Contents
Chairman’s Report
Directors’ Report
Remuneration Report
Auditors Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report to the Members
Corporate Governance Statement
Shareholder Information
Corporate Directory
2
4
13
21
22
23
24
25
26
63
64
67
67
68
1
Chairman’s Report
Dear Shareholders,
It is with great pleasure that I present the Company’s Annual Report for 2016.
Financial Year 2016 saw continued growth in the emerging Adslot business, with Trading Technology revenues
up 59% on the prior year. Trading Revenues are the fastest growing part of the business made up of both
Licence Fees (fixed contract recurring revenue) and Trading Fees (transactional revenue), both up 75% and
25% respectively on FY15.
Revenues from continuing operations and total
income were both up 19% on the prior year, and
the Company’s EBITDA loss was improved by a
further 11%.
From a cash-flow perspective, receipts from trade
and other creditors grew 36% year on year, from
$8.3m to $11.3m, while net cash outflows from
operating activities continued to reduce by 13%,
from ($3.18m) to ($2.75m).
During the twelve months to 30 June 2016, the
annualised value of digital ad spend captured via
Symphony grew by 20% from $2.3 billion to $2.75
billion, currently sitting at $3 billion. Ad spend
captured via the Symphony work-flow solution is
strategically very important to the Company, as
we will see this ad spend drive Trading Fees (clip
of the ticket transactional revenue) in the years
ahead.
far
the Company’s most significant
By
announcement came in August this year, when
Adslot announced it had signed a long-term,
world-wide contract to deploy Symphony for
groupm - the biggest media buyer in the world -
the
across multiple markets.
estimated digital ad spend executed via
Symphony is expected to more than double to circa $7 billion over the next two years – representing nearly
14% of the total digital ad spend globally in 2015.
This means
During the year, Adslot’s own CIO, Robyn Parker, was
appointed co-chair of the global Internet Advertising
Bureau’s (IAB) “OpenDirect Working Group”, which
developed the standard protocols adopted by the
industry and announced in March 2016. A number of
broking houses also initiated research coverage on the
Company, including Petra Capital, BW Equities and
Euroz.
From a corporate perspective, we undertook a $4.6
million capital raising (strategic placement) in April
2016 at $0.08 a share.
the
announcement of the groupm contract and the release
following
And
2
of the end of year financial results in August 2016, we announced a further $18 million placement and
entitlements issue at $0.11 per share in September.
As a result, the Company has never been in a stronger position to execute on its strategy. These funds will
be invested to grow our engineering team significantly over the next 18 months to maintain our product
leadership globally; accelerate deployment of Symphony into groupm throughout Europe and the Asia Pacific
region; and increase our sales and account service teams to drive adoption of our trading platform, which will
in turn drive and accelerate the growth in transactional revenues for many years to come.
I’d like to take this opportunity to thank all our loyal shareholders who have continued to support the
Company through the establishment phase, and trust all shareholders will be well-rewarded for their patience
in the years to come.
Yours sincerely,
Andrew Barlow
Chairman
28 September 2016
3
Directors’ Report
287 510 (‘the Company’) and its controlled entities (‘the Group’) for the financial year ended 30 June 2016 and the
auditor’s report thereon.
Your Directors present their report, together with the financial report of Adslot Ltd ACN 001
Information on Directors
All directors listed below were directors for the whole financial year and up to the date of this report.
Mr Andrew Barlow
Non-Executive Chairman
(Age 43)
Andrew Barlow is the founder of Adslot and an experienced technology entrepreneur. Prior to Adslot,
Mr Barlow co-founded Hitwise with Adrian Giles in 1997, was Chairman and Managing Director of
Hitwise from 1997 – 2000, and Director of R&D from 2000 – 2002. Hitwise was ranked one of the Top
10 fastest growing companies by Deloitte for five years running, before being sold to Experian Group
(LSX.EXPN) in May 2007. Mr Barlow is also the Founder of Venturian, a privately-owned venture
capital fund with investments in early-stage technology companies with unique IP, highly scalable
business models and global market potential. Mr Barlow was also Founder and CEO of Max Super,
an online retail superannuation fund sold to Orchard Funds Management in 2007.
Mr Barlow is a director of Nitro Software, Inc.
Mr Adrian Giles
Non-Executive Director
(Age 42)
Adrian Giles is an entrepreneur with business interests in Internet, information technology and
intellectual property. In 1997 Mr Giles co-founded Sinewave Interactive which researched and
pioneered the concept of marketing a website using search engines and was the first company in
Australia to offer Search Engine Optimisation (SEO) as a service.
In 1997 Mr Giles co-founded Hitwise which grew over 10 years to become one of the most recognised
global internet measurement brands operating successfully in the USA, UK, Australia, NZ, Hong Kong,
and Singapore. Whilst positioning the company for a NASDAQ listing in early 2007 Hitwise was sold to
Experian (LSX: EXPN) in one of Australia’s most successful venture backed Internet trade sales. Mr
Giles is also Chairman of Market Engine, a global retailing platform and support company offering
Western brands direct access to half a billion new customers in China.
Mr Giles is Chair of the Remuneration Committee.
Mr Ian Lowe
CEO and Executive Director
(Age 46)
Ian Lowe is one of Australia’s most experienced digital media executives, having built and run a number
of successful global media technology companies from Australia. He has also forged an impeccable
reputation in the advertising, media and technology community domestically and internationally, and
has a deep understanding of both agency (demand-side) and publisher (supply-side) businesses.
Mr Lowe previously held the role of Chief Executive Officer of Facilitate Digital Ltd, and prior to that,
worked for and managed numerous other media and media technology businesses including Traffion,
Red Sheriff, PMP Limited, and George Patterson Bates.
Mr Ben Dixon
Executive Director
(Age 43)
Ben Dixon’s career in the advertising industry goes back over 18 years and includes roles at several
large multinational agency groups including DDB and Mojo. He has wide experience across both the
media buying and account management fields having held senior positions directing accounts for
advertisers such as Telstra and Kraft Foods. In particular he was responsible for the development and
implementation of eCommerce and online strategies across a number of advertisers.
In late 1999 Ben conceptualised and then co-founded Facilitate Digital Pty Ltd, assuming the role of
General Manager. In the subsequent 3 years he played an integral role in steering the business through
an industry collapse to a position of strength. Ben was appointed Chief Executive Officer of Facilitate
when Adslot acquired it in December 2013.
4
Mr Geoff Dixon
Non-Executive Director
(Age 76)
Geoff Dixon is an experienced and successful corporate executive with a background in the media,
mining, aviation and tourism sectors at executive and board level. He was Managing Director and
Chief Executive Officer of Qantas Airways Limited for eight years until 2008 and Chairman of Tourism
Australia for six years until July 2015. He is Chairman of the Garvan Medical Research Foundation
and Chairman of the privately held Australian Pub Fund. He is on the board of the publicly listed
Crown Limited and the board of the Museum of Contemporary Art Australia, and is an Ambassador
for the Australian Indigenous Education Foundation.
Directorships of other Australian Listed Companies during the past 3 years:
Crown Limited from 7 July 2007 to present.
Mr Quentin George
Non-Executive Director
(Age 46)
Quentin George is one of the advertising industry’s most credentialed and respected thought leaders.
Based in the United States, Mr George has previously served as the Chief Digital and Innovation
Officer at IPG Mediabrands, where he was responsible for overseeing $2b in digital media spend
across global media agency networks, as well as specialist digital agencies for Fortune 500 brands.
Mr George has also previously held the positions of Global Head of Digital Media and Strategic
Innovation, and President, Global at Universal McCann. In 2008, Mr George led the team that
architected and built the industry’s first ever, standalone programmatic media-buying agency,
Cadreon, which he successfully grew into a multi-national organisation encompassing North America,
Europe and Asia-Pacific.
Mr George has also previously served on the customer advisory boards of Google, Microsoft
Advertising, Yahoo! and AOL. He has also served on high-profile industry advisory boards including
the Internet Advertising Bureau (IAB) and the American Association of Advertising Agencies (AAAA’s),
and has held senior leadership roles at digital agencies such as Razorfish and Organic.
Ms Sarah Morgan
Non-Executive Director
(Age 46)
Sarah Morgan is an experienced corporate finance advisor. Most of her career was as a Director of
independent corporate advisory firm Grant Samuel. Over this time Ms Morgan was involved in a large
number of transactions including public company M&A, IPOs, capital raisings (debt & equity), asset
acquisitions and divestments, and company and business valuations, across a broad range of
industries.
Ms Morgan is a non-executive director of Hong Kong based Luxe City Guides and the National Gallery
of Victoria Foundation and is on the advisory board of Melbourne University's entrepreneurship
program - the Melbourne Accelerator Program.
Directorships of other Australian Listed Companies during the past 3 years:
Hansen Technologies Limited (ASX:HSN) from October 2014 to current
Future Generation Global Investment Company (ASX:FGG) from July 2015 to current.
Ms Morgan is Chair of the Audit and Risk Committee.
Mr Brendan Maher
Company Secretary
(Age 48)
Brendan Maher joined the Company in 2010 as a qualified Chartered Accountant and has over 27
years’ experience gained both in Australia and overseas with Arthur Andersen, National Westminster
Bank and Skilled Group Limited.
Mr Maher has extensive experience in financial reporting, corporate transactions and was Company
Secretary at Skilled Group Limited prior to joining Adslot.
Mr Maher is a member of the Institute of Chartered Accountants in Australia and New Zealand, and
also a member of the Australian Institute of Company Directors.
5
Directors’ Report (continued)
Directorships of other listed companies
Other than those disclosed on pages 4 to 5 of this Annual Report no director holds a Directorship in any other listed
companies in the three year period immediately before the end of the financial year.
Director’ shareholdings
The following table sets out each director’s relevant interest in shares or options in shares of the Company as at the date
of this report.
Directors
Ordinary Shares
Share Rights
ESOP Shares
Mr Andrew Barlow
Mr Adrian Giles
Mr Ian Lowe
Mr Ben Dixon
Mr Geoff Dixon
Mr Quentin George
Ms Sarah Morgan
#
#
#
57,803,769
19,633,409
14,461,929
35,369,513
86,252,015
-
-
-
-
17,000,000
-
-
-
-
-
-
-
-
-
1,000,000
-
ESOP Shares
Performance Rights
#
-
-
-
500,000
-
-
-
Remuneration of directors and senior management
Information about the remuneration of directors and senior management is set out in the remuneration report of this
directors’ report.
Directors’ Meetings
The following table sets out the number of meetings of the Company’s Directors held during the year ended 30 June 2016
and the number of meetings attended by each Director.
Directors
Mr Andrew Barlow
Mr Ian Lowe
Mr Adrian Giles
Mr Geoff Dixon
Mr Ben Dixon
Mr Quentin George
Ms Sarah Morgan
Board of Directors
Held
Attended
Remuneration Committee
Held
Attended
Audit and Risk Committee
Attended
Held
9
9
9
9
9
9
9
9
9
9
7
9
6
9
3
-
3
-
-
3
-
3
-
3
-
-
3
-
-
-
3
3
-
-
3
-
-
3
2
-
-
3
Principal activities
Adslot Ltd derives revenue from three principal activities:
1. Trading Technology - comprises Adslot, a leading global media trading technology, and Symphony, market-leading
workflow automation technology for media agencies.
2. Services - comprises digital marketing services - provided by the company’s Webfirm division - and project-based
customisation of Trading Technology.
3. Adserving - technology that enables advertisers to deliver, measure and optimise the performance of online display
advertising.
Operating Results
Underpinned by a year on year increase of 59% in Trading Technology revenues, Consolidated Group revenues for the
FY16 period of $8,513,782 represent an increase of 19% versus the year prior ($7,175,494).
The Consolidated Group operating loss before interest, income tax, depreciation and amortisation (EBITDA) of $3,260,724
saw an improvement of 11% compared to a loss for the prior year of $3,647,611.
The Consolidated Group operating loss of $8,138,485, is a 12% improvement compared to a loss for the prior year of
$9,205,521.
6
Review of Operations
The 12 months to 30 June 2016 was significant for Adslot as the Company continued to progress the execution of its
strategy and build sales momentum. Significant achievements for FY16 include:
59% growth in Trading Technology revenues
Major enhancements to the Symphony-Adslot integration and first wave of trading activity via the integration
secured
Successful deployment of material product feature enhancements
These achievements, in combination with the global multi-year contract with groupm – announced on 19th August (see
further detail under ‘Subsequent Events’ on page 11) - have generated sales momentum, and see the Company well
positioned to benefit from ongoing, accelerating growth in Trading Technology revenues in FY17 and beyond.
Significant Achievements
59% growth in Trading Technology revenues year on year
The Trading Technology revenue segment was the Group’s growth driver, increasing by 59% against the prior
corresponding period and the largest contributing revenue segment for the Group.
Trading Technology revenues comprise Symphony, a market-leading workflow automation technology (from which the
Company derives Licence Fees) and Adslot, a leading global media trading technology (from which the Company derives
Trading Fees). Both platforms provide purpose built interfaces for media agencies and publishers to plan, negotiate and
trade online display advertising.
Licence Fees and Trading Fees both contributed growth in FY16, with Licence Fees accounting for the majority of total
Trading Technology revenues and delivering higher year on year growth in dollar terms.
7
Review of Operations (continued)
Due to the seasonal slow down in media buying in the March quarter, Trading Fees dipped in 2H FY16 as expected. The
June quarter saw an increased level of campaign activity although trading activity across the industry generally was slightly
softer than anticipated, as evidenced by spend levels in both Symphony and Adslot.
The September quarter has seen a significant lift, with trading activity to August 29 already exceeding that prior quarter
and with approximately 35% of the quarter remaining. It is expected the majority of the cash flow impact of this increased
trading activity will be realised in the December quarter.
The combination of agency workflow technology (Symphony), and media trading technology (Adslot) provides Adslot with
a unique combination of assets that benefit both media buyer and seller. The integration of these two platforms, whereby
Adslot can leverage circa $3b of media buying captured within Symphony to generate Trading Fees, is a core growth
strategy of the Company (see further comments under ‘First trading activity secured via the Adslot-Symphony integration’).
In line with growth in Licence Fees, Symphony’s global user base of media planners, media buyers and online publishers
continues to build (see chart below).
This growing community of media traders and the incumbency their reliance on Symphony’s workflow automation, in
combination with the ongoing integration of Adslot’s trading tools into Symphony’s workflow, creates a strong position from
which to establish adoption momentum and Trading Fee revenue growth.
Valued at USD $51b in 2015, online display advertising’s forward guaranteed segment presents material growth
opportunity for Adslot in FY17 and beyond.
Revenue segments other than Trading Technology performed broadly in line with expectation:
Services revenues increased by 6% year on year and are expected to remain flat going forward
Adserving revenues declined in FY16 and are expected to continue to decline over the course of FY17
Significant Enhancements to the Symphony-Adslot Integration
Over the FY16 period a number of major feature enhancements were made to the Adslot-Symphony integration. These
enhancements are central to the continuous improvement of the trading toolset available within Symphony, and by virtue
of it accelerated user adoption of the toolset. Examples of major enhancements to the integration include:
Briefing – allows a buyer to describe a series of campaign objectives then distribute this in the form of a brief to
select publishers. In response, publishers can then use Adslot’s real time availability feature to generate a
schedule of proposed activity and share it with the buyer.
Frequency Capping – allows a buyer to configure the number of times over any chosen period they want an
individual to see a campaign, then query inventory availability against it in real time.
