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0 2020
ANNUAL REPORT
F R E E L A N C E R L I M I T E D
A C N 1 4 1 9 5 9 0 4 2
INDEX
Index
PAGE
CONTENTS
001
Chairman's Letter
043
Directors' Report
047
Review of Operations
058
Auditor’s Independence Declaration
059
Consolidated Statement of Profit or Loss and Other Comprehensive Income
060
Consolidated Statement of Financial Position
061
Consolidated Statement of Changes in Equity
062
Consolidated Statement of Cash Flows
063
Notes to the Financial Statement
098
Directors' Declaration
099
Independent Auditor's Report
105
Additional ASX Information
107
Corporate Directory
FREELANCER LIMITED ANNUAL REPORT 2020 CHAIRMAN’S LETTER
Chairman’s
Letter
001
Dear Shareholders,
Freelancer
In 2020 the Freelancer Limited Group achieved all-time record
In FY20, revenue from Freelancer.com was $50.5m (flat on pcp),
net revenue of $58.8 million (up 1.5% on pcp) and all-time Gross
and we added 8.9 million registered users and 2.2 million jobs
Payment Volume (GPV) of $891.8m (up 13.2% on pcp). Breaking
posted. GPV was an all-time record of $192.1m (up 5.9% on pcp).
down by segment, both Freelancer and Escrow both hit all-time
After a slow 1Q20 when Covid hit China, growth accelerated
records with a GPV of $192.1m (up 5.9% on pcp) and $700m (up
throughout the year, ending with 4Q20 Gross Marketplace
15.4% on pcp) respectively.
For the year, the company achieved positive operating cash flow
of $7.9 million, also an all-time record. The group is poised for
operating leverage with EBITDA and NPAT both at $(0.6)m. As of
31 December 2020, the Company had $34.3 million in cash and
Volume (GMV) at US$25.9m (up 20.0% on pcp). As mentioned
in the fourth quarter results earnings call, the GMV numbers in
2021 so far are growing faster than this year on year.
Overall, web traffic to Freelancer.com is flying. Web traffic (users)
was up 51% in FY20 to 81 million and page views were up 95%
cash equivalents (up 7% on pcp).
on pcp to 1.2 billion. As of the writing of this letter, Freelancer.
A detailed analysis of the activities of the group are provided in
This ranking does not include our 52 other regional websites that
the Review of Operations in the Directors’ Report.
all rank independently.
com is ranked the 678th largest website in the world on by Alexa.
FREELANCER LIMITED ANNUAL REPORT 2020 CHAIRMAN’S LETTER
002
CHAIRMAN’S LETTER
For Freelancer.com, the year was one of major technological
Evidenced by the growth in GMV contribution, the Freelancer
and product improvements. We neared completion of a major
Enterprise team delivered fantastic customer value in 2020. A
overhaul to the front end stack- effectively rebuilding the
$17B global BPO company hired over 300 freelancers within
entire website. We were able to leverage this into dramatic
a matter of weeks, beating internal hiring timelines by 318%.
improvements in the mobile user experience. In July, we
A Fortune 50 Technology company created new marketing
permanently shut down our legacy standalone mobile website,
content roughly 40% faster and with over 70% cost savings
replacing it with our new webapp frontend. Since this release,
when compared to traditional agencies. IBM ran a contest that
revenue from mobile browsers has lifted by 51% in the second
attracted over 1000 freelancers and resulted in a 65% increase in
half of 2020 on pcp, which we believe can be wholly attributed to
traffic to their ICCT page.
the superior UX and fully featured offering that our new webapp
stack offers our clients on mobile devices.
Under the $25M NOIS joint NASA tender, Freelancer Enterprise
partnered with Arrow Electronics and Adiona to win a $365,000
Continuing these efforts, we focused on mobile towards the end
USD power engineering and $475,000 USD data science task
of the year. New versions of both our Android and iOS apps are
order, respectively. We will be partnering with our industry
now in mass beta, with iOS being released into full production
leading organisations to win many more task orders under the
before the end of March 2021 and Android following within a
tender.
month.
