2020 Annual Report.
VISION.
To simplify premium
media trading
through technology
and collaboration.
CONTENTS.
2 Chairman’s Report
4 CEO’S Message
6 Directors’ Report
17 Remuneration Report
26 Auditors Independence Declaration
27 Consolidated Statement of Profit or Loss
and Other Comprehensive Income
28 Consolidated Statement of Financial Position
29 Consolidated Statement of Changes in Equity
30 Consolidated Statement of Cash Flows
31 Notes to the Financial Statements
77 Directors’ Declaration
78 Independent Audit Report to the Members
82 Corporate Governance Statement
82 Shareholder Information
83 Corporate Directory
CHAIRMAN’S
REPORT.
Dear Shareholder,
With Symphony having returned to growth, and meaningful pilot validation
of the Adslot Media platform having been achieved in FY19, the Company
focussed on three key strategic priorities in FY20 in order to grow Adslot
Media Trading Fees.
The first strategic priority was to execute Master Service Agreements (MSAs)
with as many of the six global agency holding companies as possible, and
then activate their demand on the Adslot Media platform.
I am pleased to report that during the period, the Company signed MSAs with two of the six largest media
agency companies in the world, namely: Havas Media Group and Dentsu Aegis Network, in addition to
Interpublic Group (IPG) signed in June 2019. This led to the activation of two IPG agencies (Matterkind
(formerly Cadreon) and Orion) and one Havas Media Group agency (Havas) during the period. Since the end of
FY20, the Company has also signed MSAs with two further independent media agencies: Fundamental Media
and Evergreen Trading (both of which have now been activated, and have commenced trading).
The Company also has an active trading agreement in place with a fourth media holding company, and pilot
activity has commenced with a fifth media holding company. Limited initial discussions are taking place with
the sixth media holding company.
The securing of these MSAs and commencement of trading activity has established strong foundations upon
which we will build growing, sustainable Trading Fees in FY21 and beyond.
In addition to signing MSAs with global media holding companies in the US market, Adslot also focussed on
realising Trading Fees from its first iteration of the Adslot-Symphony combined platform in the test market of
Austria. This has resulted in consistent growth in Trading Fees out of Europe, in spite of the economic impact
of COVID-19 during the period. We expect these Trading Fee revenues to continue to grow in FY21.
The second strategic objective in FY20 was to expand sources of supply (premium publisher inventory) on the
Adslot Media platform to meet growing demand.
I am pleased to report that the Company has made significant progress in this area, now having signed
additional premium publishers during the year, including Associated Newspapers (publishers of the Mail
Online, the Daily Mail, Metro, etc.), Bloomberg, the Financial Times, Business Insider, WebMD, Vice Media,
PopSugar, Flight Aware, Minute Media and Times of India to name a few.
In addition, the Company signed and implemented data partnerships with Oracle Data Cloud and Liveramp
during the year, greatly enhancing the third-party audience targeting capabilities of the Adslot Media
platform for media buyers.
Adslot’s core business of Symphony also continued to perform well in FY20 following a partnership integration
with Marathon in April, which led to the signing and deployment of Symphony for Omnicom Media Group in
the Netherlands. More integrated deployments in partnership with Marathon are expected in Europe.
Finally, our third strategic priority was to continue our focus on cost management due to capital constraints.
To that end, we saw a further reduction in operating costs (down 9%), with the Company’s Adjusted EBITDA
Loss* reducing from $2.6M in FY19 to $1.2M in FY20. Adjusted NPAT Loss was also reduced from $7.0M in FY19
to $5.1M in FY20.
2
Adslot 2020 Annual Report
Further, the Company undertook further cost reduction initiatives in March 2020 following the onset of
COVID-19, including all directors not taking any fees for six months, while executives and all other staff took
salary cuts of 25% initially, reduced to 12.5% for the September 2020 quarter.
Although FY20 saw successful execution on all key objectives, we did not see the anticipated growth in
Trading Fees that we expected to see during the second half of FY20. This was mostly due to the impact of
COVID-19, which disrupted media business practices globally, slowing our deployment and pilot programs
with key media holding companies, combined with
negatively impacted global media spend during the period.
Fortunately, from a financial perspective, the shortfall in
Adslot Media Trading Fees was more than compensated for
by the continued increase in Symphony Licence Fees (up
8% to $7.2M), enabling the Company to maintain a modest
growth profile (Group Revenue up 3% to $10.6M) in FY20.
FY20 also saw a continued increase in cash receipts,
which grew 11% from $17.4M in FY19 to $19.3M in FY20. The
Company held a closing cash balance of $6.2M as at 30 June
2020, supplemented by $6.4M placement in December 2019
to support the balance sheet.
In FY21, the Company is now focused on five key strategic and operational initiatives:
• Drive activation and trading activity from previously signed global agency holding companies;
• Execute Master Service Agreements (MSAs) with the three remaining global agency holding companies;
• Expand sources of supply on the Adslot Media marketplace to meet growing
demand;
• Further explore opportunities to activate the Adslot Media marketplace with
existing Symphony customers; and,
• Maintain our focus on careful cost management.
In summary: we have positioned the Company well to realise material trading
fees from Adslot Media in FY21 via the already signed MSAs with agency
holding companies, and the continued activation and growth of demand from
“I am pleased to
report that the
Company has
made significant
progress”
those agencies. Additional MSA signings will be supplemental to that foundation.
With the appointment of Chris Maher as head of our US operations in January 2020, we have a high level of
confidence that Trading Fees will continue to grow in a meaningful way in FY21, following our record trading
quarter in the September 2020 quarter. A hint of what’s to come.
Thank you all again for your continued to support the Company throughout financial year 2020. We are
looking forward to a big FY2021.
Andrew Barlow
Executive Chairman
* Adjusted EBITDA and NPAT loss is after adding back impairment of Goodwill of $10.0M and once off provision
for FY16 R&D Claim of $1.5M to the Unadjusted EBITDA loss ($12.7M) and Unadjusted NPAT loss ($16.6M).
Adslot 2020 Annual Report
3
CEO’S
MESSAGE.
2020 was a year of achievement for Adslot in a very challenging
environment. During the year the Company made considerable
progress in developing both the buy and sell side of the Adslot
Media marketplace while also further growing the client base for
the Symphony platform.
Whilst the impacts on trading conditions caused by the COVID-19
pandemic were felt during the second half, the Company acted
quickly and prudently to mitigate these impacts and the progress
made during the second half of the year leaves Adslot well positioned for the year ahead.
As the Company has previously stated, a key objective for development of the Adslot Media
marketplace has been the execution of Master Service Agreements with the 6 largest global agency
holding companies, who between them control the majority of media buying around the world. In
the final days of the 2019 Financial Year, the Company announced the first of these agreements with
Cadreon (now Matterkind), the media trading division of the Interpublic Group of Companies (IPG).
During 2020 the Company followed this with further MSAs with holding companies Havas Media
and Dentsu Aegis. An interim trading agreement with a further holding company was agreed during
2020 leaving the Company with 4 of the 6 holding companies in a position to trade on the Adslot
Media platform.
The supply side of the Adslot Media has long been a strength with inventory from almost 50% of the
Comscore Top 50 publishers in the US market available on the platform (excluding the ‘walled gardens’
of Facebook, Google and Amazon). During 2020 new premium publishers were added to the Adslot
Media platform in multiple markets. New publishers included well-known brands such as WebMD,
AMC, Vice Media, Dow Jones, and the Economist. These additional publishers further enhance Adslot’s
presence in a number of high value verticals including finance and healthcare.
The US market remains a focus for development of the Adslot Media
marketplace due to its size and its ongoing leadership position in adoption
of new technologies and solutions for the media industry. In January 2020,
the Company made a significant commitment to the US market with the
appointment of Chris Maher to the role of President, North America. Chris is a
highly experienced sales and media executive and his leadership has seen a
strong improvement in the sales and activation efforts and client engagement.
The Company remains highly optimistic regarding the opportunities the US
market will provide in 2021 and beyond.
“
In summary,
I believe that
the company
can look
proudly on its
achievements”
Our progress was not limited to Adslot Media with two significant developments with Symphony
during the 2020 financial year. Firstly, in April 2020 the Company announced a partnership with Kalin
Setterberg Data SV to integrate their Marathon financial ERP solution with Symphony.
4
Adslot 2020 Annual Report
This integrated solution provides a best of breed solution for media agencies to manage the whole
campaign lifecycle from planning and trading through to financial reconciliation and invoicing. This
integration was completed in September 2020 and we believe a significant opportunity exists for this
integrated offering across Europe.
In May 2020 the Company announced an agreement to deploy Symphony for the Omnicom Media
Group in the Netherlands. This agreement represented the first potential deployment of Symphony in
the Netherlands, the first deployment for OMG and
the first to feature the integration with Marathon.
This activation was completed in October of 2020 and
represented a pleasing diversification of both clients
and geographic footprint for Symphony.
Further, during the June 2020 quarter the Company
saw very encouraging adoption of the integrated
offering between the Symphony and Adslot Media
platforms in the pilot market of Austria. This adoption
was a significant driver of the strong (84%) growth
in the value of media traded on the Adslot Media platform when compared to the prior quarter. The
Company believes that over the medium term further opportunities exist to replicate this success in
current and potential Symphony markets.
An undoubted low point of the year was the impact of the COVID-19 pandemic which impacted our
employees, our clients and the media industry as a whole. The Company made the decision early to
reduce our cost base, eliminate discretionary expenditure and switch our workforce to remote working.
These measures involved considerable sacrifice from our staff, for which we are very grateful, however
productivity from a sales and development perspective remained very high. Further, while media
spending globally declined significantly immediately after the start of the pandemic it has strongly
returned in many markets and many industry analysts expect strong growth in 2021 and beyond as
part of a wider recovery.
In summary, I believe that the company can look proudly on its achievements during a very
challenging period not only for our industry but for the wider economy as a whole. The progress
we have made on our key strategic objectives in 2020 leaves us well placed to finally deliver on the
considerable opportunity that this company, its employees, and its shareholders have long believed in.
Ben Dixon
CEO and Executive Director.
Adslot 2020 Annual Report
5
Director’s
Report
DIRECTORS’
REPORT.
Mr Andrew Barlow
Executive Chairman
Mr Ben Dixon
CEO and Executive Director
Mr Adrian Giles
Non-Executive Director
Your Directors present
Andrew Barlow is the founder
Ben Dixon’s career in the
Adrian Giles is an
their report, together
and Chairman of Adslot, and
advertising industry goes
entrepreneur in the Internet
with the financial
an experienced technology
back over 20 years and
and Information Technology
report of Adslot Ltd
entrepreneur. Prior to Adslot,
includes roles at several large
industries. In 1997 Mr Giles
ACN 001 287 510 (‘the
Mr Barlow co-founded online
multinational agency groups
co-founded Sinewave
Company’) and its
competitive intelligence
including DDB and Mojo. He
Interactive which pioneered
controlled entities
company, Hitwise, with Adrian
has wide experience across
the concept of marketing a
(‘the Group’) for the
Giles. Hitwise was ranked one
both the media buying
website using search engines
financial year ended
of the Top 10 fastest growing
and account management
and was the first company
30 June 2020 and
companies by Deloitte for five
fields having held senior
in Australia to offer Search
the auditor’s report
years running, before being
positions directing accounts
Engine Optimisation (SEO) as
thereon.
sold to Experian Group (LSX.
for advertisers such as
a service.
EXPN) in May 2007.
Telstra and Kraft Foods. In
Mr Giles co-founded Hitwise
Mr Barlow was also Founder
particular he was responsible
which grew over 10 years
and CEO of Max Super, an
for the development
to become one of the most
online retail superannuation
and implementation of
recognised global internet
fund sold to Orchard Funds
e-commerce and online
measurement brands in the
Management in 2007.
strategies across a number of
USA, UK, Australia, NZ, Hong
Mr Barlow is also the Founder
advertisers.
Kong, and Singapore. Whilst
of Venturian, a privately-
In late 1999 Mr Dixon
positioning the company
owned venture capital fund
conceptualised and then
for a NASDAQ listing in early
with investments in early-
co-founded Facilitate Digital
2007 Hitwise was sold to
stage technology companies
Pty Ltd, assuming the role
Experian (LSX: EXPN) in one
with unique IP, highly scalable
of General Manager. In the
of Australia’s most successful
business models and global
subsequent 3 years he played
venture capital backed trade
market potential.
an integral role in steering the
sales.
Mr Barlow served a non-
executive director of Nitro
business through an industry
collapse to a position of
Mr Giles is also Chairman
of ORDER Esports - an
Software Limited (ASX:NTO)
strength.
Australian esports team and
from 30 January 2007 until 25
Mr Dixon was appointed Chief
Chairman of Fortress Esports
August 2020.
Executive Officer of Facilitate
- an esports and video game
Mr Barlow was first appointed
when Adslot acquired it in
entertainment company.
as a Non-Executive Director
December 2013.
Mr Giles is Chair of the
on 16 February 2010. He was
the Executive Chairman
for the 2020 financial year,
returning to non-executive
Chairman on 28 July 2020.
Mr Barlow is also a member
of the Remuneration
Committee.
Remuneration Committee
and a member of the Audit &
Risk Committee.
6
Adslot 2020 Annual Report
Ms Sarah Morgan
Non-Executive Director
Mr Andrew Dyer
Non-Executive Director
Ms Felicity Conlan
Company Secretary
Sarah Morgan has
Andrew Dyer is a Senior
Felicity Conlan brings to the
extensive experience
Partner and Director of
Group extensive experience
in the finance industry,
The Boston Consulting
in the media/advertising
primarily as part of
Group (BCG).
and technology sectors
independent corporate
Mr Dyer has held local,
where she has held General
advisory firm Grant
regional and global
Manager - Finance and
Samuel. Ms Morgan has
leadership positions,
CFO roles with companies
been involved in public
including leading BCG’s
including M&C Saatchi,
and private company
People & Organization and
Network Ten, Beattie
mergers and acquisitions,
Enablement Practices.
McGuinness Bungay
as well as equity and debt
He has also been a member
(London) and Genero Media.
capital raisings. She holds
of BCG’s global Executive
Ms Conlan is a member
a degree in Engineering
Committee and holds
of CPA Australia and a
and a Master of Business
various roles on a number
member of the Australian
Administration from the
of BCG Board Committees.
Institute of Company
University of Melbourne
Mr Dyer has over 26 years'
Directors.
and is a Graduate of
consulting experience
Australian Institute of
supporting senior
Company Directors.
executives in leading
Ms Morgan is a Non-
companies around the
Executive Director of
world, with a particular
Nitro Sof tware Limited,
focus on financial and other
Future Generation Global
services businesses.
Investment Company
Mr Dyer is also a member of
Limited and Whispir
the Finance Committee of
Limited. Ms Morgan was
the Council of the Australian
a Non-Executive Director
of Hansen Technology
National University.
Prior to joining BCG in
Limited for part of the
1994, Mr Dyer worked for
2020 year.
the Commonwealth Bank
Ms Morgan is Chair of the
and the Australian Federal
Audit and Risk Committee.
Government.
Mr Dyer is a member of the
Audit & Risk Committee and
was also appointed to the
Remuneration Committee
on 2 August 2019.
Adslot 2020 Annual Report
7
PERFORMANCE.
2020 RESULTS.
+3 %
GROUP.
GROUP REVENUE
$10.6m
up +3% on prior year
+1%
TRADING TECHNOLOGY REVENUES
$8.1m
up +1% on prior year
+54%
ADJUSTED EBITDA LOSS
$1.2m
reduced by 54% on prior year
8
Adslot 2020 Annual Report
+1%
ADSLOT MEDIA.
MEDIA TRADED
$15.5m
up 1%
-35%
TRADING FEE REVENUE
$0.7m
down 35%
+9%
SYMPHONY.
LICENCE FEE REVENUE
$6.6m
up 9%
Adslot 2020 Annual Report
9
Directors’ Report
Operating Results
Trading technology revenue
8,115,100
8,038,425
76,675
Total revenue and other income
10,572,950
10,271,629
301,321
2020
$
2019
Movement
$
$
%
1%
3%
EBITDA (loss)
Adjusted EBITDA (loss) 1
NPAT (loss)
Adjusted NPAT (loss) 1
(12,725,348)
(2,619,402)
(10,105,946)
(386%)
(1,197,614)
(2,619,402)
1,421,788
54%
(16,617,725)
(7,042,755)
(9,574,970)
(136%)
(5,089,991)
(7,042,755)
1,952,764
28%
1 Adjusted EBITDA (loss) and Adjusted NPAT (loss): Adding back impairment of Goodwill (refer note 10 for further
information) and once off Provision for R&D Claim for Financial Year 2015/2016 (refer note 8 for further information) to
EBITDA and NPAT.
Licence Fees
Significant events for the past year for Symphony include:
Group revenues for FY20 were $10,572,950 an increase of 2.93% versus FY19 ($10,271,629).
The Adjusted Consolidated Group operating loss before interest, income tax, depreciation and amortisation
(Adjusted EBITDA) in FY20 was $1,197,614, a 54% decrease in losses versus FY19 ($2,619,402).
The Adjusted Consolidated Group operating loss after tax of $5,089,991 is 28% lower than the loss for the
prior year of $7,042,755.
Review of Operations
Despite challenging conditions in the second half of the 2020 financial year, the Company achieved revenue
growth on the prior year. Total group revenue of $10.6m represented a 3% increase on the prior financial year
(FY19: $10.3m). Revenue growth was primarily driven by a $0.5m (+9%) increase in Symphony licence fee
revenue and a $0.4m increase in Grant Proceeds primarily relating to COVID-19 government stimulus.
Revenues generated from Trading Technology (licence fees and trading fees combined) at $8.1m represented
a 1% growth on the prior financial year (FY19: $8.0m).
During the period the Company continued to focus on the following key strategies for the business in FY20:
1. For Adslot Media
a. Secure Master Service Agreements (MSAs) with additional agency holding companies;
b. Activate previously contracted agencies to drive growth in trading fees;
c. Secure additional premium publishers to grow the quality, quantity and variety of marketplace
inventory; and,
d. Develop partnerships with key data providers.
2. Pursue further deployments for Symphony with existing and prospective clients; and
3. Maintain focus on cost management.
The COVID-19 pandemic represented a challenge for businesses globally in the 2020 financial year, and this
is expected to continue into the 2021 financial year.
COVID-19 saw an immediate decline in media spend globally during the March 2020 quarter and this had an
impact on Adslot Media bookings during that quarter. The Company saw both reduced activity levels and
cancellations of previously booked media. This combined with the usual low seasonal activity in the March
2020 quarter resulted in the lowest quarter for the 2020 year.
By contrast, and despite ongoing uncertainty, Adslot Media achieved its highest bookings result for the 2020
financial year in the June 2020 quarter. This was driven by a significant improvement in trading activity on the
Adslot Media platform from European agencies. However, the US market continued to see negative impacts
on media trading caused by social unrest. Despite that, engagement and planning activities with US-based
agencies and publishers accelerated towards the end of the quarter and significant improvement in Adslot
Media trading activity from the US market is anticipated in the September 2020 quarter.
Symphony revenue is primarily made up of recurring contracted licence fees with little impact from COVID-19
in the 2020 financial year.
Webfirm’s digital marketing services whose clients consist mostly of small to medium enterprises, were
impacted in March and April 2020, with a small number of clients putting a hold on their retained services that
have not been reinstated to date.
Trading Technology
The strategic focus of the business remains Trading Technology revenues. These revenues are comprised of:
• Licence Fees – derived mostly from Symphony, a market-leading workflow automation tool for Media
Agencies, and also from customised solutions developed for Publishers; and,
• Trading Fees – fees charged as a percentage of media traded via the stand alone Adslot Media
platform and also via Symphony. Trading fees generated via the stand alone Adslot Media platform
attract a higher % fee and represent a significant majority of Trading Fees.
• Partnership with Marathon, a Sweden-based provider of Enterprise Resource Planning (ERP) software
to the media industry across Europe, opening up new European markets for Symphony;
• Execution of a multi-year agreement for deployment of Symphony with Omnicom Media Group in the
Netherlands, representing additional diversification of the Company’s geographic and client footprint
• Validation of the Symphony – Adslot Media offering with a significant increase in media traded in
for the Symphony product; and,
Europe on the integrated platform.
Total Licence Fee revenues across Symphony and Adslot Media were $7.2m in FY20, representing growth of
8% on the prior financial year (FY19: $6.7m).
Note: Symphony Licence Fee revenues for FY17 and FY18 are normalised to allow for the reversal of a one-
off payment, as outlined in the 20 July 2018 Symphony Outlook release.
10 Adslot 2020 Annual Report
10
Adslot 2020 Annual Report
Adslot 2020 Annual Report 11
Symphony revenue is primarily made up of recurring contracted licence fees with little impact from COVID-19
in the 2020 financial year.
Webfirm’s digital marketing services whose clients consist mostly of small to medium enterprises, were
impacted in March and April 2020, with a small number of clients putting a hold on their retained services that
have not been reinstated to date.
Trading Technology
The strategic focus of the business remains Trading Technology revenues. These revenues are comprised of:
• Licence Fees – derived mostly from Symphony, a market-leading workflow automation tool for Media
Agencies, and also from customised solutions developed for Publishers; and,
• Trading Fees – fees charged as a percentage of media traded via the stand alone Adslot Media
platform and also via Symphony. Trading fees generated via the stand alone Adslot Media platform
attract a higher % fee and represent a significant majority of Trading Fees.
Licence Fees
Significant events for the past year for Symphony include:
• Partnership with Marathon, a Sweden-based provider of Enterprise Resource Planning (ERP) software
to the media industry across Europe, opening up new European markets for Symphony;
• Execution of a multi-year agreement for deployment of Symphony with Omnicom Media Group in the
Netherlands, representing additional diversification of the Company’s geographic and client footprint
for the Symphony product; and,
• Validation of the Symphony – Adslot Media offering with a significant increase in media traded in
Europe on the integrated platform.
Total Licence Fee revenues across Symphony and Adslot Media were $7.2m in FY20, representing growth of
8% on the prior financial year (FY19: $6.7m).
Note: Symphony Licence Fee revenues for FY17 and FY18 are normalised to allow for the reversal of a one-
off payment, as outlined in the 20 July 2018 Symphony Outlook release.