Key Value Targeting – allows a Symphony buyer to view and configure advanced targeting options for a publisher
product as they would if using the Adslot interface.
Discount/Commission Management – enhancements to how a buyer and seller collaborate/negotiate and agree
via the platform applicable discount and commission rates.
Alerts enhancements - publisher comments entered into Adslot are displayed on screen and via email alert to the
Symphony buyer.
Enhanced controls & permissions – improved business rule management for media agencies, allowing them to
assign authorisation rights and controls for any trade managed via the Symphony-Adslot integration.
8
First Wave of Trading Activity via the Integration Secured
FY16 saw the commencement of trading activity via the Symphony-Adslot integration from Symphony clients in multiple
geographies including Australia, New Zealand and Europe.
Whilst still in the early adoption phase, this activity has exposed a number of large agencies to the capabilities within the
Symphony-Adslot integration. All trades executed have been successful and customer validation evident in the form of
repeat activity.
The Company remains particularly focused on this area of the growth opportunity, and momentum continues to build as
some of Adslot’s largest Symphony clients plan to transition more of their trading activity to the integration in 1H FY17.
While the majority of Trading Fees in FY16 were not generated via the Symphony-Adslot integration, as Trading Fee
revenue growth accelerates it is expected that an increasing percentage of this will be derived from the integrated solution.
Successful Deployment of Material Product Feature Enhancements
Over the FY16 period a number of major feature enhancements were also made to the Adslot platform. These
enhancements all provide incremental value to the buyer and seller using Adslot, and in combination have materially
increased the value of the technology to both the media buyer and the media seller. Examples include:
Briefing – allows a buyer to describe a series of campaign objectives then distribute this in the form of a brief to
select publishers. Publishers can then use Adslot’s real time availability feature to generate a schedule of
proposed activity and share it with the buyer in response.
Discount/Commission Management – allows buyer and seller to collaborate via the platform to agree/negotiate
applicable discount and commission rates.
Video – allows buyers and sellers to more seamlessly trade video inventory including automation of VAST tags.
Ad-hoc products – allows a buyer and seller to trade product inventory that may not yet be fully set up by the
seller in the Adslot platform. This ensures trades that have a narrow window in which to close can be executed
first, and the set up completion undertaken at a future date.
Device targeting – allows a seller to expose device specific targeting (e.g. mobile, tablet) to a buyer.
Status messaging – enhancements to status messaging for publishers (sellers), including opt in/out features.
Improvements to the API for integrations (e.g. Symphony).
Improvements to briefing and planning workflows.
9
Review of Operations (continued)
Several of these feature enhancements have rapidly translated to increased adoption. For example, in the corresponding
12 months to June 30 2016:
The number of mobile/video products available to buyers in the Adslot marketplace increased by 93%
The total number of (all) products available to buyers in the Adslot marketplace increased by 38%
Likely Developments and Business Strategies
Continued Growth in Trading Technology Revenues
The three-year trend of Trading Technology revenue growth is expected to continue and accelerate, derived from growth
in both Licence Fees and Trading Fees.
In FY17, it is anticipated that growth in Licence Fees will outpace growth in Trading Fees in dollar terms, due significantly
to the global multi-year contract with groupm announced on 19th August (see further detail under ‘Subsequent Events’ on
page 11). In combination with the organic growth of Licence Fees from existing clients (as global digital ad spend continues
to grow at circa 20% CAGR) and new business opportunities, Licence Fee revenues will in the short to medium term
represent the majority of Trading Technology revenues.
Trading Fee growth will also continue, and in percentage growth terms likely exceed Licence Fee growth year on year.
The hybrid of passive, recurring Licence Fees and transaction generated Trading Fees is a strong position from which the
Company can focus increasing sales effort over time to unlock more Trading Fees from Symphony customers. Whilst
Trading Fees is a relatively nascent revenue stream, and the media industry remains in the early adoption phase, the
Company’s sales pipeline is building and the revenue opportunity it presents is a multiple of Licence Fees.
Continued Growth of Demand Captured via Symphony
As a direct result of the global multi-year contract with groupm announced on 19th August (see further detail under
‘Subsequent Events’ on page 11), and in combination with the rate of industry growth in global digital ad spend, Adslot
expects to see a significant lift in the value of media activity (demand) executed via Symphony over the next 3+ years as
outlined in the chart below.
Annualised Display Spend Executed via Symphony (AUD)
In addition to the general correlation between activity executed via Symphony and the Licence Fees it generates, the
anticipated growth in this demand (projected to be as high as circa $7b annualised by Q4 FY18), increases with it the size
of the Trading Fee revenue opportunity.
Furthermore, as the level of activity and demand captured via Symphony builds, the Company’s ability to leverage this to
drive adoption of its integrated trading toolset improves.
10
The Integration of Symphony and Adslot will be Continually Enhanced
The Company has engaged in close consultation with agencies and publishers, including the global Symphony agency
client base, and identified a number of enhancements to the Symphony-Adslot integration that it’s confident will generate
accelerated adoption and with it further Trading Fee revenue growth.
Customer feedback from those that have used the Symphony-Adslot integration, Symphony agencies yet to use the
integration, and agencies and publishers more generally, has identified a number of areas in which new features will
substantially increase adoption.
The product areas targeted for future development include:
Enhanced audience segmentation – buyers want to be able to rapidly discover, plan, negotiate and trade audience
targeted products and inventory. Enhancements in this area of the platform and the Symphony-Adslot integration
will also allow online publishers to expose more granular audience variables to buyers including the ability to
match to an audience specific to an advertiser or campaign.
Performance optimisation:
o Buyers and sellers want to reference their aggregate trading history to inform discussions and
negotiations pertaining to what inventory to buy/sell, and the price the pay/ask for it.
o Buyers and sellers want to reference historical campaign performance to inform discussions and
negotiations pertaining to what inventory to buy/sell, it’s projected value or performance and the price to
pay/ask.
Partner integrations – the Company expects to complete and launch two partner integrations in 1H FY17, further
detail of which will be released on completion.
These product enhancements align with the Company’s belief that trading automation must deliver more than just
operational efficiency, but also improve campaign effectiveness (performance).
Matters Subsequent to the End of the Financial Year
Global Multi-Year Contract with groupm – the World’s Largest Media Buyer
On 19th August 2016 the Company announced it had signed a multi-year contract with groupm. A division of WPP, groupm
is a multi-national media agency group and the world’s largest media buyer.
The global contract will see groupm activate Adslot’s workflow and trading automation platform Symphony into a
significant number of new markets, including an immediate commitment to multiple deployments in Europe and APAC.
The contract also sees groupm renew their commitment to Adslot across APAC, where Symphony has already been
deployed in a number of markets including Australia, China and Japan.
The contract has a number of material implications, including:
Significant additional revenue in the form of Licence Fees as new markets are deployed (see commentary in
section ‘Continued Growth of Demand Captured via Symphony’ on page 11).
Global deal with immediate focus on multiple market deployments across Europe and APAC.
Establishes Adslot as a truly global solution via:
Fully funded market entry for each new country of deployment
o
o
a new customer footprint in the EMEA region, and
an expanded customer footprint in the APAC region.
In combination with organic growth from existing customers and other new business, the value of media executed
via Symphony is expected to increase from circa $3 billion per annum to circa $7 billion per annum over the next
2 - 3 years.
As a result, Adslot’s Automated Guaranteed Trading Fee opportunity via the Symphony-Adslot integration will
effectively double.
Market-ready product can be sold into the broader industry in each new market activated.
Using Adslot’s existing service and support footprint, and its highly scalable cloud based infrastructure, costs incurred to
support the contracted revenue growth secured via the groupm agreement are modest and incremental.
The Company is keenly focused on optimising the speed of new market activations for groupm.
Environmental regulations
The Group’s operations are not subject to any significant environmental regulations under the Commonwealth, State or
any other country in which the entity operates.
Dividends
The Directors do not recommend the declaration of a dividend. No dividend has been declared or paid during the year.
11
Review of Operations (continued)
Shares under option
There were no unissued shares or interests under option as at the date of signing this report.
Shares subject to rights
Details of unissued shares or interests subject to rights as at the date of signing this report are:
CEO Sign on Rights
Share price required (a)
Number of rights
Right to receive ordinary shares
Right to receive ordinary shares
Right to receive ordinary shares
Right to receive ordinary shares
Total
$0.200
$0.300
$0.400
$0.500
3,000,000
4,000,000
5,000,000
5,000,000
17,000,000
(a) Share price required to trade above a 30 day VWAP before entitlement to Right
Executive Performance Rights
Issue Type
Issue or
Acquisition
Date
Performance Rights
26/11/14
Performance Rights
26/8/15
Performance Rights
27/06/16
Issue
Price
$
Nil
Nil
Nil
Balance at
beginning
of the year
(Number)
Issued
during the
year
(Number)
Transfers
during the
year
(Number)
Forfeited
during the
year
(Number)
Balance at end
of the year
(Number)
10,750,000
-
(2,520,377)
(2,920,100)
5,309,523
-
-
2,660,000
600,000
-
-
(705,000)
1,955,000
-
600,000
10,750,000
3,260,000
(2,520,377)
(3,625,100)
7,864,523
Indemnification and Insurance of Officers
The Company has during the financial year, in respect of each person who is or has been an officer of the company or a
related body Corporate, made a relevant agreement for indemnifying against a liability incurred as an officer, including
costs and expenses in successfully defending legal proceedings.
Since the end of the financial year, the Company has paid premiums to insure all directors and officers of Adslot Ltd and
the Adslot Group of companies, against costs incurred in defending any legal proceedings arising out of their conduct as
a director and officer of the Company, other than for conduct involving a wilful breach of duty or a contravention of Sections
232(5) or (6) of the Corporations Act 2011, as permitted by section 241A(3) of the Corporations Act. Disclosure of the
premium amount is prohibited by the insurance contract.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking
responsibility on behalf of the company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of
the Corporations Act 2001.
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 30 June 2016 has been received and can be found on page 21
of the financial report. Details of amounts paid or payable to the auditor for non-audit services provided during the year are
outlined in Note 21 to the financial statements.
The Directors are satisfied that the provision of non-audit services, during the year by the auditor is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001.
12
Remuneration Report
The remuneration report is set out under the following headings:
Section 1:
Non-executive directors’ remuneration
Section 2:
Executive remuneration
Section 3:
Details of remuneration
Section 4:
Executive contracts of employment
Section 5:
Equity-based compensation
Section 6:
Equity holdings and transactions
Section 7:
Other transactions with key management personnel
Section 1: Non-executive directors’ remuneration
Non-executive directors’ fees are reviewed annually and are determined by the Board. In making its determination it takes
into account fees paid to other non-executive directors of comparable companies.
Non-executive directors’ fees are within the maximum aggregate limit of $350,000 per annum agreed to by shareholders
at the Annual General Meeting held on 30 November 2009. To preserve the independence and integrity of their position,
non-executive directors do not receive performance-based bonuses.
The Chairman’s fees are $75,000 per annum. Non-executive directors fees are $50,000 per annum. In addition, the Chair
of the Audit & Risk Committee receives a further $25,000 in recognition of the additional workload of that position.
Section 2: Executive remuneration
The Board of Directors are responsible for determining and reviewing compensation arrangements for key management
personnel and the executive team. In June 2011, the Company established a Remuneration Committee who now makes
recommendations on remuneration of key management personnel to the Board.
The Board assesses the appropriateness of the nature and amount of emoluments of these employees on a periodic basis
by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit
from the retention of high quality executives. Executives’ remuneration consists of a fixed cash component, short-term
incentives in the form of cash bonuses, and long-term incentives in the form of equity-based compensation linked to the
long term prospects and future performance of the Company. The inclusion of equity-based compensation in executives’
remuneration provides a direct link between their remuneration and shareholder wealth, otherwise there are no direct
relationships.
In providing the Company’s performance and benefits for shareholder wealth, the Board have regard to the following
indices in respect of the current financial year and the previous four financial years:
Item
EPS (cents)
Net loss ($)
2016
(0.77)
2015
(0.89)
2014
(1.20)
2013
(0.94)
2012
(1.08)
8,138,485
9,205,521
10,095,562
6,460,947
7,331,658
Share price at 30 June ($)
0.110
0.090
0.115
0.044
0.035
13
Remuneration Report (continued)
Section 3: Details of remuneration
Details of the remuneration of the directors and the key management of the Company and its controlled entities are set out
in the following tables.
The key management personnel of Adslot Ltd and its controlled entities include the following directors and executive
officers:
Directors
Position
Date appointed/resigned
Mr Adrian Giles
Non-Executive Director
Appointed 26 November 2013
Mr Andrew Barlow
Non-Executive Director
Appointed 16 February 2010
Non-Executive Chairman
Appointed 26 November 2013
Mr Ian Lowe
Chief Executive Officer
Executive Director
Appointed 8 October 2012
Appointed 8 October 2012
Mr Ben Dixon
Executive Director
Appointed 23 December 2013
Mr Geoff Dixon
Non-Executive Director
Appointed 23 December 2013
Mr Quentin George
Non-Executive Director
Appointed 14 June 2014
Ms Sarah Morgan
Non-Executive Director
Appointed 27 January 2015
Executive Officers
Mr Brendan Maher
Company Secretary / Chief Financial Officer
Appointed 15 November 2010
Mr Tom Peacock
Group Commercial Director
Appointed 23 December 2013
14
Group
2016
Name
Short-term benefits
Long Term
Benefits
Post-
employment
benefits
Share-based payment
Salary
& fees
$
Bonus
$
Other
$
Long
Service
Leave
$
Super-
annuation
$
Shares1
$
Rights1
$
Total
$
Executive directors
Mr I Lowe
Mr B Dixon
309,000
-
203,854
17,351
Non-executive directors
Mr A Giles
Mr A Barlow
Mr G Dixon
Mr Q George
Ms S Morgan
50,000
68,493
45,662
50,000
68,493
Other key management personnel
Mr B Maher
Mr T Peacock
252,838
205,500
-
-
-
-
-
-
-
Totals
1,253,840
17,351
-
-
-
-
-
-
-
-
-
-
-
8,969
19,308
20,818
-
-
-
-
-
-
28,572
328,308
279,564
-
-
-
-
-
50,000
75,000
50,000
75,744
75,000
-
-
-
-
-
-
6,507
4,338
-
25,744
6,507
-
7,628
5,745
19,308
19,308
19,743
89,891
47,620
38,096
347,137
358,540
22,342
96,094
135,378
114,288
1,639,293
1 Awards of Shares and Rights are governed by the rules of the Company’s ESOP. Given the forfeiture conditions contained
in that Plan, these awards are in substance rights issues.
Bonuses
Bonuses appearing in the table above were paid for the year ended 30 June 2016 (but relate to the performance from the
prior year) as follows:
Name
Amount
available in
future
periods
Total Bonus
Opportunity
Amount Paid
$
$
$
Assessment Criteria
Mr I Lowe
Mr B Dixon
Mr B Maher
Mr T Peacock
-
17,351
-
-
-
-
-
-
125,000 Company performance to budget, product development and launch,
and client & partnership signings.
55,000 Performance related KPI’s.
45,063 Division performance, governance, reporting and performance
related KPI’s.
N/A (a) Performance related KPI’s.
(a)
Not applicable as total bonus opportunity is based on a percentage of the Group’s performance.
No portion of the total bonus opportunity for key management personnel was forfeited.