In addition to superior UX and fully featured offerings, by
The year was also defined by the COVID-19 crisis. Prior to
Covid, C-suite from Fortune 500 universally told us that in the
reducing the number of codebases we are required to maintain
future, some percentage of their organisation will permanently
and develop from four to one, we are seeing significant
improvements to developer productivity, speeding up product
be staffed from the cloud- they were not sure whether it was
5%, 10%, 15% or 25% - but that is the range. It is also not known
development.
if this is 1 year away, 3, 5 or 10 years. However, Covid has
accelerated the scale and speed of these plans. It is our belief
003
Outside of mobile development, our product efforts were
that this new paradigm of working online is here to stay, and will
focused around improving our hourly payment offering (tracked
define the economic landscape for years to come.
hours up 27% on pcp), strengthening our customer acquisition
through improving SEM profitability and SEO volume and finally
continuing our focus on building out our enterprise offering.
Escrow
The year was a record year for Freelancer Enterprise headlined
Payment Volume of $700m, up 15.4% on pcp. The business had
by a 67% year on year increase in GMV. Capitalising on the global
particularly strong growth inclusive of September onwards. GPV
tailwind of remote work and the acceleration of large enterprises
in the fourth quarter of 2020 was $213.6m (up 45.7% on a pcp
In FY20 Escrow.com achieved an all-time record Gross
to build flexible and elastic workforce solutions, Freelancer
Enterprise saw a significant uplift in both deal volume and deal
size. For the first time Freelancer Enterprise started signing
SOWs and fielding requests for thousands of Freelance hires at
once- while these agreements are not “take or pay”, we believe
that we are not far away from a large step up in GMV.
of $146.6m) or US$156.6m (up 56.2% on a pcp of $100.3m).
December GPV was US$63.4m, up 109.9% on pcp.
In 2020, Escrow.com continued to solidify its dominant market
position in domain names, websites, IP address ranges &
intellectual property, but also expanded into other markets with
key partners in the automotive and fine art verticals.
To keep up with the increase in demand the Enterprise go-
to-market team grew threefold in 2020. Executing strongly
against our value proposition to connect talent with opportunity
In July we announced that eBay had integrated Escrow.com in
both the eBay Motors USA website and mobile app to enable
on demand, the team helped leading organisations improve
the buying and selling of vehicles online. Escrow.com is the
internal workforce utilization, better manage their contingent
workforce and build private talent clouds around hot skills.
Freelancer Enterprise is the only solution in the market that
can help organisations seamlessly build a blended workforce
across all their talent clouds: internal, existing continent and
first digital payment option since the launch of the new app in
December 2019. In October 2020, we deepened the relationship
by going into beta with eBay Watches. In January 2021, Jamie
Lannone, Chief Executive of eBay, discussed the Escrow.com
relationship 9 minutes into an interview with Yahoo Finance
new freelancers.
(https://www.youtube.com/watch?v=hSgPm5o2Flk).
FREELANCER LIMITED ANNUAL REPORT 2020 CHAIRMAN’S LETTER
The flexibility of Escrow.com’s API means that partners across
At the higher end, Escrow.com competes with incredibly
diverse verticals can transact without buyers and sellers ever
inefficient systems of payment- law firms running to banks to
having to meet in person. In the fine art world, Escrow.com is
set up trust or escrow accounts and archaic letters of credit that
integrated with Artsy and Artland while in mining, the same API is
require relying on third party quality inspection firms, that have
integrated into Energy Domain’s marketplace for oil and gas rights.
no idea about your business, inspecting goods at the point of
Merchants looking to use Escrow.com in their eCommerce stores
loading on a boat on the other side of the world. Escrow.com
are able to make use of the Escrow.com WordPress, compatible
allows buyers to receive and inspect the goods before payment
with WooCommerce.
is made.
Our most popular integration, Escrow Pay added support for
Summary
new localised payment methods such as ACH debit and saw
significant investment in product development focused on faster
With 50 million users across 2000 skill sets in 247 countries,
and more secure onboarding. The result of these developments
regions and territories- no other provider comes close to the
has been a large improvement in conversion with our largest
scale, scope and ability of Freelancer.com to deliver skilled talent
marketplace partners, and we look forward to rolling out these
over the Internet. Within weeks we will hit 20 million jobs posted
improvements platform wide in 2021.
on the platform, which is a tremendous achievement.
Another feature made available platform wide in 2020 was the
Likewise, Escrow.com is a superior method of payment for
international commerce. It is also unique in terms of its offering
as there is no payments system like it globally.
Combined, we are not far away from over $1 billion dollars a year
of volume through our group payments infrastructure, which is
another great milestone for the business.