Adslot 2020 Annual Report 11
Adslot 2020 Annual Report
11
Directors’ Report (Continued)
Trading Fees
The March 2020 quarter was significantly impacted by the COVID-19 pandemic with trades paused or
cancelled due to uncertainty. Bookings came back strongly in the June 2020 quarter, at $4.8m, the largest in
the 2020 financial year.
follows:
Value of Media Traded - Stand Alone
Adslot (AUD)
(cid:3)(cid:1010)(cid:853)(cid:1004)(cid:1004)(cid:1004)(cid:853)(cid:1004)(cid:1004)(cid:1004)
(cid:3)(cid:1009)(cid:853)(cid:1004)(cid:1004)(cid:1004)(cid:853)(cid:1004)(cid:1004)(cid:1004)
(cid:3)(cid:1008)(cid:853)(cid:1004)(cid:1004)(cid:1004)(cid:853)(cid:1004)(cid:1004)(cid:1004)
(cid:3)(cid:1007)(cid:853)(cid:1004)(cid:1004)(cid:1004)(cid:853)(cid:1004)(cid:1004)(cid:1004)
(cid:3)(cid:1006)(cid:853)(cid:1004)(cid:1004)(cid:1004)(cid:853)(cid:1004)(cid:1004)(cid:1004)
(cid:3)(cid:1005)(cid:853)(cid:1004)(cid:1004)(cid:1004)(cid:853)(cid:1004)(cid:1004)(cid:1004)
(cid:3)(cid:882)
(cid:89)(cid:1005)(cid:3)(cid:38)(cid:122)(cid:1005)(cid:1013)
(cid:89)(cid:1006)(cid:3)(cid:38)(cid:122)(cid:1005)(cid:1013)
(cid:89)(cid:1007)(cid:3)(cid:38)(cid:122)(cid:1005)(cid:1013)
(cid:89)(cid:1008)(cid:3)(cid:38)(cid:122)(cid:1005)(cid:1013)
(cid:89)(cid:1005)(cid:3)(cid:38)(cid:122)(cid:1006)(cid:1004)
(cid:89)(cid:1006)(cid:3)(cid:38)(cid:122)(cid:1006)(cid:1004)
(cid:89)(cid:1007)(cid:3)(cid:38)(cid:122)(cid:1006)(cid:1004)
(cid:89)(cid:1008)(cid:3)(cid:38)(cid:122)(cid:1006)(cid:1004)
The FY20 value of media traded via the stand alone Adslot Media platform at $15.5m was flat on FY19
($15.4m). The FY20 trading activity resulted in Trading Fees derived from the Adslot Media platform of $0.7m
(FY19 $1.1m). The reduction in trading fees despite a similar value of media traded in FY19, reflects the lower
average fee percentage in European markets where many larger agencies access the Adslot Media platform
via the integration to the Group’s Symphony platform. Average trading fee percentages are expected to
increase as activity in the US market grows.
The Group continues to make significant progress in growing adoption and sales pipelines across all active
regions, including the US, UK, Europe and Australia.
The Group’s growth strategy continues to focus on the six largest global media agency holding companies for
the US market, and securing Master Services Agreements (MSAs) with these groups to enable access to the
demand they control. The Company’s status with the six largest global media agency holding companies is as
• Formal MSAs in place with three of the six largest global media agency holding companies – IPG /
Matterkind, Havas and Dentsu / Amplifi;
• An active interim trading agreement with a fourth holding company, anticipated to proceed to formal
MSA later in 2020;
• Confirmed pilot activity with a fifth holding company scheduled for the September 2020 quarter; and,
• Limited initial discussions the remaining sixth holding company.
During the financial year, the Group continued to add premium publishers to its Adslot Media marketplace
around the world. These included WebMD, Reach plc, AMC Networks, Vice Media, Frankly Media, Young
Hollywood, Investing.com and Russmedia. The sales pipeline of large publishers continues to grow.
In addition, publisher-initiated demand continues to grow across agreements with publishers that see Adslot
as a preferred or mandated channel for certain transactions. These include the leading Australian property
website Domain and the UK publisher the Financial Times (FT).
In the 2020 financial year the Company executed data partnership agreements with:
• Oracle Data Cloud (ODC), the world’s largest cloud-based data management platform for marketing;
• LiveRamp, a leading provider of technology for the onboarding of advertiser’s first party data.
These relationships will make it easy for advertisers to share their audiences for targeting against media in the
and
Adslot Platform.
Services
Services revenue is derived predominantly from Webfirm, the Group’s Australian-based digital marketing
services business, providing website design, hosting, search engine optimisation (SEO), search engine
marketing (SEM) and social media marketing services (FY20: $1.6m).
The COVID-19 pandemic resulted in thirteen clients of Webfirm’s digital marketing services putting a hold on
their SEO retained services in March and April 2020, that have not been reinstated to date.
FY20 Services revenue at $1.6m was a reduction year on year (-4% reduction).
Services revenue is also derived to a lesser extent from custom development work for Symphony and Adslot
Media customers.
Government Stimulus
The Group was eligible for Australian Government stimulus in FY2020 including JobKeeper of $97.5k, Cash
Flow Boost Grant of $200k and the Small Business Grant (UK) of $18k.
The Group expects to receive an additional $448.5k for the current JobKeeper scheme and $158k for the
Paycheck Protection Program (US) in FY21.
12
12 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 13
The Group continues to make significant progress in growing adoption and sales pipelines across all active
regions, including the US, UK, Europe and Australia.
The Group’s growth strategy continues to focus on the six largest global media agency holding companies for
the US market, and securing Master Services Agreements (MSAs) with these groups to enable access to the
demand they control. The Company’s status with the six largest global media agency holding companies is as
follows:
• Formal MSAs in place with three of the six largest global media agency holding companies – IPG /
Matterkind, Havas and Dentsu / Amplifi;
• An active interim trading agreement with a fourth holding company, anticipated to proceed to formal
MSA later in 2020;
• Confirmed pilot activity with a fifth holding company scheduled for the September 2020 quarter; and,
• Limited initial discussions the remaining sixth holding company.
During the financial year, the Group continued to add premium publishers to its Adslot Media marketplace
around the world. These included WebMD, Reach plc, AMC Networks, Vice Media, Frankly Media, Young
Hollywood, Investing.com and Russmedia. The sales pipeline of large publishers continues to grow.
In addition, publisher-initiated demand continues to grow across agreements with publishers that see Adslot
as a preferred or mandated channel for certain transactions. These include the leading Australian property
website Domain and the UK publisher the Financial Times (FT).
In the 2020 financial year the Company executed data partnership agreements with:
• Oracle Data Cloud (ODC), the world’s largest cloud-based data management platform for marketing;
and
• LiveRamp, a leading provider of technology for the onboarding of advertiser’s first party data.
These relationships will make it easy for advertisers to share their audiences for targeting against media in the
Adslot Platform.
Services
Services revenue is derived predominantly from Webfirm, the Group’s Australian-based digital marketing
services business, providing website design, hosting, search engine optimisation (SEO), search engine
marketing (SEM) and social media marketing services (FY20: $1.6m).
The COVID-19 pandemic resulted in thirteen clients of Webfirm’s digital marketing services putting a hold on
their SEO retained services in March and April 2020, that have not been reinstated to date.
FY20 Services revenue at $1.6m was a reduction year on year (-4% reduction).
Services revenue is also derived to a lesser extent from custom development work for Symphony and Adslot
Media customers.
Government Stimulus
The Group was eligible for Australian Government stimulus in FY2020 including JobKeeper of $97.5k, Cash
Flow Boost Grant of $200k and the Small Business Grant (UK) of $18k.
The Group expects to receive an additional $448.5k for the current JobKeeper scheme and $158k for the
Paycheck Protection Program (US) in FY21.
Adslot 2020 Annual Report 13
Adslot 2020 Annual Report
13
Directors’ Report (Continued)
People
In January 2020 the Group appointed Chris Maher to the role of President, North America, a critical role leading
the US team to drive success in the US market.
The Group’s entire workforce moved to working from home with the onset of the COVID-19 pandemic, using
enabling technology solutions. All business travel was cancelled.
period (FY19: $19.3m).
Practical support and guidance to aid working from home included early identification and sourcing of
equipment, tests to ensure systems worked remotely, ongoing technical support and grants for home
equipment.
Where employees were able to return to work, the Group implemented both social distancing and elevated
health measures, including additional cleaning regimes, to ensure the safety of our employees.
The Group adopted all government and public health authority guidelines in each of our markets. We have
also put additional measures in place to support the health and wellbeing of all our employees in these
uncertain times, including a new Employee Assistance Program offering counselling advice to employees and
their families.
Cost Management
Total operating costs of $11.7m for FY20 represents a $1.1m (-9%) reduction in costs on FY19 ($12.8m)
including reclassification of rental expense of $0.6m , waived Directors fees of $0.2m and travel savings of
$0.2m.
In March 2020, the Group removed twenty external development contractors representing annual savings of
$1.4m (with associated reduction in recurring revenues in FY21).
Due to the impact of the COVID-19 pandemic on the Group, the following employee cost reductions were
implemented in the 2020 financial year:
• The Chairman and non-executive directors waived all fees from March to June 2020 (inclusive);
• 30% salary reduction for the CEO and CFO for the quarter to June 2020;
• up to 25% salary reductions across employees earning above a minimum threshold for the quarter to
June 2020;
further headcount reductions due to redundancy and natural attrition; and
freeze on all salary increases and new hires.
•
•
These initiatives resulted in an annualised $1.09m or 30% cash saving in employment costs across Staff Costs
($0.75M) and Intellectual Property ($0.34m).
The employee salary reductions implemented in the June 2020 quarter have been reduced by half in the
September 2020 quarter. The Chairman and non-executive directors have continued to waive all fees in the
September 2020 quarter.
Cost reductions were targeted to ensure continued investment in strategic and revenue generating product
development and no disruption to existing client relationships.
EBITDA
The EBITDA loss for the 2020 financial year is $12,725,348 (FY19 $2,619,402).
During the period the Group:
• made a one-off provision of $1,527,734 for the part repayment of the FY16 R&D claim (see Note 8);
and,
• made a non-cash goodwill impairment charge of $10,000,000 (see Note 10).
The Adjusted EBITDA loss for the 2020 financial year, excluding the FY16 R&D provision and goodwill
impairment, is $1,197,614 representing a 54% reduction on the prior period due to the growth in revenue
combined with tight cost control.
Cash Management
Key major shareholders and new investors supported the Group in a capital raise of $6.4m in FY20
contributing net cash inflows from financing activities of $5.6m (after transaction costs).
Net cash outflows from operating activities for FY20 were $3.4m, a $2.3m increase on the prior period (FY19:
$1.1m net cash outflow). Cash receipts for FY20 were $19.3m, an 11% increase of $1.9m on the prior period
(FY19: $17.4m). Cash payments for operating activities at $22.8m was a 19% increase of $3.5m on the prior
The Group received $328k (FY19 $3.0m) in R&D receipts across operating activities ($51k) and investing
activities ($278k). This significant reduction in R&D receipts is due to the ATO offsetting the disputed FY16
R&D claim against the FY19 R&D claim, as outlined in Note 8.
Cash from government stimulus includes an Australian Cash Flow Boost payment of $100k; a UK Small
Business Grant of $18k included in operating activities (see note 3); and a US Paycheck Protection Program
payment of $167k, in financing activities (see note 12, flow through P&L in FY21).
Due to the impact of the COVID-19 pandemic on operations, the Company expects to receive an additional
$0.4m Job Keeper allowance and an additional $0.05m ATO Boost Payment in the September 2020 quarter.
Cash as at 30 June 2020 was $6.2m (FY19: $8.2m).
Matters Subsequent to the End of the Financial Year
The Company granted the following unlisted share options:
25,625,000 options issued to employees as outlined in the Appendix 3G lodged on 22 July 2020.
18,000,000 options granted to Mr Ben Dixon, CEO and executive director as outlined in the ASX release on
12 August 2020.
COVID-19 Pandemic
The outbreak of the coronavirus pandemic in early 2020 has had an adverse impact on the business across
all geographic regions. It is not practicable to estimate the duration or potential quantum of the impact of the
health and economic crisis, after the reporting date. The situation continues to develop and any further impact
will be dependent on any measures imposed by the Australian Government and other Governments around
the world including restrictions on social and work environments and economic stimulus.
Other than the above, there has not been any matter or circumstance occurring subsequent to the end of the
financial year that has significantly affected, or may significantly affect, the operations of the Group, the results
of those operations or the state of affairs of the Group in future years.
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 year.
The Directors do not recommend the declaration of a dividend. No dividend has been declared or paid during
14
14 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 15
Cash Management
Key major shareholders and new investors supported the Group in a capital raise of $6.4m in FY20
contributing net cash inflows from financing activities of $5.6m (after transaction costs).
Net cash outflows from operating activities for FY20 were $3.4m, a $2.3m increase on the prior period (FY19:
$1.1m net cash outflow). Cash receipts for FY20 were $19.3m, an 11% increase of $1.9m on the prior period
(FY19: $17.4m). Cash payments for operating activities at $22.8m was a 19% increase of $3.5m on the prior
period (FY19: $19.3m).
The Group received $328k (FY19 $3.0m) in R&D receipts across operating activities ($51k) and investing
activities ($278k). This significant reduction in R&D receipts is due to the ATO offsetting the disputed FY16
R&D claim against the FY19 R&D claim, as outlined in Note 8.
Cash from government stimulus includes an Australian Cash Flow Boost payment of $100k; a UK Small
Business Grant of $18k included in operating activities (see note 3); and a US Paycheck Protection Program
payment of $167k, in financing activities (see note 12, flow through P&L in FY21).
Due to the impact of the COVID-19 pandemic on operations, the Company expects to receive an additional
$0.4m Job Keeper allowance and an additional $0.05m ATO Boost Payment in the September 2020 quarter.
Cash as at 30 June 2020 was $6.2m (FY19: $8.2m).
Matters Subsequent to the End of the Financial Year
The Company granted the following unlisted share options:
25,625,000 options issued to employees as outlined in the Appendix 3G lodged on 22 July 2020.
18,000,000 options granted to Mr Ben Dixon, CEO and executive director as outlined in the ASX release on
12 August 2020.
COVID-19 Pandemic
The outbreak of the coronavirus pandemic in early 2020 has had an adverse impact on the business across
all geographic regions. It is not practicable to estimate the duration or potential quantum of the impact of the
health and economic crisis, after the reporting date. The situation continues to develop and any further impact
will be dependent on any measures imposed by the Australian Government and other Governments around
the world including restrictions on social and work environments and economic stimulus.
Other than the above, there has not been any matter or circumstance occurring subsequent to the end of the
financial year that has significantly affected, or may significantly affect, the operations of the Group, the results
of those operations or the state of affairs of the Group in future years.
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.
Adslot 2020 Annual Report 15
Adslot 2020 Annual Report
15
Directors’ Report (Continued)
Shares under option
Details of unissued shares or interests under option as at the date of signing this report are.
Non-executive directors’ and Chairman’s remuneration
Issue Type
Expiry Date
Exercise
Price
$
Balance at
beginning
of the year
(Number)
Issued during
the year
(Number)
Forfeited
during the
year
(Number)
Exercised
during the
year
(Number)
Ordinary options
04/10/2021
0.073
3,000,000
Ordinary options
25/11/2021
0.060
5,600,000
Ordinary options
25/02/2022
0.035
23,500,000
Ordinary options
15/05/2022
0.034
11,400,000
Ordinary options
27/05/2022
0.036
4,000,000
Ordinary options
30/01/2023
0.060
5,800,000
-
-
-
-
-
-
-
-
-
-
-
(750,000)
Ordinary options
02/09/2023
0.041
Ordinary options
12/12/2023
0.045
Ordinary options
15/12/2022
0.044
Ordinary options
29/01/2024
0.032
-
-
-
-
11,900,000
(200,000)
4,000,000
8,000,000
8,000,000
-
-
-
53,300,000
31,900,000
(950,000)
-
-
-
-
-
-
-
-
-
-
-
Balance at end of
the year
(Number)
3,000,000
5,600,000
23,500,000
11,400,000
4,000,000
5,050,000
11,700,000
4,000,000
8,000,000
8,000,000
84,250,000
Indemnification and Insurance of Officers
The Group has during the financial year, in respect of each person who is or has been an officer of the Group
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 Group 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 Group, 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 Group
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Group, or to intervene in any proceedings to which the Group is a party, for the
purpose of taking responsibility on behalf of the Group for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Group 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 2020 has been received and can be found
on page 26 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 19 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.
Remuneration Report
The remuneration report is set out under the following headings:
Section 1:
Section 2:
Section 3:
Section 4:
Section 5:
Executive remuneration
Details of remuneration
Executive contracts of employment
Long Term Incentives (equity-based compensation)
Section 6:
Culture, accountability and remuneration
Section 7:
Equity holdings and transactions
Section 8:
Other transactions with key management personnel
Section 1: Non-executive directors’ and Chairman’s 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.
For the 2020 financial year, the Chairman’s fees were $100,000 per annum plus time-based executive fees.
For the 2020 financial year, non-executive directors’ fees were $50,000 per annum. Mr Andrew Dyer waived
his non-executive director fees for the 2020 year. In addition, the Chair of the Audit & Risk Committee and the
Remuneration Committee received a further $25,000 in recognition of the additional workload of those
positions.
With the onset of the COVID-19 pandemic and in support of the Group’s immediate actions to reduce costs,
the Chairman and non-executive directors waived their fees from March 2020 to June 2020 inclusive. The
Chairman and non-executive directors have continued to waive all fees in the September 2020 quarter.
Section 2: Executive remuneration
The Board of Directors are responsible for determining and reviewing compensation arrangements for key
management personnel and the executive team. The Remuneration Committee makes recommendations on
remuneration of key management personnel to the Board.
The Board assesses the appropriateness of the nature and amount of emoluments of these employees on a
periodic basis by reference to relevant employment market conditions with the overall objective of ensuring
maximum stakeholder benefit by:
a) Attracting the highest quality employees;
b) Retaining the best performing employees;
c) Aligning the employees with shareholder outcomes;
optimal strategic outcomes for the business; and
e) Ensuring it aligns with the latest industry best practice.
d) Aligning employee motivation to a cascading set of key performance indicators that drive the most
Executives’ remuneration consists of a fixed cash component, short-term incentives in the form of cash
bonuses, and long-term incentives in the form of equity-based compensation linked to the long-term prospects
and future performance of the Group. The inclusion of equity-based compensation in executives’ remuneration
provides a direct link between their remuneration and shareholder wealth, otherwise there are no direct
relationships.
Item
EPS (cents)
Net loss ($)
In providing the Group’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:
2020
(0.96)
2019
(0.49)
2018
(0.91)
2017
(0.70)
2016
(0.77)
16,617,725
7,042,755
11,653,319
8,630,187
8,138,485
Share price at 30 June ($)
0.018
0.028
0.026
0.051
0.110
16
16 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 17
Remuneration Report
The remuneration report is set out under the following headings:
Section 1:
Section 2:
Section 3:
Section 4:
Section 5:
Section 6:
Section 7:
Section 8:
Non-executive directors’ and Chairman’s remuneration
Executive remuneration
Details of remuneration
Executive contracts of employment
Long Term Incentives (equity-based compensation)
Culture, accountability and remuneration
Equity holdings and transactions
Other transactions with key management personnel
Section 1: Non-executive directors’ and Chairman’s 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.
For the 2020 financial year, the Chairman’s fees were $100,000 per annum plus time-based executive fees.
For the 2020 financial year, non-executive directors’ fees were $50,000 per annum. Mr Andrew Dyer waived
his non-executive director fees for the 2020 year. In addition, the Chair of the Audit & Risk Committee and the
Remuneration Committee received a further $25,000 in recognition of the additional workload of those
positions.
With the onset of the COVID-19 pandemic and in support of the Group’s immediate actions to reduce costs,
the Chairman and non-executive directors waived their fees from March 2020 to June 2020 inclusive. The
Chairman and non-executive directors have continued to waive all fees in the September 2020 quarter.
Section 2: Executive remuneration
The Board of Directors are responsible for determining and reviewing compensation arrangements for key
management personnel and the executive team. The Remuneration Committee makes recommendations on
remuneration of key management personnel to the Board.
The Board assesses the appropriateness of the nature and amount of emoluments of these employees on a
periodic basis by reference to relevant employment market conditions with the overall objective of ensuring
maximum stakeholder benefit by:
a) Attracting the highest quality employees;
b) Retaining the best performing employees;
c) Aligning the employees with shareholder outcomes;
d) Aligning employee motivation to a cascading set of key performance indicators that drive the most
optimal strategic outcomes for the business; and
e) Ensuring it aligns with the latest industry best practice.
Executives’ remuneration consists of a fixed cash component, short-term incentives in the form of cash
bonuses, and long-term incentives in the form of equity-based compensation linked to the long-term prospects
and future performance of the Group. The inclusion of equity-based compensation in executives’ remuneration
provides a direct link between their remuneration and shareholder wealth, otherwise there are no direct
relationships.
In providing the Group’s performance and benefits for shareholder wealth, the Board have regard to the
following indices in respect of the current financial year and the previous four financial years:
Item
EPS (cents)
Net loss ($)
2020
(0.96)
2019
(0.49)
2018
(0.91)
2017
(0.70)
2016
(0.77)
16,617,725
7,042,755
11,653,319
8,630,187
8,138,485
Share price at 30 June ($)
0.018
0.028
0.026
0.051
0.110
Adslot 2020 Annual Report 17
Adslot 2020 Annual Report
17
Remuneration Report (Continued)
Section 3: Details of remuneration
Details of the remuneration of the directors and the key management of the Group 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 Andrew Barlow
Non-Executive Chairman
Appointed 28 July 2020
Executive Chairman
Appointed 27 February 2018
Mr Ben Dixon
Chief Executive Officer
Appointed 1 January 2019
Executive Director
Appointed 23 December 2013
Mr Andrew Dyer
Non-Executive Director
Appointed 28 May 2018
Mr Adrian Giles
Non-Executive Director
Appointed 26 November 2013
Ms Sarah Morgan
Non-Executive Director
Appointed 27 January 2015
Mr Quentin George
Non-Executive Director
Appointed 14 June 2014
Resigned 16 July 2019
Executive Officers
Position
Date appointed/resigned
Ms Felicity Conlan
Company Secretary
Chief Financial Officer
Appointed 9 October 2017
Appointed 30 August 2017
Mr Tom Peacock
Chief Commercial Officer
Appointed 6 December 2017
$
$
Due to the impact of COVID-19 on the Group, employment cost reduction initiatives in the period included:
Mr B Dixon
50,000
100,000
$
100,000
Group performance to budget and executive
management to achieve KPIs
• The Chairman and non-executive directors waived all fees from March to June 2020 (inclusive);
• 30% salary reduction for the CEO and CFO for the quarter to June 2020;
• up to 25% salary reductions across employees earning above a minimum threshold for the quarter to June
2020;
further headcount reductions due to redundancy and natural attrition; and
freeze on all salary increases and new hires.
•
•
The employee salary reductions implemented in the June 2020 quarter have been reduced by half in the
September 2020 quarter. The Chairman and non-executive directors have continued to waive all fees in the
September 2020 quarter.
18
18 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 19
Group
2020
Name
Executive directors
Mr A Barlow (i)
Mr B Dixon
Non-executive directors
Mr A Giles
Mr Q George (ii)
Ms S Morgan
Mr A Dyer
Ms F Conlan
Mr T Peacock
Salary
& fees
$
95,883
277,500
50,000
2,273
45,662
-
237,708
224,063
933,089
Other key management personnel
Short-term benefits
employment
Share-based payment
Post-
Benefits
benefits
Long
Term
Long
Service
Leave
Short
Term
Incentive Other
$
$
Super-
Share
Performance
annuation
Options
Rights
$
Total
$
5,715
20,739
2,557
$
-
-
-
-
-
$
5,784
-
-
-
4,338
$
-
-
-
-
4,409
1,186
4,685
20,324
20,009
2,979
2,979
11,586
71,194
12,924
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
101,667
306,511
50,000
2,273
50,000
4,409
262,197
251,736
1,028,793
includes $35,000 consultancy fees incurred during his appointment as Executive Chairman.
Mr. George resigned on 16 July 2019.