15
Remuneration Report (continued)
Section 3: Details of remuneration (Continued)
Group
2015
Name
Short-term benefits
Long Term
Benefits
Post-
employment
benefits
Share-based payment
Salary
& fees
$
Bonus
$
Other
$
Long
Service
Leave
$
Super-
annuation
$
Shares1
$
Rights1
$
Total
$
Executive directors
Mr I Lowe
Mr B Dixon
309,000
20,531
175,397
5,000
Non-executive directors
Mr A Giles
Mr A Barlow
Mr G Dixon
Mr Q George
Ms S Morgan (i)
50,000
68,493
45,662
50,000
29,680
-
-
-
-
-
Other key management personnel
Mr B Maher
Mr T Peacock
266,862
200,000
15,000
10,000
Totals
1,195,094
50,531
-
-
-
-
-
-
-
-
-
-
-
5,663
18,783
17,599
12,123
113,384
_
7,253
473,821
210,912
-
-
-
-
-
-
6,507
4,338
-
-
-
-
60,683
2,820
-
-
-
-
-
-
50,000
75,000
50,000
110,683
32,500
11,101
3,722
20,208
18,783
51,280
134,381
12,089
9,671
376,540
376,557
20,486
89,038
258,467
142,397
1,756,013
1 Awards of Shares and Rights are governed by the rules of the Company’s ESOP. Given the forfeiture conditions contained
in that Plan, these awards are in substance rights issues.
(i)
from 27 January 2015
Bonuses
Bonuses appearing in the table above were paid for the year ended 30 June 2015 (but relate to the performance from the
prior year) as follows:
Name
Amount
available in
future
periods
Total Bonus
Opportunity
Amount Paid
$
$
$
Assessment Criteria
Mr I Lowe
20,531
-
125,000 Company performance to budget, product development and launch,
Mr B Dixon
Mr B Maher
5,000
15,000
Mr T Peacock
10,000
and client & partnership signings.
19,000
55,000 Performance related KPI’s.
-
-
45,063 Division performance, governance, reporting and performance
related KPI’s.
N/A (a) Performance related KPI’s.
(b)
Not applicable as total bonus opportunity is based on a percentage of the Group’s performance.
No portion of the total bonus opportunity for key management personnel was forfeited.
16
Section 4: Executive contracts of employment
Formal contracts of employment for all members of the key management personnel are in place. Contractual terms for
most executives are similar but do, on occasions, vary to suit different needs. The following table summarises the key
contractual terms for all key management personnel.
Length of contract
Open ended
Fixed Remuneration
Remuneration comprises salary and statutory employer superannuation contributions.
Incentive Plans
Eligible to participate. Incentive criteria and award opportunities vary for each executive.
Notice Period
Resignation
Retirement
Members of the key management, including executive directors, have notice periods
ranging from three weeks to three months. The Chief Executive Officer and Chief
Financial Officer have notice periods of 3 months. Other Executives have notice periods
ranging from 3 weeks to 1 month.
Employment may be terminated by giving notice consistent with the notice period.
There are no financial entitlements due from the Company on retirement of an executive.
Termination by the
Company
The Company may terminate the employment agreement by providing notice consistent
with the notice period or payment in lieu of the notice period.
Redundancy
Payments for redundancy are discretionary and are determined having regard to the
particular circumstances. There are no contractual commitments to pay redundancy over
and above any statutory entitlement.
Termination for serious
misconduct
The Company may terminate the employment agreement at any time without notice, and
the executive will be entitled to payment of remuneration only up to the date of termination.
Section 5: Equity-based compensation
Performance Rights over Shares
Shareholders approved at the November 2014 Annual General Meeting the creation of Performance Rights over Shares
which enables the Board to offer eligible employees the right to Performance Rights which convert to shares subject to the
executive’s performance against certain performance criteria. No amounts are paid or payable by the recipient on receipt
of the right. The rights carry no voting rights. All rights are subject to service periods which require the employees remain
an employee of the Company.
The following table shows grants of share-based compensation to directors and senior management under the
Performance Rights Plan during the current financial year:
Name
Ben Dixon
Brendan Maher
Tom Peacock
Series
Nov 14
Nov 14
Nov 14
Balance at
beginning of the
year (Number)
Granted during
the year
(Number)
Expired during
the year
(Number)
Exercised
during the year
(Number)
Balance at the
end of the year
(Number)
750,000
1,250,000
1,000,000
3,000,000
-
-
-
-
-
-
-
-
(250,000)
(416,667)
(333,333)
500,000
833,333
666,667
(1,000,000)
2,000,000
No Performance rights to shares were granted to KMP during the year ended 30 June 2016.
The following table shows grants of share-based compensation to directors and senior management under the
Performance Rights Plan during the prior year ending 30 June 2015:
Name
Ben Dixon
Brendan Maher
Tom Peacock
Series
Nov 14
Nov 14
Nov 14
Balance at
beginning
of the year
(Number)
Granted
during the
year
(Number)
Expired
during the
year
(Number)
Exercised
during the
year
(Number)
Balance at
the end of
the year
(Number)
-
-
-
-
750,000
1,250,000
1,000,000
3,000,000
-
-
-
-
-
750,000
- 1,250,000
- 1,000,000
- 3,000,000
17
Remuneration Report (continued)
Section 5: Equity-based compensation (Continued)
The model inputs for Performance rights to shares granted during the year ended 30 June 2015 included:
Model Input
Grant Date
Assessment period
Exercise Price
Probability of Conversion to Shares
Price at Grant Date
PR # 15-2
26/11/2014
2 years
-
25%
$0.105
Employee share ownership plan (ESOP)
In November 2012 the Company gained approval to establish an employee incentive scheme comprising the Adslot Limited
Share Option Plan and the Adslot Employee Share Trust.
Rights to shares are available to be issued to eligible employees based on the performance against agreed key
performance indicators. Any rights awarded are subject to a two-year service period and if this service period is not met,
the rights to shares will be forfeited by the eligible employee. Shares held by the Trust under the scheme will have voting
and dividend rights, and the right to participate in further issues pro-rata to all ordinary shareholders.
The ESOP was replaced by the Performance Rights over Shares Plan in financial year 2015 and as such there have been
no new ESOP rights granted during the years ending 30 June 2016 and 30 June 2015.
The following table shows the vesting of ESOP share-based compensation to directors and senior management under the
ESOP for the current financial year ended June 2016:
During the Financial year
Name
ESOP Series
Number
Granted
Number
Vested
% of Grant
Vested
% of Grant
Forfeited
Brendan Maher
Sept 2013
March 2014
Tom Peacock
Jan 2014
March 2014
-
-
-
-
763,602
561,526
176,928
2,823,072
100%
100%
100%
100%
0%
0%
0%
0%
The following table shows the vesting of ESOP share-based compensation to directors and senior management under the
ESOP during prior year ending June 2015:
During the Financial year
Name
ESOP Series
Number
Granted
Number
Vested
% of Grant
Vested
% of Grant
Forfeited
Ian Lowe
October 2012
Brendan Maher
September 2012
-
-
1,500,000
100%
1,674,872
100%
0%
0%
18
Rights over Shares
Upon commencement of employment (8 October 2012) Mr Lowe was granted the right to receive the following shares after
the share price of the Company trades above a 30 day volume-weighted average price (VWAP) as per the table below.
Each right would convert into one ordinary share of Adslot Ltd when the VWAP criteria is met. In the event of a Change
of Control of the Company some of these Rights would vest on a sliding scale between the take over price and required
VWAP of the next eligible series.
No amounts are paid or payable by the recipient on receipt of the right. The rights carry no voting rights. Some rights are
subject to escrow per the below table and all rights are subject to Mr Lowe remaining an employee of the Company.
Rights over shares movements during the financial year are summarised below:
Issue Type
Rights over shares
Rights over shares
Rights over shares
Rights over shares
Required
VWAP
Price $
Balance at
beginning
of the year
(Number)
Granted
during the
year
(Number)
Expired
during the
year
(Number)
Exercised
during the
year
(Number)
Balance at
the end of
the year
(Number)
0.200
0.300
0.400
0.500
3,000,000
4,000,000
5,000,000
5,000,000
17,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
4,000,000
5,000,000
5,000,000
- 17,000,000
During the year, the 3,000,000 Rights over shares relating to the 10 cents VWAP hurdle, that were awarded in December
2013 to Mr Lowe, were released from their 2-year escrow requirement and transferred from the Employee Share Trust
unencumbered to Mr Lowe.
The following table shows grants of rights over shares to directors and senior management during prior year ending 30
June 2015:
Issue Type
Rights over shares
Rights over shares
Rights over shares
Rights over shares
Required
VWAP
Price $
Balance at
beginning
of the year
(Number)
Granted
during the
year
(Number)
Expired
during the
year
(Number)
Exercised
during the
year
(Number)
Balance at
the end of
the year
(Number)
0.200
0.300
0.400
0.500
3,000,000
4,000,000
5,000,000
5,000,000
17,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
4,000,000
5,000,000
5,000,000
- 17,000,000
Details of ESOP and other rights to ordinary shares in the Company provided as remuneration of directors and the key
management personnel of the Company are set out below:
Name
2016
2015
2016
2015
Number
$
Number
$
Number
$
Number
$
Rights Granted During the Year
Rights Vested During the Year
Directors
Mr Adrian Giles
Mr Ian Lowe
Mr Andrew Barlow
Mr B Dixon
Mr G Dixon
Mr Q George
Ms S Morgan (i)
Other Key Management Personnel
Mr B Maher
Mr T Peacock
(i)
from 27 January 2015
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
750,000
78,750
250,000
26,250
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,500,000
165,000
-
-
-
-
-
-
-
-
-
-
1,250,000
131,250 1,741,795
122,695
1,674,872
245,109
1,000,000
105,000 3,333,333
288,682
-
-
The assessed fair value at issue date of the rights granted to the executive is allocated equally over the period from issue
date to vesting date, and the amount is included in the remuneration tables above.
19
Remuneration Report (continued)
Section 6: Equity holdings and transactions
The number of shares in the Company held during the financial year by each Director of Adslot Ltd and other key
management personnel of the Group, including their personally related parties, are set out below:
2016
Name
Directors
Mr A Giles
Mr A Barlow
Mr I Lowe
Mr B Dixon
Mr G Dixon
Mr Q George
Ms S Morgan
Balance
at the start
of the year
(Number)
19,633,409
57,803,769
11,461,929
35,119,513
86,252,015
-
-
Received during
the year as
compensation
Net other changes
during the year
Balance
at the end
of the year
(Number)
(Number)
(Number)
-
-
3,000,000
250,000
-
-
-
-
-
-
-
-
-
-
19,633,409
57,803,769
14,461,929
35,369,513
86,252,015
-
-
Other key management personnel
Mr B Maher
Mr T Peacock
274,872
742,642
1,741,795
3,333,333
(1,455,141)
-
561,526
4,075,975
Totals
211,288,149
8,325,128
(1,455,141)
218,158,136
Section 7: Other transactions with Key Management Personnel
Transactions with Directors and their personally related entities:
During the year the Company earned revenue to the value of $353 from a Publisher related to Mr Ben Dixon and Mr
Geoff Dixon on normal commercial terms and conditions.
This marks the end of the audited remuneration report.
This report is made in accordance with a resolution of directors.
Andrew Barlow
Chairman
31 August 2016
20
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2016
Total revenue from continuing operations
Other income
Total revenue and other income
Hosting & other related technology costs
Salaries and employment related costs
Directors’ fees
Marketing costs
Lease – rental premises
Impairment of receivables
Listing & registrar fees
Legal fees
Travel expenses
Consultancy fees
Audit and accountancy fees
Other expenses
Share based payment expense
Depreciation and amortisation expenses
Total expenses
Loss before income tax expense
Income tax benefit / (expense)
Loss after income tax expense
Net loss attributable to members
Other comprehensive income / (loss)
Items that may be reclassified subsequently to profit or loss
Foreign exchange translation
Total other comprehensive income / (loss)
Notes
3
4
4
4
5
2016
$
7,735,278
778,504
8,513,782
(1,402,979)
(6,908,429)
(298,656)
(104,830)
(941,552)
(28,240)
(111,237)
(27,728)
(315,124)
(76,236)
(159,889)
(884,133)
(440,138)
2015
$
6,495,312
680,182
7,175,494
(1,094,477)
(5,954,451)
(259,568)
(246,726)
(820,431)
37,440
(117,301)
(35,993)
(396,234)
(44,553)
(138,284)
(854,693)
(702,806)
(4,930,957)
(5,731,779)
(16,630,128)
(16,359,856)
(8,116,346)
(9,184,362)
(22,139)
(8,138,485)
(8,138,485)
(21,159)
(9,205,521)
(9,205,521)
(10,739)
(10,739)
53,065
53,065
Total comprehensive loss attributable to the members
(8,149,224)
(9,152,456)
Earnings per share (EPS) from loss from continuing operations
attributable to the ordinary equity holders of the company
Basic earnings per share
Diluted earnings per share
16
16
2016
Cents
(0.77)
(0.77)
2015
Cents
(0.89)
(0.89)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
22
Consolidated Statement of Financial Position
As at 30 June 2016
Notes
2016
$
2015
$
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Total current assets
NON-CURRENT ASSETS
Property, plant & equipment
Deferred tax assets
Intangible assets
Total non-current assets
Total assets
CURRENT LIABILITIES
Trade and other payables
Other liabilities
Provisions
Total current liabilities
NON-CURRENT LIABILITIES
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
7
8
9
5
10
11
12
13
13
5
14
15
4,745,969
4,355,987
9,101,956
4,441,226
4,430,402
8,871,628
65,518
39,677
74,296
39,677
26,759,567
30,289,099
26,864,762
30,403,072
35,966,718
39,274,700
2,976,527
2,853,010
557,878
457,522
683,148
507,747
3,991,927
4,043,905
315,587
39,677
355,264
242,671
39,677
282,348
4,347,191
4,326,253
31,619,527
34,948,447
120,693,650
115,100,833
404,736
1,187,988
(89,478,859)
(81,340,374)
31,619,527
34,948,447
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
23
Consolidated Statement of Changes in Equity
For the year ended 30 June 2016
2016
Balance at 1 July 2015
115,100,833
1,187,988
(81,340,374)
34,948,447
Issued
Capital
$
Reserves
$
Accumulated
Losses
$
Total
Equity
$
Notes
Movement in foreign exchange translation reserve
15
Other comprehensive income
Loss attributable to members of the company
Total comprehensive income
Transactions with equity holders in their capacity
as equity holders
Contributions of equity, net of transaction costs
Reclassification of vested ESOP
Increase in employees share based payments reserve
14
15
15
-
-
-
-
(10,739)
(10,739)
-
-
(10,739)
(10,739)
-
(8,138,485)
(8,138,485)
(10,739)
(8,138,485)
(8,149,224)
4,382,380
1,210,437
-
5,592,817
-
(1,212,651)
440,138
(772,513)
-
-
-
-
4,382,380
(2,214)
440,138
4,820,304
Balance 30 June 2016
120,693,650
404,736
(89,478,859)
31,619,527
2015
Balance at 1 July 2014
Notes
Issued
Capital
$
108,515,858
Movement in foreign exchange translation reserve
15
Decrease in available for sale investment reserve
Other comprehensive income
Loss attributable to members of the company
Total comprehensive income
Transactions with equity holders in their capacity
as equity holders
Contributions of equity, net of transaction costs
Reclassification of lapsed options to retained earnings
Reclassification of vested ESOP
Increase in employees share based payments reserve
14
15
15
15
Reserves
$
Accumulated
Losses
$
Total
Equity
$
1,242,375
53,065
-
53,065
(72,565,017)
37,193,216
-
-
-
53,065
-
53,065
-
53,065
(9,205,521)
(9,205,521)
(9,205,521)
(9,152,456)
-
-
-
-
-
6,204,881
-
380,094
-
6,584,975
-
(430,164)
(380,094)
702,806
(107,452)
-
6,204,881
430,164
-
-
-
-
702,806
430,164
6,907,687
Balance 30 June 2015
115,100,833
1,187,988
(81,340,374)
34,948,447
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
24
Consolidated Statement of Cash Flow
As at 30 June 2016
Notes
2016
$
2015
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from trade and other debtors
Interest received
Receipt of R&D tax incentive and other Grants
11,327,511
76,463
511,425
8,278,552
184,099
436,152
Payments to trade creditors, other creditors and employees
(14,685,066)
(12,046,481)
Income tax received/ (paid)
Interest paid
17,187
(187)
(19,868)
(8,130)
Net cash outflows from operating activities
24
(2,752,667)
(3,175,676)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
Receipt of R&D tax incentive relating to capitalised assets
Payments for intangible assets
Net cash outflows from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Payments of equity raising costs
Net cash inflows from financing activities
Net increase / (decrease) in cash held
Cash at the beginning of the financial year
Effects of exchange rate changes on cash
(58,140)
1,716,792
(40,786)
1,741,136
(2,911,523)
(3,638,707)
(1,252,871)
(1,938,357)
4,600,000
6,523,200
(237,135)
(370,441)
4,362,865
6,152,759
357,327
4,441,226
(52,584)
1,038,726
3,354,051
48,449
CASH AT THE END OF THE FINANCIAL YEAR
7
4,745,969
4,441,226
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
25
Notes to the Financial Statement
For the year ended 30 June 2016
Summary of Significant Accounting Policies
The financial report covers Adslot Ltd (‘the Company’) and controlled entities (‘the Group’). Adslot Ltd is a listed
public company, incorporated and domiciled in Australia. The financial report is for the financial year ended 30 June
2016 and is presented in Australian dollars.
