’s ESOP (the details of which are set out
in the Explanatory Memorandum attached to the Company’s Notice of Annual Meeting of
Shareholders dated 28 August 2017) is as follows:
Holdings Ranges
Holders
Total Units
%
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-99,999,999,999
Totals
0
0
0
0
2
2
0
0
0
0
0.00%
0.00%
0.00%
0.00%
1,143,413
100.00%
1,143,413
100.00%
None of the options issued under the NEDs Share Options Scheme have vested.
CEO share options:
Issued to the Chief Executive officer in October 2020 under the Company’s ESOP (the details
of which are set out in the Explanatory Memorandum attached to the Company’s Annual
Meeting of Shareholders dated 10 September 2020), the distribution schedule for options
over fully-paid ordinary shares, each with an exercise price of A$0.036, is as follows:
Holdings Ranges
Holders
Total Units
%
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-99,999,999,999
Totals
None of the options issued have vested.
0
0
0
0
1
1
0
0
0
0
0.00%
0.00%
0.00%
0.00%
8,455,613
100.00%
8,455,613
100.00%
9 Spokes International Limited
Additional Information for ASX Listed Companies
As at 30 April 2021
68
Employee Share Options (March 2021):
Issued in March 2021 to certain employees under the Company’s current ESOP 5210000
options 70% of the options (3,647,000) with an exercise price of A$0.032 per share and 30%
of the options (1,563,000) with an exercise price of A$0.05 per share.
The distribution schedule for options over fully paid ordinary shares, each with an exercise
price of A$0.032, is as follows:
Holdings Ranges
Holders
Total Units
%
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-99,999,999,999
Totals
0
0
0
0
4
4
0
0
0
0
0.00%
0.00%
0.00%
0.00%
3,647,000
100.00%
3,647,000
100.00%
Of the 3,647,000 options on issue, 2,431,334 have vested.
The distribution schedule for options over fully paid ordinary shares, each with an exercise
price of A$0.05, is as follows:
Holdings Ranges
Holders
Total Units
%
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-99,999,999,999
Totals
Of the 1,563,000 options on issue, 1,042,000 have vested.
5. Marketable Securities
0
0
0
0
4
4
0
0
0
0
0.00%
0.00%
0.00%
0.00%
1,563,000
100.00%
1,563,000
100.00%
The number of holders holding less than a marketable parcel (i.e. the value of a parcel that
is less than A$500) of the Company’s main class of securities (fully-paid ordinary shares),
based on the closing market price of A$0.019 as at 30 April 2021 was 679.
9 Spokes International Limited
Additional Information for ASX Listed Companies
As at 30 April 2021
69
6. 20 Largest Holders
As at 30 April 2021, the names on the share register of the 20 largest holders of fully paid
ordinary shares, the number of those shares held, and the percentage of capital held,
is as follows:
Holder name
Number of shares
% holding
HSBC Custody Nominees (Australia) Limited - A/C 2
159,838,669
10.70%
J P Morgan Nominees Australia Pty Limited
Harrogate Trustee Limited
HSBC Custody Nominees (Australia) Limited
Adrian David Grant
Te Arai Advisory Limited
Citicorp Nominees Pty Limited
G&S Capital Limited
Custodial Services Limited
Sekots Group Limited
Mr Hien Quang Trinh
Byron Carl Thomas
Brendan Paul Roberts & Ml Trustees 3287 Limited
Scribani Rossi Shooting Pty Ltd
Mr Gregory Frank Gray
Holder name
Graham E Jackson & Donald M Gibson & Kristin M
Jackson
Mr Bhagwanji Bhula Rama
Mr Alan Siu Lun Chan
Mr Andrew Mark Jones
Tappenden Holdings Limited
7. Company Secretary
101,723,370
92,311,270
70,948,946
66,680,151
61,389,721
46,079,586
37,617,886
33,331,658
32,029,452
24,727,429
18,222,641
15,310,135
14,779,609
11,000,000
6.81%
6.18%
4.75%
4.47%
4.11%
3.09%
2.52%
2.23%
2.14%
1.66%
1.22%
1.03%
0.99%
0.74%
Number of shares
% holding
10,000,000
10,000,000
9,462,500
9,402,660
5,750,527
0.67%
0.67%
0.63%
0.63%
0.39%
For the purposes of the ASX Listing Rules, the Company Secretary is currently Neil Hopkins.