We continue to be heads down and focused on execution. The
Board and myself wish to thank our staff, shareholders and 50
million users across the group. We couldn’t have done it without
you.
004
Regards,
Matt Barrie
Chairman
31 March 2021
real time digital ID verification (eKYC) added on top of our KYC.
This increased our rate of approved accounts, and overall made
it faster for buyers and sellers to set up an account and start a
transaction.
In 2020 we commenced building out the sales team globally. We
added Chris Weir as the head of business in Europe, and Raffaela
Maiorano as Director of Compliance & Legal and MLRO for our
Authorised Payments Institution license in the region, which is in
process.
Escrow continues to be the most licensed escrow provider globally
by a long margin. We have three states left as part of our US
licensing program, and are at an advanced stage in the licensing
application process for the remaining states. We are already
licensed in Australia and Canada and hope to have our UK API
license approved in 2021. After that, we will turn our attention to
Europe, as well as joint control escrow licensing in jurisdictions
where it is available so that we can secure transactions for real
estate, business sales and equity (e.g. M&A transactions).
Globally, payment systems break down with transaction sizes
over a few thousand dollars. Escrow.com excels for transaction
sizes from the thousands of dollars to tens of millions, or more.
Fundamentally there are no effective payment systems for global
commerce at scale operating in a world of risk.
At the lower end, Escrow.com competes against buyer protection
for credit cards and payment systems like Paypal. When
something goes wrong however, these protections are more
akin to insurance policies, and it can take months to rectify a
transaction which provides a terrible customer service experience.
FREELANCER LIMITED ANNUAL REPORT 2020
MARKETPLACE STATISTICS
50.8 M
005
TOTAL REGISTERED USERS
52
48
44
40
36
32
28
24
20
16
12
8
4
0
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FREELANCER LIMITED ANNUAL REPORT 2020 19.1M
TOTAL JOBS POSTED
MARKETPLACE STATISTICS
006
24
22
20
18
16
14
12
10
8
6
4
2
0
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FREELANCER LIMITED ANNUAL REPORT 2020 ABOUT FREELANCER
Freelancer.com is
the world’s largest
freelancing marketplace
007
With over 50.8 million registered users Freelancer
is the world’s largest freelancing and crowdsourcing
marketplace by total number of users and jobs posted.
We’re changing lives in the developing world by providing
opportunity and income.
Five billion people on the planet live on $10 a day or less.
On Freelancer they can earn $10 an hour or more, as they
develop their skills, education and reputation.
FREELANCER LIMITED ANNUAL REPORT 2020 ABOUT FREELANCER
008
FREELANCER LIMITED ANNUAL REPORT 2020 ABOUT FREELANCER
We help our customers
grow their revenue,
their reach and their
possibilities.
009
“My team and I have only recently started using Freelancer
as a complement to our in-house expertise. Our startup company
will soon be launching a new socially responsible marketplace
powered exclusively by local retailers called Lowkler. The experience
has been beyond our most optimistic expectations. The freelancers
are qualified and professional while the recruiters go above and
beyond to make sure we feel supported. This looks like the
beginning of a great partnership!“
Danny Zako
Executive Vice President, Sekurcorp
Laval, Canada
FREELANCER LIMITED ANNUAL REPORT 2020 ABOUT FREELANCER
010
FREELANCER LIMITED ANNUAL REPORT 2020 ABOUT FREELANCER
011
FREELANCER LIMITED ANNUAL REPORT 2020 ABOUT FREELANCER
We're helping founders,
entrepreneurs and
startups around the world
take their businesses to
new heights.
“I had a tough time working with someone from within my network to boost sales
for my new e-commerce site. I was suggested to find someone on Freelancer.
012
I was very skeptical about competence, security of information etc. to hand over the
project to someone I don't know face to face. However, on the first day of posting the
requirements, there was a good response from professionals across the globe.
Within a few hours, I signed my contract with a professional and created a milestone
for the project. To my surprise, the freelancer finished the project in time, within
budget and offered a lot of flexibility while working. All the work was handled very
systematically. As a consequence, I could go into the market at planned timelines
and get a good boost in my
sales. This would never have
happened without Freelancer.
Thank you so much.”
Naveen Alle
Adobe Premiere Pro
Video Editor
Sint Truiden, Belgium
FREELANCER LIMITED ANNUAL REPORT 2020 ABOUT FREELANCER
We change lives by
opening up global
markets to small
businesses.