The principal accounting policies adopted in the preparation of these consolidated financial statements are
summarised below. These policies have been consistently applied to all the years presented, unless otherwise
stated.
Basis of preparation
This general purpose financial report has been prepared in accordance with Australian Accounting Standards,
other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations
Act 2001.
Compliance with IFRS
Australian Accounting Standards include International Financial Reporting Standards as adopted in Australia.
Compliance with Australian Accounting Standards ensures that the financial statements and notes of Adslot Ltd
comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board (IASB). Adslot Ltd is a for-profit entity for the purpose of preparing the financial statements.
Historical cost convention
These financial statements have been prepared under the historical cost convention as modified by the
revaluation of available-for-sale financial assets. Under the historical cost convention assets are recorded at the
amount of cash or cash equivalents paid or the fair value of the consideration given to acquire them at the time
of their acquisition. Liabilities are recorded at the amount of proceeds received in exchange for the obligation,
or in some circumstances at the amounts of cash or cash equivalents expected to be paid to satisfy the liability
in the normal course of business.
Critical accounting estimates
The preparation of financial statements in conformity with Australian Accounting Standards requires the use of
certain critical accounting estimates. It also requires management to exercise its judgement in the process of
applying the Group’s accounting policies. The estimates and associated assumptions are based on historical
experience and other factors that are considered relevant. Actual results may differ from these estimates. The
estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period or in the
period of the revision and future periods if the revision affects both current and future periods.
Going concern
Management continue to invest resources to successfully launch the Adslot products in multiple geographies.
The Group has incurred net cash outflows from operations of $2.7m for the year, and management anticipate
incurring further net cash outflows from operations until such time as sufficient revenue growth is achieved.
The ability of the Group to continue as a going concern is dependent upon revenue growth and levels of cash
reserves. During FY 2016 the Company increased the earnings from its Trading Technology revenues which is
represented by the Adslot and Symphony products. During FY 2017 the Company expects to further increase
revenues from these two products on a stand-alone basis and also from the integration of these two products.
Despite this, the Company anticipates net operating cash flows from operations will continue to be negative in
FY 2017. However the Directors believe the Group can continue to pay its debts as and when the fall due for
the following reasons:
The Group had a cash position as at 30 June 2016 of $4.7m;
The Group expects to receive $2.3m in grants for Research & Development relating to prior year
expenditure within the next four months;
The Webfirm division is expected to make continued positive net cash flows from its operations
during FY 2017;
The Group has successfully raised capital in the past; and
Management could reduce the level of resources dedicated to expanding the business if so required.
Accordingly the Directors believe there exists a reasonable expectation that the Group can continue to pay its
debts as and when they fall due, and the financial report has been prepared on a going concern basis.
26
Principles of consolidation
Subsidiaries
The consolidated financial statements comprise those of the Company, and the entities it controlled at the end
of, or during, the financial year. The Company controls a subsidiary if it is exposed, or has rights, to variable
returns from its involvement with the subsidiary and has the ability to affect those returns through its power over
the subsidiary.
All intra-group transactions, balances, income and expenses between entities in the Group included in the
financial statements have been eliminated in full. Where unrealised losses on intra-group asset sales are
reversed on consolidation, the underlying asset is also tested for impairment from a group perspective. Where
an entity either began or ceased to be controlled during the year, the results are included only from the date
control commenced or up to the date control ceased. The accounting policies adopted in preparing the financial
statements have been consistently applied by entities in the Group.
Investments in subsidiaries are accounted for at cost less impairment losses in the parent entity information in
Note 26.
Business combinations
Acquisition of subsidiaries and businesses are accounted for using the acquisition method. The consideration
for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given,
liabilities incurred or assumed and equity instruments issued by the Group in exchange for control of the
acquiree. Acquisition related costs are recognised in profit or loss as incurred.
The Group recognises identifiable assets and liabilities assumed in the business combination regardless of
whether they have been previously recognised in the acquiree’s financial statements prior to acquisition. Assets
acquired and liabilities assumed are generally measured at their acquisition date fair values. Goodwill is stated
after separate recognition of identifiable intangible assets calculated as the excess of the sum of the fair value
of the consideration transferred over the acquisition date fair value of identifiable net assets. If the identifiable
net assets exceed the consideration transferred, the excess amount is recognised in profit or loss immediately.
Any deferred settlement of cash consideration is discounted to its present value as at the date of acquisition.
The discount rate used is the incremental borrowing rate that the Group can obtain from an independent
financier under comparable terms and conditions.
Foreign Currency Exchange
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s
functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each
reporting date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the
reporting date. Exchange differences are recognised in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income in the period in which they arise.
On consolidation, the assets and liabilities of the Group’s foreign operations are translated into Australian dollars
at exchange rates prevailing on the reporting date. Income and expense items are translated at the average
exchange rates for the period. Exchange differences arising, if any, are charged/credited to other
comprehensive income and recognised in the Group’s foreign currency translation reserve in equity. On disposal
of a foreign operation the cumulative translation difference recognised in equity are reclassified to profit or loss
and recognised as part of the gain or loss on disposal.
Cash and cash equivalents
For the purposes of the Statement of Cash Flows, cash includes cash on hand and deposits at call which are
readily convertible to cash and are not subject to significant risk of changes in value, net of bank overdrafts.
Publisher Account Cash represents share of advertising revenue held before release to Adslot Publishers.
27
Notes to the Financial Statements (Continued)
1. Summary of Significant Accounting Policies (Continued)
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment in value.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be recoverable. Leasehold improvements are depreciated
using the straight-line method over the remaining period of the underlying lease.
Depreciation is calculated on a straight line basis for all plant and equipment. The estimated useful lives, residual
values and depreciation method are reviewed at the end of each annual reporting period, with the effect of any
changes recognised on a prospective basis.
The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as
the difference between the sales proceeds and the carrying amount of asset and is recognised in profit or loss.
The following depreciation rates are used for each class of depreciable asset:
Computer Equipment
Plant & Equipment
Leasehold Improvements
33 – 40% per annum
20 – 33% per annum
20 – 80% per annum
Receivables
Trade receivables are recognised initially at fair value and thereafter are measured at amortised cost, less
provision for impairment. They are non-derivative financial assets with fixed or determinable amounts not
quoted in an active market. Trade accounts receivable are generally settled between 14 and 60 days and
carried at amounts recoverable.
Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are
written off. A provision for doubtful receivables is established when there is objective evidence that the Group
will not be able to collect all amounts due according to the original terms of the receivables. The amount of the
provision is the difference between the asset’s carrying amount and the present value of estimated future cash
flows, discounted at the effective interest rate. The amount of the provision is recognised in profit or loss.
Subsequent recoveries of amounts previously written off are credited against the allowance account.
Investments and other financial assets
Financial assets are recognised when the group entity becomes a party to the contractual provisions of the
instrument.
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset
not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed
through profit or loss.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. Loans and receivables are measured subsequent to recognition at amortised cost
using the effective interest method, less provision for impairment. Discounting is omitted where the effect of
discounting is immaterial.
Available-for-sale financial assets are non-derivative financial assets that are either designated to this category
or do not qualify for inclusion in any other category of financial assets. Available-for-sale financial assets are
measured at fair value. Gains or losses arising from changes in available-for-sale financial assets are presented
in other comprehensive income in the period in which they arise.
Trade and other creditors – financial liabilities
Trade accounts payable and other creditors represent liabilities for goods and services provided to the Group
prior to the end of the financial year and which are unpaid. The amounts are unsecured and are usually paid
within 45 days of recognition.
Financial liabilities are measured subsequently at amortised cost using the effective interest method.
28
Borrowings
Borrowings are initially recognised at fair value (less transaction costs) and subsequently measured at amortised
cost. Any difference between the proceeds and the redemption amount is recognised in profit or loss over the
period of the borrowing using the effective interest method.
Finance costs
Finance costs are recognised as expenses in the period in which they are incurred except where they are
incurred in the construction of a qualifying asset in which case the finance costs are capitalised as part of the
asset.
Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income
based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying
amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply
when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or
substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of
deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is
made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred
tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other
than a business combination, that at the time of the transaction did not affect either accounting profit or 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. Deferred
tax liabilities are always provided for in full.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount
and tax bases of investments in controlled entities where the parent entity is able to control the timing of the
reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable
future.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised
directly in equity.
Tax consolidation legislation
Adslot Ltd and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.
The head entity, Adslot Ltd, and the controlled entities in the tax consolidated group account for their own current
and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group
continues to be a stand-alone taxpayer in its own right.
To the extent that it is not probable that taxable profit will be available in the foreseeable future against which
the unused tax losses or unused tax credits can be utilised, the deferred tax assets of its own and its controlled
entities are not recognised by Adslot Ltd.
Employee benefits
Wages and salaries, annual leave and sick leave
Short-term employee benefits are current liabilities included in employee benefits, measured at the
undiscounted amount that the Group expects to pay as a result of the unused entitlement. Annual leave is
included in ‘provisions’. The Group does not discount the leave liability calculations as the Group expects all
annual leave for all employees to be used wholly within 12 months of the end of reporting period.
Long service leave
The liability for long service leave expected to be settled within 12 months of the reporting date is recognised in
provisions for employee entitlements and is measured at the amount expected to be paid when the liabilities are
settled. The liability for long service leave expected to be settled more than 12 months from the reporting date,
is recognised in the non-current provision for employee benefits and is measured as the present value of the
estimated future cash outflows to be made by the Group in respect of services provided by employees up to
reporting date.
29
Notes to the Financial Statements (Continued)
1. Summary of Significant Accounting Policies (Continued)
Share-based compensation benefits
Equity-settled share-based payments with employees and others providing similar services are measured at the
fair value of the equity instrument at the grant date. The fair value at grant date is determined using a binomial
option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the
share price at grant date, the expected price volatility of the underlying share, the expected dividend yield and
the risk-free interest rate for the term of the option.
The fair value determined at the grant date of the equity-settled share-based payments is recognised as an
expense, with a corresponding increase in equity (share-based payments reserve) on a straight line basis over
the vesting period.
Upon the exercise of options, the balance of the share-based payments reserve relating to those options is
transferred to share capital while the proceeds received, net of any directly attributable transaction costs, are
credited to share capital.
Intangible Assets
Goodwill
Goodwill arising in a business combination is recognised as an asset at the date that control is acquired
(acquisition date). Goodwill is measured as the excess of the fair value of consideration paid over the fair value
of the identifiable net assets of the entity or operations acquired. Goodwill acquired in business combinations is
not amortised. Instead, goodwill is tested for impairment annually, being allocated to the cash flows of the
relevant cash generating unit and is carried at cost less accumulated impairment losses. An impairment loss for
goodwill is recognised immediately in profit or loss and is not reversed in a subsequent period.
Research & development expenditure
Research costs are expensed as incurred. An intangible asset arising from development expenditure on an
internal project is recognised only when the Group can demonstrate the technical feasibility of completing the
intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell
the asset, how the asset will generate future economic benefits, the availability of resources to complete the
development and the ability to measure reliably the expenditure attributable to the intangible asset during its
development. Following the initial recognition of the development expenditure, the cost model is applied
requiring the assets to be carried at cost less any accumulated amortisation and accumulated impairment
losses. Any expenditure so capitalised is amortised over the period of expected benefits from the related project.
The carrying value of an intangible asset arising from development costs is tested for impairment annually when
the asset is not yet available for use or more frequently when an indicator of impairment arises during the
reporting period.
Intellectual property
The intellectual property relates to the platform technology, branding and domains acquired as a result of the
acquisition of Adslot, QDC IP Technology and Facilitate Digital businesses. Where the useful life is assessed
as indefinite, assets are not amortised and the carrying value is tested for impairment annually or more
frequently if events or changes in circumstances indicate impairment. It is carried at cost less impairment losses.
For those assets assessed as having a finite life, they are amortised on a straight-line basis over the estimated
useful life of the asset. The expected accounting useful life of intellectual property relating to the Adslot, QDC
IP Technology and Facilitate Digital business is 4 to 5 years.
Domain name
Acquired domain names are accounted for at cost, useful life is assessed as indefinite and the assets are not
amortised. The carrying value is tested for impairment annually or more frequently if events or changes in
circumstances indicate impairment. They are carried at cost less impairment losses.
Software
Software represents internally developed software platforms capitalised according to accounting standards.
Software is assessed as having a finite life and is amortised on a straight-line basis over the estimated useful
life of the asset. The expected accounting useful life of software is 5 years.
The carrying value of the software is tested for impairment when an indicator of impairment arises during the
reporting period.
30
Leased assets
Leases of assets under which the Group assumes substantially all the risks and benefits of ownership are
classified as finance leases. This is distinct from operating leases under which the lessor effectively retains
substantially all such risks and benefits. Property, plant and equipment acquired by finance leases are
capitalised at the present value of the minimum lease payments as a finance lease asset and as a corresponding
lease liability from date of inception of the lease. Lease assets are amortised over the period the entity is
expected to benefit from the use of the assets or the term of the lease, whichever is shorter. Finance lease
liabilities are reduced by the component of principal repaid. Lease payments are allocated between the principal
component of the liability and interest expense.
Operating lease payments are charged to statement of profit or loss and other comprehensive income on a
straight-line basis over the period of the lease term. Associated costs such as maintenance and insurance are
expensed as incurred.
Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
i. Where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part
of the cost of acquisition of an asset or as part of an item of expense; or
ii.
For receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as
revenue are net of returns, allowances, duties and taxes paid.