Short Term Incentives
Short Term Incentives (STIs) paid in the year, along with the total STI opportunity in each year, relating to the
2019 and 2020 financial years, are outlined in the table below:
Totals
(i)
(ii)
Name
Amount
Paid
Total 2019
STI
Opportunity
Amount
Paid
Total 2020
Opportunity
STI
Assessment Criteria
$
-
-
-
Ms F Conlan
Mr T Peacock
-
-
50,000
N/A (a)
100,000 (b) Revenue achievement and KPIs
100,000 (b) Revenue achievement and KPIs
(a)
(b)
Not applicable as total bonus opportunity is based on a percentage of the Group’s performance.
A new STI plan was introduced in 2020 with a $100,000 STI opportunity. A third assessed on revenue targets
at the half year and the balance assessed on revenue targets and personal KPIs at the full year
No STIs were paid to key management personnel in relation to the 2020 financial year.
Group
2020
Name
Executive directors
Mr A Barlow (i)
Mr B Dixon
Salary
& fees
$
95,883
277,500
Non-executive directors
Mr A Giles
Mr Q George (ii)
Ms S Morgan
Mr A Dyer
50,000
2,273
45,662
-
Other key management personnel
Ms F Conlan
Mr T Peacock
Totals
237,708
224,063
933,089
Short-term benefits
Short
Term
Incentive Other
$
$
Long
Term
Benefits
Long
Service
Leave
$
Post-
employment
benefits
Share-based payment
Super-
annuation
$
Share
Options
$
Performance
Rights
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,715
5,784
-
20,739
2,557
-
-
-
-
-
-
4,338
-
-
-
-
4,409
1,186
4,685
20,324
20,009
2,979
2,979
11,586
71,194
12,924
-
-
-
-
-
-
-
-
-
Total
$
101,667
306,511
50,000
2,273
50,000
4,409
262,197
251,736
1,028,793
(i)
(ii)
includes $35,000 consultancy fees incurred during his appointment as Executive Chairman.
Mr. George resigned on 16 July 2019.
Short Term Incentives
Short Term Incentives (STIs) paid in the year, along with the total STI opportunity in each year, relating to the
2019 and 2020 financial years, are outlined in the table below:
Name
Amount
Paid
Total 2019
STI
Opportunity
Amount
Paid
Total 2020
STI
Opportunity
Assessment Criteria
$
$
Mr B Dixon
50,000
100,000
Ms F Conlan
Mr T Peacock
-
-
50,000
N/A (a)
$
-
-
-
$
100,000
Group performance to budget and executive
management to achieve KPIs
100,000 (b) Revenue achievement and KPIs
100,000 (b) Revenue achievement and KPIs
(a)
(b)
Not applicable as total bonus opportunity is based on a percentage of the Group’s performance.
A new STI plan was introduced in 2020 with a $100,000 STI opportunity. A third assessed on revenue targets
at the half year and the balance assessed on revenue targets and personal KPIs at the full year
No STIs were paid to key management personnel in relation to the 2020 financial year.
Adslot 2020 Annual Report 19
Adslot 2020 Annual Report
19
Remuneration Report (Continued)
Section 3: Details of remuneration (Continued)
Group
2019
Name
Short-term benefits
Salary
& fees
$
Short
Term
Incentive Other
$
$
Long
Term
Benefits
Long
Service
Leave
$
Post-
employment
benefits
Share-based payment
Super-
annuation
$
Share
Options
$
Performance
Rights
$
Executive directors
Mr A Barlow (i)
228,262
-
Mr B Dixon
253,000
50,000
Non-executive directors
Mr A Giles
Mr Q George
Ms S Morgan
Mr A Dyer
75,000
50,000
68,493
-
Other key management personnel
Ms F Conlan
Mr T Peacock
Mr I Lowe (ii)
250,000
231,500
67,509
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60,000
-
16,648
8,676
-
20,051
10,226
-
-
-
-
-
-
6,507
-
-
-
-
18,402
594
7,522
-
20,531
49,686
20,531
49,686
5,133
20,452
-
-
-
-
-
-
-
-
-
Total
$
236,938
349,925
75,000
50,000
75,000
18,402
320,811
309,239
153,094
Totals
(i)
(ii)
1,223,764
50,000
60,000
24,764
81,429
148,452
-
1,588,409
includes $136,938 consultancy fees incurred during his appointment as Executive Chairman.
resigned as CEO and Executive Director on 27 February 2018. Continued to be a key management personnel
until 27 July 2018.
Termination for
serious misconduct
The Group 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.
Short Term Incentives
Short Term Incentives (STIs) paid in the year, along with the total STI opportunity in each year, relating to the
2018 and 2019 financial years, are outlined in the table below:
Name
Amount
Paid
Total 2018
STI
Opportunity
Amount
Paid
Total 2019
STI
Opportunity
Assessment Criteria
Mr B Dixon
Ms F Conlan
Mr T Peacock
Mr I Lowe
$
-
-
-
-
$
$
$
100,000
50,000
100,000
Group performance to budget and executive
management to achieve KPIs
50,000
N/A (a)
-
-
50,000 Performance related KPIs
N/A(a) Performance related KPIs
N/A
-
80,000 to
160,000
Bonus for completion of strategic project
(a)
Not applicable as total bonus opportunity is based on a percentage of the Group’s performance.
No STIs were paid in relation to the 2018 financial year. Mr Dixon was the only key management personnel
entitled to be paid an STI in the 2019 financial year, which was paid during the 2019 financial year.
20
20 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 21
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
Incentive Plans
Eligible to participate. Incentive criteria and award opportunities vary for each
contributions.
executive.
Notice Period
Resignation
Retirement
Group
Redundancy
Key Management Personnel, including executive directors, have notice periods
ranging from three to four months. The Chief Executive Officer has a notice
period of four months and the Chief Financial Officer and Chief Commercial
Officer have notice periods of three months. Other Executives have notice
periods ranging from four weeks to three months.
Employment may be terminated by giving notice consistent with the notice period.
There are no financial entitlements due from the Group on retirement of an
executive.
Termination by the
The Group may terminate the employment agreement by providing notice
consistent with the notice period or payment in lieu of the notice period.
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.
Section 5: Long Term Incentives (equity-based compensation)
Incentive Option Plan
At the November 2017 Annual General Meeting, shareholders approved the creation of the Group’s Incentive
Option Plan which enables the Board to offer eligible employees and directors the right to options which convert
to fully-paid ordinary shares upon exercise, subject to meeting certain vesting criteria.
The objective of the Incentive Option Plan is to attract, motivate and retain key employees and the Group
considers that the adoption of the Incentive Option Plan and the future issue of options under the Incentive
Option Plan will provide selected employees and directors with the opportunity to participate in the future
growth of the Group.
Adslot continually reviews its operations, performance and the broader market conditions to ensure that
incentives offered to key executives are aligned with the growth of the Group and shareholder outcomes whilst
ensuring it can attract and retain experienced talent in a competitive industry. Adslot continues to operate
within a highly competitive employment environment for experienced people in the technology and software
field.
of the Group.
No amounts are paid or payable by the recipient on the receipt of the options. The options carry no voting
rights. All options are subject to service periods which require the employees remain an employee or Director
The following tables show grants and movements of share-based compensation to directors and senior
management under the Incentive Option Plan during the current financial year and the previous financial year:
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
Notice Period
Resignation
Retirement
Eligible to participate. Incentive criteria and award opportunities vary for each
executive.
Key Management Personnel, including executive directors, have notice periods
ranging from three to four months. The Chief Executive Officer has a notice
period of four months and the Chief Financial Officer and Chief Commercial
Officer have notice periods of three months. Other Executives have notice
periods ranging from four weeks to three months.
Employment may be terminated by giving notice consistent with the notice period.
There are no financial entitlements due from the Group on retirement of an
executive.
Termination by the
Group
The Group 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 Group 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: Long Term Incentives (equity-based compensation)
Incentive Option Plan
At the November 2017 Annual General Meeting, shareholders approved the creation of the Group’s Incentive
Option Plan which enables the Board to offer eligible employees and directors the right to options which convert
to fully-paid ordinary shares upon exercise, subject to meeting certain vesting criteria.
The objective of the Incentive Option Plan is to attract, motivate and retain key employees and the Group
considers that the adoption of the Incentive Option Plan and the future issue of options under the Incentive
Option Plan will provide selected employees and directors with the opportunity to participate in the future
growth of the Group.
Adslot continually reviews its operations, performance and the broader market conditions to ensure that
incentives offered to key executives are aligned with the growth of the Group and shareholder outcomes whilst
ensuring it can attract and retain experienced talent in a competitive industry. Adslot continues to operate
within a highly competitive employment environment for experienced people in the technology and software
field.
No amounts are paid or payable by the recipient on the receipt of the options. The options carry no voting
rights. All options are subject to service periods which require the employees remain an employee or Director
of the Group.
The following tables show grants and movements of share-based compensation to directors and senior
management under the Incentive Option Plan during the current financial year and the previous financial year:
Adslot 2020 Annual Report 21
Adslot 2020 Annual Report
21
Remuneration Report (Continued)
Section 5: Long Term Incentives (Continued)
2020
Name
Ian Lowe (i)
Ben Dixon
Felicity Conlan
Tom Peacock
Felicity Conlan
Tom Peacock
Andrew Dyer
Felicity Conlan
Tom Peacock
Series
OP # 18-1
OP # 18-1
OP # 18-2
OP # 18-2
OP # 18-3
OP # 18-3
OP # 18-5
OP # 20-1
OP # 20-1
Balance at
beginning of
the year
(Number)
2,000,000
1,000,000
1,000,000
1,000,000
6,500,000
6,500,000
4,000,000
Granted during
the year
(Number)
Expired during
the year
(Number)
Exercised
during the
year
(Number)
Balance at the
end of the year
(Number)
Vested and
exercisable at
the end of the
year
(Number)
-
-
-
-
-
2,000,000
2,000,000
-
1,000,000
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
1,000,000
1,000,000
1,000,000
6,500,000
6,500,000
6,500,000
6,500,000
-
-
-
4,000,000
4,000,000
-
1,000,000
-
1,000,000
22,000,000
2,000,000
-
-
-
-
-
-
1,000,000
1,000,000
-
-
24,000,000
22,000,000
(i) Based on the Separation and Exit Deed signed with the Group, Mr Lowe is entitled to retain the 2,000,000 options
issued to him. The Board has agreed to exercise its discretion to waive the vesting condition that Mr Lowe remains an
employee.
On 7 August 2020 18,000,000 options were granted to Mr Ben Dixon, the issuing of the options is subject to
shareholder approval at a general meeting.
The options are valued using the Black-Scholes pricing model. The model inputs for options granted during
the year ended 30 June 2020 included:
Model Input
Grant Date
Expiry Date
Exercise Price $
5-day VWAP at Grant Date $
Expected Volatility
Risk Free Interest rate
2019
Name
Ian Lowe (i)
Ben Dixon
Felicity Conlan
Tom Peacock
Felicity Conlan
Tom Peacock
Andrew Dyer (ii)
Series
OP # 18-1
OP # 18-1
OP # 18-2
OP # 18-2
OP # 18-3
OP # 18-3
OP # 18-5
OP # 20-1
03/09/19
02/09/23
0.041
0.028
62.60%
0.99%
Balance at
beginning of
the year
(Number)
2,000,000
1,000,000
1,000,000
1,000,000
6,500,000
6,500,000
4,000,000
Granted during
the year
(Number)
Expired during
the year
(Number)
Exercised
during the
year
(Number)
Balance at the
end of the year
(Number)
Vested and
exercisable at
the end of the
year
(Number)
-
-
-
-
-
2,000,000
-
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
1,000,000
6,500,000
6,500,000
-
-
-
-
6,500,000
6,500,000
-
-
-
4,000,000
3,000,000
22,000,000
-
-
-
22,000,000
16,000,000
(i) Based on the Separation and Exit Deed signed with the Group, Mr Lowe is entitled to retain the 2,000,000 options
issued to him. The Board has agreed to exercise its discretion to waive the vesting condition that Mr Lowe remains an
employee.
(ii)
In conjunction with his appointment as Director, Mr Dyer was granted 4,000,000 options. The exercise price of each
Option is $0.036 and the Options expire on 27 May 2022. 2,000,000 of the options vested immediately. The remaining
2,000,000 vest in four equal tranches in 6 month intervals from the date of appointment. Mr Dyer has agreed to waive
his annual base director fees of $50,000 per annum for the first two years of his directorship.
There were no new options granted to key management personnel under the Incentive Option Plan during the
year ended 30 June 2019.
Details of Share Options, ESOP and other rights to ordinary shares in the Group provided as remuneration of
directors and the key management personnel of the Group are set out below:
Name
2020 (Options)
2019 (Options)
2020 (Rights)
2019 (Rights)
Number
$
Number
$
Number
$
Number
$
Options Granted During the Year
Rights Vested During the Year
Directors
Mr A Giles
Mr A Barlow
Mr B Dixon
Mr Q George (i)
Ms S Morgan
Mr A Dyer
Other Key Management Personnel
Ms F Conlan
Mr T Peacock
1,000,000
10,724
1,000,000
10,724
(i) Mr. George resigned on 16 July 2019.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
250,000 31,250
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
375,000
46,875
The assessed fair value at issue date of the rights, and the assessed fair value at grant date of the options,
granted to the executive are allocated equally over the period from issue/grant date to vesting date, and the
amount is included in the remuneration tables above.
Section 6: Culture, accountability and remuneration
The Group’s values of respect, collaboration, communication, integrity and innovation remain critical to our
culture and effectively guide our employees in making decisions that realise opportunity for the benefit of our
clients, our shareholders, our employees and the communities in which we operate.
Employees are made aware that these values form the basis of all behaviours and actions. These behavioural
expectations are outlined in the Board approved Code of Conduct. The Group communicates and reinforces
our culture through executive communications, non-monetary performance recognition, policy reminders and
updates, training, learning and development.
The Remuneration Committee and the Board are able to assess culture in many ways including through People
& Culture reporting, senior management off-sites, department head presentations, staff survey results, as well
as through personal observation of management and staff behaviours and actions.
The remuneration framework supports our principles by motivating staff to be innovative but also be
accountable for their decisions within the business.
22
22 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 23
(i) Based on the Separation and Exit Deed signed with the Group, Mr Lowe is entitled to retain the 2,000,000 options
issued to him. The Board has agreed to exercise its discretion to waive the vesting condition that Mr Lowe remains an
employee.
In conjunction with his appointment as Director, Mr Dyer was granted 4,000,000 options. The exercise price of each
Option is $0.036 and the Options expire on 27 May 2022. 2,000,000 of the options vested immediately. The remaining
2,000,000 vest in four equal tranches in 6 month intervals from the date of appointment. Mr Dyer has agreed to waive
his annual base director fees of $50,000 per annum for the first two years of his directorship.
(ii)
There were no new options granted to key management personnel under the Incentive Option Plan during the
year ended 30 June 2019.
Details of Share Options, ESOP and other rights to ordinary shares in the Group provided as remuneration of
directors and the key management personnel of the Group are set out below:
Name
2020 (Options)
2019 (Options)
2020 (Rights)
2019 (Rights)
Number
$
Number
$
Number
$
Number
$
Options Granted During the Year
Rights Vested During the Year
Directors
Mr A Giles
Mr A Barlow
Mr B Dixon
Mr Q George (i)
Ms S Morgan
Mr A Dyer
-
-
-
-
-
-
-
-
-
-
-
-
Other Key Management Personnel
Ms F Conlan
Mr T Peacock
1,000,000
10,724
1,000,000
10,724
(i) Mr. George resigned on 16 July 2019.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
250,000 31,250
-
-
-
-
-
-
-
-
-
-
-
-
-
375,000
46,875
The assessed fair value at issue date of the rights, and the assessed fair value at grant date of the options,
granted to the executive are allocated equally over the period from issue/grant date to vesting date, and the
amount is included in the remuneration tables above.
Section 6: Culture, accountability and remuneration
The Group’s values of respect, collaboration, communication, integrity and innovation remain critical to our
culture and effectively guide our employees in making decisions that realise opportunity for the benefit of our
clients, our shareholders, our employees and the communities in which we operate.
Employees are made aware that these values form the basis of all behaviours and actions. These behavioural
expectations are outlined in the Board approved Code of Conduct. The Group communicates and reinforces
our culture through executive communications, non-monetary performance recognition, policy reminders and
updates, training, learning and development.
The Remuneration Committee and the Board are able to assess culture in many ways including through People
& Culture reporting, senior management off-sites, department head presentations, staff survey results, as well
as through personal observation of management and staff behaviours and actions.
The remuneration framework supports our principles by motivating staff to be innovative but also be
accountable for their decisions within the business.
Adslot 2020 Annual Report 23
Adslot 2020 Annual Report
23
Remuneration Report (Continued)
Section 7: Equity holdings and transactions
Other Directors’ Report Disclosures
The number of shares in the Group 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:
Ben Dixon
Adrian Giles
CEO & Executive Director
Non-Executive Director
2020
Name
Balance at the
start of the year
Received during
the year on
exercise of an
option or right
Net other changes
during the year
Balance at the
end of the year
(Number)
(Number)
(Number)
(Number)
Directors
Mr A Giles
Mr A Barlow
Mr B Dixon
Mr Q George (i)
Ms S Morgan
Mr A Dyer
9,571,452
48,102,668
37,603,660
1,000,000
200,500
35,659,342
Other key management personnel
Ms F Conlan
Mr T Peacock
Totals
500,000
3,375,000
136,012,622
(i) Mr. George resigned on 16 July 2019.
-
-
-
-
-
-
-
-
-
3,000,000
10,250,000
12,571,452
58,352,668
-
37,603,660
(1,000,000)
-
-
200,500
13,452,000
49,111,342
-
-
500,000
3,375,000
25,702,000
161,714,622
Section 8: Other transactions with Key Management Personnel
Transactions with Directors and their personally related entities:
During the year the Company earned revenue of $ 28,242 from a company requiring web development and
marketing services related to Mr. Adrian Giles on normal commercial terms and conditions. There were no
other transactions with directors and their personally related entities for the financial years ending 30 June
2020 and 30 June 2019.
This marks the end of the audited remuneration report.
This report is made in accordance with a resolution of directors.
Andrew Barlow
Chairman
25 August 2020
Directors
Andrew Barlow
Chairman
Sarah Morgan
on 16 July 2019.
Directors’ shareholdings
the date of this report.
Directors
Mr Andrew Barlow
Mr Adrian Giles
Mr Ben Dixon
Ms Sarah Morgan
Mr Andrew Dyer
of this directors’ report.
Directors’ Meetings
Mr Andrew Barlow
Mr Adrian Giles
Mr Ben Dixon
Ms Sarah Morgan
Mr Andrew Dyer
Mr Quentin George
Principal activities
Non-Executive Director
Non-Executive Director
Andrew Dyer
Mr Andrew Barlow, Mr Adrian Giles, Mr Ben Dixon, Ms Sarah Morgan and Mr Andrew Dyer were directors for
the whole financial year and up to the date of this report. Mr Quentin George (Non-Executive Director) resigned
Directorships of other listed companies
Other than those disclosed on pages 8 to 9 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.
The following table sets out each director’s relevant interest in shares or options in shares of the Group as at
Ordinary Shares
Share Options
#
58,352,668
12,571,452
37,603,660
200,500
49,111,342
#
-
-
-
19,000,0001
4,000,000
1 18,000,000 subject to shareholder approval
Remuneration of directors and senior management
Information about the remuneration of directors and senior management is set out in the remuneration report
The following table sets out the number of meetings of the Group’s Directors held during the year ended 30
June 2020 and the number of meetings attended by each Director.
Directors
Held
Attended
Held
Attended
Held
Attended
Board of Directors
Remuneration Committee Audit and Risk Committee
8
8
8
8
8
-
8
8
8
8
8
-
4
4
-
-
3
-
4
4
-
-
3
-
-
7
-
7
7
-
-
7
-
7
7
-
Adslot Ltd derives revenue from two principal activities:
1. Trading Technology - comprises Adslot Media, a leading global media trading technology platform, and
Symphony, market-leading workflow automation technology for media agencies.
2. Services - comprises digital marketing services - provided by the Group’s Webfirm division - and project-
based customisation of Trading Technology.
24
24 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 25
Other Directors’ Report Disclosures
Directors
Andrew Barlow
Chairman
Ben Dixon
CEO & Executive Director
Adrian Giles
Non-Executive Director
Sarah Morgan
Non-Executive Director
Andrew Dyer
Non-Executive Director
Mr Andrew Barlow, Mr Adrian Giles, Mr Ben Dixon, Ms Sarah Morgan and Mr Andrew Dyer were directors for
the whole financial year and up to the date of this report. Mr Quentin George (Non-Executive Director) resigned
on 16 July 2019.
Directorships of other listed companies
Other than those disclosed on pages 8 to 9 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.
6 to 7
Directors’ shareholdings
The following table sets out each director’s relevant interest in shares or options in shares of the Group as at
the date of this report.
Directors
Mr Andrew Barlow
Mr Adrian Giles
Mr Ben Dixon
Ms Sarah Morgan
Mr Andrew Dyer
Ordinary Shares
#
58,352,668
12,571,452
37,603,660
200,500
49,111,342
Share Options
#
-
-
19,000,0001
-
4,000,000
1 18,000,000 subject to shareholder approval
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 Group’s Directors held during the year ended 30
June 2020 and the number of meetings attended by each Director.
Directors
Held
Attended
Held
Attended
Held
Attended
Board of Directors
Remuneration Committee Audit and Risk Committee
Mr Andrew Barlow
Mr Adrian Giles
Mr Ben Dixon
Ms Sarah Morgan
Mr Andrew Dyer
Mr Quentin George
Principal activities
8
8
8
8
8
-
8
8
8
8
8
-
4
4
-
-
3
-
4
4
-
-
3
-
-
7
-
7
7
-
-
7
-
7
7
-
Adslot Ltd derives revenue from two principal activities:
1. Trading Technology - comprises Adslot Media, a leading global media trading technology platform, and
Symphony, market-leading workflow automation technology for media agencies.
2. Services - comprises digital marketing services - provided by the Group’s Webfirm division - and project-
based customisation of Trading Technology.