“Using Freelancer has been an incredibly rewarding experience for AuriGen Medical.
Our brief was to create a two-minute 3D photorealistic animation – demonstrating
013
a complex medical procedure for our implantable heart device. The Freelancer.com
platform allowed AuriGen to receive 30+ proposals from highly rated creatives across
the globe in 24 hours.
Communication with our Freelancer was simple, straightforward and we always
received answers to our queries within a 3-4 hour time frame. The finished product
was received ahead of schedule and surpassed all of our expectations. Our budget
for the work was $3,000 and the animation we received looked like it cost $10,000+.
We have already received several compliments on the animation and have been
successful in a recent fundraising round where the animation played a pivotal role
in illuminating our value proposition.
I would recommend Freelancer.com to anyone looking for high quality, cost-effective
designers, and AuriGen Medical we will certainly be using the platform for our future
projects.”
Dr. John Thompson
Co-Founder, GMIT Innovation Hubs
Ireland
FREELANCER LIMITED ANNUAL REPORT 2020 ABOUT FREELANCER
014
FREELANCER LIMITED ANNUAL REPORT 2020 FREELANCER CONTESTS
NASA
crowdsources
talent with
Freelancer
015
In 2020, Freelancer jointly won the US$25 Million
NASA Open Innovation Services 2 (NOIS2) tender.
Under the contract, Freelancer.com will help NASA
crowdsource talent to design innovative tools and
technologies for its new era of space exploration.
FREELANCER LIMITED ANNUAL REPORT 2020 FREELANCER CONTESTS
Under the NOIS2, we won our first task Order for
We also won a second task order valued at
the US Bureau of Reclamation valued at $365,000
$474,500 working with the Eunice Kennedy
USD in partnership with Arrow Electronics. The
Shriver National Institute of Child Health and
project is attempting to improve the reliability of
Human Development (NICHD) in partnership
hydropower plant generation by automating safety
with Adiona, an Australian based data analytics
equipment testing and reducing plant downtime.
company with expertise in data science and
Over the course of two years and two contests,
machine learning. The project seeks to spur new
including an on-site testing demonstration, we will
research in maternal mortality, morbidity, and
source innovative solutions for Reclamation from
severe maternal morbidity through innovative
a global community.
exploration of NICHD's large databases.
016
Steven N. Rader, Deputy
“Crowdsourcing is a very good tool for public
of NASA's Center of Excellence for
engagement with NASA. Our approach with
Collaborative Innovation (CoECI), said:
NOIS2 is designed to encourage the crowd
to work on some of NASA's most compelling
matters, making them feel they are a part of
the mission. We want to tap into the diverse
talents available around the world, made
possible through crowdsourcing.”
FREELANCER LIMITED ANNUAL REPORT 2020
MARKETPLACE STATISTICS
Marketplace
Statistics
017
Freelancer is a game-changer for entrepreneurs,
small businesses, and large organisations. We
provide easy access to talented freelancers from
all around the world, who offer a wide range of
services at competitive prices.
$182
68%
263M+
AVERAGE COMPLETED
PROJECT SIZE IN USD
OF JOBS RECEIVE A BID
TOTAL
WITHIN 60 SECONDS
MESSAGES SENT
50.8M+
19.1M+
TOTAL REGISTERED
TOTAL JOBS POSTED
USERS
$6.1B
TOTAL JOBS
POSTED IN USD
FREELANCER LIMITED ANNUAL REPORT 2020 FREELANCER CONTESTS
FREELANCER CONTESTS
018
Source solutions through the
power of the crowd. Post a
Contest on Freelancer.com.
220+
AVERAGE ENTRIES
PER CONTEST
87%
OF CONTESTS RECEIVE
ENTRIES IN 1 HOUR
The Freelancer contest platform gives you access to millions
of talented individuals with the skills to provide you with the
Quick, collaborative and creative
solutions that you need. Whether that be a logo, a design, an
article, or anything in between. There are no limitations to
The contest platform is the ultimate tool to engage with your
what the crowd can do. Generating solutions for the likes of
community to get instant feedback on new ideas. Collaborate
NASA, Airbus, IBM, Deloitte, The US Department of Energy,
with your network through contest share, which invites others
The US Bureau of Reclamation and the National Institute of
to interact with, rate, and award the participants of your contest.