Revenue is recognised for the major business activities as follows:
Rendering of services
Service revenue is recognised on an accruals basis as and when the service has been passed onto the
customer.
Website development revenue is recorded based on project delivery. All projects are assigned percentages of
project completion (based on actual work in progress) and all website development revenue applicable to
percentage of incomplete work is recorded as unearned revenue.
Website hosting, SSL certificate and domain name registration revenue is recorded over a one year duration.
While 30% of search engine optimisation renewal revenue is recorded as earned in first month of renewal
contract, the remaining 70% revenue is recognised over a one year duration. Prepaid revenue calculated in this
regard is excluded from revenue and is being treated as unearned revenue in the Consolidated Statement of
Financial Position.
Adslot Publisher revenue is accounted for in accordance with AASB 118 Revenue such that only the portion of
the media campaign that is retained by Adslot for their services is recorded as revenue. Where underlying
campaigns selected by advertisers are served over a period a time, the portion that extends beyond the reporting
period is not taken up as revenue. Where the funds for these campaigns are prepaid by advertisers those
amounts are treated as unearned revenue in the Consolidated Statement of Financial Position.
Funds collected from advertisers and due to publisher clients are separated from company funds and are
disclosed in the accounts as “Cash held on behalf of Publishers” and “Publisher Creditors”.
Interest revenue
Interest revenue is recognised when it is probable that the economic benefits will flow to the Group and the
amount can be measured reliably, taking into account the effective yield on the financial asset.
Government grants
Government grants are recognised at fair value where there is reasonable assurance that the grant will be
received and all grant conditions will be met. Grants relating to expense items are recognised as income over
the periods necessary to match the grant to the costs they are compensating. Grants relating to assets are
credited to deferred income and are amortised on a straight line basis over the expected lives of the assets.
31
Notes to the Financial Statements (Continued)
1. Summary of Significant Accounting Policies (Continued)
Sale of non-current assets
The net gain from the sale of non-current asset sales is recognised as income at the date control of the asset
passes to the buyer, usually when the signed contract of sale becomes unconditional.
Leasehold improvements
The cost of improvements to leasehold properties is amortised over the unexpired period of the lease or the
estimated useful life of the improvement to the Group, whichever is the shorter.
Earnings per share
Basic earnings per share
Basic earnings per share for continuing operations and total operations attributable to members of the Company
are determined by dividing net profit after income tax from continuing operations and the net profit attributable
to members of the Company respectively, excluding any costs of servicing equity other than ordinary shares,
by the weighted average number of ordinary shares outstanding during the financial period. The number of
shares used in the calculation at any time during the period is based on the physical number of shares issued.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in
relation to dilutive potential ordinary shares.
Dividends
Provision is made for the amount of any dividend determined or recommended by the directors on or before the
end of the financial year but not distributed at reporting date.
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s
fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash inflows which are largely independent of the
cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than
goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker has been identified as the Chief Executive
Officer.
Each of the operating segments is managed separately as each of these service lines requires different
technologies, service different clients and sells different products. All inter-segment transactions are carried out
at arm’s length prices.
The Group reports its segments based on geographical locations:
APAC – Australia, New Zealand and Asia;
EMEA – Europe, the Middle East and Africa; and
The Americas – North, Central and South America.
32
Critical accounting judgements and key sources of estimation uncertainty
Critical judgements in applying the entity’s accounting policies
The following are the critical judgements (apart from those involving estimations, which are dealt with below),
that management has made in the process of applying the Group’s accounting policies and that have the most
significant effect on the amounts recognised in the financial statements:
Revenue recognition
In web development and web hosting business operations, management assesses stage of completion of each
project and recognises revenue in the period in which development work is undertaken. In making its judgement,
management considered the standard duration of such contracts, stage of progress in contracts and
commencement date of such contracts. Accordingly, management has deferred recognising some web
development and web hosting revenue of an estimated value of services to be rendered in the future.
Key sources of estimation uncertainty
The following are the key assumptions concerning the future and other key estimation uncertainty at the
reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year.
Impairment of goodwill and intangible assets
Determining whether goodwill and intangible assets are impaired requires an estimation of the value in use of
the cash-generating units to which goodwill and intangible assets have been allocated. The value in use
calculation requires the entity to estimate the future cash flows expected to arise from the cash-generating unit
and a suitable discount rate in order to calculate the present value. The future cash flows included in the
assessments are predicated largely on:
the adoption of the integrated Adslot-Symphony Platform;
the continued adoption of the Adslot Marketplace product; and
the growth of Symphony.
In the event that these products do not generate revenues as planned an impairment of the related intangible
assets may result.
The carrying amount of goodwill and intangible assets at the reporting date was $26,759,567 (2015:
$30,289,099) and there were no impairment losses (2015: nil) recognised during the current financial year.
Refer to Note 10 for further details.
Capitalisation of internally developed software
Distinguishing the research and development phases of software projects and determining whether the
recognition requirements for the capitalisation of development costs are met, requires judgement. After
capitalisation, management monitors whether the recognition requirements continue to be met and whether
there are any indicators that capitalised costs may be impaired.
The capitalised internally developed software amount for the year was $1,336,540 (2015: $2,001,289).
Share based payments
The calculation of the fair value of options issued requires significant estimates to be made in regards to several
variables such as volatility and the probability of options reaching their vesting period. The estimations made
are subject to variability that may alter the overall fair value determined. The share based payment expense for
the year was $440,138 (2015: $702,806).
Unrecognised deferred tax assets
As disclosed in Note 5, the Group recognises deferred tax assets relating to temporary differences, capital
losses or operating losses when it is probable that they will be able to be utilised in future reporting periods.
Due to the continuing operating losses, the Directors have determined it not appropriate to recognise deferred
tax assets until a point in time where it is probable that future taxable income is going to be available to utilise
the assets. The tax benefit of deferred tax assets not recognised is $9,703,919 (2015: $8,635,840).
33
Notes to the Financial Statements (Continued)
1. Summary of Significant Accounting Policies (Continued)
Research and development tax concessions
A receivable of $2,317,658 (2015: $2,184,913) has been recognised in relation to a research and development
tax concession for the 2016 financial year. The actual claim is yet to be submitted with the Australian Tax Office
and therefore there remains some uncertainty in regards to the quantum of the concession to be received. The
financial statements reflect the Directors’ estimate of the receivable after taking into account the likelihood of
each component of the claim being received.
New standards and interpretations issued but not effective
The following new or amendments to existing standards have been published and are mandatory for accounting
periods beginning on or after 1 July 2018 or later periods, but have not been adopted.
AASB 9 Financial Instruments was issued and introduces changes in the classification and measurement of
financial assets and financial liabilities, impairment of financial assets and new rules for hedge accounting. This
standard becomes mandatory for the year ending 30 June 2019. The potential effects on adoption of the
standard are currently being assessed. The group has not yet completed its assessment of this new standard
however based on the financial instruments held at balance date, this standard is not expected to have a material
impact upon initial adoption.
AASB 15 Revenue from Contracts with Customers establishes a comprehensive framework for determining
whether, how much and when revenue is recognised. This standard becomes mandatory for the year ending
30 June 2019. The potential effects on adoption of the standard are currently being assessed. This new
standard may have a small impact on the financial statements on adoption however the group has not yet
completed its assessment of this standard.
AASB 16 Leases was issued and introduced changes to lessee accounting. It requires recognition of lease
liabilities and assets other than short-term leases or leases of low-value assets on statement of financial position.
This will replace the operating / finance lease distinction and accounting requirements prescribed in AASB 117
Leases. This standard becomes mandatory for the year ending 30 June 2020. This new standard may have a
material impact on the financial statements on adoption based on the contracts expected to be in place at that
time however the group has not yet completed its assessment of this standard.
AASB 9, AASB 15 and AASB 16 are available for early adoption but have not been applied in this financial
report.
34
Segment Information
2016
Operating segments
APAC
EMEA
The
Americas
Total
Revenue for services rendered (i)
Segment result from continuing operations
Depreciation included in segment result (Note 9)
Amortisation included in segment result (Note 10)
Additions to non-current assets (PP&E) (Note 9)
Impairment of intangibles
6,489,675
(4,972,044)
59,441
4,866,072
51,854
-
640,802
(279,866)
1,817
-
1,766
-
498,869
(1,017,005)
3,627
-
4,906
-
7,629,346
(6,268,915)
64,885
4,866,072
58,526
-
Statement of Financial Position
Segment assets
Segment liabilities
37,616,620
(16,037,783)
512,104
(103,966)
391,113
(49,610)
38,519,837
(16,191,359)
2015
Operating segments
APAC
EMEA
The
Americas
Total
Revenue for services rendered (i)
Segment result from continuing operations
Depreciation included in segment result (Note 9)
Amortisation included in segment result (Note 10)
Additions to non-current assets (PP&E) (Note 9)
Impairment of intangibles
5,533,327
(5,303,162)
71,494
5,653,652
47,810
-
246,101
(694,383)
3,237
-
1,754
-
497,309
(835,464)
3,396
-
2,575
-
6,276,737
(6,833,009)
78,127
5,653,652
52,139
-
Statement of Financial Position
Segment assets
Segment liabilities
41,329,869
(15,603,752)
161,477
(182,714)
138,660
(191,365)
41,630,006
(15,977,831)
Segment revenue reconciles to total revenue from continuing operations as follows:
Revenue
Total segment revenue
Head office revenue
Interest revenue
Intersegment eliminations
Total revenue from continuing operations
(i) Refer to Note 3 for a description Revenue.
2016
$
2015
$
7,629,346
6,276,737
30,600
75,332
-
23,755
195,104
(284)
7,735,278
6,495,312
35
Notes to the Financial Statements (Continued)
2.
Segment Information (Continued)
A reconciliation from segment result to operating profit before income tax is provided as follows:
Segment Result
Total segment result
Interest revenue
Other revenue
Share option expenses
Gain / (Loss) on foreign exchange
Income tax benefit/(expense)
Loss on write off of asset
Other head office income/(expenses) not allocated in segment result
2016
$
2015
$
(6,268,915)
(6,833,009)
75,332
778,504
(440,138)
35,486
(22,139)
(1,624)
(2,294,991)
195,104
680,182
(702,806)
60,352
(21,159)
-
(2,584,185)
Loss before income tax from continuing operations
(8,138,485)
(9,205,521)
Reportable segment assets are reconciled to total assets as follows:
Segment assets
Total segment assets
Head office assets
Intersegment eliminations
2016
$
38,519,837
47,795,613
(50,348,732)
2015
$
41,630,006
49,019,570
(51,374,876)
Total assets as per the statement of financial position
35,966,718
39,274,700
Reportable segment liabilities are reconciled to total liabilities as follows:
Segment liabilities
Total segment liabilities
Head office liabilities
Intersegment eliminations
2016
$
(16,191,359)
(526,358)
12,370,526
2015
$
(15,977,831)
(718,948)
12,370,526
Total liabilities as per the statement of financial position
(4,347,191)
(4,326,253)
The Company’s Total Revenue and Other Income (Note 3) and its non-current assets (other than financial instruments)
are divided into the following geographical areas:
Australia (Domicile)
New Zealand
USA
Other countries
Total
2016
$
2015
$
Revenue
Non-Current Assets
Revenue
Non-Current Assets
6,034,933
576,596
498,869
1,403,384
8,513,782
26,810,189
2,346
4,739
47,488
26,864,762
5,114,063
693,217
497,309
870,905
7,175,494
30,349,986
1,018
2,723
49,345
30,403,072
Revenues from external customers in the Group’s domicile, Australia, as well as its major markets, New Zealand and the
USA, have been identified on the basis of the customer’s geographical location. Non-current assets are allocated based
on their physical location.
36
Notes to and forming part of the segment information
Business segments
The Group reports its segments based on geographical locations:
APAC – Australia, New Zealand and Asia;
EMEA – Europe, the Middle East and Africa; and
The Americas – North, Central and South America.
Accounting policies
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 1.
Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment and the relevant
portion that can be allocated to the segment on a reasonable basis. Segment profit represents the profit earned by each
segment without investment revenue, finance costs and income tax expense. This is the measure reported to the chief
operating decision maker for the purposes of resource allocation and assessment of segment performance.
Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, capitalised
R&D and other intangible assets, net of related provisions but do not include non-current inter-entity assets and liabilities
which are considered quasi-equity in substance.
Segment liabilities consist primarily of trade and other creditors, employee benefits and sundry provisions and accruals.
Segment assets and liabilities do not include income taxes.
Inter-segment transfers
Segment revenue reported above represents revenue generated from external customers. There were no Inter segment
revenue transfers or expenses to be eliminated on consolidation. In the prior year there was $284 of Inter segment
revenue.
Major customers
The Group provides services to and derives revenue from a number of customers across all the divisions. The Group had
certain customers whose revenue individually represented 10% or more of the Company’s total revenue.
For the year to 30 June 2016, one customer accounted for 10% of revenue. There were no customers representing 10%
or more revenue for the year to 30 June 2015.
37
Notes to the Financial Statements (Continued)
Revenue and Other Income
Revenue
Revenue from Trading Technology
Revenue from Services
Revenue from Adserving
Total revenue for services rendered
Interest income
Total revenue from continuing operations
Other income
Grant income
Total revenue and other income
2016
$
2015
$
4,227,677
2,532,188
900,081
7,659,946
75,332
7,735,278
2,652,086
2,396,948
1,251,174
6,300,208
195,104
6,495,312
778,504
778,504
680,182
680,182
8,513,782
7,175,494
Revenue derived from the three product lines are described as follows:
Trading Technology
Comprises Adslot, a leading global media trading technology, and Symphony, market-leading workflow automation
technology, purpose built for digital media agencies.
Services
Comprising marketing services that are provided by the company’s Webfirm division to SME clients and project-based
customisation of Trading Technology.
Adserving
Technology that enables advertisers to deliver and measure the performance of online display advertising (including
impressions, clicks and online sales).
38
Expenses
Loss before income tax includes the following specific
expenses:
Depreciation and amortisation
Amortisation – Leasehold improvements
Amortisation – Software development costs
Depreciation – Plant & equipment
Total depreciation and amortisation
Other charges against assets
2016
$
2015
$
17,152
4,866,072
47,733
4,930,957
28,340
5,653,652
49,787
5,731,779
Impairment / (recovery) of trade receivables
(28,240)
(37,440)
Capitalised development wages (net of related grants)
Development wages expensed in the period
Total Development wages
Rental expense – operating leases
Defined contribution superannuation expense
Foreign currency (gain) / loss
1,336,540
2,181,628
3,518,168
941,552
622,406
(35,486)
2,001,289
1,637,418
3,638,707
820,431
601,939
(60,352)
39
Notes to the Financial Statements (Continued)
Income Tax Expense
a) Numerical reconciliation of income tax expense to prima facie
tax benefit
Loss before income tax
2016
$
2015
$
(8,116,346)
(9,184,362)
Prima facie tax benefit on loss before income tax at 30% (2015: 30%)
(2,434,904)
(2,755,309)
Tax effect of:
Other non-allowable items
Share based expensed during year
Research & development tax concession
Income tax benefit attributable to entity
Deferred tax income relating to utilisation of unused tax losses
Deferred tax assets relating to tax losses not recognised
Other – adjustments and net foreign exchange differences
Income tax (benefit)/expense attributable to entity
b) Movement in deferred tax balances
Balance at
1 July
2015
$
Recognised
in Profit &
Loss
$
Acquired in
Business
combination
$
Trade and other receivables
(125,957)
Property, plant and equipment
Intangible assets
Unused tax losses
Net tax (assets) / liabilities
199
165,435
(39,677)
-
-
-
-
-
-
-
-
-
-
-
Balance at
1 July
2014
$
Recognised
in Profit &
Loss
$
Acquired in
Business
combination
$
Trade and other receivables
(125,957)
Property, plant and equipment
Intangible assets
Unused tax losses
Net tax (assets) / liabilities
199
165,435
(39,677)
-
-
-
-
-
-
-
-
-
-
-
8,154
132,041
7,475
210,842
1,545,105
1,443,457
(749,604)
(1,093,535)
-
1,068,079
(296,336)
22,139
-
1,407,063
(292,369)
21,159
Balance at 30 June 2016
Net
Deferred
tax assets
Deferred tax
liabilities
$
(125,957)
199
165,435
(39,677)
$
-
-
-
(39,677)
$
(125,957)
199
165,435
-
-
(39,677)
39,677
Balance at 30 June 2015
Net
Deferred
tax assets
Deferred tax
liabilities
$
(125,957)
199
165,435
(39,677)
$
-
-
-
(39,677)
$
(125,957)
199
165,435
-
-
(39,677)
39,677
40
c) Deferred tax assets not brought to account
Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions for
deductibility set out on Note 1(k) occur.