Adslot 2020 Annual Report 25
Adslot 2020 Annual Report
25
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2020
Collins Square, Tower 5
727 Collins Street
Melbourne Victoria 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Adslot Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Adslot Ltd
for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
M J Climpson
Partner – Audit & Assurance
Melbourne, 25 August 2020
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
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Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Total comprehensive loss attributable to the members
(16,586,137)
(6,935,164)
Earnings per share (EPS) from loss from continuing operations
attributable to the ordinary equity holders of the Group
Basic earnings per share
Diluted earnings per share
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
26
Adslot 2020 Annual Report
Adslot 2020 Annual Report 27
Total revenue for services rendered
Interest revenue
Other income
Total revenue from continuing operations
Total revenue and other income
Hosting & other related technology costs
Employee benefits expense
Directors’ fees
Recruitment fees
Advertising expense
Lease – rental premises
Impairment of receivables
Listing & registrar fees
Legal fees
Travel expenses
Consultancy fees
Provision for R&D claim for financial year 2015/2016
Audit and accountancy fees
Other expenses
Share based payment expense
Depreciation and amortisation expenses
Impairment of Goodwill
Interest Expense
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
3
3
3
4,10
4
4,8
4
21
4
10
8
5
17
17
10,572,950
10,271,629
2020
$
9,787,867
48,039
9,835,906
737,044
(1,290,381)
(7,654,417)
(203,939)
(49,778)
(204,018)
(419,386)
(19,565)
(79,858)
(174,754)
(155,546)
(183,270)
(189,819)
(890,524)
(207,270)
(3,665,792)
(10,000,000)
(1,527,734)
(148,041)
(27,064,092)
(16,491,142)
(126,583)
(16,617,725)
(16,617,725)
31,588
31,588
2020
Cents
(0.96)
(0.96)
2019
$
9,839,017
55,144
9,894,161
377,468
(1,214,754)
(7,817,748)
(436,938)
(106,649)
(258,976)
(1,024,336)
(3,489)
(87,620)
(65,835)
(367,553)
(218,638)
(196,012)
(919,212)
(118,127)
(4,367,983)
-
-
-
(17,203,870)
(6,932,241)
(110,514)
(7,042,755)
(7,042,755)
107,591
107,591
2019
Cents
(0.49)
(0.49)
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2020
Total revenue for services rendered
Interest revenue
Total revenue from continuing operations
Other income
Total revenue and other income
Hosting & other related technology costs
Employee benefits expense
Directors’ fees
Recruitment fees
Advertising expense
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
Impairment of Goodwill
Provision for R&D claim for financial year 2015/2016
Interest Expense
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)
Total comprehensive loss attributable to the members
Earnings per share (EPS) from loss from continuing operations
attributable to the ordinary equity holders of the Group
Basic earnings per share
Diluted earnings per share
Notes
3
3
3
3
4,10
4
4,8
4
21
4
10
8
5
17
17
2020
$
9,787,867
48,039
9,835,906
737,044
2019
$
9,839,017
55,144
9,894,161
377,468
10,572,950
10,271,629
(1,290,381)
(7,654,417)
(203,939)
(49,778)
(204,018)
(419,386)
(19,565)
(79,858)
(174,754)
(155,546)
(183,270)
(189,819)
(890,524)
(207,270)
(3,665,792)
(10,000,000)
(1,527,734)
(148,041)
(27,064,092)
(16,491,142)
(126,583)
(16,617,725)
(16,617,725)
(1,214,754)
(7,817,748)
(436,938)
(106,649)
(258,976)
(1,024,336)
(3,489)
(87,620)
(65,835)
(367,553)
(218,638)
(196,012)
(919,212)
(118,127)
(4,367,983)
-
-
-
(17,203,870)
(6,932,241)
(110,514)
(7,042,755)
(7,042,755)
31,588
31,588
107,591
107,591
(16,586,137)
(6,935,164)
2020
Cents
(0.96)
(0.96)
2019
Cents
(0.49)
(0.49)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
Adslot 2020 Annual Report 27
Adslot 2020 Annual Report
27
Consolidated Statement of Financial Position
As at 30 June 2020
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
Lease liability
Provisions
Total current liabilities
Non-current liabilities
Lease liability
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Notes
2020
$
2019
$
7
8
9
5
10
11
12
13
14
13
14
5
15
16
6,160,440
5,032,434
8,165,544
6,424,659
11,192,874
14,590,203
1,845,736
601,239
36,370
36,370
13,184,940
22,886,434
15,067,046
23,524,043
26,259,920
38,114,246
3,098,704
6,538,788
685,610
886,952
634,916
374,781
146,300
658,736
5,306,182
7,718,605
960,915
675,146
36,370
1,672,431
323,110
439,041
36,370
798,521
6,978,613
8,517,126
19,281,307
29,597,120
151,866,361
145,838,216
939,474
649,149
(133,524,528)
(116,890,245)
19,281,307
29,597,120
Consolidated Statement of Changes in Equity
For the year ended 30 June 2020
2020
Balance 30 June 2020
151,866,361
939,474
(133,524,528)
19,281,307
Balance at 1 July 2019
Adjustment from adoption of AASB 16
Adjusted balance at 1 July 2019
Other comprehensive income
Loss attributable to members of the Group
Total comprehensive income/(loss)
Movement in foreign exchange translation reserve
16
Transactions with equity holders in their capacity
as equity holders
Contributions of equity, net of transaction costs
Share based payments - third party
Increase in employees share based payments reserve
15
16
16
2019
Balance at 1 July 2018
Adjustment from adoption of AASB 15
Adjusted balance at 1 July 2018
Other comprehensive income
Loss attributable to members of the Group
Total comprehensive income/(loss)
Movement in foreign exchange translation reserve
16
Transactions with equity holders in their capacity
as equity holders
Contributions of equity, net of transaction costs
Reclassification of vested performance rights
Net movement in treasury shares
Increase in employees share based payments reserve
15
16
16
-
-
-
-
-
-
-
-
-
-
Issued
Capital
$
Reserves
$
Accumulated
Losses
$
Total
Equity
$
145,838,216
649,149
(116,890,245)
29,597,120
-
(16,558)
(16,558)
Notes
1(a)
145,838,216
649,149
(116,906,803)
29,580,562
31,588
31,588
31,588
31,588
-
(16,617,725)
(16,617,725)
31,588
(16,617,725)
(16,586,137)
6,079,612
(51,467)
-
6,028,145
-
51,467
207,270
258,737
6,079,612
-
207,270
6,286,882
-
-
-
-
-
-
Issued
Capital
$
Reserves
$
Accumulated
Losses
$
Total
Equity
$
Notes
138,397,710
712,654
(109,762,365)
29,347,999
-
(85,125)
(85,125)
138,397,710
712,654
(109,847,490)
29,262,874
107,591
107,591
-
-
107,591
107,591
-
(7,042,755)
(7,042,755)
107,591
(7,042,755)
(6,935,164)
7,151,283
184,223
105,000
-
7,440,506
-
(184,223)
(105,000)
118,127
(171,096)
-
-
-
-
-
7,151,283
-
-
118,127
7,269,410
Balance 30 June 2019
145,838,216
649,149
(116,890,245)
29,597,120
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
28
28 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 29
Consolidated Statement of Changes in Equity
For the year ended 30 June 2020
2020
Issued
Capital
$
Reserves
$
Accumulated
Losses
$
Total
Equity
$
Notes
Balance at 1 July 2019
145,838,216
649,149
(116,890,245)
29,597,120
Adjustment from adoption of AASB 16
1(a)
-
-
(16,558)
(16,558)
Adjusted balance at 1 July 2019
145,838,216
649,149
(116,906,803)
29,580,562
Movement in foreign exchange translation reserve
16
Other comprehensive income
Loss attributable to members of the Group
Total comprehensive income/(loss)
Transactions with equity holders in their capacity
as equity holders
Contributions of equity, net of transaction costs
Share based payments - third party
Increase in employees share based payments reserve
15
16
16
-
-
-
-
31,588
31,588
-
-
31,588
31,588
-
(16,617,725)
(16,617,725)
31,588
(16,617,725)
(16,586,137)
6,079,612
(51,467)
-
6,028,145
-
51,467
207,270
258,737
-
-
-
-
6,079,612
-
207,270
6,286,882
Balance 30 June 2020
151,866,361
939,474
(133,524,528)
19,281,307
2019
Balance at 1 July 2018
Adjustment from adoption of AASB 15
Adjusted balance at 1 July 2018
Movement in foreign exchange translation reserve
16
Other comprehensive income
Loss attributable to members of the Group
Total comprehensive income/(loss)
Transactions with equity holders in their capacity
as equity holders
Contributions of equity, net of transaction costs
Reclassification of vested performance rights
Net movement in treasury shares
Increase in employees share based payments reserve
15
16
16
Issued
Capital
$
Reserves
$
Accumulated
Losses
$
Total
Equity
$
Notes
138,397,710
712,654
(109,762,365)
29,347,999
-
-
(85,125)
(85,125)
138,397,710
712,654
(109,847,490)
29,262,874
-
-
-
-
107,591
107,591
-
-
107,591
107,591
-
(7,042,755)
(7,042,755)
107,591
(7,042,755)
(6,935,164)
7,151,283
184,223
105,000
-
7,440,506
-
(184,223)
(105,000)
118,127
(171,096)
-
-
-
-
-
7,151,283
-
-
118,127
7,269,410
Balance 30 June 2019
145,838,216
649,149
(116,890,245)
29,597,120
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Adslot 2020 Annual Report 29
Adslot 2020 Annual Report
29
Consolidated Statement of Cash Flows
For the year ended 30 June 2020
Notes
2020
$
2019
$
Cash flows from operating activities
Receipts from trade and other debtors
Interest received
Receipt of R&D tax incentive and other Grants
19,294,163
17,401,152
49,746
183,175
56,077
733,145
Payments to trade creditors, other creditors and employees
(22,769,767)
(19,300,249)
Income tax refund
Interest paid
4,338
(144,063)
-
-
Net cash outflows from operating activities
22
(3,382,408)
(1,109,875)
Any new, revised or amended Accounting Standards or Interpretations that are not yet mandatory have not
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
(6,099)
277,760
(33,109)
2,265,149
(4,562,586)
(5,021,387)
(4,290,925)
(2,789,347)
Cash flows from financing activities
Proceeds from issue of shares
Payments of equity raising costs
Payments for leased assets
Proceeds from borrowings
6,400,000
(328,250)
(681,698)
167,315
7,500,000
(392,949)
-
-
12(ii)
Net cash inflows from financing activities
5,557,367
7,107,051
Net increase / (decrease) in cash held
Cash at the beginning of the financial year
Effects of exchange rate changes on cash
(2,115,966)
8,165,544
110,862
3,207,829
4,775,331
182,384
Cash at the end of the financial year
7
6,160,440
8,165,544
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Notes to the Financial Statements
For the year ended 30 June 2020
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 2020 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.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new, revised or amended Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board (AASB) that are mandatory for the current reporting period. The
adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial
performance or position of the group.
been early adopted.
AASB 16 ‘Leases’
AASB 16 ‘Leases’ replaced AASB 117 ‘Leases’ along with three interpretations namely; determining whether
an arrangement contains a lease, operating leases-incentives and evaluating the substance of transactions
involving the legal form of a lease.
AASB 16 ‘Leases’ provides lessees with a choice between two transition approaches.
1. Fully Retrospective Approach - Under this method, the financial statements are presented as if AASB 16
‘Leases’ has always been applied. The impact of adoption is adjusted in the opening balance sheet of the
earliest period presented and comparative amounts are reinstated for each prior period presented. The
rate used to discount the cash flows should be the prevailing rate on the commencement date of the lease.
2. Modified Retrospective Method - The cumulative effect of adopting AASB 16 ‘Leases’ is recognised in
equity as an adjustment to the opening balance of retained earnings for the current period. Prior periods
are not restated. The Group has chosen this method as its method of transition.
The new standard has been adopted by the Group using the modified retrospective approach with the
cumulative effect of adopting AASB 16 being recognised in equity as an adjustment to the opening balance of
retained earnings for the current period. In doing so, the Group has used the following practical expedients
permitted by the standard when using the modified retrospective method:
the use of a single discount rate to a portfolio of leases,
relying in previous assessments on whether leases are onerous as an alternative to performing an
the accounting for operating leases with remaining lease term of less than 12 months of initial application
as a short-term lease and recognise lease rentals as an expense,
• not carrying out transition adjustments for low value assets and accounting for same on a straight-line
• exclusion of initial direct costs in arriving at the right-of-use asset value, and
• use of hindsight in determining the lease term where there are options to extend or terminate the lease.
For contracts which are classified as leases under AASB 16 ‘Leases’, recognition of lease expenses on a
straight-line basis and therefore being included in the operating costs, has been replaced with a depreciation
charge for the right-of-use asset and an interest expense on the corresponding lease liability. Due to replacing
of lease expenses otherwise included under operating costs, by interest expense and depreciation, EBITDA
(Earnings Before Interest, Tax, Depreciation and Amortisation) has been improved.
A right-of-use asset has been recognised in the balance sheet, along with a corresponding lease liability, split
between current and non-current liabilities.
impairment review,
•
•
•
basis,
30
30 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 31
Notes to the Financial Statements
For the year ended 30 June 2020
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 2020 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.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new, revised or amended Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board (AASB) that are mandatory for the current reporting period. The
adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial
performance or position of the group.
Any new, revised or amended Accounting Standards or Interpretations that are not yet mandatory have not
been early adopted.
AASB 16 ‘Leases’
AASB 16 ‘Leases’ replaced AASB 117 ‘Leases’ along with three interpretations namely; determining whether
an arrangement contains a lease, operating leases-incentives and evaluating the substance of transactions
involving the legal form of a lease.
AASB 16 ‘Leases’ provides lessees with a choice between two transition approaches.
1. Fully Retrospective Approach - Under this method, the financial statements are presented as if AASB 16
‘Leases’ has always been applied. The impact of adoption is adjusted in the opening balance sheet of the
earliest period presented and comparative amounts are reinstated for each prior period presented. The
rate used to discount the cash flows should be the prevailing rate on the commencement date of the lease.
2. Modified Retrospective Method - The cumulative effect of adopting AASB 16 ‘Leases’ is recognised in
equity as an adjustment to the opening balance of retained earnings for the current period. Prior periods
are not restated. The Group has chosen this method as its method of transition.
The new standard has been adopted by the Group using the modified retrospective approach with the
cumulative effect of adopting AASB 16 being recognised in equity as an adjustment to the opening balance of
retained earnings for the current period. In doing so, the Group has used the following practical expedients
permitted by the standard when using the modified retrospective method:
•
•
•
the use of a single discount rate to a portfolio of leases,
relying in previous assessments on whether leases are onerous as an alternative to performing an
impairment review,
the accounting for operating leases with remaining lease term of less than 12 months of initial application
as a short-term lease and recognise lease rentals as an expense,
• not carrying out transition adjustments for low value assets and accounting for same on a straight-line
basis,
• exclusion of initial direct costs in arriving at the right-of-use asset value, and
• use of hindsight in determining the lease term where there are options to extend or terminate the lease.
For contracts which are classified as leases under AASB 16 ‘Leases’, recognition of lease expenses on a
straight-line basis and therefore being included in the operating costs, has been replaced with a depreciation
charge for the right-of-use asset and an interest expense on the corresponding lease liability. Due to replacing
of lease expenses otherwise included under operating costs, by interest expense and depreciation, EBITDA
(Earnings Before Interest, Tax, Depreciation and Amortisation) has been improved.
A right-of-use asset has been recognised in the balance sheet, along with a corresponding lease liability, split
between current and non-current liabilities.
Adslot 2020 Annual Report 31
Adslot 2020 Annual Report
31
Notes to the Financial Statements (Continued)
1. Summary of Significant Accounting Policies (Continued)
(a) New or amended Accounting Standards and Interpretations adopted (Continued)
In the statement of cash flows, lease payments have been separated in to both a principal component (included
under financing activities) and an interest component (included under operating activities). There is no impact
to the net cash flow for the period.
The operating leases for the office premises in Sydney and Melbourne were classified as leases under AASB
16. Rental agreements for foreign entities did not fall into the category of leases under AASB 16 as the
remaining lease term as at the initial adoption date of 1 July 2019, was less than 12 months. Further
agreements for the hiring of printers did not qualify as leases as they are low value assets.
On transition to AASB 16 the incremental borrowing rate applied to lease liabilities recognised under AASB 16
was 5.6%.
The following is a reconciliation of total operating lease commitments as at 30 June 2019 to the lease liabilities
recognised as at 1 July 2019.
Total operating lease commitments disclosed as at 30 June 2019
Deduct: Low Value Assets
Deduct: Leases with remaining lease term of less than 12 months
Deduct: Variable Lease Payments not recognised
Adjustment for lease incentive liability excluded in operating lease commitments
Discounted using lessee’s incremental borrowing rate of 5.6%
Lease Liability Recognised as at 1 July 2019
$
2,838,515
(7,704)
(185,122)
(341,057)
482,424
(314,257)
2,472,799
Upon adoption of AASB 16 ‘Leases’, following amounts were recognised on 1 July 2019:
• a make good provision of $151,266 which is the present value of estimated make good costs as at lease
commencement date,
• depreciation relating to make good costs up to 30 June 2019 $51,556,
• net book value of make good costs as at 1 July 2019 $99,710,
•
•
•
lease liabilities of $2,472,799,
reversal of existing lease incentive liability of $469,411 (merged with the right-of-use asset),
right-of-use assets of $2,629,244 which included:
the lease liability $2,472,799,
less existing lease incentive liability of $469,411,
the net book value of leasehold improvements of $526,145,
•
•
•
• make good costs $99,711 as at 1 July 2019.
• unwinding of discount relating to make good costs up to 30 June 2019 $14,593, and
•
reversal of existing make good provision of $49,591 included under accrued expenses as of 30 June 2019.
On the date of the initial application of AASB16 ‘Lease’, 1 July 2019, the impact to retained earnings of the
Group was as follows:
Expense/Expense reversal
Depreciation relating to make good costs up to 30 June 2019
Unwinding of discount relating to make good costs up to 30 June 2019
Reversal of existing make good provision included under accrued expenses
Total
Other
Equity
Accumulated
Losses
Total
Equity
$
-
-
-
-
$
$
(51,556)
(51,556)
(14,593)
49,591
(16,558)
(14,593)
45,591
(16,558)
32
32 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 33
The tables below highlight the impact of AASB 16 ‘Leases’ on the Group’s statement of profit or loss and other
comprehensive income, the statement of financial position and the statement of cash flows for the financial
year ending 30 June 2020.
Consolidated Statement of Profit or Loss and Other
Amounts
Adjustments
Comprehensive Income (Extract)
1,023,775
(604,389)
419,386
Lease - rental premises
Other expenses
Depreciation and amortisation expenses
Interest Expense
Loss after income tax expense
Total comprehensive loss for the half-year
Consolidated Statement of Financial Position (Extract)
Amounts
Adjustments
under
AASB 117
$
-
921,845
3,029,977
(16,469,579)
(16,437,991)
under
AASB 117
$
391,501
24,805,685
3,179,616
146,300
176,811
-
-
-
5,359,674
19,446,011
Amounts
under
AASB 16
$
890,524
3,665,792
148,041
(16,617,725)
(16,586,137)
Amounts
under
AASB 16
$
1,845,736
26,259,920
3,098,704
886,952
-
-
960,915
175,095
6,978,613
19,281,307
$
(31,321)
635,815
148,041
148,146
148,146
$
1,454,235
1,454,235
(80,912)
(146,300)
886,952
(176,811)
960,915
175,095
1,618,939
(164,704)
(133,359,824)
19,446,011
(164,704)
(164,704)
(133,524,528)
19,281,307
Non-Current Assets
Property, plant & equipment
Total Assets
Current Liabilities
Trade and other payables
Lease incentive liability
Lease Liability
Non-Current Liabilities
Lease incentive liability
Lease Liability
Provisions
Total Liabilities
Net Assets
Equity
Accumulated losses
Total Equity
The tables below highlight the impact of AASB 16 ‘Leases’ on the Group’s statement of profit or loss and other
comprehensive income, the statement of financial position and the statement of cash flows for the financial
year ending 30 June 2020.
Consolidated Statement of Profit or Loss and Other
Comprehensive Income (Extract)
Lease - rental premises
Other expenses
Depreciation and amortisation expenses
Interest Expense
Loss after income tax expense
Total comprehensive loss for the half-year
Consolidated Statement of Financial Position (Extract)
Non-Current Assets
Property, plant & equipment
Total Assets
Current Liabilities
Trade and other payables
Lease incentive liability
Lease Liability
Non-Current Liabilities
Lease incentive liability
Lease Liability
Provisions
Total Liabilities
Net Assets
Equity
Accumulated losses
Total Equity
Amounts
under
AASB 117
$
Adjustments
$
Amounts
under
AASB 16
$
1,023,775
(604,389)
419,386
921,845
3,029,977
-
(16,469,579)
(16,437,991)
Amounts
under
AASB 117
$
391,501
24,805,685
3,179,616
146,300
-
176,811
-
-
5,359,674
19,446,011
(31,321)
635,815
148,041
148,146
148,146
890,524
3,665,792
148,041
(16,617,725)
(16,586,137)
Adjustments
$
1,454,235
1,454,235
(80,912)
(146,300)
886,952
(176,811)
960,915
175,095
1,618,939
(164,704)
Amounts
under
AASB 16
$
1,845,736
26,259,920
3,098,704
-
886,952
-
960,915
175,095
6,978,613
19,281,307
(133,359,824)
19,446,011
(164,704)
(164,704)
(133,524,528)
19,281,307
Adslot 2020 Annual Report 33
Adslot 2020 Annual Report
33
Notes to the Financial Statements (Continued)
1. Summary of Significant Accounting Policies (Continued)
(a) New or amended Accounting Standards and Interpretations adopted (Continued)
Consolidated Statement of Financial Position (Extract)
Cash Flows from Operating Activities
Payments to trade creditors, other creditors and employees
Interest paid
Net cash outflow from operating activities
Cash flows from financing activities
Payments for Leased Assets
Net cash outflow from financing activities
Net increase (decrease) in cash held
Amounts
under
AASB 117
$
(23,595,528)
-
(4,064,106)
-
6,239,065
(2,115,966)
Adjustments
$
825,761
(144,063)
681,698
(681,698)
(681,698)
Amounts
under
AASB 16
$
(22,769,767)
(144,063)
(3,382,408)
(681,698)
5,557,367
-
(2,115,966)
growth is achieved.
AASB Interpretation 23 Uncertainty over Income Tax Treatment
Interpretation 23 clarifies how the recognition and measurement requirements of AASB 112 Income Taxes are
applied where there is uncertainty over income tax treatments.
The Group has adopted AASB Interpretation 23 Uncertainty over Income Tax Treatment in the 2020 financial
year, which gives guidance on the accounting for uncertain tax provisions. The adoption of AASB Interpretation
23 has not resulted in a material change in relation to provisions for tax uncertainties held by the Group.
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.
It is noted that Directors have considered the impact of the COVID-19 pandemic on accounting policies,
judgements and estimates, as outlined in the applicable area in the Notes to the Financial Statements.
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 continues to invest resources to support growth in trading fees, primarily from media agency
holding companies and their subsidiaries in the US market.
In December 2019 the Group successfully raised $6.4 million via a share placement, resulting in $5.4 million
net cash inflows in the period under review.
Inflows from financing activities of $5.6 million, combined with the net cash outflows from operating and
investing activities of $7.7 million, resulted in net cash outflows of $2.1 million in the 2020 financial year.
Management anticipate incurring further net cash outflows from operations until such time as sufficient revenue
Based on the findings made by Innovation and Science Australia in relation to the FY16 R&D activities, the
ATO amended the R&D Tax Incentive Offset for FY16. The ATO offset the $1.5 million relating to the disputed
FY2016 R&D claim from the FY2019 R&D refund, with a net $0.3 million received in April 2020 for the FY2019
R&D claim. The Group continues to defend the legitimacy of its claim and has requested a review of the
findings by the Administrative Appeals Tribunal (AAT). If successful, the $1.5 million will be refunded to the
Group.
The FY2020 R&D claim of $1.9m is expected to be received in the first half of the 2021 financial year.
If a delay in expected growth in revenues, and/or a delay in payment of the FY2020 R&D claim was to occur,
this has the potential to create a cash flow risk to the Group which could affect its ability to pay its debts as
and when they fall due, and to realise its assets in the normal course of business.
However, the directors believe the Group will be able to continue to pay its debts as and when they fall due for
the following reasons:
•
the Group had a cash position of $6.2 million at 30 June 2020;
• FY2020 R&D claim of $1.9m is expected to be received in the first half of FY2021;
• Symphony licence fees which are largely recurring and predictable;
• $0.7 million cash from the current COVID-19 related stimulus packages expected in the first half of
• ongoing cost management initiatives, including current employee salary reductions in place in response
FY2021;
to the COVID-19 pandemic;
•
•
•
reduction to office space in each market, reducing the largest fixed cost of the business outside salaries;
the opportunity to implement further cost reductions; and
the Group has a proven track record of successfully raising capital from existing and new investors.