Child Health, the contest platform is a powerful tool to tap
into global talent.
Publicise your contest through polls, which allows you to share
your contest with the public to gather feedback on the best
Imagine having access to thousands of designers at a
ideas. Engage with participants through the Public Clarification
moment's notice, turning your dream into reality, overnight.
This is the power of the Freelancer contest platform, where
Board, which connects you with the talent of the world through
comments to iterate on better designs. In 2020, the contest
new creations are submitted within hours of posting your
platform generated over 13 million ideas to help contest holders
contest, and contests receive on average around 220 entries.
come up with solutions quickly and collaboratively.
FREELANCER LIMITED ANNUAL REPORT 2020 FREELANCE ENTERPRISE
019
FREELANCER ENTERPRISE
Freelancer Enterprise
connects talent with
opportunity, at scale.
$8.5T
OF LOST REVENUE
BY 2030 DUE TO A GLOBAL
SKILLS SHORTAGE
Source: Korn Ferry
https://www.kornferry.com/insights/
articles/talent-crunch-future-of-work
Freelancer Enterprise brings exceptional talent to the world’s largest companies
on demand. Leveraging the power of our platform, organisations can improve
internal workforce utilization and seamlessly access Approved Talent Clouds for
unparalleled quality and scale trusted by the largest organizations in the world.
By 2030, there will be a talent shortage of 85 million people. In this global war
for talent companies need access to an elastic workforce to compete better and
innovate faster. The labour cloud economy on Freelancer Enterprise is how.
IBM, BCG and Amazon are part of the 80% of Fortune 500s who use the platform
to power their growth. The platform frees up an organization’s time and budget
by providing access to the world’s intellectual capital at the fingertips.
Freelancer Enterprise provides transformational programs and API integration to
connect your existing contingent workforce, new flexible talent and full-time staff
into a blended workforce ready for the future.
FREELANCER LIMITED ANNUAL REPORT 2020 FREELANCE ENTERPRISE
Freelancer powers
the workforce of
the future.
318%
HIRING TARGET BEAT BY
$15B MULTINATIONAL
COMPANY
This was a record year for Freelancer Enterprise. In 2020 we
cloud faster. A $17B global BPO company beat their hiring
doubled the pilots launched with Fortune 500 companies,
targets by 318% within a matter of weeks.
with many scaling up to multi-region and multi-workflows by
year end. Adoption of the platform increased and GMV is up
2020 will also hold a record for the size and scale of innovation
67% year on year. Covid has taken a seat in the C-suite and
on our platform. Under the $25M NOIS2 joint NASA tender,
accelerated digital transformation like never before.
Freelancer Enterprise partnered with Arrow Electronics and
Adiona to secure a $365,000 USD power engineering and
Our clients applied our technology and talent to their
$475,000 USD data science contest. Thousands of freelancers
businesses in innovative and unexpected ways. A $30B global
around the world will now get their shot at winning one of the
IT company dispatched engineers in multiple APAC markets,
largest contests ever on Freelancer!
reducing response time by 10% and improving labour costs
by 10-15%. Professional services firms staffed up projects 3x
As diverse and unique as our customer stories sound,
faster at 7x the cost savings compared to traditional agencies.
A $100B company is leveraging thousands of developers to
Freelancer Enterprise is the platform that unites F500s on a
mission to build a diverse workforce for the future: exceptional
scale network effects, enabling their clients to migrate to the
talent at scale, on demand.
020
FREELANCER LIMITED ANNUAL REPORT 2020 FREELANCER MOBILE
The full power of
Freelancer.com on any
browser and any device.
021
FREELANCER MOBILE
Work is no longer restricted to a physical office,
or a computer sitting at a desk.
Freelancer understands the importance of mobile platforms
in the world of remote work. In 2020, we focused our energies
on a complete overhaul of the entire website to provide a
streamlined experience across desktop and mobile. Our
customers can now access a new fully featured responsive
website from the convenience of their mobile devices.
Since this release in July 2020, the Freelancer revenue from
mobile browsers grew by 50.5% thanks to the dramatically
improved user experience.
FREELANCER LIMITED ANNUAL REPORT 2020
WORKING IN THE CLOUD
WORKING IN THE CLOUD
022
We provide a platform
that lets you work the
way you’d like to work.