Temporary differences
Tax Losses:
Operating losses
Capital losses
Potential tax benefit (30%)
2016
$
2015
$
(4,240,800)
(5,119,749)
36,348,938
33,667,624
238,258
238,258
32,346,396
28,786,133
9,703,919
8,635,840
The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group and are
therefore taxed as a single entity. The head entity within the tax-consolidated group is Adslot Ltd.
Dividends
The Company did not declare any dividends in the current year or prior year. There are no franking credits available
to shareholders of the Company.
Cash and Cash Equivalents
Cash at bank and on hand
Publisher account
2016
$
3,493,749
1,252,220
4,745,969
2015
$
3,416,910
1,024,316
4,441,226
Included in the Cash at Bank is $365,877 (2015:$393,400) of funds held on term deposit as guarantee for our corporate
credit card facilities and for the benefit of landlords under office lease agreements.
41
Notes to the Financial Statements (Continued)
Trade and Other Receivables
Current:
Trade debtors
Less: Allowance for impairment
Other receivables
Prepayments
The average age of the Company’s trade receivables is 63 days (2015: 57 days).
(a) Ageing of past due but not impaired
0 – 30 days
31 – 60 days
61 – 90 days
Over 91 days
(b) Movement in the provision for impairment
Balance at beginning of the year
Impairment recognised during the year
Amounts written off as uncollectible
Amounts recovered during the year
Net foreign exchange differences
Balance at the end of the year
2016
$
1,915,712
(161,683)
1,754,029
2,375,890
226,068
4,355,987
2016
$
75,994
29,976
4,032
4,700
114,702
2016
$
241,074
12,369
(92,011)
(1,873)
2,124
161,683
2015
$
2,261,222
(241,074)
2,020,148
2,227,608
182,646
4,430,402
2015
$
107,949
382,112
86,493
107,330
663,884
2015
$
413,987
20,294
(118,408)
(116,161)
41,362
241,074
In determining the recoverability of a trade receivable, the Company considers any recent history of payments and the
status of the projects to which the debt relates. No payment terms have been renegotiated. The concentration of credit
risk is limited due to the customer base being large and unrelated. Accordingly, the Directors believe that there is no
further provision required in excess of the allowance for impairment.
Fair value of receivables
Fair value of receivables at year end is measured to be the same as receivables net of the allowance for impairment.
42
Non-Current Assets – Property, Plant and Equipment
Leasehold improvements – at cost
Less: Accumulated amortisation
Plant and equipment – at cost
Less: Accumulated depreciation
Computer equipment – at cost
Less: Accumulated depreciation
Total carrying amount of property, plant and equipment
2016
$
104,280
(104,172)
108
152,970
(149,069)
2015
$
104,280
(87,020)
17,260
148,841
(129,223)
3,901
19,618
332,767
(271,258)
61,509
65,518
326,045
(288,627)
37,418
74,296
Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the
current financial year are set out below:
2016
Carrying amount at 1 July 2015
Additions
Disposals/Write Offs
Leasehold
Plant and
Computer
Improvements
Equipment
Equipment
$
17,260
-
-
$
19,618
3,954
-
$
37,418
54,571
(1,624)
Depreciation / amortisation expense
(17,152)
(19,671)
(28,062)
Net foreign exchange differences
Carrying amount at 30 June 2016
2015
Carrying amount at 1 July 2014
Additions
Depreciation / amortisation expense
Net foreign exchange differences
-
108
-
(794)
3,901
61,509
Leasehold
Plant and
Computer
Improvements
Equipment
Equipment
$
32,640
12,960
$
38,492
1,735
(28,340)
(20,609)
-
-
$
28,946
37,444
(29,178)
206
Total
$
74,296
58,525
(1,624)
(64,885)
(794)
65,518
Total
$
100,078
52,139
(78,127)
206
Carrying amount at 30 June 2015
17,260
19,618
37,418
74,296
43
Notes to the Financial Statements (Continued)
Non-Current Assets – Intangible Assets
Year ended 30 June 2016
Opening net book amount
Acquisitions
Amortisation
Carrying amount at 30 June
2016
At 30 June 2016
Cost
Accumulated amortisation and
impairment
Carrying amount at 30 June
2016
Year ended 30 June 2015
Opening net book amount
Acquisitions
Amortisation
Carrying amount at 30 June
2015
At 30 June 2015
Cost
Accumulated amortisation and
impairment
Carrying amount at 30 June
2015
Internally
Developed
Software
$
2,990,943
1,336,540
(952,352)
Domain
Name
$
Intellectual
Property
$
Goodwill
$
Total
$
38,267
12,097,950
15,161,939
30,289,099
-
-
-
(3,913,720)
-
-
1,336,540
(4,866,072)
3,375,131
38,267
8,184,230
15,161,939
26,759,567
5,335,748
38,267
29,045,250
15,161,939
49,581,204
(1,960,617)
-
(20,861,020)
-
(22,821,637)
3,375,131
38,267
8,184,230
15,161,939
26,759,567
Internally
Developed
Software
$
1,516,737
2,001,289
(527,083)
Domain
Name
$
Intellectual
Property
$
Goodwill
$
Total
$
38,267
17,224,519
15,161,939
33,941,462
-
-
-
(5,126,569)
-
-
2,001,289
(5,653,652)
2,990,943
38,267
12,097,950
15,161,939
30,289,099
4,103,169
38,267
29,316,305
20,543,592
54,001,333
(1,112,226)
-
(17,218,355)
(5,381,653)
(23,712,234)
2,990,943
38,267
12,097,950
15,161,939
30,289,099
44
Internally Developed Software
Internally developed software represents a number of software platforms developed within the Company. The following
table shows the portion of platform development costs that are capitalised and expensed for the current financial year,
2016:
Platform
Capitalised Wages
R&D grants offsetting
capitalised wages
Net Capitalised
Wages
Adslot Publisher and Marketplace
Symphony
Adslot-Symphony Integration
$
1,178,560
1,073,595
177,917
$
(530,352)
(483,118)
(80,062)
$
648,208
590,477
97,855
The following table shows the portion of platform development costs that are capitalised and expensed for the prior
financial year, 2015:
Platform
Capitalised Wages
R&D grants offsetting
capitalised wages
Net Capitalised
Wages
Adslot Publisher and Marketplace
Symphony
Adslot-Symphony Integration
$
1,726,589
1,489,542
422,577
$
(776,965)
(670,294)
(190,160)
$
949,624
819,248
232,417
The Directors have assessed the accounting useful life of these internally developed software systems, for accounting
purposes, to be five years. This assessment has given regard to the expected financial benefits of the technology.
Domain names
Domain names opening carrying value of $38,267 (2015: $38,267) relates to the various domain names held by
Webfirm and Adslot. The Directors have assessed that this intellectual property has an indefinite useful life on the basis
that the Directors do not believe that there is a foreseeable limit on the period over which this asset is expected to
generate cash inflows for the entity.
Intellectual property
Adslot Technologies Pty Ltd (“Adslot”) holds valuable copyright and patent licences (“Licences”) in respect of
Combinatorial Auction Platform Technology (“CAP” or “Core IP”) owned by Enterprise Point Pty Ltd and its controlled
entities (“Enterprise”). $5,932,006 (2015: $5,932,006) of the opening balance relates to this “CAP” technology.
Accumulated amortisation of this asset as at 30 June 2016 was $5,932,006 (2015: $5,932,006). This asset has been
fully amortised.
QDC IP Technology (“QDC”) is creative ad building and video advertising technology with licences to the Core IP valued
at $6,466,517 (2015: $6,466,517) in the opening balance and attached to the Adslot CGU. Accumulated amortisation
of this asset as at 30 June 2016 was $6,466,517 (2015: $5,904,904). This asset was fully amortised during the year.
The Symphony platform technology was acquired as part of the Facilitate Digital Holdings Limited acquisition. The fair
value attributable to the Symphony technology platform intellectual property was $16,191,496 (2015: $16,191,496).
Accumulated amortisation of this asset at 30 June 2016 was $8,175,172 (2015: $4,936,872). This asset has a remaining
useful life for accounting purposes of two and a half years.
The Facilitate for Agencies (“FFA”) platform technology was acquired as part of the Facilitate Digital Holdings Limited
acquisition. The fair value attributable to the FFA technology platform intellectual property was $455,231 (2015:
$455,231). Accumulated amortisation of this asset at 30 June 2016 was $287,325 (2015: $173,518). This asset has a
remaining useful life for accounting purposes of one and a half years.
With the exception of FFA, the Directors have assessed the accounting useful life of all of the above technologies for
accounting purposes to be five years. This assessment has given regard to the expected financial benefits of the
technologies to be potentially well beyond a five year period, together with the risk that competitors could replicate
these technologies and in light of the Company’s ongoing commitment to research and development of the Core IP.
FFA has an accounting useful life of four years.
45
Notes to the Financial Statements (Continued)
10. Non-Current Assets – Intangible Assets (Continued)
Goodwill
The Goodwill balance relating to the acquisition of Facilitate has an attributed fair value of $15,161,939 and has not
been impaired.
(a) Cash Generating Units (CGUs)
The goodwill has been allocated to the Adslot-Symphony Integration CGU as this is the area of operation in which
opportunities for deriving revenue synergies from the acquisition exist. A summary of the carrying amount of goodwill
and intangible assets with indefinite useful lives is detailed below:
CGU
2016
2015
Intangible assets
with indefinite
useful lives
$
Goodwill
$
Intangible assets
with indefinite
useful lives
$
Goodwill
$
Adslot-Symphony Integration
15,161,939
-
15,161,939
-
(b)
Impairment testing and key assumptions
The Group tests whether goodwill and other intangible assets have suffered any impairment in accordance with the
Group’s accounting policies. The recoverable amounts of assets and CGUs have been determined using a fair value
less costs to sell approach based on discounted cash flows projections.
The most significant judgement relates to the forecast cash flows within the impairment model, in particular the forecast
revenue growth. As the Adslot-Symphony Integration is a relatively new innovation for the Group, the lack of historical
revenues across this platform has required the Group to make significant estimations of the revenue growth that can
be expected across the forecast period.
The cash flow projections have been derived from management forecasts based on the 2017 budget as approved by
the Board of Directors, with assumptions relating to growth in revenues and expenses being made across the remaining
forecast period. The revenue growth rates observed for the first two years are significantly higher than the remainder
of the model reflecting the initial adoption of the integrated Adslot-Symphony Platform.
In determining the budget for 2017, assumptions were made in relation to the following key areas:
The proportion of the market share captured by the Integration platform from existing customers;
Expected growth from new customers;
Average fees received from each customer; and
The costs that will be incurred to support the growth of the revenue.
Other key assumptions
Adslot-Symphony Integration
Discounted cash flow
7
13
Valuation method
Years of
projected
cash flows
Post-tax
discount rate
%
A forecast period of greater than 5 years has been adopted without the use of a terminal value. This is considered
appropriate given the expected timeframe upon which the current version of the integrated product will be able to
generate revenues. Revenue growth forecast in the final two periods of the model are lower than the average
growth forecast within the model.
(c) Sensitivity analysis
Future net cash flows of CGUs are based on the key assumptions noted above, which are subject to some uncertainty.
Any reasonable change in the key assumptions would not result in the carrying amounts exceeding their recoverable
amounts.
46
Trade and Other Payables
Trade creditors
Publisher creditors (i)
Other creditors
(i) Refer to Note 1(p) for further information on publisher creditors.
Other Liabilities
Current:
Unearned revenue (i)
2016
$
2015
$
293,196
1,252,220
1,431,111
214,195
1,024,316
1,614,499
2,976,527
2,853,010
2016
$
2015
$
557,878
557,878
683,148
683,148
(i) Unearned revenue relates to website development and hosting invoices that are rendered based on full contract
terms at the contracts’ inception, however performed over stages which straddle the reporting date, and advertising
campaigns that have been purchased but whose delivery will occur after the reporting date.
Provisions
Current:
Employee benefits
Non-current:
Employee benefits
2016
$
2015
$
457,522
507,747
315,587
242,671
47
Notes to the Financial Statements (Continued)
Contributed equity
2016
Number
2015
Number
2016
$
2015
$
Ordinary Shares – Fully Paid
1,113,323,224
1,041,695,054
120,693,650
115,100,833
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the
numbers of shares.
At the shareholders meeting each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands.
Movements in Paid-Up Capital
Date
Details
30-Jun-14
Balance (including Treasury shares)
10-07-2014 Share Placement
25-09-2014 Exercise of Options
01-05-2015
Issue of shares – employee ESOP
30-Jun-15
Less: Treasury shares
30-Jun15
Balance
Number of
shares
Number
988,550,756
Issue
price
$
Capital
raising
costs
$
Value
$
(933,903)
109,990,537
65,000,000
$0.100
(316,665)
6,183,335
200,000
3,000,000
$0.116
$0.090
(1,654)
-
21,546
270,000
1,056,750,756
(15,055,702)
1,041,695,054
(1,252,222)
116,465,418
(1,364,585)
(1,252,222)
115,100,833
01-Jul-15
Balance (including Treasury shares)
1,056,750,756
(1,252,222)
116,465,418
27-08-2015
Issue of shares – Performance Rights vesting
2,520,377
$0.074
(2,214)
184,294
13-04-2016 Share Placement
30-Jun-16
Less: Treasury shares
30-Jun16
Balance
57,500,000
$0.080
(217,620)
4,382,380
1,116,771,133
(3,447,909)
1,113,323,224
(1,472,056)
121,032,092
-
(338,442)
(1,472,056)
120,693,650
48
Treasury Shares
Treasury shares are shares in Adslot Ltd that are held by the Adslot Employee Share Trust, which administers the
Adslot Employee Share Ownership Plan (ESOP). This Trust has been consolidated in accordance with Note 1(c).
Shares held by the Trust on behalf of eligible employees are shown as treasury shares in the financial statements.
Shares issued under this scheme will, subject to the provision of the Trust deed, rank equally in all respects and will
have the same rights and entitlements as ordinary shares under the Constitution of the Company.