As part of the directors’ consideration of the appropriateness of adopting the going concern basis in preparing
the financial statements, a range of scenarios regarding the impact of the COVID-19 pandemic on the Group’s
current and future earnings were critically reviewed. The scenarios are most sensitive to the assumptions
made for Adslot Media in the USA where the greatest revenue growth is expected.
34
34 Adslot 2020 Annual Report
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Adslot 2020 Annual Report 35
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 continues to invest resources to support growth in trading fees, primarily from media agency
holding companies and their subsidiaries in the US market.
In December 2019 the Group successfully raised $6.4 million via a share placement, resulting in $5.4 million
net cash inflows in the period under review.
Inflows from financing activities of $5.6 million, combined with the net cash outflows from operating and
investing activities of $7.7 million, resulted in net cash outflows of $2.1 million in the 2020 financial year.
Management anticipate incurring further net cash outflows from operations until such time as sufficient revenue
growth is achieved.
Based on the findings made by Innovation and Science Australia in relation to the FY16 R&D activities, the
ATO amended the R&D Tax Incentive Offset for FY16. The ATO offset the $1.5 million relating to the disputed
FY2016 R&D claim from the FY2019 R&D refund, with a net $0.3 million received in April 2020 for the FY2019
R&D claim. The Group continues to defend the legitimacy of its claim and has requested a review of the
findings by the Administrative Appeals Tribunal (AAT). If successful, the $1.5 million will be refunded to the
Group.
The FY2020 R&D claim of $1.9m is expected to be received in the first half of the 2021 financial year.
If a delay in expected growth in revenues, and/or a delay in payment of the FY2020 R&D claim was to occur,
this has the potential to create a cash flow risk to the Group which could affect its ability to pay its debts as
and when they fall due, and to realise its assets in the normal course of business.
However, the directors believe the Group will be able to continue to pay its debts as and when they fall due for
the following reasons:
the Group had a cash position of $6.2 million at 30 June 2020;
•
• FY2020 R&D claim of $1.9m is expected to be received in the first half of FY2021;
• Symphony licence fees which are largely recurring and predictable;
• $0.7 million cash from the current COVID-19 related stimulus packages expected in the first half of
FY2021;
• ongoing cost management initiatives, including current employee salary reductions in place in response
to the COVID-19 pandemic;
reduction to office space in each market, reducing the largest fixed cost of the business outside salaries;
the opportunity to implement further cost reductions; and
the Group has a proven track record of successfully raising capital from existing and new investors.
•
•
•
As part of the directors’ consideration of the appropriateness of adopting the going concern basis in preparing
the financial statements, a range of scenarios regarding the impact of the COVID-19 pandemic on the Group’s
current and future earnings were critically reviewed. The scenarios are most sensitive to the assumptions
made for Adslot Media in the USA where the greatest revenue growth is expected.
Adslot 2020 Annual Report 35
Adslot 2020 Annual Report
35
Notes to the Financial Statements (Continued)
1. Summary of Significant Accounting Policies (Continued)
Business combinations
(c) Going concern (Continued)
The primary growth in revenue expected in the 2021 financial year is from increased Adslot Media trading fees.
While all the major holding companies (the Group’s largest clients) are currently facing significant revenue
decreases and responding with extensive cost reductions, the COVID-19 pandemic has also focused their
strategic attention to automation and process improvement. This has enabled an acceleration of discussions
with senior people about the role Adslot Media can play in the digital media booking workflow.
Further it is possible that the major agency holding companies may seek to reduce operating costs including
those associated with existing software solutions in response to the COVID-19 pandemic. This may see
currently deployed software solutions such as Symphony come under greater pricing pressure in FY2021 from
customers seeking to reduce costs. Conversely, Symphony is also expected to benefit from prospective clients
seeking to improve workflow efficiencies especially through technology solutions. For example, Symphony is
currently undergoing the first market implementation for the Omnicom Group in the Netherlands.
While media spend globally reduced in the 2020 financial year, digital media (the group’s market), had lower
decreases compared to other channels, including cinema, out-of-home and print media. It is noted that all
markets in which the Group operates have experienced increased media trading from the March 2020 low.
The Group is expected to receive $0.7 million in the first half of FY2021 under current government stimulus
packages from the markets the Group operates in. The Group may be eligible for additional stimulus, such as
JobKeeper 2.0 in FY2021.
The full financial impacts of COVID-19 in Australia and across the globe are inherently uncertain. However as
described above, the Group is well placed to respond to any opportunities.
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.
Principles of consolidation
Subsidiaries
The consolidated financial statements comprise those of the Group, and the entities it controlled at the end of,
or during, the financial year. The Group 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 24.
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
closing 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 Consolidated 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.
36
36 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 37
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
closing 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 Consolidated 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.
Adslot 2020 Annual Report 37
Adslot 2020 Annual Report
37
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
Receivables
33– 40% per annum
20 – 33% per annum
20 – 100% per annum
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. The Group makes use of a simplified approach in accounting for trade receivables and records
the loss allowance at the amount equal to the expected lifetime credit losses. In using this practical expedient,
the Group uses its historical experience, external indicators and forward-looking information to calculate the
expected credit losses. The amount of the expected credit loss is recognised in profit or loss. Subsequent
recoveries of amounts previously written off are credited against the allowance account.
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.
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 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
Finance costs
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
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised
future.
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 where the entity is subject to tax as
part of the tax-consolidated group.
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.
38
38 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 39
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 where the entity is subject to tax as
part of the tax-consolidated group.
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.
Adslot 2020 Annual Report 39
Adslot 2020 Annual Report
39
Notes to the Financial Statements (Continued)
1. Summary of Significant Accounting Policies (Continued)
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.
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 at least on an annual basis. An impairment loss for
goodwill is recognised immediately in profit or loss and is not reversed in a subsequent period.
Research and 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
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
project.
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.
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.
Domain name
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.
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40 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 41
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 at least on an annual basis. An impairment loss for
goodwill is recognised immediately in profit or loss and is not reversed in a subsequent period.
Research and 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.
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41
Notes to the Financial Statements (Continued)
1.
Summary of Significant Accounting Policies (Continued)
Revenue recognition
Leased assets and liabilities
In line with AASB 16 ‘Leases’, the Group recognises a right-of-use asset and a corresponding lease liability at
the commencement of a lease. The right-of-use asset is recognised at an amount equal to the initial
measurement of the lease liability, adjusted for lease prepayments, lease incentives received, initial direct
costs incurred and an estimate of any future restoration, removal or dismantling costs.
The lease liability is measured at the present value of future lease payments comprising; fixed lease payments
less incentives, variable lease payments, residual guarantees payable, payment of purchase options where
exercise is reasonably certain and any anticipated termination penalties. The lease payments are discounted
at the rate implicit in the lease, or where not readily determinable, at the entity’s incremental borrowing rate.
For all new contracts, the Group considers whether a contract is, or contains a lease. A lease is defined as a
contract or a part of a contract, that conveys the right to use an asset for a period of time in exchange for
consideration. To apply this definition, the Group assesses whether the contract meets three key evaluations
as follows:
•
•
•
the contract contains an identified asset, which is either explicitly identified in the contract or implicitly
specified by being identified at the time the asset is made available to the Group;
the Group has the right to obtain substantially all of the economic benefits from the use of the identified
asset throughout the period of use, considering its rights within the scope of the contract; and
the Group has the right to direct the use of the identified asset throughout the period of use. The Group
assess whether it has the right to direct ‘how and for what purpose’ the asset is used throughout the period
of use.
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to
the earlier of the end of the useful life of the asset or the end of the lease term. The Group also assesses the
right-of-use asset for impairment when such indicators exist.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest.
It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed
payments. When the liability is remeasured, the corresponding amount is reflected in the right-of-use asset.
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.
The Group derives revenue from trading technology and services. To determine whether to recognise revenue,
the Group follows a 5-step process:
1.
2.
Identifying the contract with a customer
Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue when/as performance obligation(s) are satisfied
The Group often enters into transactions involving a range of the Group’s products and services. In all cases,
the total transaction price for a contract is allocated amongst the various performance obligations based on
their relative stand-alone selling prices. The transaction price for a contract excludes any amounts collected
on behalf of third parties.
Revenue is recognised either at a point in time or over time, when (or as) the Group satisfies performance
obligations by transferring the promised services to its customers.
The Group recognises contract liabilities for consideration received in respect of unsatisfied performance
obligations and reports these amounts as contract liabilities in the statement of financial position. Similarly, if
the Group satisfies a performance obligation before it receives the consideration, the Group recognises either
a contract asset or a receivable in its statement of financial position, depending on whether something other
than the passage of time is required before the consideration is due.
Revenue is recognised for the major business activities as follows:
Revenue from Trading Technology - Licence Fees
Adslot and Symphony licence fees are derived by providing customers access to the Group’s technology
platforms. The fee is based on either annual contracted amounts, the number of users, a tier system based on
historical volumes traded on the platform, and/or resources allocated. The contracts are ongoing but
cancellable with defined notice periods. The Group is expected to maintain its performance obligations
throughout the contracted period for the client to achieve the benefits of the platforms. As per AASB 15,
revenue is recognised over time; since the promise to grant a licence as a performance obligation is satisfied
over time. The client simultaneously receives and consumes the benefit from the Group’s performance of
providing access to the platforms.
Revenue from Trading Technology – Trading Fees
Adslot Publisher revenues are recognised over time. Only the portion of the media campaign that is retained
by the Group for their services is recorded as revenue. This is typically a percentage of the total media
transacted on the Adslot platform. Where media campaigns are realised over a period a time, the portion that
extends beyond the reporting period is not taken up as revenue as the performance obligations have not been
satisfied. Where the funds for these campaigns are prepaid by advertisers those amounts are treated as
contract liabilities in the Consolidated Statement of Financial Position. As the fees are usage-based revenues
the revenue is recognised over time when the usage occurs and the performance obligations are satisfied.
Funds collected or collectable from advertisers and due to be repaid to publisher clients are disclosed in the
accounts as publisher creditors and categorised under Trade and other payables in the Consolidated
Statement of Financial Position.
Symphony trading fees are charged for the use of the Symphony platform as a workflow solution. The fee is
based on a percentage fee calculated from the total transacted value of campaigns. As per AASB 15, revenue
is recognised over time when the usage occurs and the performance obligations are satisfied.
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Revenue recognition
The Group derives revenue from trading technology and services. To determine whether to recognise revenue,
the Group follows a 5-step process:
Identifying the contract with a customer
Identifying the performance obligations
1.
2.
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue when/as performance obligation(s) are satisfied
The Group often enters into transactions involving a range of the Group’s products and services. In all cases,
the total transaction price for a contract is allocated amongst the various performance obligations based on
their relative stand-alone selling prices. The transaction price for a contract excludes any amounts collected
on behalf of third parties.
Revenue is recognised either at a point in time or over time, when (or as) the Group satisfies performance
obligations by transferring the promised services to its customers.
The Group recognises contract liabilities for consideration received in respect of unsatisfied performance
obligations and reports these amounts as contract liabilities in the statement of financial position. Similarly, if
the Group satisfies a performance obligation before it receives the consideration, the Group recognises either
a contract asset or a receivable in its statement of financial position, depending on whether something other
than the passage of time is required before the consideration is due.
Revenue is recognised for the major business activities as follows:
Revenue from Trading Technology - Licence Fees
Adslot and Symphony licence fees are derived by providing customers access to the Group’s technology
platforms. The fee is based on either annual contracted amounts, the number of users, a tier system based on
historical volumes traded on the platform, and/or resources allocated. The contracts are ongoing but
cancellable with defined notice periods. The Group is expected to maintain its performance obligations
throughout the contracted period for the client to achieve the benefits of the platforms. As per AASB 15,
revenue is recognised over time; since the promise to grant a licence as a performance obligation is satisfied
over time. The client simultaneously receives and consumes the benefit from the Group’s performance of
providing access to the platforms.
Revenue from Trading Technology – Trading Fees
Adslot Publisher revenues are recognised over time. Only the portion of the media campaign that is retained
by the Group for their services is recorded as revenue. This is typically a percentage of the total media
transacted on the Adslot platform. Where media campaigns are realised over a period a time, the portion that
extends beyond the reporting period is not taken up as revenue as the performance obligations have not been
satisfied. Where the funds for these campaigns are prepaid by advertisers those amounts are treated as
contract liabilities in the Consolidated Statement of Financial Position. As the fees are usage-based revenues
the revenue is recognised over time when the usage occurs and the performance obligations are satisfied.
Funds collected or collectable from advertisers and due to be repaid to publisher clients are disclosed in the
accounts as publisher creditors and categorised under Trade and other payables in the Consolidated
Statement of Financial Position.
Symphony trading fees are charged for the use of the Symphony platform as a workflow solution. The fee is
based on a percentage fee calculated from the total transacted value of campaigns. As per AASB 15, revenue
is recognised over time when the usage occurs and the performance obligations are satisfied.
Adslot 2020 Annual Report 43
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43
Notes to the Financial Statements (Continued)
1. Summary of Significant Accounting Policies (Continued)
(p) Revenue recognition (Continued)
Rendering of services
Service revenue is recognised at a point in time or over time based on when the performance obligations are
met, and the customer can realise benefit from service received without further involvement from the Group.
Symphony services revenue is derived as a once off Symphony activation fee or custom development work.
The revenue is recognised at a point in time when the Group has completed its performance obligation and
the customer has obtained the ability to direct the use of, and obtain substantially all of the remaining benefits
from, the work carried out.
Website development revenue is recorded based on project delivery revenue over time as the project is
completed. 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 contract
liabilities. As such revenue is recognised over time when the performance obligations are met and when the
Group receives a right to payment for performance completed to date.
Search Engine Optimisation and Search Engine Advertising attempts to improve search engine rankings of
the client’s website or bid on certain keywords in order for their clickable ads to appear in search results. These
are ongoing contracts and can be cancelled with 90 days’ notice. The Group needs to continuously manage
these campaigns; as such the revenue is recognised over time as the clients simultaneously receive the service
and the Group satisfies its performance obligations.
Hosting revenue is derived for hosting the client’s websites in third party cloud servers managed by the Group.
These contracts are ongoing and can be cancelled with 90 days’ notice. Clients may pay upfront annually. The
Group needs to continually satisfy the performance obligations of hosting the site and provide customer
support, as and when required. Therefore, revenue is recognised over time.
For Domain Names Registration and SSL Certification at the time of initial activation the service has been
transferred in full to the customer; and the customer is able to realise benefits from services received without
further involvement from the Group. Furthermore, the Group separately prices and sells these products. There
is no further performance obligation for the Group. As such revenue needs to be recognised at a point in time.
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
In accordance with AASB 120, 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. Where appropriate grants relating
to expense items are recognised as other income in reporting the related expense, 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.
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.
Financial Instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument and are measured initially at fair value adjusted by transactions costs,
except for those carried at fair value through the profit or loss statement, and which are measured initially at
fair value. Subsequent measurement of financial assets and financial liabilities are described below.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire,
or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is
derecognised when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at
the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value
adjusted for transaction costs (where applicable).
Subsequent measurement of financial assets
For the purpose of subsequent measurement, financial assets, other than those designated and effective as
hedging instruments, are classified as financial assets at amortised cost.
Classifications are determined by both:
• The entity’s business model for managing the financial asset; and
• The contractual cash flow characteristics of the financial assets.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables which is
presented within other expenses.
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not
designated as financial assets at fair value through profit and loss):
they are held within a business model whose objective is to hold the financial assets and collect its
•
•
contractual cash flows; and
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting
is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and
most other receivables fall into this category of financial instruments as well as government bonds.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as well as contract
assets and records the loss allowance at the amount equal to the expected lifetime credit losses. In using this
practical expedient, the Group uses its historical experience, external indicators and forward-looking
information to calculate the expected credit losses.
Trade and other receivables and contract assets are subject to review at least at each reporting date to identify
expected credit losses.
At reporting date and throughout the reporting period the Group did not have any other financial instruments
other than trade and other receivables.
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Adslot 2020 Annual Report 45
Financial Instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument and are measured initially at fair value adjusted by transactions costs,
except for those carried at fair value through the profit or loss statement, and which are measured initially at
fair value. Subsequent measurement of financial assets and financial liabilities are described below.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire,
or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is
derecognised when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at
the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value
adjusted for transaction costs (where applicable).
Subsequent measurement of financial assets
For the purpose of subsequent measurement, financial assets, other than those designated and effective as
hedging instruments, are classified as financial assets at amortised cost.
Classifications are determined by both:
• The entity’s business model for managing the financial asset; and
• The contractual cash flow characteristics of the financial assets.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables which is
presented within other expenses.
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not
designated as financial assets at fair value through profit and loss):
•
•
they are held within a business model whose objective is to hold the financial assets and collect its
contractual cash flows; and
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting
is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and
most other receivables fall into this category of financial instruments as well as government bonds.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as well as contract
assets and records the loss allowance at the amount equal to the expected lifetime credit losses. In using this
practical expedient, the Group uses its historical experience, external indicators and forward-looking
information to calculate the expected credit losses.
Trade and other receivables and contract assets are subject to review at least at each reporting date to identify
expected credit losses.
At reporting date and throughout the reporting period the Group did not have any other financial instruments
other than trade and other receivables.
Adslot 2020 Annual Report 45
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45
Notes to the Financial Statements (Continued)
1.
Summary of Significant Accounting Policies (Continued)
Segment reporting
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.
Officer.
Earnings per share
Basic earnings per share
Basic earnings per share for continuing operations and total operations attributable to members of the Group
are determined by dividing net profit after income tax from continuing operations and the net profit attributable
to members of the Group 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.
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
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.
Provisions, contingent assets and contingent liabilities
Provisions for product warranties, legal disputes, onerous contracts or other claims are recognised when the
Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow
of economic resources will be required from the Group and amounts can be estimated reliably. The timing or
amount of the outflow may still be uncertain.
Restructuring provisions are recognised only if a detailed formal plan for the restructuring exists and
management has either communicated the plan’s main features to those affected or started implementation.
Provisions are not recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the
most reliable evidence available at the reporting date, including the risks and uncertainties associated with
the present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be
required in settlement is determined by considering the class of obligations as a whole. Provisions are
discounted to their present values, where the time value of money is material.
Any reimbursement that the Group is virtually certain to collect from a third party with respect to the obligation
is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.
No liability is recognised if an outflow of economic resources as a result of present obligations is not probable.
Such situations are disclosed as contingent liabilities unless the outflow of resources is remote.
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. It is noted that directors have
considered the impact of the COVID-19 pandemic on accounting policies, judgements and estimates where
appropriate.
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.
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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.
Provisions, contingent assets and contingent liabilities
Provisions for product warranties, legal disputes, onerous contracts or other claims are recognised when the
Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow
of economic resources will be required from the Group and amounts can be estimated reliably. The timing or
amount of the outflow may still be uncertain.
Restructuring provisions are recognised only if a detailed formal plan for the restructuring exists and
management has either communicated the plan’s main features to those affected or started implementation.
Provisions are not recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the
most reliable evidence available at the reporting date, including the risks and uncertainties associated with
the present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be
required in settlement is determined by considering the class of obligations as a whole. Provisions are
discounted to their present values, where the time value of money is material.
Any reimbursement that the Group is virtually certain to collect from a third party with respect to the obligation
is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.
No liability is recognised if an outflow of economic resources as a result of present obligations is not probable.
Such situations are disclosed as contingent liabilities unless the outflow of resources is remote.
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. It is noted that directors have
considered the impact of the COVID-19 pandemic on accounting policies, judgements and estimates where
appropriate.
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.
Adslot 2020 Annual Report 47
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47
A receivable of $1,888,385 (2019: $2,051,661) has been recognised in relation to a research and development
tax concession for the 2020 financial year. Refer to Note 8 for further details. 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
At the date of authorisation of these financial statements, several new, but not yet effective, Standards and
amendments to existing Standards, and Interpretations have been published by the AASB. None of these
Standards or amendments to existing Standards have been adopted early by the Group.
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or
after the effective date of the pronouncement. New Standards, amendments and Interpretations not adopted
in the current year have not been disclosed.
Notes to the Financial Statements (Continued)
1.
Summary of Significant Accounting Policies (Continued)
Research and development tax concessions
(x) Critical accounting judgements and key sources of estimation uncertainty (Continued)
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 fair value less
costs to sell of the cash-generating units to which goodwill and intangible assets have been allocated. Under
the market-based approach for fair value less costs to sell calculations, the entity is required to estimate the
amount obtainable from the sale of an asset or CGU in an arm’s length transaction between knowledgeable,
willing parties, less the costs of disposal.
The Group’s shares are traded on the Australian Stock Exchange, and in the absence of a binding sale
agreement, the year-end share price is used to calculate the asset’s market value.
In the event the share price falls, an impairment of the related intangible assets may result.
At 30 June 2020 an assessment of impairment was performed and the Group considered if there was an
impairment to goodwill and intangible assets. The impacts of COVID-19 on the business was taken into
consideration in the assessment.
Following a review of the carrying value of its intangible assets and in accordance with relevant accounting
standards, goodwill was assessed to be impaired and a non-cash after tax impairment loss of $10.0m has
been recognised in the financial results for the year ended 30 June 2020.
The carrying amount of goodwill and intangible assets at the reporting date was $13,184,940 (2019:
$22,886,434) and there was a goodwill impairment of $10,000,000 (2019: 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 capitalisation of internally developed software amount for the year was $3,112,875 (2019: $3,792,752).
Refer to Note 10 for further details.
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 $207,270 (2019: $118,127).
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 is 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 $10,018,203 (2019: $9,600,762).
Refer to Note 5 for further details.
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Research and development tax concessions
A receivable of $1,888,385 (2019: $2,051,661) has been recognised in relation to a research and development
tax concession for the 2020 financial year. Refer to Note 8 for further details. 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
At the date of authorisation of these financial statements, several new, but not yet effective, Standards and
amendments to existing Standards, and Interpretations have been published by the AASB. None of these
Standards or amendments to existing Standards have been adopted early by the Group.
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or
after the effective date of the pronouncement. New Standards, amendments and Interpretations not adopted
in the current year have not been disclosed.
Adslot 2020 Annual Report 49
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49
Notes to the Financial Statements (Continued)
Segment Information
2020
Operating segments
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)
Statement of financial position
Segment assets
Segment liabilities
APAC
EMEA
$
8,758,112
(92,091)
846,718
2,814,369
2,554
$
816,273
(77,277)
1,726
-
-
The
Americas
$
213,482
(2,009,048)
2,979
-
3,290
Total
$
9,787,867
(2,178,416)
851,423
2,814,369
5,844
29,182,734
17,900,803
341,101
116,713
240,564
238,976
39,664,399
18,256,492
Provision for R&D claim for financial year 2015/2016
Other head office income/(expenses) not allocated in segment result
2019
Operating segments
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)
APAC
EMEA
The
Americas
$
$
$
8,711,221
(1,971,143)
251,096
4,109,086
23,208
477,541
(348,518)
1,228
-
3,784
650,255
(1,310,843)
6,573
-
-
Total
$
9,839,017
(3,630,504)
258,897
4,109,086
26,992
Statement of financial position
Segment assets
Segment liabilities
39,658,875
19,555,388
295,844
127,145
180,112
131,484
40,134,831
19,814,017
Segment revenue reconciles to total revenue from continuing operations as follows:
Revenue
Total segment revenue
Head office revenue
Interest revenue
Total revenue from continuing operations
(i) Refer to Note 3 for a description Revenue.