$332
AVERAGE VALUE OF
HOURLY PROJECTS
IN USD
32
AVERAGE LENGTH
OF ENGAGEMENT
IN DAYS
On Freelancer you can begin a project with a fixed scope and
and transparent hourly rate. You can review the outcomes and
price in mind - the best option for projects that have a well-
billings for the project on a weekly basis, and a summary of all
defined scope and deliverables.
your project’s activity is automatically sent to you.
Alternatively, you can work on an ongoing basis. Payments
Hourly projects are a great choice for building long-term, open-
are based on the freelancer’s time spent working, at a clear
ended working relationships with freelancers.
FREELANCER LIMITED ANNUAL REPORT 2020
FREELANCER API
023
FREELANCER API
Add the power and depth of the
world’s largest global cloud workforce
to your website, app or software with
a Freelancer API integration.
The Freelancer API is the foundation of the Freelancer
Beyond accessing the Freelancer marketplace to increase
ecosystem. Web and mobile applications alike share the same
internal productivity, the Freelancer API may be used to build
backend code and infrastructure which third parties may use to
both B2C and B2B applications. Freelancer took this to heart
power their applications.
in 2020, building a new photo ordering app called Photo
Anywhere. Users simply enter a location and their payment
Organisations looking to adapt to a changing world and
details into the app, and photos of the location are delivered
capitalise on the future of work can directly source talent and
back to them in 24 to 48 hours. This is all enabled by the
expertise through the Freelancer API. The Freelancer API allows
Freelancer API.
workforce automation at scale with unparalleled speed and
savings through elastic cloud labour.
FREELANCER LIMITED ANNUAL REPORT 2020 LOCATION-BASED JOBS AND FIELD SERVICES
The world’s largest marketplace
for online jobs is now the best
marketplace for local jobs.
Not all work takes place at a desk and the Freelancer platform is built to support myriad
location based use cases. From delivery to photography to field services at scale, Freelancer
Local Jobs provides features such as mapping, routing and GPS tracking to allow work to
get done wherever in the world it is required.
As the Freelancer platform matures, new business models are emerging that showcase
the possibilities of being able to hire a global workforce. Photo Anywhere is a new app
that illustrates this. Users simply enter a location and their payment details into the app,
and photos of the location are delivered back to them in 24 to 48 hours. This would not be
possible without the 50.8 million users on the Freelancer marketplace and the Freelancer
Local Jobs infrastructure that supports it.
50.8M+
GLOBAL USERS
100K
CITIES AROUND
THE WORLD HAVE
FREELANCERS IN
OUR NETWORK
LOCATION-BASED JOBS AND FIELD SERVICES
024
FREELANCER LIMITED ANNUAL REPORT 2020 FREELANCER API
025
FREELANCER LIMITED ANNUAL REPORT 2020 FREIGHTLANCER
026
Freight anything, anywhere
with Freightlancer.com
7500+
LICENSED TRANSPORT
OPERATORS
Freightlancer is a combination of a marketplace and management system with
global reach. It’s simplifying the supply chain for freight owners and transport
companies, with major customers in the mining, construction, tunnelling, rail,
oil & gas industries. Powered by the Freelancer network, it also facilitates
rapid metro delivery with the network of 50.8 million freelancers. Freightlancer
facilitates the fast, reliable and cost efficient transport of freight while ensuring a
high standard of compliance.
Major freight owners such as Newcrest Mining and Boart Longyear use
Freightlancer to reduce the cost while assuring the security of freight deliveries
at scale. Transport operators, large and small, trust Freightlancer with their fleet
capacities and use our app to manage freight end to end.
2020
FREELANCER LIMITED ANNUAL REPORT 2020 ESCROW.COM
1.38M
REGISTERED USERS
$5B
USD IN PAID
TRANSACTIONS
22
YEARS LICENCED
027
ESCROW.COM
Secure online payment processing
for the world’s largest online escrow
service since 1999.
Escrow.com was excited to announce
our partnership with eBay in 2020
listing in the United States and was
also rolled out as part of the eBay’s
Providing guidance through the escrow
process our knowledgeable Account
as well as a number of key partners
Luxury Watches Authenticity Guarantee
Management team has been able to
across the domains, IPv4, arts and
program.
marketplace industries ensuring we
support users through tricky domain
purchase through our Concierge
protect both parties of the transactions
Escrow Offer continues to empower
services and Domain Name Holding
during these unprecedented times as
buyers and sellers to negotiate a
as well as supporting motors vehicle
people make more payments online.
price for domain names, cars, boats,
transactions through Title Collection
aircrafts, watches or any high value
and Lien Title Payoff.