Treasury Shares movements during the financial year are summarised below:
Issue Type
Issue or
Acquisition
Date
Employee ESOP
14/09/12
Employee ESOP
24/09/14
Employee ESOP
23/12/14
Employee ESOP
16/06/14
Employee ESOP
1/05/15
Employee ESOP
27/08/15
Issue
Price
$
0.046
0.059
0.115
0.105
0.090
0.080
Balance at
beginning of the
year
(Number)
977,011
3,828,691
6,250,000
1,000,000
3,000,000
Issued during
the year
(Number)
Transfers
during the year
(Number)
Balance at end of
the year (Number)
-
-
-
-
-
(977,011)
(3,828,691)
(6,250,000)
-
(657,225)
-
-
-
1,000,000
2,342,775
135,134
3,477,909
-
135,134
-
15,055,702
135,134
(11,712,927)
Rights over shares movements during the financial year are summarised below:
Issue Type
Rights over shares
Rights over shares
Rights over shares
Rights over shares
Required VWAP
Price $
Balance at
beginning of the
year (Number)
Granted
during the
year (Number)
Expired during
the year
(Number)
Vested during
the year
(Number)
Balance at the end of
the year (Number)
0.200
0.300
0.400
0.500
3,000,000
4,000,000
5,000,000
5,000,000
17,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
4,000,000
5,000,000
5,000,000
17,000,000
Performance rights movements during the financial year are summarised below:
Issue Type
Issue or
Acquisition
Date
Performance Rights
26/11/14
Performance Rights
26/8/15
Performance Rights
27/06/16
Issue
Price
$
Nil
Nil
Nil
Balance at
beginning
of the year
(Number)
10,750,000
Issued
during the
year
(Number)
Transfers
during the
year
(Number)
Forfeited
during the
year
(Number)
Balance at end
of the year
(Number)
-
(2,520,377)
(2,920,100)
5,309,523
-
-
2,660,000
600,000
-
-
(705,000)
1,955,000
-
600,000
10,750,000
3,260,000
(2,520,377)
(3,625,100)
7,864,523
49
Notes to the Financial Statements (Continued)
Reserves
Reserves
Share–based payments reserve
Foreign currency translation reserve
Share–based payments reserve
Opening balance
Reclassification of lapsed options
Reclassification vested ESOP
Share based payment expense
Closing balance
Foreign currency translation reserve
Opening balance
Movement on currency translation
Closing balance
2016
$
297,118
107,618
404,736
2015
$
1,069,631
118,357
1,187,988
1,069,631
1,177,083
-
(1,212,651)
440,138
297,118
(430,164)
(380,094)
702,806
1,069,631
118,357
(10,739)
107,618
65,292
53,065
118,357
The Share-based payments reserve is used to record the value of options accounted for in accordance with AASB2:
Share Based Payments.
The foreign currency translation reserve is used to record the value of aggregate movements in the translation of
foreign currency in accordance with AASB 121: The Effects of Changes in Foreign Exchange Rates.
50
Earnings Per Share
(a) Basic earnings per share
2016
Cents
2015
Cents
Loss attributable to the ordinary equity holders of the Company
(0.77)
(0.89)
(b) Diluted earnings per share
Loss attributable to the ordinary equity holders of the Company
(0.77)
(0.89)
(c) Reconciliation of earnings used on calculating earnings per share (i)
Loss from continuing operations attributable to the members of the Company used
on calculating basic and diluted earnings per share
(8,138,485)
(9,205,521)
2016
$
2015
$
(d) Weighted average number of shares used as the denominator
Weighted average number of shares on issue used in the calculation of basic EPS
1,062,178,629
1,038,969,447
2016
Number
2015
Number
(e) Weighted average number of shares used as the denominator
Weighted average number of shares on issue used in the calculation of
diluted EPS
1,062,178,629
1,038,969,447
(i) During 2016 and 2015 there were no discontinued operations or values attributable to minority interests.
2016
Number
2015
Number
Weighted average number of rights that could potentially dilute basic earnings
per share in the future, but are not included in the calculation of diluted EPS
because they are anti-dilutive for the period presented.
2016
Number
2015
Number
5,593,259
29,320,440
51
Notes to the Financial Statements (Continued)
Discontinued Operations
There were no discontinued operations during the year ended 30 June 2016.
Business Combinations
There were no business combinations during the year ended 30 June 2016.
Contingencies
No contingent assets or liabilities are noted.
Commitments
Operating lease commitments
Total operating lease expenditure contracted for at reporting date but not
capitalised in the financial statements payable:
Within 1 year
Between 1 and 5 years
2016
$
2015
$
778,375
176,879
955,254
608,550
299,561
908,111
The lease commitments detailed above relate to rental premises and lease rental of printer/copier.
Capital commitments
The Group and the Company have not entered any capital expenditure contracts at reporting date that are not
recognised as liabilities on the Statement of Financial Position.
Remuneration of auditors
During the year the following fees were paid/payable to the auditor of the Company:
Audit services
Audit and review of financial reports
During the year the following fees were paid/payable to a related entity of the
auditor of the company:
Other services
Taxation compliance and Research & Development grant advice
2016
$
2015
$
109,000
105,000
13,500
122,500
40,250
145,250
52
Key Management Personnel Disclosures
Directors
The following persons were directors of the Company during the financial year:
Mr Andrew Barlow (Non-Executive Chairman)
Mr Adrian Giles (Non-Executive Director)
Mr Ian Lowe (Executive Director & CEO)
Mr Ben Dixon (Executive Director)
Mr Geoff Dixon (Non-Executive Director)
Mr Quentin George (Non-Executive Director)
Ms Sarah Morgan (Non-Executive Director)
Other key management personnel
The following persons also had authority and responsibility for planning, directing and controlling the activities of the
Group, directly or indirectly, during the financial year:
Name
Mr Brendan Maher
Mr Tom Peacock
Position
Chief Financial Officer and Company Secretary
Group Commercial Director
Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Other long-term employee benefits
Termination benefits
Share based payments
Total compensation (a)
2016
$
1,271,191
96,094
22,342
-
2015
$
1,245,625
89,038
20,486
-
249,666
400,864
1,639,293
1,756,013
a) There were 9 key management personnel throughout 2016, some of whom have a part year of service (2015: 9).
Business Acquisitions:
There were no related party transactions during the year ended 30 June 2016.
Transactions with Directors and their personally related entities:
During the year the company earned revenue of $353 from advertising inventory traded on the Adslot platform by an
entity related to two Directors on normal commercial terms and conditions.
53
Notes to the Financial Statements (Continued)
Share Based Payments
Employee Share Ownership Plan (ESOP)
In November 2012 the Company gained approval to establish an employee incentive scheme comprising the Adslot
Limited Share Option Plan and the Adslot Employee Share Trust.
Awards of rights to shares are available to be issued to eligible employees based on the performance against agreed
key performance indicators. Any rights awarded are subject to a two-year service period and if this service period is
not met, the rights to shares will be forfeited by the eligible employee. Shares held by the Trust under the scheme will
have voting and dividend rights, and the right to participate in further issues pro-rata to all ordinary shareholders.
The following tables shows grants of share-based compensation to employees under the ESOP for the current financial
year and the model inputs:
2016
Grant
Date
Escrow
End Date
Valuation
Price $
09/07/13
09/07/15
05/09/13
05/09/15
24/12/13
24/12/15
28/01/14
24/01/16
06/03/14
04/03/16
15/06/14
15/06/15
15/06/14
2016-2018
10/07/14
08/07/16
08/09/14
07/09/16
10/07/15
09/07/17
27/08/15
07/09/16
27/08/15
07/09/17
0.042
0.061
Converted
Right
0.120
0.090
0.105
0.105
0.100
0.155
0.086
0.080
0.080
Balance at
start of the
year
Granted
during
the year
Transferred
during the
year
Forfeited
during
the year
(Number)
(Number)
(Number)
(Number)
Balance at
end of the
year
(Number)
Vested at
the end
of the
year
(Number)
666,667
2,902,935
3,000,000
176,928
4,845,045
250,000
750,000
666,667
96,523
-
-
-
-
-
-
-
-
-
-
-
-
666,666
67,567
67,567
(666,667)
-
(2,889,153)
(13,782)
-
-
-
-
-
-
-
-
-
-
250,000
250,000
750,000
249,996
-
-
-
-
-
(666,667)
(96,523)
(666,666)
-
-
-
-
-
67,567
67,567
-
-
-
-
-
(3,000,000)
(176,928)
(4,845,045)
-
-
-
-
-
-
-
Total
13,354,765
801,800
(11,577,793)
(1,443,638)
1,135,134
499,996
Weighted average share price
$0.064
$0.085
$0.083
$0.097
$0.102
$0.105
Weighted average remaining contractual life at 30 June 2016 (days)
341
Model Input
Grant Date
Escrow End Date
Exercise Price
Price at Grant Date
ESOP #16-1
ESOP #16-3
ESOP #16-3
10/07/15
8/07/17
-
$0.086
27/08/15
7/09/16
-
$0.08
27/08/15
7/09/17
-
$0.08
ESOP rights to shares are valued using the Binomial option-pricing model.
The volatility calculation is based upon historical share price information for the same period as the option life to the
date that the options were granted.
54
2015
Grant
Date
Escrow
End Date
Valuation
Price $
Balance at
start of the
year
Granted
during
the year
Transferred
during the
year
Forfeited
during
the year
(Number)
(Number)
(Number)
(Number)
14/09/12
13/09/14
10/10/12
09/10/14
09/07/13
09/07/15
05/09/13
05/09/15
24/12/13
24/12/15
28/01/14
24/01/16
06/03/14
04/03/16
15/06/14
15/06/15
15/06/14
2015-2018
10/07/14
08/07/16
08/09/14
07/09/16
01/05/15
01/05/16
01/05/15
01/05/17
01/05/15
01/05/18
0.046
0.059
0.042
0.061
Converted
Right
0.120
0.090
0.105
0.105
0.100
0.155
0.090
0.090
0.090
5,042,685
1,500,000
666,667
2,902,935
3,000,000
176,928
7,845,045
250,000
750,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
666,667
96,523
1,000,000
1,000,000
1,000,000
(5,042,685)
(1,500,000)
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
end of the
year
(Number)
-
-
666,667
2,902,935
3,000,000
176,928
-
-
-
-
-
-
Vested at
the end
of the
year
(Number)
-
-
-
-
-
-
-
(3,000,000)
4,845,045
-
-
-
-
(1,000,000)
(1,000,000)
(1,000,000)
250,000
250,000
750,000
666,667
96,523
-
-
-
-
-
-
-
-
-
Total
22,134,260
3,763,190
(6,542,685)
6,000,000
13,354,765
250,000
Weighted average share price
$0.061
$0.093
$0.049
$0.090
$0.064
Weighted average remaining contractual life at 30 June 2015 (days)
200
The model inputs for ESOP rights to shares granted during the year ended 30 June 2015 included:
Model Input
ESOP #15-1
ESOP #15-2
ESOP #15-3
ESOP #15-4
ESOP #15-5
Grant Date
Escrow End Date
Exercise Price
Price at Grant Date
10/07/14
8/07/16
-
$0.10
8/09/14
7/09/16
-
$0.155
1/05/15
1/05/16
-
$0.090
1/05/15
1/05/17
-
$0.090
1/05/15
1/05/18
-
$0.090
55
Notes to the Financial Statements (Continued)
23. Share Based Payments (continued)
Performance Rights over Shares
Shareholders approved at the November 2014 Annual General Meeting the creation of Performance Rights over Shares
which enables the Board to offer eligible employees the right to Performance Rights which convert to shares subject to
the employee’s performance against certain performance criteria. No amounts are paid or payable by the recipient on
receipt of the right. The rights carry no voting rights. All rights are subject to service periods which require the
employees remain an employee of the Company.
The following table shows grants and movements of share-based compensation to employees under the Performance
Rights over Shares Plan during the current financial year:
Grant
Date
Assessment
period
Valuation
Price $
Balance at
start of the
year
(Number)
Granted
during the
year
Transferred
during the
year
Forfeited
during the
year
(Number)
(Number)
(Number)
Balance at
end of the
year
(Number)
Vested at
the end of
the year
(Number)
26/11/14
26/08/15
27/06/16
Total
2 years
2 years
2 years
0.105
0.074
0.100
10,750,000
-
(2,520,377)
(2,920,100)
5,309,523
-
-
2,660,000
600,000
-
-
(705,000)
1,955,000
-
600,000
10,750,000
3,260,000
(2,520,377)
(3,625,100)
7,864,523
-
-
-
-
The model inputs for Performance Rights to shares grated during the year ended 30 June 2016 included:
Model Input
Grant Date
Assessment Period
Exercise Price
Probability of Conversion to Shares
PR # 16-1
PR # 16-2
PR # 16-3
PR # 16-4
26/08/15
2 years
-
10%
26/08/15
2 years
-
20%
26/08/15
2 years
-
25%
27/06/16
2 years
-
50%
Price at Grant Date
$0.074
$0.074
$0.074
$0.100
The Performance Rights over Shares issued in 2015.
Grant
Date
Assessment
period
Valuation
Price $
26/11/14
2 years
0.105
Total
Balance at
start of the
year
(Number)
Granted
during the
year
Transferred
during the
year
Forfeited
during the
year
(Number)
(Number)
(Number)
Balance at
end of the
year
(Number)
-
-
10,750,000
10,750,000
-
-
10,750,000
10,750,000
-
-
The model inputs for Performance Rights to shares grated during the year ended 30 June 2015 included:
Model Input
Grant Date
Assessment Period
Exercise Price
Probability of Conversion to Shares
PR # 15-1
PR # 15-2
PR # 15-3
PR # 15-4
26/11/14
2 years
-
10%
26/11/14
2 years
-
25%
26/11/14
2 years
-
50%
26/11/14
2 years
-
75%
Price at Grant Date
$0.105
$0.105
$0.105
$0.105
56
Rights over Shares
Upon commencement of employment (8 October 2012) Mr Lowe was granted the right to receive the following shares
after the share price of the Company trades above a 30 day volume-weighted average price (VWAP) as per the table
below. Each right would convert into one ordinary share of Adslot Ltd when the VWAP criteria is met. In the event of
a Change of Control of the Company some of these Rights would vest on a sliding scale between the take over price
and required VWAP of the next eligible series.
No amounts are paid or payable by the recipient on receipt of the right. The rights carry no voting rights. Some rights
are subject to escrow per the below table and all rights are subject to Mr Lowe remaining an employee of the Company.
No Rights over Shares were issued in 2016. During the year, the 3,000,000 Rights over shares relating to the 10 cents
VWAP hurdle, that were awarded in December 2013 to Mr Lowe, were released from their 2-year escrow requirement
and transferred from the Employee Share Trust unencumbered to Mr Lowe.