2020
$
2019
$
9,787,867
9,839,017
-
48,039
-
55,144
9,835,906
9,894,161
A reconciliation from segment result to operating profit before income tax is provided as follows:
Loss before income tax from continuing operations
(16,617,725)
(7,042,755)
Reportable segment assets are reconciled to total assets as follows:
Segment Result
Total segment result
Interest revenue
Other revenue
Interest expenses
Share option expenses
Gain / (Loss) on foreign exchange
Income tax benefit/(expense)
Profit/ (Loss) on sale/write off of asset
Impairment of Goodwill
Segment assets
Total segment assets
Head office assets
Intersegment eliminations
Segment liabilities
Total segment liabilities
Head office liabilities
Intersegment eliminations
Total assets as per the statement of financial position
Reportable segment liabilities are reconciled to total liabilities as follows:
Total liabilities as per the statement of financial position
2020
$
2019
$
(2,178,416)
(3,630,504)
48,039
737,044
(148,041)
(207,270)
(28,549)
(542)
-
(10,000,000)
(1,527,734)
(3,312,256)
55,144
377,468
(118,127)
(32,263)
732
(3,083)
-
-
-
(3,692,122)
2020
$
29,764,399
48,129,649
2019
$
40,134,831
48,085,810
(51,634,128)
(50,106,395)
26,259,920
38,114,246
2020
$
18,256,492
2,265,740
2019
$
19,814,017
491,016
(13,543,619)
(11,787,907)
6,978,613
8,517,126
50
50 Adslot 2020 Annual Report
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Adslot 2020 Annual Report 51
A reconciliation from segment result to operating profit before income tax is provided as follows:
Segment Result
Total segment result
Interest revenue
Other revenue
Interest expenses
Share option expenses
Gain / (Loss) on foreign exchange
Income tax benefit/(expense)
Profit/ (Loss) on sale/write off of asset
Impairment of Goodwill
Provision for R&D claim for financial year 2015/2016
Other head office income/(expenses) not allocated in segment result
2020
$
2019
$
(2,178,416)
(3,630,504)
48,039
737,044
(148,041)
(207,270)
(28,549)
(542)
-
(10,000,000)
(1,527,734)
(3,312,256)
55,144
377,468
-
(118,127)
(32,263)
732
(3,083)
-
-
(3,692,122)
Loss before income tax from continuing operations
(16,617,725)
(7,042,755)
Reportable segment assets are reconciled to total assets as follows:
Segment assets
Total segment assets
Head office assets
Intersegment eliminations
2020
$
29,764,399
48,129,649
(51,634,128)
2019
$
40,134,831
48,085,810
(50,106,395)
Total assets as per the statement of financial position
26,259,920
38,114,246
Reportable segment liabilities are reconciled to total liabilities as follows:
Segment liabilities
Total segment liabilities
Head office liabilities
Intersegment eliminations
2020
$
18,256,492
2,265,740
(13,543,619)
2019
$
19,814,017
491,016
(11,787,907)
Total liabilities as per the statement of financial position
6,978,613
8,517,126
Adslot 2020 Annual Report 51
Adslot 2020 Annual Report
51
Notes to the Financial Statements (Continued)
2.
Segment Information (Continued)
The Group’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)
USA
Other countries
Total
2020
$
2019
$
Revenue
Non-Current Assets
Revenue
Non-Current Assets
7,391,131
213,482
2,968,337
10,572,950
15,058,442
3,343
5,261
15,067,046
7,526,723
650,255
2,094,651
10,271,629
23,511,419
3,084
9,540
23,524,043
Revenues from external customers in the Group’s domicile, Australia, as well as its major markets the USA,
have been identified on the basis of the customer’s geographical location. Non-current assets are allocated
based on their physical location.
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 (2019: nil).
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 Group’s total
revenue.
For the year to 30 June 2020, one customer accounted for 10% or more of revenue (2019: one).
Revenue and Other Income
Revenue
Revenue from Trading Technology
Revenue from Services
Total revenue for services rendered
Interest revenue
Total revenue from continuing operations
Other income
Grant income
Total other Income
Total revenue and other income
Grant Income
R&D Tax Incentive - AusIndustry
Cashflow Boost Grant - Australian Taxation Office
JobKeeper - Australian Taxation Office
Export Market Development Grants - Austrade
Small Business Grant - UK Government
Total Grant Income
2020
$
8,115,100
1,672,767
9,787,867
48,039
9,835,906
737,044
737,044
407,336
200,000
97,500
14,251
17,957
737,044
2019
$
8,038,425
1,800,592
9,839,017
55,144
9,894,161
377,468
377,468
366,444
-
-
-
11,024
377,468
10,572,950
10,271,629
Revenue derived from the two product lines are described as follows:
Trading Technology
Services
Grant Income
Comprises Adslot Media, a leading global media trading technology, and Symphony, market-leading
workflow automation technology, purpose built for digital media agencies.
Comprising marketing services that are provided by the Group’s Webfirm division to SME clients and project-
based customisation of Trading Technology.
Part of the Group qualified for Job Keeper in June 2020, recognising $97,500 for JobKeeper in the 2020
financial year, with the corresponding cash received in financial year 2021. The Group expects to receive
JobKeeper payments for 60 Australian employees in the three months to September 2020. The Group will
assess further eligibility for JobKeeper 2.0 in the 2021 financial year.
The Group received $50,000 each for two of its Australian employer entities as a Cashflow Boost Grant in
the financial year 2020. A further $50,000 each is expected in the financial year 2021. Since the Group has
met all requirements to be eligible for the grant, the total $200,000 has been recognised in the financial year
2020.
Cash for the US government stimulus under the US Paycheck Protection Program was received in the 2020
year in the form of a loan. The Group expects to apply for full forgiveness of the loan in the financial year
2021, as outlined in note 12. The forgiveness amount would be recognised as grant income when
confirmation of forgiveness is received.
52
52 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 53
Revenue and Other Income
Revenue
Revenue from Trading Technology
Revenue from Services
Total revenue for services rendered
Interest revenue
Total revenue from continuing operations
Other income
Grant income
Total other Income
Total revenue and other income
Grant Income
R&D Tax Incentive - AusIndustry
Cashflow Boost Grant - Australian Taxation Office
JobKeeper - Australian Taxation Office
Export Market Development Grants - Austrade
Small Business Grant - UK Government
Total Grant Income
2020
$
8,115,100
1,672,767
9,787,867
48,039
9,835,906
737,044
737,044
2019
$
8,038,425
1,800,592
9,839,017
55,144
9,894,161
377,468
377,468
10,572,950
10,271,629
407,336
200,000
97,500
14,251
17,957
737,044
366,444
-
-
11,024
-
377,468
Revenue derived from the two product lines are described as follows:
Trading Technology
Comprises Adslot Media, 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 Group’s Webfirm division to SME clients and project-
based customisation of Trading Technology.
Grant Income
Part of the Group qualified for Job Keeper in June 2020, recognising $97,500 for JobKeeper in the 2020
financial year, with the corresponding cash received in financial year 2021. The Group expects to receive
JobKeeper payments for 60 Australian employees in the three months to September 2020. The Group will
assess further eligibility for JobKeeper 2.0 in the 2021 financial year.
The Group received $50,000 each for two of its Australian employer entities as a Cashflow Boost Grant in
the financial year 2020. A further $50,000 each is expected in the financial year 2021. Since the Group has
met all requirements to be eligible for the grant, the total $200,000 has been recognised in the financial year
2020.
Cash for the US government stimulus under the US Paycheck Protection Program was received in the 2020
year in the form of a loan. The Group expects to apply for full forgiveness of the loan in the financial year
2021, as outlined in note 12. The forgiveness amount would be recognised as grant income when
confirmation of forgiveness is received.
Adslot 2020 Annual Report 53
Adslot 2020 Annual Report
53
Notes to the Financial Statements (Continued)
Expenses
Income Tax Expense
2020
$
2019
$
Loss before income tax includes the following specific expenses:
a) Numerical reconciliation of income tax expense to prima facie tax benefit
Depreciation and amortisation
Amortisation – Software development costs
Amortisation – Leasehold improvements
Amortisation – Right of Use Assets
Depreciation – Computer & Equipment
Depreciation – Plant & equipment
Total depreciation and amortisation
Other charges against assets
Impairment of trade receivables
Provision for R&D Claim for Financial Year 2015/2016
Impairment of Goodwill
8
10
Employee benefits expense
Total capitalised development wages
Employee benefits included in Share based payment expense
2,814,369
-
799,168
48,237
4,018
4,109,086
163,354
-
90,090
5,453
3,665,792
4,367,983
19,565
1,527,734
10,000,000
7,654,417
4,562,586
202,861
3,489
-
-
7,817,748
5,288,455
99,726
Total employee benefits
12,419,865
13,205,929
Defined contribution superannuation expense included in Employee
benefit expense
806,565
840,297
Capitalised development wages (net of related grants)
Capitalised development wages included in the R&D grant
Total capitalised development wages
Rental expense
Foreign currency (gain) / loss included in Other expenses
3,112,875
1,449,711
4,562,586
419,386
28,549
3,792,752
1,495,703
5,288,455
1,024,336
32,264
Prima facie tax benefit on loss before income tax at 27.5% (2019: 27.5%)
Loss before income tax
Tax effect of:
Other non-allowable items
Share based expensed during year
Research and 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
2020
$
2019
$
(16,491,142)
(6,932,241)
(4,535,064)
(1,906,366)
6,340
56,999
12,766
32,485
1,191,220
1,297,027
(3,280,505)
(564,088)
-
417,440
2,736,482
-
433,327
20,247
(126,583)
(110,514)
b) Movement in deferred tax balances
Balance at
Recognised
in Profit &
Acquired in
Business
Loss
combination
Net
tax assets
liabilities
Deferred
Deferred tax
Balance at 30 June 2020
Trade and other receivables
Property, plant and equipment
Intangible assets
Unused tax losses
Trade and other receivables
Property, plant and equipment
Intangible assets
Unused tax losses
1 July
2019
$
(125,957)
199
165,435
(39,677)
1 July
2018
$
(125,957)
199
165,435
(39,677)
$
10,496
(17)
(13,786)
3,307
$
10,496
(17)
(13,786)
3,307
Net tax (assets) / liabilities
-
-
-
(36,370)
36,370
Balance at
Recognised
in Profit &
Acquired in
Business
Loss
combination
Net
tax assets
liabilities
Deferred
Deferred tax
Balance at 30 June 2019
$
(115,461)
182
151,649
(36,370)
(36,370)
$
(115,461)
182
151,649
(36,370)
(36,370)
$
-
-
-
$
-
-
-
(115,461)
182
151,649
$
-
(115,461)
182
151,649
$
-
$
-
-
-
-
-
$
-
-
-
-
-
Net tax (assets) / liabilities
-
-
-
(36,370)
36,370
54
54 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 55
Income Tax Expense
a) Numerical reconciliation of income tax expense to prima facie tax benefit
Loss before income tax
Prima facie tax benefit on loss before income tax at 27.5% (2019: 27.5%)
Tax effect of:
Other non-allowable items
Share based expensed during year
Research and 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
2020
$
2019
$
(16,491,142)
(6,932,241)
(4,535,064)
(1,906,366)
6,340
56,999
12,766
32,485
1,191,220
1,297,027
(3,280,505)
(564,088)
-
417,440
2,736,482
-
433,327
20,247
(126,583)
(110,514)
b) Movement in deferred tax balances
Trade and other receivables
Property, plant and equipment
Intangible assets
Unused tax losses
Balance at
1 July
2019
$
(125,957)
199
165,435
(39,677)
Net tax (assets) / liabilities
-
-
Recognised
in Profit &
Loss
$
Acquired in
Business
combination
$
Trade and other receivables
Property, plant and equipment
Intangible assets
Unused tax losses
Balance at
1 July
2018
$
(125,957)
199
165,435
(39,677)
Recognised
in Profit &
Loss
$
Acquired in
Business
combination
$
Net tax (assets) / liabilities
-
-
10,496
(17)
(13,786)
3,307
10,496
(17)
(13,786)
3,307
-
-
-
-
-
-
-
-
-
-
Balance at 30 June 2020
Net
$
Deferred
tax assets
$
Deferred tax
liabilities
$
(115,461)
182
151,649
-
-
-
(36,370)
(36,370)
(115,461)
182
151,649
-
-
(36,370)
36,370
Balance at 30 June 2019
Net
$
Deferred
tax assets
$
Deferred tax
liabilities
$
(115,461)
182
151,649
-
-
-
(36,370)
(36,370)
(115,461)
182
151,649
-
-
(36,370)
36,370
Adslot 2020 Annual Report 55
Adslot 2020 Annual Report
55
Notes to the Financial Statements (Continued)
5.
Income Tax Expense (Continued)
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 (27.5% 2019: 27.5%)
2020
$
2019
$
(4,714,903)
(6,121,877)
40,906,473
40,795,482
238,258
238,258
36,429,828
10,018,203
34,911,863
9,600,762
(i) During the period the Group made a one-off provision of $1,527,734 for the part repayment of the FY16 R&D claim.
In December 2019 the Group was advised by Innovation & Science Australia that the preliminary decision regarding
ineligible activities within the FY16 R&D claim was upheld. The Group continues to appeal these findings and defend
the legitimacy of its claim and has requested a review of the findings by the Administrative Appeals Tribunal (AAT).
Based on the findings made by Innovation and Science Australia in relation to the FY16 R&D activities, the R&D Tax
Incentive Offset for FY16 was offset against the FY2019 R&D refund of $2.0 million, with the net balance of the
FY2019 R&D refund paid in April 2020. In the event the Group is successful in overturning the AusIndustry decision,
this provision will be reversed. The $3.4 million R&D grant receivable includes $1.5 million of the FY19 R&D receivable
(offsetting the FY16 R&D provision) and $1.9 million for the FY20 R&D grant receivable.
The average age of the Group’s trade debtors is 50 days (2019: 40 days). The increase in debtor days is due
to recent collection delays experienced from our overseas clients resulting from COVID-19 disruptions. In
response to these disruptions, management have implemented more frequent trade debtor reviews and new
processes to proactively manage trade debtors and minimise risk to collection.
The increase in the Allowance for impairment relates primarily to an ongoing collection issue unrelated to the
COVID-19 pandemic.
(a) Ageing of trade debtors not impaired
The Group 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.
Deferred tax liabilities from temporary differences of $1,296,568 (2019: $1,683,516) have not been
recognised as they have been offset with deferred tax assets of the same value.
Dividends
The Group did not declare any dividends in the current year or prior year. There are no franking credits
available to shareholders of the Group.
0 – 30 days
31 – 60 days
61 – 90 days
Over 91 days
Cash and Cash Equivalents
Cash at bank and on hand
Cash held on behalf of Publishers
2020
$
4,972,001
1,188,439
6,160,440
2019
$
5,775,127
2,390,417
8,165,544
Included in the Cash at Bank is $528,801 (2019: $509,605) of funds held on term deposit as guarantee for our
corporate credit card facilities and for the benefit of landlords under office lease agreements.
Trade and Other Receivables
Current:
Trade debtors
Less: Allowance for impairment
Trade debtors not impaired
Research and Development grant receivable
Provision for R&D Claim for Financial Year 2015/2016 (i)
Other receivables
Prepayments
2020
$
2,639,552
(19,085)
2,620,467
3,416,119
(1,527,734)
313,859
209,723
2019
$
4,260,637
(2,782)
4,257,855
1,887,381
-
56,165
223,258
5,032,434
6,424,659
1,178,253
3,034,440
2020
$
623,060
363,769
455,385
2,620,467
2020
$
2,782
19,085
(2,782)
19,085
2019
$
81,287
136,628
1,005,500
4,257,855
2019
$
2,370
2,782
(2,370)
2,782
(b)
Movement in the provision for impairment
Balance at beginning of the year
Impairment recognised during the year
Amounts written off as uncollectible
Balance at the end of the year
In determining the recoverability of a trade receivable, the Group 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.
While collection delays have been experienced, there has not been an increase in defaults resulting from
COVID-19 disruptions to date.
Accordingly, the directors believe that there is no further provision required in excess of the allowance for
impairment.
Fair value of receivables
impairment.
Fair value of receivables at year end is measured to be the same as receivables net of the allowance for
56
56 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 57
(i) During the period the Group made a one-off provision of $1,527,734 for the part repayment of the FY16 R&D claim.
In December 2019 the Group was advised by Innovation & Science Australia that the preliminary decision regarding
ineligible activities within the FY16 R&D claim was upheld. The Group continues to appeal these findings and defend
the legitimacy of its claim and has requested a review of the findings by the Administrative Appeals Tribunal (AAT).
Based on the findings made by Innovation and Science Australia in relation to the FY16 R&D activities, the R&D Tax
Incentive Offset for FY16 was offset against the FY2019 R&D refund of $2.0 million, with the net balance of the
FY2019 R&D refund paid in April 2020. In the event the Group is successful in overturning the AusIndustry decision,
this provision will be reversed. The $3.4 million R&D grant receivable includes $1.5 million of the FY19 R&D receivable
(offsetting the FY16 R&D provision) and $1.9 million for the FY20 R&D grant receivable.
The average age of the Group’s trade debtors is 50 days (2019: 40 days). The increase in debtor days is due
to recent collection delays experienced from our overseas clients resulting from COVID-19 disruptions. In
response to these disruptions, management have implemented more frequent trade debtor reviews and new
processes to proactively manage trade debtors and minimise risk to collection.
The increase in the Allowance for impairment relates primarily to an ongoing collection issue unrelated to the
COVID-19 pandemic.
(a) Ageing of trade debtors 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
Balance at the end of the year
2020
$
1,178,253
623,060
363,769
455,385
2,620,467
2020
$
2,782
19,085
(2,782)
19,085
2019
$
3,034,440
81,287
136,628
1,005,500
4,257,855
2019
$
2,370
2,782
(2,370)
2,782
In determining the recoverability of a trade receivable, the Group 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.
While collection delays have been experienced, there has not been an increase in defaults resulting from
COVID-19 disruptions to date.
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.
Adslot 2020 Annual Report 57
Adslot 2020 Annual Report
57
Notes to the Financial Statements (Continued)
Property, Plant and Equipment
Intangible Assets
Leasehold improvements – at cost
Less: Accumulated amortisation
Right of use asset – at cost
Less: Accumulated depreciation
Plant and equipment – at cost
Less: Accumulated depreciation
Computer equipment – at cost
Less: Accumulated depreciation
Total carrying amount of property, plant and equipment
2020
$
7,746
(7,746)
-
2,616,195
(799,168)
1,817,027
95,151
(88,435)
6,716
450,125
(428,132)
21,993
1,845,736
2019
$
816,061
(289,915)
526,146
-
-
-
93,119
(84,527)
8,592
446,030
(379,529)
66,501
601,239
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:
Carrying amount at 30 June 2020
7,984,734
38,267
-
5,161,939
13,184,940
2020
Carrying amount at 1 July 2019
AASB 16 Adjustment (note 1(a))
Additions
Lease modifications
Depreciation / amortisation expense
Net foreign exchange differences
Carrying amount at 30 June 2020
2019
Carrying amount at 1 July 2018
Additions
Disposals/ Write Offs
Depreciation / amortisation expense
Net foreign exchange differences
Carrying amount at 30 June 2019
Right of Use
Assets
Leasehold
Improvements
Plant and
Equipment
Computer
Equipment
$
2,629,244
-
(13,049)
(799,168)
-
1,817,027
$
526,145
(526,145)
-
-
-
-
-
$
8,593
-
2,009
-
(4,018)
132
6,716
$
66,501
-
3,835
-
(48,237)
(106)
21,993
Leasehold
Improvements
Plant and
Equipment
Computer
Equipment
$
689,499
-
-
(163,354)
-
526,145
$
11,253
2,757
-
(5,453)
36
8,593
$
132,081
30,257
(6,059)
(90,090)
312
66,501
Total
$
601,239
2,103,099
5,844
(13,049)
(851,423)
26
1,845,736
Total
$
832,833
33,014
(6,059)
(258,897)
348
601,239
Internally
Developed
Software
$
Domain
Name
$
Intellectual
Property
$
Goodwill
$
Total
$
Opening net book amount
7,686,228
38,267
15,161,939
22,886,434
3,112,875
(2,814,369)
-
-
-
-
-
-
3,112,875
(2,814,369)
(10,000,000)
(10,000,000)
-
-
-
-
-
Carrying amount at 30 June 2020
7,984,734
38,267
5,161,939
13,184,940
Year ended 30 June 2020
Additions
Amortisation
Impairment
At 30 June 2020
Cost
Accumulated amortisation and
impairment
18,513,064
38,267
29,045,251
15,161,939
62,758,521
(10,528,330)
-
(29,045,251)
(10,000,000)
(49,573,581)
Internally
Developed
Software
$
Domain
Name
$
Intellectual
Property
$
Goodwill
$
Total
$
Year ended 30 June 2019
Opening net book amount
6,462,835
38,267
1,539,727
15,161,939
23,202,768
Additions
Amortisation
3,792,752
(2,569,359)
-
-
-
(1,539,727)
-
-
3,792,752
(4,109,086)
Carrying amount at 30 June 2019
7,686,228
38,267
-
15,161,939
22,886,434
At 30 June 2019
Cost
Accumulated amortisation and
impairment
15,400,189
38,267
29,045,251
15,161,939
59,645,646
(7,713,961)
-
(29,045,251)
-
(36,759,212)
Carrying amount at 30 June 2019
7,686,228
38,267
-
15,161,939
22,886,434
58
58 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 59
Intangible Assets
Internally
Developed
Software
$
Domain
Name
$
Intellectual
Property
$
Goodwill
$
Total
$
Year ended 30 June 2020
Opening net book amount
7,686,228
38,267
Additions
Amortisation
Impairment
3,112,875
(2,814,369)
-
-
-
-
Carrying amount at 30 June 2020
7,984,734
38,267
-
-
-
-
-
15,161,939
22,886,434
-
-
3,112,875
(2,814,369)
(10,000,000)
(10,000,000)
5,161,939
13,184,940
At 30 June 2020
Cost
Accumulated amortisation and
impairment
18,513,064
38,267
29,045,251
15,161,939
62,758,521
(10,528,330)
-
(29,045,251)
(10,000,000)
(49,573,581)
Carrying amount at 30 June 2020
7,984,734
38,267
-
5,161,939
13,184,940
Internally
Developed
Software
$
Domain
Name
$
Intellectual
Property
$
Goodwill
$
Total
$
Year ended 30 June 2019
Opening net book amount
6,462,835
38,267
1,539,727
15,161,939
23,202,768
Additions
Amortisation
3,792,752
(2,569,359)
-
-
-
(1,539,727)
-
-
3,792,752
(4,109,086)
Carrying amount at 30 June 2019
7,686,228
38,267
-
15,161,939
22,886,434
At 30 June 2019
Cost
Accumulated amortisation and
impairment
15,400,189
38,267
29,045,251
15,161,939
59,645,646
(7,713,961)
-
(29,045,251)
-
(36,759,212)
Carrying amount at 30 June 2019
7,686,228
38,267
-
15,161,939
22,886,434
Adslot 2020 Annual Report 59
Adslot 2020 Annual Report
59
Notes to the Financial Statements (Continued)
10. Intangible Assets (Continued)
Internally Developed Software
Internally developed software represents a number of software platforms developed within the Group. The
following table shows the portion of platform development costs that are capitalised and expensed for the
current financial year, 2020:
Platform
Capitalised Wages
R&D grants offsetting
capitalised wages
Net Capitalised
Wages
Adslot Publisher and Marketplace
Symphony
$
1,534,726
3,027,860
4,562,586
$
(624,144)
(825,567)
(1,449,711)
$
910,582
2,202,293
3,112,875
The following table shows the portion of platform development costs that are capitalised and expensed for the
prior financial year, 2019:
Platform
Capitalised Wages
R&D grants offsetting
capitalised wages
Net Capitalised
Wages
Adslot Publisher and Marketplace
Symphony
$
1,592,262
3,696,193
5,288,455
$
(577,515)
(918,188)
(1,495,703)
$
1,014,747
2,778,005
3,792,752
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 (2019: $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 (2019: $5,932,006) of the opening balance relates to this “CAP”
technology. Accumulated amortisation of this asset as at 30 June 2020 was $5,932,006 (2019: $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 (2019: $6,466,517) in the opening balance and attached to the Adslot CGU.