Escrow Pay is the simplest way to
items online.
add escrow payments in any website,
mobile app, online store, classified site
Escrow.com also extended our
or marketplace via a single Escrow
API call. This became the only online
regulatory footprint into Alabama which
brings our license coverage to 47,
payment method for eBay Motors
across US states and across the globe.
FREELANCER LIMITED ANNUAL REPORT 2020 ESCROW.COM
Escrow.com is used to secure a wide
range of valuable or complex transactions.
Personal
Protective
Equipment
Intellectual
Property
Domain Names
Electronics
Cars
Boats
Antiques
Airplanes
Motorcycles
Collectables
IPv4
Import / Export
Business
Assets
Network Equipment
Gemstones
& Jewellery
Industrial Equipment
028
Space Station
Deposits
FREELANCER LIMITED ANNUAL REPORT 2020 RECRUITER
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that you’ll always have the perfect talent for the job.
029
RECRUITER
18%
GROWTH IN RECRUITER
PROJECTS IN FY20
18%
GROWTH IN PREFERRED
FREELANCER PROGRAM
FREELANCER LIMITED ANNUAL REPORT 2020
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030
FREELANCER LIMITED ANNUAL REPORT 2020 This shoe
design cost
$60 USD
Real project completed at freelancer.com
Have an idea? Post your project today
and get free quotes!
FREELANCER.COM
032
FREELANCER LIMITED ANNUAL REPORT 2020 This
skateboard
graphic cost
$50 USD
Real project completed at freelancer.com
Have an idea? Post your project today
and get free quotes!
FREELANCER.COM
034
FREELANCER LIMITED ANNUAL REPORT 2020 This package
design cost
$300 USD
Real project completed at freelancer.com
Have an idea? Post your project today
and get free quotes!
FREELANCER.COM
036
FREELANCER LIMITED ANNUAL REPORT 2020 This T-shirt
design cost
$75 USD
Real project completed at freelancer.com
Have an idea? Post your project today
and get free quotes!
FREELANCER.COM
038
FREELANCER LIMITED ANNUAL REPORT 2020 2020 AWARDS
2020
Awards
In terms of awards and recognition, Freelancer.com
won a total of 9 awards and 1 honoree in 2020 including
1 Webby Honoree, 5 Stevie International Business
Awards, and 4 APAC Stevie Awards. Escrow.com
also won a total of 2 awards - all in the 2020 Stevie
International Business Awards.
039
The Webby Awards
Stevie Awards
Organizers hailed the 24th annual Webby Awards’ edition
The Stevie Awards are the world’s premier business awards,
WFH: Webbys From Home with a special focus on those
which were created in 2002 to honor and generate public
using the Internet to respond to the impact of COVID-19.
recognition of the achievements and positive contributions of
The Webby Awards received nearly 13,000 entries
organizations and working professionals worldwide. There are
from 50 states and 70 countries worldwide. From the
seven Stevie Awards programs, each with its own focus, list of
thousands of global entries submitted, fewer than 10%
categories, and schedule; such as the International Business
were selected as Nominees. Although not won an award
Awards that are open to all organizations worldwide, and include
this year, Freelancer.com was recognized by the Webby
categories to honor accomplishments in all aspects of work
Academy as an Official Webby Honoree for the category
of Best Employment Website.
life; and the Asia-Pacific Stevie Awards that are open to all
organizations in the 29 nations of Asia-Pacific region. In 2020,
freelancer.com won a total of 9 Stevie Awards, including 5 Stevie
International Business Awards (IBA) and 4 Asia-Pacific Stevies.
Escrow took out 2 Stevie International Business Awards in total :
1 Gold and 1 Bronze.
FREELANCER LIMITED ANNUAL REPORT 2020 2020 AWARDS
040
Stevie Awards
Stevie International Business Awards (IBA): For Escrow.com, we won Gold
Award for Company of The Year: Financial Services - Small; and Bronze Award
for Most Innovative Company of the Year - Up to 100 Employees. Meanwhile
for Freelancer.com, we won 3 Gold Awards for Communications, Investor
Relations or PR Executive of The Year: Sebastian Siseles; Best Website:
Business or Professional Services; and for Communications Team of The Year.