The following table shows movement in the Rights over Shares for the current financial year:
2016
Required
VWAP
Price
Issue Date
$
8-Oct-2012
8-Oct-2012
8-Oct-2012
8-Oct-2012
Total
0.20
0.30
0.40
0.50
2015
Required
VWAP
Price
Issue Date
$
8-Oct-2012
8-Oct-2012
8-Oct-2012
8-Oct-2012
Total
0.20
0.30
0.40
0.50
Escrow
Required
from
award
2 years
-
-
-
Valuation
Price
$
64,500
66,000
73,000
63,500
3,000,000
4,000,000
5,000,000
5,000,000
267,000
17,000,000
Balance at
start of the
year
Granted
during the
year
Vested
during
the year
Forfeited
during
the year
(Number)
(Number)
(Number)
(Number)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Escrow
Required
from
award
2 years
-
-
-
Valuation
Price
$
64,500
66,000
73,000
63,500
3,000,000
4,000,000
5,000,000
5,000,000
267,000
17,000,000
Balance at
start of the
year
Granted
during the
year
Vested
during
the year
Forfeited
during
the year
(Number)
(Number)
(Number)
(Number)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
end of the
year
(Number)
3,000,000
4,000,000
5,000,000
5,000,000
17,000,000
Balance at
end of the
year
(Number)
3,000,000
4,000,000
5,000,000
5,000,000
17,000,000
57
Notes to the Financial Statements (Continued)
Cash Flow reconciliation
Reconciliation of Net Cash Flows from Operating Activities to Loss for the year
Loss for the year after income tax
Depreciation and amortisation
Share based payment
Impairment of receivables
(Profit)/Loss on asset write off
Unrealised foreign currency loss / (gain)
Movements in receivables relating to investing activities
Changes in assets and liabilities (net of effects of acquisition and disposal of entities)
(Increase)/Decrease in receivables
(Decrease)/Increase in payables and other provisions
Net cash outflow from operating activities
2016
$
2015
$
(8,138,485)
(9,205,521)
4,930,957
5,731,779
440,138
28,240
1,624
22,250
(132,744)
702,806
(37,440)
-
(60,352)
39,253
74,415
20,938
(848,201)
502,000
(2,752,667)
(3,175,676)
Financial Risk Management
The Group’s operations expose it to various financial risks including market, credit, liquidity and cash flow risks. Risk
management programmes and policies are employed to mitigate the potential adverse effects of these exposures on
the results of the Group.
Financial risk management is carried out by the Chief Financial Officer with oversight provided by the Audit & Risk
Committee and Board.
(a) Market risks
Market risks include foreign exchange risk, interest rate risk and other price risk. The Group’s activities expose it to the
financial risks of changes in foreign currency, interest rate risk relating to interest earned on cash and cash equivalents.
Disclosures relating to foreign currency risks are covered in Note 00 and interest rate risk is covered in Note 0(e). The
Group does not have formal policies that address the risks associated with changes in interest rates or changes in fair
values on available-for-sale financial assets.
(b) Credit risk
Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted.
The credit risk on financial assets, other than investments, of the Group which have been recognised in the
Consolidated Statement of Financial Position is the carrying amount net of any provision for doubtful debts.
The Group has no significant concentrations of credit risk. As disclosed in Note 8(a), ‘Impairment of receivables’, the
Group has policies in place to ensure that sales of services are made to customers with appropriate credit history.
Before accepting any new customers, the Group internally reviews the potential customer’s credit quality. A substantial
deposit on contract in website development and hosting segment of the Group mitigates initial credit risk.
The Group held the following financial assets with potential credit risk exposure:
Financial assets
Cash and cash equivalents
Trade debtors and Other receivables (Note 8)
2016
$
4,745,969
4,291,602
2015
$
4,441,226
4,488,830
9,037,571
8,930,056
58
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of
funding through an adequate amount of committed credit facilities and the ability to close-out market positions. Due to
the dynamic nature of the underlying business, the Board aims at maintaining flexibility in funding by keeping committed
credit lines and sufficient cash available.
All financial liabilities are expected to be settled within 12 months of the reporting date, per the contractual terms of the
obligations.
Financial liabilities
Trade and other payables
(d) Foreign currency risk
2016
$
2,976,527
2015
$
2,853,010
Most of the Group’s transactions are carried out in Australian Dollars (AUD). Exposures to currency exchange rates
arise from the Group’s overseas operations which are primarily denominated in US dollars (USD), Pound Sterling
(GBP), Euros (EUR), New Zealand dollars (NZD), Chinese Yuan (CNY) and Malaysian Ringgit (MYR).
Foreign currency exposure is monitored by the Board on a monthly basis.
Foreign currency denominated financial assets and liabilities which expose the Group to currency risk are disclosed
below. The amounts shown are those reported to key management translated into AUD at the closing rate:
30 June 2016
USD
A$
GBP
A$
EUR
A$
NZD
A$
CNY
A$
MYR
A$
Financial Assets
905,527
374,099
119,800
99,372
61,808
Financial Liabilities
(667,983)
(280,936)
(34,392)
(48,840)
(16,752)
Total Exposure
237,544
93,163
85,408
50,532
45,056
30 June 2015
Financial Assets
Financial Liabilities
1,102,446
(783,412)
161,270
(356,742)
Total Exposure
319,034
(195,472)
161,097
(41,333)
119,764
188,063
(47,936)
140,127
39,913
(30,456)
9,457
612
-
612
4,245
-
4,245
The following table illustrates the sensitivity on profit and equity in relation to the Group’s financial assets and liabilities
and the USD/AUD exchange rate, GBP/AUD exchange rate, EUR/AUD exchange rate, NZD/AUD exchange rate and
CNY/AUD exchange rate ‘all other things being equal’. It assumes a +/- 10% change of the following exchange rates
for the year ended 30 June 2016 (30 June 2015:10%).
These percentages have been determined based on the average market volatility in exchange rates in the previous 12
months. There is no Equity exposure to foreign currency risk.
+10%
30 June 2016
Impact on Profit
USD
A$
9,020
GBP
A$
17,239
Impact on Reserves
(30,615)
(25,708)
Impact on Equity
(21,595)
(8,469)
EUR
A$
(1,438)
(6,326)
(7,764)
NZD
CNY
MYR
Total
A$
302
A$
(3,441)
A$
(56)
A$
21,626
(4,896)
(655)
-
(68,200)
(4,594)
(4,096)
(56)
(46,574)
30 June 2015
Impact on Profit
(31,618)
11,618
(11,428)
(648)
227
(386)
(32,235)
Impact on Reserves
2,615
6,152
540
(12,091)
(1,087)
-
(3,871)
Impact on Equity
(29,003)
17,770
(10,888)
(12,739)
(860)
(386)
(36,106)
USD
GBP
EUR
NZD
CNY
MYR
Total
-10%
59
Notes to the Financial Statements (Continued)
A$
A$
(11,024)
(21,070)
37,418
26,394
31,421
10,351
A$
1,757
7,733
9,490
A$
(369)
5,984
5,615
30 June 2016
Impact on Profit
Impact on Reserves
Impact on Equity
30 June 2015
Impact on Profit
38,645
(14,200)
Impact on Reserves
(3,197)
(7,519)
Impact on Equity
35,448
(21,719)
13,698
(661)
13,307
792
14,778
15,570
A$
4,205
801
5,006
(278)
1,329
1,051
A$
68
-
68
472
-
472
A$
(26,433)
83,357
56,924
39,399
4,730
44,129
(e) Cash flow and interest rate risk
As the Group has no significant interest-bearing assets or liabilities (except cash), the Group’s income and operating
cash flows are not materially exposed to changes in market interest rates.
Interest rate sensitivity analysis
The sensitivity analysis below has been determined based on exposure to interest rates on interest bearing bank
balances throughout the reporting period. A 100 basis point increase or decrease is used when reporting interest rate
risk internally to key management personnel and represents management’s assessment of the possible change in
interest rates (also comparable to movement in interest rates during the reporting year).
At reporting date, if interest rates had been 100 basis points higher or lower and all other variables were held constant,
the Group’s net profit would:
30 June 2016
30 June 2015
+1%
$
31,184
64,035
-1%
$
(29,162)
(62,093)
This is mainly attributable to the Group’s exposure to interest rate on its bank balances bearing interest.
(f) Net fair value of financial assets and liabilities
The net fair value of cash and cash equivalents and other short-term financial assets and financial liabilities of the
Group approximates their carrying value.
The net fair value of other financial assets and financial liabilities is based upon market prices where a market exists
or by discounting the expected future cash flows by the current interest rates for assets and liabilities with similar risk
profiles.
60
Parent Entity Information
The following details of information are related to the parent entity, Adslot Ltd, at 30 June 2016. This information has
been prepared using consistent accounting policies as presented in Note 1.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Contributed equity
Share-based payments reserve
Retained losses
Total equity
Loss for the year
Total comprehensive loss for the year
2016
$
3,496,229
2015
$
3,638,842
44,261,447
45,285,866
47,757,676
48,924,708
133,372
163,707
-
-
133,372
163,707
121,032,092
116,465,418
297,118
1,069,631
(73,704,906)
(68,774,048)
47,624,304
48,761,001
(4,930,858)
(6,040,543)
(4,930,858)
(6,040,543)
The Commitments Note 20 includes commitments incurred by the parent entity related to leases of the head office
premises at 85 Coventry Street, South Melbourne for an amount of $299,452 (2015: $330,658).
Related Party Transactions
Other than the transactions disclosed in Note 22 relating to key management personnel, there have been no related
party transactions that have occurred during the current or prior financial year.
Events Subsequent to Reporting Date
On 19 August 2016 the Company announced to the Australian Stock Exchange the signing of a material contract with
groupm. The contract is multi-year and will have an immediate positive impact on Trading Technology revenues via
increased Symphony licence fees, but importantly represents an effective doubling of the future Trading Fees revenue
opportunity via the Adslot-Symphony integration.
61
Notes to the Financial Statements (Continued)
Consolidated Entities
Name
Parent entity
Adslot Ltd
Controlled entities
Adslot Technologies Pty Ltd
Ansearch.com.au Pty Ltd
Ansearch Group Services Pty Ltd
Webfirm Pty Ltd
Adimise Pty Ltd
Full Circle Online Pty Ltd
QDC IP Technologies Pty Ltd
Adslot UK Limited
Adslot Inc.
Symphony International Solutions Limited
Symphony Workflow Pty Ltd
Symphony Media Pty Ltd
Facilitate Digital (Shanghai) Software Services Co. Ltd
Facilitate Digital Limited
Facilitate Digital Trust
Facilitate Digital, LLC
Facilitate Digital UK Limited
Facilitate Digital Deutschland GmbH
Facilitate Digital Europe Marketing Technology Ltd
Country of
Incorporation
Ordinary Share
Consolidated Equity Interest
2016
%
2015
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
United Kingdom
United States
Australia
Australia
Australia
China
New Zealand
New Zealand
United States
United Kingdom
Germany
Republic of Ireland
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Equity interests in all controlled entities are by way of ordinary shares.
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
62
Directors’ Declaration
The directors declare that the financial statements, comprising the statement of profit or loss and other comprehensive
income, statement of financial position, statement of changes in equity, statement of cash flows, accompanying notes, as
set out on pages 22 to 62 are in accordance with the Corporations Act 2001 and:
(a) comply with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements in Australia;
(b) give a true and fair view of the group’s financial position as at 30 June 2016 and of its performance, as represented
by the results of its operations and its cash flows, for the financial year ended on that date; and
(c) the company has included in the notes to the financial statements an explicit and unreserved statement of
compliance with International Financial Reporting Standards.
In the directors’ opinion:
(a) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become
due and payable.
(b) the audited remuneration disclosures set out on pages 13 to 20 of the Directors’ Report comply with section 300A
of the Corporations Act 2001.
The directors have been given the declaration by the Chief Executive Officer and Chief Financial Officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
Andrew Barlow
Chairman
Adslot Ltd
31 August 2016
63
Corporate Governance Statement
In accordance with Listing Rule 4.10.3 Adslot’s Corporate Governance Statement can be
http://www.adslot.com/investor-relations/corporate-governance/
found at
Shareholder Information
Additional information required by the Australian Securities Exchange Limited and not shown elsewhere in this report is
as follows. The information is current as at 25 August 2016.
Distribution of equity securities
The number of shareholders by size of shareholding are:
Ordinary Shares
Number of Holders Number of Shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 +
TOTAL
The number of shareholders holding less than a marketable parcel of
shares (4,000 shares):
Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:
NATIONAL NOMINEES LIMITED
DAWNIE DIXON PTY LTD
FINICO PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
VENTURIAN PTY LTD
AMBLESIDE VENTURES PTY LTD
DAK DRAFTING SERVICES PTY LTD
ANDAMA HOLDINGS PTY LTD
UBS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
1
2
3
4
5
6
7
8
9
10
11 MR RICHARD ARMSTRONG CALDOW
12
13
14
15
16
17
18
19 MR PETER JOHN DIAMOND + MRS DIANA ELIZABETH DIAMOND
INVIA CUSTODIAN PTY LIMITED
CAPITAL ACCRETION PTY LTD
COTU INVESTMENTS PTY LTD
GWYNVILL TRADING PTY LTD
DIAMOND S/F A/C>
IAN LOWE + BEN DIXON
20
Total Top 20 holders of Ordinary Shares
Remaining holders balance
Classes of Shares
Adslot Ltd has only one class of share on issue, being fully paid ordinary shares.
Substantial Shareholders
Geoff Dixon
Chris Morris
Andrew Barlow
Voting Rights
All ordinary shares carry one vote per share without restrictions.
195
447
785
2,005
976
4,408
423
20,135
1,614,076
6,408,222
82,271,499
1,026,457,201
1,116,771,133
619,802
Listed Ordinary Shares
Number of
Shares
% of
Shares
73,629,542
72,452,688
47,648,796
41,964,511
35,803,769
31,607,563
28,000,000
25,500,000
21,253,973
20,415,635
13,900,000
12,585,032
12,302,184
10,923,371
9,179,849
8,000,000
8,000,000
8,000,000
7,000,000
6,938,729
495,105,642
621,665,491
6.59
6.49
4.27
3.76
3.21
2.83
2.51
2.28
1.90
1.83
1.24
1.13
1.10
0.98
0.82
0.72
0.72
0.72
0.63
0.62
44.33
55.67
Shares
86,252,015
67,626,081
57,803,769
% Shares
7.72%
6.06%
5.18%
67
Corporate Directory
Directors
Mr Andrew Barlow – Chairman
Mr Ian Lowe – Executive Director
Mr Ben Dixon – Executive Director
Mr Adrian Giles – Non-Executive Director
Mr Geoff Dixon – Non-Executive Director
Mr Quentin George – Non Executive Director
Ms Sarah Morgan – Non Executive Director
Chief Executive Officer
Mr Ian Lowe
Company Secretary
Mr Brendan Maher
Auditors
Grant Thornton Australia
The Rialto
Level 30, 525 Collins Street
MELBOURNE VIC 3000
Bankers
National Australia Bank Limited
424 St Kilda Road
St Kilda VIC 3004
Share Register
Computershare Registry Services Pty Ltd
Yarra Falls
452 Johnston Street
Abbotsford, VIC 3001
Home Stock Exchange
Australian Securities Exchange Limited
Level 45, South Tower
Rialto, 525 Collins St
Melbourne, VIC 3000
ASX Code: ADJ
Website
www.adslot.com
Registered Office
Adslot Ltd
Level 2, 85 Coventry Street
South Melbourne Vic 3205 Australia
Phone: + 61 3 8695 9199
Fax: + 61 3 9696 0700
Toll free 1300 852 722
Head Office
Adslot Ltd
Level 2, 85 Coventry Street
South Melbourne Vic 3205 Australia
Phone: + 61 3 8695 9199
Fax: + 61 3 9696 0700
Toll free 1300 852 722
Asia Pacific Offices
Level 6, 241 Commonwealth Street
Surry Hills NSW 2010
Australia
1-231, Shanghai 1933
No 10 Shajing Road
Shanghai 200080
China
301S Botany Road
Botany Downs, Auckland
New Zealand
North America Offices
373 Park Avenue South, 4th Floor
New York, NY 10016
United States of America
European Offices
79 Wardour Street
Soho, London W1D 6QB
United Kingdom
Hamburg Business Center
Poststrasse 33
20354 Hamburg
Germany
68