Accumulated amortisation of this asset as at 30 June 2020 was $6,466,517 (2019: $6,466,517). This asset
has been fully amortised.
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 (2019:
$16,191,496). Accumulated amortisation of this asset at 30 June 2020 was $16,191,496 (2019: $16,191,496).
This asset has been fully amortised.
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 (2019: $455,231). Accumulated amortisation of this asset at 30 June 2020 was $455,231 (2019:
$455,231). This asset has been fully amortised.
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 Group’s ongoing commitment to research and development of the Core IP.
60
60 Adslot 2020 Annual Report
Adslot 2020 Annual Report
The Goodwill balance relating to the acquisition of Facilitate has an attributed fair value of $5,161,939 (2019:
Goodwill
$15,161,939) and has been impaired.
(a) Cash Generating Units (CGUs)
For the purpose of impairment testing, goodwill has been allocated to the group of CGUs that are expected to
benefit from the acquisition, being both the Adslot and Symphony CGUs. A summary of the carrying amount
of goodwill and intangible assets with indefinite useful lives is detailed below:
CGU
Adslot and Symphony CGUs
(b) Impairment testing and key assumptions
2020
2019
Intangible assets
with indefinite
useful lives
$
-
Goodwill
$
15,161,939
Intangible assets
with indefinite
useful lives
$
-
Goodwill
$
5,161,939
The Group tests whether goodwill and other intangible assets have suffered any impairment in accordance
with the Group’s accounting policies. In addition, directors have considered the impact on accounting policies,
judgements and estimates in light of the impact of the COVID-19 pandemic.
The recoverable amounts of assets and CGUs have been determined using a fair value less costs to sell
approach. The directors have assessed the fair value having regard to a market-based approach and have
determined a non-cash impairment of $10.0 million.
The directors’ determination of fair value using a market-based approach is the market capitalisation of the
Group, less the value attributed to business units that are not part of the group of CGUs attributed to goodwill,
less other net assets.
The most significant judgements and key assumptions pertaining to the calculation are:
•
the Group’s share price (ASX: ADS) in the months leading up to 30 June 2020;
• a 4x valuation multiple on EBITDA to estimate the value of the business unit (Webfirm) that is not part of
the group of CGUs attributed to goodwill; and
• costs to sell including a transaction fee (3.5% of total value) plus estimate of legal, account and other
consultant costs ($200k).
The Group’s directors appointed an independent expert to review the approach adopted by management in
assessing the carrying value of the intangible assets of the Group as at 30 June 2018. The review supported
the selection of methodology and the assessment of the value of the Group under the primary quoted security
price approach. The director’s determined the same methodology be adopted for the tests at 30 June 2020.
(c) Sensitivity analysis
The Group’s share price forms the basis of the market-based approach. A material adverse change in the
Group’s share price would likely result in the carrying amount exceeding the recoverable amount.
While headroom exists under the market-based approach using the year end share price of $0.018, the results
from the market-based approach were revisited in light of the impact of the COVID-19 pandemic on Australian
financial markets and the Group’s share price in the 2020 financial year.
The COVID-19 pandemic developed rapidly in early 2020, impacting the Australian stock market and Adslot
Limited’s share price. The measures taken to contain the virus continue to have adverse effects on economic
activity and disrupt businesses. Due to ongoing increased uncertainty resulting from the COVID-19 pandemic,
the directors widened the range of reasonably possible changes in the Adslot Limited share price assumptions.
Sensitivity Analysis has been performed, using the share price low of $0.007 on 27 March 2020 and the 31
March 20 closing share price of $0.010. With all other elements of the 30 June calculation remaining equal,
this results in a significant deficit fair value over carrying value of the intangible assets at each share price.
Taking into consideration the lows in March 2020, the closing balance at the end of March 2020, the average
April 20 share price of $0.015, and the 30 June 2020 year end share price, a discounted share price in the
range of $0.010 to $0.012 has been used as the more prudent base for the impairment testing, representing
impairment ranges from $8 million to $12 million.
There are no other material sensitivities involved in the directors’ determination of fair value using a market
based approach.
Adslot 2020 Annual Report 61
Goodwill
The Goodwill balance relating to the acquisition of Facilitate has an attributed fair value of $5,161,939 (2019:
$15,161,939) and has been impaired.
(a) Cash Generating Units (CGUs)
For the purpose of impairment testing, goodwill has been allocated to the group of CGUs that are expected to
benefit from the acquisition, being both the Adslot and Symphony CGUs. A summary of the carrying amount
of goodwill and intangible assets with indefinite useful lives is detailed below:
CGU
Adslot and Symphony CGUs
2020
2019
Intangible assets
with indefinite
useful lives
$
-
Goodwill
$
5,161,939
Goodwill
$
15,161,939
Intangible assets
with indefinite
useful lives
$
-
(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. In addition, directors have considered the impact on accounting policies,
judgements and estimates in light of the impact of the COVID-19 pandemic.
The recoverable amounts of assets and CGUs have been determined using a fair value less costs to sell
approach. The directors have assessed the fair value having regard to a market-based approach and have
determined a non-cash impairment of $10.0 million.
The directors’ determination of fair value using a market-based approach is the market capitalisation of the
Group, less the value attributed to business units that are not part of the group of CGUs attributed to goodwill,
less other net assets.
The most significant judgements and key assumptions pertaining to the calculation are:
the Group’s share price (ASX: ADS) in the months leading up to 30 June 2020;
•
• a 4x valuation multiple on EBITDA to estimate the value of the business unit (Webfirm) that is not part of
the group of CGUs attributed to goodwill; and
• costs to sell including a transaction fee (3.5% of total value) plus estimate of legal, account and other
consultant costs ($200k).
The Group’s directors appointed an independent expert to review the approach adopted by management in
assessing the carrying value of the intangible assets of the Group as at 30 June 2018. The review supported
the selection of methodology and the assessment of the value of the Group under the primary quoted security
price approach. The director’s determined the same methodology be adopted for the tests at 30 June 2020.
(c) Sensitivity analysis
The Group’s share price forms the basis of the market-based approach. A material adverse change in the
Group’s share price would likely result in the carrying amount exceeding the recoverable amount.
While headroom exists under the market-based approach using the year end share price of $0.018, the results
from the market-based approach were revisited in light of the impact of the COVID-19 pandemic on Australian
financial markets and the Group’s share price in the 2020 financial year.
The COVID-19 pandemic developed rapidly in early 2020, impacting the Australian stock market and Adslot
Limited’s share price. The measures taken to contain the virus continue to have adverse effects on economic
activity and disrupt businesses. Due to ongoing increased uncertainty resulting from the COVID-19 pandemic,
the directors widened the range of reasonably possible changes in the Adslot Limited share price assumptions.
Sensitivity Analysis has been performed, using the share price low of $0.007 on 27 March 2020 and the 31
March 20 closing share price of $0.010. With all other elements of the 30 June calculation remaining equal,
this results in a significant deficit fair value over carrying value of the intangible assets at each share price.
Taking into consideration the lows in March 2020, the closing balance at the end of March 2020, the average
April 20 share price of $0.015, and the 30 June 2020 year end share price, a discounted share price in the
range of $0.010 to $0.012 has been used as the more prudent base for the impairment testing, representing
impairment ranges from $8 million to $12 million.
There are no other material sensitivities involved in the directors’ determination of fair value using a market
based approach.
Adslot 2020 Annual Report 61
Adslot 2020 Annual Report
61
Notes to the Financial Statements (Continued)
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: Contract liabilities (i)
Current: Short term loan (ii)
2020
$
218,716
2019
$
518,498
2,381,870
5,154,892
498,118
865,398
3,098,704
6,538,788
2020
$
527,258
158,352
685,610
2019
$
374,781
-
374,781
(i) Contract liabilities 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, licence fees billed in
advance and advertising campaigns that have been purchased but whose delivery will occur after the reporting date.
(ii)
In May, the Group’s US subsidiary Adslot Inc applied for and received a Paycheck Protection Program loan through
HSBC USA. It is a no fee loan provided by the US Federal Government for businesses impacted by COVID-19. The
loan is for a two-year period, at 1.00% fixed interest rate and the loan payments deferred for the first six months. No
collateral or guarantees were required. The full loan amount is available forgiveness provided the loan is utilised for
allowable expenditure. The Group expects to apply for full forgiveness in the financial year 2021. The proceeds from
borrowings disclosed in the Consolidated Statement of Cash Flows is at historical exchange rate at the day of the
receipt of loan, while the amount included in the Consolidated Statement of Financial Position is at the exchange rate
as at 30 June 2020.
Lease Liabilities
Current: Lease incentive liability
Current: Lease liability
Non-current: Lease incentive liability
Non-current: Lease liability
2020
$
2019
$
-
146,300
886,952
-
-
323,110
960,915
-
Current year (2020) represents lease liabilities as per AASB 16 and prior year (2019) represents lease liabilities
as per AASB 117. Refer Note 1 (a) for further information.
Lease payments not recognised as a liability
The Group has elected not to recognise a lease liability for short term leases (leases of expected term of 12
months or less) or for leases of low value assets. Payments made under such leases are expensed on a
straight-line basis.
At 30 June 2020 short term and low value leases that were not recognised as a liability represented a total
commitment of $ 176,483 for the Group.
Provisions
Current: Employee benefits
Non-current: Employee benefits
Non-current: Provision for make good costs (i)
(i) Refer Note 1 (a) for further information.
Contributed equity
2020
$
634,916
500,051
175,095
675,146
2019
$
658,736
439,041
-
439,041
Ordinary Shares – Fully Paid
1,843,875,994
1,587,875,994
151,866,361
145,838,216
2020
Number
2019
Number
2020
$
2019
$
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.
01-Jul-18
Balance (including Treasury shares)
1,288,006,269
(2,622,047)
138,699,400
Movements in Paid-Up Capital
Date
Details
09-Aug-18
Share Placement
19-Sep-18
Share Placement
09-May-19
Share Placement
30-Jun-19
Less: Treasury shares
30-Jun19
Balance
10-Dec-19
Share Placement
29-Jan-20
Share Placement
30-Jun-20
Less: Treasury shares
30-Jun-20
Balance
01-Jul-19
Balance (including Treasury shares)
Value
$
2,852,695
531,858
3,766,730
Number of
shares
Number
Issue
price
Capital
raising costs
$
$
118,000,000
22,000,000
160,000,000
1,588,006,269
(130,275)
1,587,875,994
1,588,006,269
226,000,000
30,000,000
1,844,006,269
(130,275)
1,843,875,994
$0.025
$0.025
$0.025
(97,305)
(18,142)
(233,270)
(2,970,764)
145,850,683
-
(12,467)
(2,970,764)
145,838,216
(2,970,764)
145,850,683
$0.025
$0.025
(347,127)
(24,728)
5,302,573
725,772
(3,342,619)
151,878,828
-
(12,467)
(3,342,619)
151,866,361
62
62 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 63
Provisions
Current: Employee benefits
Non-current: Employee benefits
Non-current: Provision for make good costs (i)
(i) Refer Note 1 (a) for further information.
Contributed equity
2020
$
634,916
500,051
175,095
675,146
2019
$
658,736
439,041
-
439,041
Ordinary Shares – Fully Paid
1,843,875,994
1,587,875,994
151,866,361
145,838,216
2020
Number
2019
Number
2020
$
2019
$
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
Number of
shares
Number
Issue
price
$
Capital
raising costs
$
Value
$
01-Jul-18
Balance (including Treasury shares)
1,288,006,269
(2,622,047)
138,699,400
09-Aug-18
Share Placement
19-Sep-18
Share Placement
09-May-19
Share Placement
30-Jun-19
Less: Treasury shares
30-Jun19
Balance
01-Jul-19
Balance (including Treasury shares)
10-Dec-19
Share Placement
29-Jan-20
Share Placement
30-Jun-20
Less: Treasury shares
30-Jun-20
Balance
118,000,000
22,000,000
160,000,000
1,588,006,269
(130,275)
1,587,875,994
1,588,006,269
226,000,000
30,000,000
1,844,006,269
(130,275)
1,843,875,994
$0.025
$0.025
$0.025
(97,305)
(18,142)
(233,270)
2,852,695
531,858
3,766,730
(2,970,764)
145,850,683
-
(12,467)
(2,970,764)
145,838,216
(2,970,764)
145,850,683
$0.025
$0.025
(347,127)
(24,728)
5,302,573
725,772
(3,342,619)
151,878,828
-
(12,467)
(3,342,619)
151,866,361
Adslot 2020 Annual Report 63
Adslot 2020 Annual Report
63
Notes to the Financial Statements (Continued)
15.
Contributed equity (Continued)
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(d). Shares are 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 Group. The Employee Share Ownership Plan (ESOP) has now been discontinued and the balance
shares held by the Trust is an excess balance.
Treasury Shares movements during the financial year are summarised below:
Issue Type
Issue or
Acquisition
Date
Employee ESOP
01/05/15
Issue
Price
$
0.090
Balance at
beginning of
the year
(Number)
Issued
during the
year
(Number)
Transfers
during the
year
(Number)
130,275
130,275
-
-
-
-
Balance at
end of the
year
(Number)
130,275
130,275
Options movements during the financial year are summarised below:
Issue Type
Expiry Date
Exercise
Price
$
Balance at
beginning of
the year
(Number)
Issued during
the year
(Number)
Forfeited
during the
year
(Number)
Exercised
during the
year
(Number)
Ordinary options
Ordinary options
Ordinary options
Ordinary options
Ordinary options
Ordinary options
Ordinary options
Ordinary options
Ordinary options
Ordinary options
04/10/21
25/11/21
25/02/22
15/05/22
27/05/22
30/01/23
02/09/23
12/12/23
15/12/22
29/01/24
0.073
3,000,000
0.060
5,600,000
0.035
23,500,000
0.034
11,400,000
0.036
4,000,000
0.060
0.041
0.045
0.044
0.032
5,800,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(750,000)
11,900,000
(200,000)
4,000,000
8,000,000
8,000,000
-
-
-
53,300,000
31,900,000
(950,000)
-
-
-
-
-
-
-
-
-
-
-
Balance at
end of the
year
(Number)
3,000,000
5,600,000
23,500,000
11,400,000
4,000,000
5,050,000
11,700,000
4,000,000
8,000,000
8,000,000
84,250,000
Reserves
Reserves
Share–based payments reserve
Foreign currency translation reserve
Share–based payments reserve
Opening balance
Reclassification of Treasury Shares
Reclassification vested Performance Rights
Share based payment expenses - third Party (i)
Share based payment expense - employees
Closing balance
Foreign currency translation reserve
Opening balance
Movement on currency translation
Closing balance
(i) Refer Equity Based Payments on Note 21
2020
$
693,619
245,855
939,474
434,882
-
-
51,467
207,270
693,619
2019
$
434,882
214,267
649,149
605,978
(105,000)
(184,223)
118,127
434,882
214,267
31,588
245,855
106,676
107,591
214,267
The Share-based payments reserve is used to record the value of options accounted for in accordance with
AASB 2: 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.
64
64 Adslot 2020 Annual Report
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Adslot 2020 Annual Report 65
Reserves
Reserves
Share–based payments reserve
Foreign currency translation reserve
Share–based payments reserve
Opening balance
Reclassification of Treasury Shares
Reclassification vested Performance Rights
Share based payment expenses - third Party (i)
Share based payment expense - employees
Closing balance
Foreign currency translation reserve
Opening balance
Movement on currency translation
Closing balance
(i) Refer Equity Based Payments on Note 21
2020
$
693,619
245,855
939,474
434,882
-
-
51,467
207,270
693,619
2019
$
434,882
214,267
649,149
605,978
(105,000)
(184,223)
118,127
434,882
214,267
31,588
245,855
106,676
107,591
214,267
The Share-based payments reserve is used to record the value of options accounted for in accordance with
AASB 2: 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.
Adslot 2020 Annual Report 65
Adslot 2020 Annual Report
65
Notes to the Financial Statements (Continued)
Earnings Per Share
(a)
Basic earnings per share
2020
Cents
2019
Cents
Directors
The following persons were directors of the Group during the financial year:
Key Management Personnel Disclosures
Loss attributable to the ordinary equity holders of the Group
(0.96)
(0.49)
(b) Diluted earnings per share
Loss attributable to the ordinary equity holders of the Group
(0.96)
(0.49)
2020
$
2019
$
Mr Andrew Barlow (Executive Chairman) (i)
Mr Adrian Giles (Non-Executive Director)
Ms Sarah Morgan (Non-Executive Director)
Mr Andrew Dyer (Non-Executive Director)
Mr Ben Dixon (Executive Director & CEO)
Mr Quentin George (Non-Executive Director) (ii)
Other key management personnel
(c)
Reconciliation of earnings used on calculating earnings per share (i)
Loss from continuing operations attributable to the members of the Group used on
calculating basic and diluted earnings per share
(16,617,725)
(7,042,755)
of the Group, directly or indirectly, during the financial year:
The following persons also had authority and responsibility for planning, directing and controlling the activities
(d) Weighted average number of shares used as the denominator
2020
Number
2019
Number
Name
Ms Felicity Conlan
Mr Tom Peacock
Position
Chief Financial Officer and Company Secretary
Chief Commercial Officer
Weighted average number of shares on issue used in the calculation of basic EPS
1,725,848,672
1,432,078,391
Key management personnel compensation
(e) Weighted average number of shares used as the denominator
Weighted average number of shares on issue used in the calculation of diluted
EPS
1,725,848,672
1,432,078,391
(i) During 2019 and 2018 there were no discontinued operations or values attributable to minority interests.
Weighted average number of rights and options 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.
2020
Number
2019
Number
72,438,525
50,428,767
Contingencies
No contingent assets and liabilities are noted.
Remuneration of auditors
During the year the following fees were paid/payable to the auditor of the Group:
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 Group:
Other services
Taxation compliance, GroupM compliance audit and taxation advice (Research and
Development grant, JobKeeper grant and transfer pricing)
2020
$
2019
$
109,000
115,000
93,911
96,503
202,911
211,503
2020
$
933,089
71,194
11,586
12,924
2019
$
1,333,764
81,429
24,764
148,452
1,028,793
1,588,409
Short-term employee benefits
Post-employment benefits
Other long-term employee benefits
Share based payments
Total compensation (a)
(2019: 9).
Business Acquisitions:
(i) On 28 July 2020, Mr Barlow reverted to a Non-Executive Chairman role
(ii) Mr George resigned on 16 July 2019
(a) There were 8 key management personnel throughout 2020, some of whom have a part year of service
There were no related party transactions during the year ended 30 June 2020.
Transactions with Directors and their personally related entities:
During the year the Company earned revenue of $ 28,242 from a company requiring web development and
marketing services related to Mr. Adrian Giles on normal commercial terms and conditions. There were no
other transactions with Directors and their personally related entities for the financial years ending 30 June
2020 and 30 June 2019.
66
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Adslot 2020 Annual Report 67
Key Management Personnel Disclosures
Directors
The following persons were directors of the Group during the financial year:
Mr Andrew Barlow (Executive Chairman) (i)
Mr Adrian Giles (Non-Executive Director)
Ms Sarah Morgan (Non-Executive Director)
Mr Andrew Dyer (Non-Executive Director)
Mr Ben Dixon (Executive Director & CEO)
Mr Quentin George (Non-Executive Director) (ii)
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
Ms Felicity Conlan
Mr Tom Peacock
Position
Chief Financial Officer and Company Secretary
Chief Commercial Officer
Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Other long-term employee benefits
Share based payments
Total compensation (a)
2020
$
933,089
71,194
11,586
12,924
2019
$
1,333,764
81,429
24,764
148,452
1,028,793
1,588,409
(i) On 28 July 2020, Mr Barlow reverted to a Non-Executive Chairman role
(ii) Mr George resigned on 16 July 2019
(a) There were 8 key management personnel throughout 2020, some of whom have a part year of service
(2019: 9).
Business Acquisitions:
There were no related party transactions during the year ended 30 June 2020.
Transactions with Directors and their personally related entities:
During the year the Company earned revenue of $ 28,242 from a company requiring web development and
marketing services related to Mr. Adrian Giles on normal commercial terms and conditions. There were no
other transactions with Directors and their personally related entities for the financial years ending 30 June
2020 and 30 June 2019.
Adslot 2020 Annual Report 67
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67
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 Group 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 Group 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 were paid or payable by the recipient on receipt of the right. The rights carried 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 Group.
These shares were forfeited with the departure of Mr Lowe during the financial year 2019. The following table
shows movement in the Rights over Shares for the financial year 2019:
Issue Date
$
$
(Number)
(Number)
(Number)
(Number)
(Number)
Valuation
Price
year
Balance at
start of the
Granted
Vested
during the
during the
Forfeited
during the
Balance at
end of the
year
year
year
year
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
-
-
-
-
-
-
-
-
-
-
3,000,000
4,000,000
5,000,000
5,000,000
17,000,000
-
-
-
-
-
Required
VWAP
Price
0.20
0.30
0.40
0.50
Escrow
Required
from
award
2 years
-
-
-
8-Oct-2012
8-Oct-2012
8-Oct-2012
8-Oct-2012
Total
Employee Option Plan
Shareholders approved at the November 2017 Annual General Meeting the creation of Incentive Option Plan
which enables the Board to offer eligible employees and directors the right to options which can be exercised
to shares subject to the certain vesting criteria.
The objective of the Option Plan is to attract, motivate and retain key employees and it is considered by the
Group that the adoption of the Option Plan and the future issue of Options under the Option Plan will provide
selected employees and directors with the opportunity to participate in the future growth of the Group.
No amounts are paid or payable by the recipient on the receipt of the options. The options carry no voting
rights. All options are subject to service periods which require the employees remain an employee or Director
or the Group.
Notes to the Financial Statements (Continued)
Share Based Payments
Employee Share Option Plan (ESOP)
In November 2012 the Group 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 were
available to be issued to eligible employees and was subject to a two-year service period and if this service
period is not met, the rights to shares were to be forfeited by the eligible employee. Shares held by the Trust
under the scheme had voting and dividend rights and had the right to participate in further issues pro-rata to
all ordinary shareholders. ESOP rights to shares were valued at fair value at the date the options were granted.