9 Spokes International Limited
Additional Information for ASX Listed Companies
As at 30 April 2021
70
8. Address
The Company’s principal administrative office is:
Level 5, AECOM House, 8 Mahuhu Crescent, Auckland, 1010, New Zealand
The Company’s registered office in Australia is:
Level 22, 19 Martin Place, Sydney, NSW, 2000
The Company does not have a contact telephone number in either New Zealand or Australia.
The Company is contactable at investors@9spokes.com.
9. Register of Securities
The register of securities is held at the following address:
Boardroom Pty Limited,
Level 12, 225 George Street, NSW, 2000, Australia
Telephone: +61 1300 737 760
10. Stock Exchanges
The Company’s securities are not quoted on any stock exchange other than the ASX.
11. Restricted Securities
None of the Company’s securities are currently restricted.
12. Unquoted Securities
The following unquoted securities are on issue:
Class
Number of Holders Number on Issue
Options over Ordinary Shares.
Pre-IPO Employee Share Options issued in December
2015: exercise price of NZ$0.16.
Options issued to Employees under ESOP in August 2017:
exercise price of A$0.20
Director Options under the ESOP issued September 2017:
exercise price of A$0.225
Director Options under the ESOP issued to CEO October
2020: exercise price of A$0.036
Options issued to Employees under ESOP in March 2021:
exercise prices of A$0.032
Options issued to Employees under ESOP in March 2021:
exercise prices of A$0.05.
4
12
2
1
4
4
1,476,968
1,007,035
1,143,413
8,455,613
3,647,000
1,563,000
9 Spokes International Limited
Additional Information for ASX Listed Companies
As at 30 April 2021
71
13. Review of Operations
A review of the operations and activities of the Company for the year ended 31 March 2021 is
provided in the Chairman’s report and Chief Executive’s report sections of this
Annual Report.
14. Buy-Back
There is no current on-market buy-back being conducted by the Company.
15. Further Information
The Company is incorporated in New Zealand.
The Company is not subject to Chapters 6, 6A, 6B and 6C of the Corporations Act dealing
with the acquisition of its shares (including substantial holdings and takeovers).
In general, securities in the Company can be transferred freely, with restrictions or
limitations applying only in relation to takeovers, overseas investment and competition.
Limitations on the acquisition of the securities imposed by the law in which the Company is
incorporated (New Zealand) are as follows:
• The New Zealand Takeovers Code and the FMCA prescribe a general 20% threshold
under which a person is prevented from increasing the percentage of voting rights held or
controlled by them in excess of that threshold or from becoming the holder or controller
of an increased percentage of voting rights if they already hold or control more than 20%
of the voting rights, subject to some exceptions. Under the New Zealand Takeovers Code,
compulsory acquisitions are also permitted by persons who hold or control 90% or more
of the voting rights in the Company.
• Generally, the consent of the New Zealand Overseas Investment Office is required
where an overseas person acquires shares in the Company that amount to more than
25% of the total shares issued by the Company, or if the person already holds 25% or
more of the shares, the acquisition increases such holding and the value of the shares, or
of the Company’s and its subsidiaries’ assets, exceeds $100 million.
• Under the Commerce Act 1986 (NZ), a person may be prevented from acquiring shares
in the Company if the acquisition would have, or would be likely to have, the effect of
substantially lessening competition in the market.
9 Spokes International Limited
Company directory
72
Registered Office
Level 5, AECOM House
8 Mahuhu Crescent
Auckland 1010, New Zealand
New Zealand Company Number
3538758
New Zealand Business Number
9429030957862
Australian Registered Business Number
610 518 075
Directors
Australian Lawyers
Group Auditors
Share Registrar
ASX
Website
Paul Reynolds (Non-executive & Independent
Chairman)
Shelley Ruha (Non-executive & Independent
Director)
Thomas Power (Non-executive & Independent
Director)
Adrian Grant (Executive Director & CEO)
Bird & Bird Lawyers
Level 11, 68 Pitt Street
Sydney, NSW 2000, Australia
BDO Auckland
Level 4, Building A,
BDO Centre, 4
Graham Street,
Auckland 1010, New Zealand
Boardroom Pty Limited
Level 12, 225 George Street
Sydney, NSW 2000, Australia
The Company’s ordinary shares are listed on
the ASX, under code ASX:9SP
9spokes.com
73
9 Spokes International LimitedNotes to the Consolidated Financial Statements