The ESOP was replaced by the Performance Rights over Shares Plan in financial year 2015. As such there
have been no new ESOP rights granted since the end of financial year 2015. All remaining ESOP shares were
vested and transferred to the employees; and the plan concluded during the 2019 financial year.
The following tables shows the movement of share-based compensation to employees under the ESOP for
the financial year 2019.
2019
2019
Grant Date
Escrow
End Date
Valuation
Price $
15/06/14
15/06/15
15/06/14
2016-2018
0.105
0.105
Total
Balance at
start of the
year
Granted
during
the year
Transferre
d during
the year
Forfeited
during the
year
Balance at
end of the
year
Vested at
the end of
the year
(Number)
(Number)
(Number)
(Number)
(Number)
(Number)
250,000
750,000
1,000,000
-
-
-
-
(250,000)
(750,000)
(1,000,000)
$0.105
-
-
-
-
-
-
-
-
-
-
-
-
-
Weighted average share price
$0.105
Weighted average remaining contractual life at 30 June 2019 (days)
Performance Rights over Shares
At the November 2014 Annual General Meeting the shareholders approved 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 were paid
or payable by the recipient on receipt of the right. The rights carried no voting rights. All rights were subject to
service periods which required the employees remain an employee of the Group.
The Performance Rights over Shares Plan was replaced by the Incentive Option Plan in financial year 2018
and no new Performance Rights granted during since then. With the transfer of the final rights, Plan concluded
during the 2019 financial year.
The following table shows grants of share-based compensation to directors and senior management under the
Performance Rights over Shares Plan during the 2019 financial year:
2019
Grant
Date
Assessment
period
Valuation
Price $
Balance at
start of the
year
Granted
during the
year
Transferred
during the
year
Forfeited
during the
year
Balance at
end of the
year
Vested at
the end of
the year
(Number)
(Number)
(Number)
(Number)
(Number)
(Number)
01/09/16
2 years
0.125
2,125,000
Total
2,125,000
-
-
(1,925,000)
(200,000)
(1,925,000)
(200,000)
-
-
-
-
68
68 Adslot 2020 Annual Report
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Adslot 2020 Annual Report 69
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 Group 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 Group 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 were paid or payable by the recipient on receipt of the right. The rights carried 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 Group.
These shares were forfeited with the departure of Mr Lowe during the financial year 2019. The following table
shows movement in the Rights over Shares for the financial year 2019:
2019
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
-
-
-
Employee Option Plan
Valuation
Price
Balance at
start of the
year
Granted
during the
year
Vested
during the
year
Forfeited
during the
year
Balance at
end of the
year
$
(Number)
(Number)
(Number)
(Number)
(Number)
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
-
-
-
-
-
-
-
-
-
-
3,000,000
4,000,000
5,000,000
5,000,000
17,000,000
-
-
-
-
-
Shareholders approved at the November 2017 Annual General Meeting the creation of Incentive Option Plan
which enables the Board to offer eligible employees and directors the right to options which can be exercised
to shares subject to the certain vesting criteria.
The objective of the Option Plan is to attract, motivate and retain key employees and it is considered by the
Group that the adoption of the Option Plan and the future issue of Options under the Option Plan will provide
selected employees and directors with the opportunity to participate in the future growth of the Group.
No amounts are paid or payable by the recipient on the receipt of the options. The options carry no voting
rights. All options are subject to service periods which require the employees remain an employee or Director
or the Group.
Adslot 2020 Annual Report 69
Adslot 2020 Annual Report
69
Notes to the Financial Statements (Continued)
21. Share Based Payments (continued)
The following table shows grants and movements of share-based compensation to employees under the
Employee Option Plan during the current financial year:
2020
Exercise
Price
Balance at
start of the
year
Granted
during
the year
Exercised
during the
year
Lapsed
during the
year
Forfeited
during the
year
Balance at
end of the
year
Vested and
exercisable
at the end of
the year
$
(Number)
(Number)
(Number)
(Number)
(Number)
(Number)
(Number)
Grant
Date
Expiry
Date
05/10/17
04/10/21
0.073
3,000,000
26/11/17
25/11/21
0.060
5,600,000
26/02/18
25/02/22
0.035
23,500,000
16/05/18
15/05/22
0.034
11,400,000
28/05/18
27/05/22
0.036
4,000,000
30/01/19
30/01/23
0.060
5,800,000
-
-
-
-
-
-
03/09/19
02/09/23
0.041
13/12/19
12/12/23
30/01/20
29/01/24
0.045
0.032
- 11,900,000
-
-
4,000,000
8,000,000
Total
53,300,000 23,900,000
Weighted average exercise
price
$0.042
$0.039
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
3,000,000
5,600,000
5,600,000
23,500,000
23,500,000
11,400,000
11,400,000
4,000,000
4,000,000
(750,000)
5,050,000
2,650,000
(200,000)
11,700,000
-
-
-
4,000,000
2,000,000
8,000,000
-
(950,000)
76,250,000
52,150,000
$0.056
$0.041
$0.041
The options are valued using the Black-Scholes pricing model. The model inputs for options granted during
the year ended 30 June 2019 included:
Model Input
Grant Date
Expiry Date
Exercise Price $
5-day VWAP at Grant Date $
Expected Volatility
Risk Free Interest rate
Equity Based Payments
OP # 19-1
31/01/19
30/01/23
0.060
0.041
92.93%
0.99%
During the financial year the Group granted 8,000,000 new Options under mandate to Peloton Capital Pty Ltd
as consideration for corporate advisory services provided. The exercise price of the Options are $0.044 (175%
premium to the December 2019 placement price of $0.025 - announced to the ASX on 4 December 2019).
The Options were vested on issue and have an expiry date of 15 December 2022.
Grant
Date
Expiry
Date
Balance at
Granted
Exercised
Lapsed
Forfeited
Balance at
Exercise
start of the
during
during the
during the
during the
end of the
at the end of
Price
year
the year
year
year
year
year
the year
$
(Number)
(Number)
(Number)
(Number)
(Number)
(Number)
(Number)
30/01/20
15/12/22
0.044
- 8,000,000
-
-
-
8,000,000
8,000,000
Vested and
exercisable
The options are valued using the Black-Scholes pricing model. The model inputs for options granted during
the year ended 30 June 2020 included:
The options are valued using the Black-Scholes pricing model. The model inputs for options granted were:
Model Input
Grant Date
Expiry Date
Exercise Price $
5-day VWAP at Grant Date $
Expected Volatility
Risk Free Interest rate
EOP # 20-1
30/01/20
15/12/22
0.044
0.032
63.79%
0.88%
Model Input
Grant Date
Expiry Date
Exercise Price $
5-day VWAP at Grant Date $
Expected Volatility
Risk Free Interest rate
2019
OP # 20-1 OP # 20-2 OP # 20-3
03/09/19
02/09/23
0.041
0.028
62.60%
0.99%
13/12/19
12/12/23
30/01/20
29/01/24
0.045
0.031
0.032
0.032
61.60%
63.79%
0.88%
0.88%
Exercise
Price
Balance at
start of the
year
Granted
during
the year
Exercised
during the
year
Lapsed
during the
year
Forfeited
during the
year
Balance at
end of the
year
Vested and
exercisable
at the end of
the year
$
(Number)
(Number)
(Number)
(Number)
(Number)
(Number)
(Number)
Grant
Date
Expiry
Date
05/10/17
04/10/21
0.073
3,000,000
26/11/17
25/11/21
0.060
5,800,000
26/02/18
25/02/22
0.035
23,500,000
16/05/18
15/05/22
0.034
12,700,000
28/05/18
27/05/22
0.036
4,000,000
-
-
-
-
-
31/01/19
30/01/23
0.060
-
5,800,000
Total
49,000,000
5,800,000
Weighted average exercise
price
$0.040
$0.060
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
(200,000)
5,600,000
-
-
-
23,500,000
23,500,000
(1,300,000)
11,400,000
11,400,000
-
-
4,000,000
3,000,000
5,800,000
-
(1,500,000)
53,300,000
37,900,000
$0.037
$0.042
$0.035
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70 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 71
The options are valued using the Black-Scholes pricing model. The model inputs for options granted during
the year ended 30 June 2019 included:
Model Input
Grant Date
Expiry Date
Exercise Price $
5-day VWAP at Grant Date $
Expected Volatility
Risk Free Interest rate
Equity Based Payments
OP # 19-1
31/01/19
30/01/23
0.060
0.041
92.93%
0.99%
During the financial year the Group granted 8,000,000 new Options under mandate to Peloton Capital Pty Ltd
as consideration for corporate advisory services provided. The exercise price of the Options are $0.044 (175%
premium to the December 2019 placement price of $0.025 - announced to the ASX on 4 December 2019).
The Options were vested on issue and have an expiry date of 15 December 2022.
Exercise
Price
Balance at
start of the
year
Granted
during
the year
Exercised
during the
year
Lapsed
during the
year
Forfeited
during the
year
Balance at
end of the
year
Vested and
exercisable
at the end of
the year
$
(Number)
(Number)
(Number)
(Number)
(Number)
(Number)
(Number)
Grant
Date
Expiry
Date
30/01/20
15/12/22
0.044
- 8,000,000
-
-
-
8,000,000
8,000,000
The options are valued using the Black-Scholes pricing model. The model inputs for options granted were:
Model Input
Grant Date
Expiry Date
Exercise Price $
5-day VWAP at Grant Date $
Expected Volatility
Risk Free Interest rate
EOP # 20-1
30/01/20
15/12/22
0.044
0.032
63.79%
0.88%
Adslot 2020 Annual Report 71
Adslot 2020 Annual Report
71
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
Add/(less) non-cash and other items
Adjustment from adoption of AASB 15 (movement in contract liabilities)
Depreciation and amortisation
Cash based: depreciated leasehold fitout
Impairment of Goodwill
Share based payment
Provision for impairment of 2016 R&D receivables
Impairment of receivables
(Profit)/Loss on asset write off
Unrealised foreign currency loss / (gain)
2020
$
2019
$
(16,617,725)
(7,042,755)
-
3,665,792
-
10,000,000
207,270
1,527,734
19,565
-
3,009
(85,125)
4,367,983
(146,300)
-
118,127
-
3,489
3,083
(31,327)
Movements in receivables relating to investing activities
1,171,950
(1,036,515)
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
(151,812)
(952,734)
(3,208,191)
3,692,199
(3,382,408)
(1,109,875)
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 23(d) and interest rate risk is covered in Note
23(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.
Financial Assets
7,473,794
310,516
159,241
63,779
47,189
2,746
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.
72
72 Adslot 2020 Annual Report
Adslot 2020 Annual Report
Adslot 2020 Annual Report 73
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)
2020
$
2019
$
6,160,440
8,165,544
5,032,434
6,424,659
11,192,874
14,590,203
2020
$
2019
$
3,140,929
6,538,788
(c) Liquidity risk
Financial liabilities
Trade and other payables
terms of the obligations.
(d) Foreign currency 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
Most of the Group’s financial assets and liabilities 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
Foreign currency exposure is monitored by the Board on a periodic 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
USD
A$
GBP
A$
EUR
A$
NZD
A$
CNY
A$
MYR
A$
Financial Assets
5,093,083
342,619
332,667
27,660
54,587
2,035
Financial Liabilities
(3,013,410)
(594,247)
(175,353)
(3,655)
(28,754)
-
2,079,673
(251,628)
157,314
24,005
25,833
2,035
Ringgit (MYR).
closing rate:
30 June 2020
Total Exposure
30 June 2019
Financial Liabilities
(4,670,052)
(365,601)
(105,015)
(6,511)
(34,406)
-
Total Exposure
2,803,742
(55,085)
54,226
57,268
12,783
2,746
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)
(c) Liquidity risk
Financial liabilities
Trade and other payables
2020
$
6,160,440
5,032,434
2019
$
8,165,544
6,424,659
11,192,874
14,590,203
2020
$
3,140,929
2019
$
6,538,788
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.
(d) Foreign currency risk
Most of the Group’s financial assets and liabilities 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 periodic 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:
USD
A$
GBP
A$
EUR
A$
NZD
A$
CNY
A$
MYR
A$
30 June 2020
Financial Assets
5,093,083
342,619
332,667
27,660
54,587
2,035
Financial Liabilities
(3,013,410)
(594,247)
(175,353)
(3,655)
(28,754)
-
Total Exposure
30 June 2019
2,079,673
(251,628)
157,314
24,005
25,833
2,035
Financial Assets
7,473,794
310,516
159,241
63,779
47,189
2,746
Financial Liabilities
(4,670,052)
(365,601)
(105,015)
(6,511)
(34,406)
-
Total Exposure
2,803,742
(55,085)
54,226
57,268
12,783
2,746
Adslot 2020 Annual Report 73
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73
Notes to the Financial Statements (Continued)
23. Financial Risk Management (Continued)
(f) Net fair value of financial assets and liabilities
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 2020 (30 June 2019:10%).
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.
30 June 2020
USD
A$
GBP
A$
EUR
A$
+10%
NZD
A$
CNY
A$
MYR
A$
Total
A$
Impact on Profit
(174,825)
38,265
(13,666)
-
-
(185)
(150,411)
Impact on Reserves
(14,236)
(15,390)
(635)
Impact on Equity
(189,061)
22,875
(14,301)
(2,182)
(2,182)
(2,348)
(2,348)
-
(34,791)
(185)
(185,202)
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.
Parent Entity Information
The following details of information are related to the parent entity, Adslot Ltd, at 30 June 2020. This information
has been prepared using consistent accounting policies as presented in Note 1.
30 June 2019
Impact on Profit
(250,745)
15,674
(6,185)
-
Impact on Reserves
(4,141)
(10,666)
1,255
Impact on Equity
(254,886)
5,008
(4,930)
(357)
(805)
(250)
(241,863)
-
(19,563)
(1,162)
(250)
(261,426)
30 June 2020
Impact on Profit
USD
A$
GBP
A$
EUR
A$
CNY
A$
213,675
(46,768)
16,703
-
-
Impact on Reserves
17,400
18,809
776
Impact on Equity
231,075
(27,959)
17,479
2,667
2,667
2,870
2,870
MYR
A$
226
Total
A$
183,836
-
42,522
226
226,358
(5,206)
(5,206)
-10%
NZD
A$
30 June 2019
Impact on Profit
306,466
(19,157)
7,560
-
Impact on Reserves
5,061
13,037
(1,535)
Impact on Equity
311,527
(6,120)
6,025
6,363
6,363
437
983
305
295,611
-
23,909
1,420
305
319,520
(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:
(cid:3)
30 June 2020
+1%
$
34,017
-1%
$
(29,447)
30 June 2019
30,800
(28,163)
This is mainly attributable to the Group’s exposure to interest rate on its bank balances bearing interest.
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Adslot 2020 Annual Report 75
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
2020
$
2019
$
2,081,735
3,630,511
45,750,149
44,463,013
47,831,884
48,093,524
962,435
1,136,010
2,098,445
306,357
323,111
629,468
151,878,829
145,850,683
693,617
434,880
(106,839,007)
(98,821,507)
45,733,439
47,464,056
(8,000,943)
(7,118,262)
(8,000,943)
(7,118,262)
Related Party Transactions
Other than the transactions disclosed in Note 20 relating to key management personnel, there have been no
related party transactions that have occurred during the current or prior financial year.
(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.
Parent Entity Information
The following details of information are related to the parent entity, Adslot Ltd, at 30 June 2020. 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
2020
$
2,081,735
2019
$
3,630,511
45,750,149
44,463,013
47,831,884
48,093,524
962,435
1,136,010
2,098,445
306,357
323,111
629,468
151,878,829
145,850,683
693,617
434,880
(106,839,007)
(98,821,507)
45,733,439
47,464,056
(8,000,943)
(7,118,262)
(8,000,943)
(7,118,262)
Related Party Transactions
Other than the transactions disclosed in Note 20 relating to key management personnel, there have been no
related party transactions that have occurred during the current or prior financial year.
Adslot 2020 Annual Report 75
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75
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 and accompanying notes, as set out on pages 31 to 76 are in accordance with the Corporations Act 2001
(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 Company’s financial position as at 30 June 2020 and of its performance,
as represented by the results of its operations and its cash flows, for the financial year ended on that
(c) the Company has included in the notes to the financial statements an explicit and unreserved
statement of compliance with International Financial Reporting Standards.
date; and
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 17 to 24 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.
Notes to the Financial Statements (Continued)
Events Subsequent to Reporting Date
The Company granted the following unlisted share options:
• 25,625,000 options issued to employees as outlined in the Appendix 3G lodged on 22 July 2020.
• 18,000,000 options granted to Mr Ben Dixon, CEO and executive director as outlined in the ASX
release on 12 August 2020.
and:
COVID-19 Pandemic
The outbreak of the coronavirus pandemic in early 2020 has had an adverse impact on the business across
all geographic regions. It is not practicable to estimate the duration or potential quantum of the impact of the
health and economic crisis, after the reporting date. The situation continues to develop and any further impact
will be dependent on any measures imposed by the Australian Government and other Governments around
the world including restrictions on social and work environments and economic stimulus.
Other than the above, there has not been any matter or circumstance occurring subsequent to the end of the
financial year that has significantly affected, or may significantly affect, the operations of the Group, the results
of those operations or the state of affairs of the Group in future years.
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
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 Service Co., Ltd
Facilitate Digital Limited
Facilitate Digital Trust
Facilitate Digital, LLC
Facilitate Digital UK Limited
Facilitate Digital Deutschland GmbH
Country of
Incorporation
Ordinary Share Consolidated
Equity Interest
2020
%
2019
%
Australia
Australia
Australia
Australia
Australia
Australia
United Kingdom
United States
Australia
Australia
Australia
China
New Zealand
New Zealand
United States
United Kingdom
Germany
100
100
100
100
100
100
100
100
100
100
100
100
100
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.
Andrew Barlow
Chairman
Adslot Ltd
25 August 2020
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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 and accompanying notes, as set out on pages 31 to 76 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 Company’s financial position as at 30 June 2020 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 17 to 24 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
25 August 2020
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77
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81
Corporate Governance Statement
In accordance with Listing Rule 4.10.3, Adslot’s Corporate Governance Statement can be found at
http://www.adslot.com/investor-relations/governance/
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 13 August 2020.
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 (19,231 shares):
Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:
NATIONAL NOMINEES LIMITED
MR PETER DIAMOND + MRS DIANA DIAMOND
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
DAWNIE DIXON PTY LTD
J & M BARLOW PENSION FUND
INVIA CUSTODIAN PTY LIMITED
MR ANDREW BARLOW
CAPITAL ACCRETION PTY LTD
ZERO NOMINEES PTY LTD
AMBLESIDE VENTURES PTY LTD
SAPEAME PTY LTD
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
STOCK RANGE PTY LTD
HILLBOI NOMINEES PTY LTD
CHARMED5 PTY LTD
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17 MR PETER STANKOVIC
18
19 MR VLADIMIR ANTHONY VITEZ & MS CATHERINE MARY DOWLAN
20 MR ANTONY ANDREW SHEIL
G & D DIXON INVESTMENTS PTY LTD
Total Top 20 holders of Ordinary Shares
Remaining holders balance
207
313
453
1,168
870
3,011
1,321
22,941
1,038,457
3,616,350
44,871,461
1,794,457,060
1,844,006,269
9,571,070
Listed Ordinary Shares
Number of
Shares
% of
Shares
225,372,208
200,000,000
139,394,209
86,046,522
60,440,000
60,252,850
58,352,668
34,235,296
33,500,000
33,091,710
30,700,000
27,659,170
21,382,837
19,764,704
19,540,512
17,055,000
15,500,000
12,302,184
11,000,000
10,773,499
1,116,363,369
727,642,900
12.22
10.85
7.56
4.67
3.28
3.27
3.16
1.86
1.82
1.79
1.66
1.50
1.16
1.07
1.06
0.92
0.84
0.67
0.60
0.58
60.54
39.46
Corporate Directory
Directors
Mr Andrew Barlow – Non-Executive Chairman
Mr Ben Dixon – Executive Director
Mr Adrian Giles – Non-Executive Director
Ms Sarah Morgan – Non-Executive Director
Mr Andrew Dyer – Non-Executive Director
Chief Executive Officer
Mr Ben Dixon
Company Secretary
Ms Felicity Conlan
Auditors
Grant Thornton Australia
Collins Square, Tower 5
727 Collins Street
Melbourne, VIC 3008
Australia
Bankers
National Australia Bank Limited
330 Collins Street,
Melbourne, VIC 3000
Australia
Share Register
Computershare Registry Services Pty Ltd
Yarra Falls
452 Johnston Street
Abbotsford, VIC 3001
Australia
Home Stock Exchange
Australian Securities Exchange Limited
Level 45, South Tower
Rialto, 525 Collins Street
Melbourne, VIC 3000
Australia
ASX Code: ADS
Website
www.adslot.com
Registered Office
Adslot Ltd
Level 2, 419 Collins Street,
Melbourne, VIC 3000
Australia
Phone: + 61 3 8695 9100
Head Office
Adslot Ltd
Level 2, 419 Collins Street,
Melbourne, VIC 3000
Australia
Phone: + 61 3 8695 9100
Asia Pacific Offices
Level 8, 10-14 Waterloo 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 Office
79 Madison Avenue
New York, NY 10016
United States of America
European Offices
10 John Street
London, WCIN 2EB
United Kingdom
8th Floor 33
Theatinerstrasse 11
80333 Munchen Bayern
Germany
Classes of Shares - Adslot Ltd has only one class of share on issue, being fully paid ordinary shares.
Substantial Shareholders
Peter Diamond
Private Portfolio Managers Pty Ltd
Geoff Dixon
Jencay Capital Pty Ltd
Shares
200,000,000
115,781,145
107,599,566
93,545,083
% Shares
10.85
6.28
5.84
5.07
Voting Rights - All ordinary shares carry one vote per share without restrictions.
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Adslot 2020 Annual Report 83
Corporate Directory
Directors
Mr Andrew Barlow – Non-Executive Chairman
Mr Ben Dixon – Executive Director
Mr Adrian Giles – Non-Executive Director
Ms Sarah Morgan – Non-Executive Director
Mr Andrew Dyer – Non-Executive Director
Chief Executive Officer
Mr Ben Dixon
Company Secretary
Ms Felicity Conlan
Auditors
Grant Thornton Australia
Collins Square, Tower 5
727 Collins Street
Melbourne, VIC 3008
Australia
Bankers
National Australia Bank Limited
330 Collins Street,
Melbourne, VIC 3000
Australia
Share Register
Computershare Registry Services Pty Ltd
Yarra Falls
452 Johnston Street
Abbotsford, VIC 3001
Australia
Home Stock Exchange
Australian Securities Exchange Limited
Level 45, South Tower
Rialto, 525 Collins Street
Melbourne, VIC 3000
Australia
ASX Code: ADS
Website
www.adslot.com
Registered Office
Adslot Ltd
Level 2, 419 Collins Street,
Melbourne, VIC 3000
Australia
Phone: + 61 3 8695 9100
Head Office
Adslot Ltd
Level 2, 419 Collins Street,
Melbourne, VIC 3000
Australia
Phone: + 61 3 8695 9100
Asia Pacific Offices
Level 8, 10-14 Waterloo 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 Office
79 Madison Avenue
New York, NY 10016
United States of America
European Offices
10 John Street
London, WCIN 2EB
United Kingdom
8th Floor 33
Theatinerstrasse 11
80333 Munchen Bayern
Germany
Adslot 2020 Annual Report 83
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83
adslot.com