Freelancer.com also won 1 Silver Award for Matt Barrie as Executive of The
Year - Business or Professional Services; and 1 Bronze Award for Company
of The Year : Business or Professional Services - Large.
Asia Pacific Stevies: We won 3 Silver Awards for Innovative Management
in Technology Industry (more than 100 employees); for Excellence
in Innovation in Technology Industry (more than 100 employees); and
Innovation in Technology Management, Planning, and Implementation
(more than 100 employees); as well as 1 Bronze Award for Most Innovative
Communications Professional of The Year : Helma Kusuma.
FREELANCER LIMITED ANNUAL REPORT 2020
OUR ONLINE ECONOMY
041
Our Online
Economy
This map illustrates the Freelancer
online economy. The pink lines indicate
where projects are being posted by
employers, and the blue lines indicate
where the projects are being performed
by freelancers. Thicker lines indicate
a higher dollar volume of work. White
dots indicate the location of Freelancer’s
users. Edges are sampled data from
awarded projects in November 2020.
FREELANCER LIMITED ANNUAL REPORT 2020 OUR ONLINE ECONOMY
042
FREELANCER LIMITED ANNUAL REPORT 2020 DIRECTORS’ REPORT
Directors’
Report
043
Your Directors submit the financial report of Freelancer
Limited (the Company) for the year ended 31 December
2020. In order to comply with the provisions of the
Corporations Act 2001, the Directors report as follows.
The names and particulars of the directors of the Company
during or since the end of the financial year (Directors) are:
FREELANCER LIMITED ANNUAL REPORT 2020 Matt
Barrie
Executive Chairman
(appointed 10 April 2010)
BE (Hons I) BSc (Hons I)
GDipAppFin MAppFin MSEE
(Stanford) GAICD SEP FIEAust
Founder and Executive Chairman of the Company.
Serial entrepreneur with extensive experience and knowledge
in the technology sector. Previously co-founded and was
CEO of Sensory Networks Inc., a vendor of high performance
network security processors, which was acquired by Intel
Corporation Inc. in 2013.
044
Formerly Adjunct Associate Professor at the Department of
Electrical and Information Engineering at the University of
Sydney. Co-author of over 20 US patent applications.
Qualifications include first class honours degrees in Electrical
Engineering and Computer Science from the University of
Sydney, Masters in Applied Finance from Macquarie University,
Masters in Electrical Engineering from Stanford, California,
Graduate of the Stanford Executive Program at the Graduate
School of Business, Fellow of the Institute of Engineers
Australia and Councillor of the Electrical and Information
Engineering Foundation at the University of Sydney.
Relevant interest in 197,161,429 fully paid ordinary shares,
including a relevant interest in 3,158,998 fully paid ordinary
shares by virtue of having a voting power of over 20% in the
Company, which has a relevant interest as a result of trading
restrictions over shares issued under the Employee Share Plan.
Beneficial interest in 194,002,431 fully paid ordinary shares
(representing 42.81% of issued capital).
Member of the Nomination and Remuneration Committee
and Audit Committee.
FREELANCER LIMITED ANNUAL REPORT 2020 DIRECTORS’ REPORT
Darren
Williams
045
Non-Executive Director
from 1 November 2015.
Executive Director
until 31 October 2015
(appointed 10 April 2010)
BSc (Hons I) PhD
(Computer Science)
Non-Executive Director of Company. Was the Chief
Technology Officer and Executive Director of the
Company until 31 October 2015.
Extensive experience in computer security, protocols,
networking and software. Previously co-founded and was
CTO (and subsequently CEO) of Sensory Networks Inc., a
vendor of high performance network security processors,
which was acquired by Intel Corporation Inc. in 2013.
Previously lectured Computer Science at the University of
Sydney. Author of numerous articles, patents and papers
relating to security technology, software and networking.
Qualifications include first class honours degree in
Computer Science and a Ph.D. in Computer Science
specialising in computer networking from the University
of Sydney.
Beneficial and relevant interest in 10,627,165 fully paid
ordinary shares (representing 2.35% of issued capital).
Member of the Nomination and Remuneration
Committee and Audit Committee.
FREELANCER LIMITED ANNUAL REPORT 2020 Simon
Clausen
Non-Executive Director
(appointed 10 April 2010)
Founding investor and Non-Executive Director of the
Company.
046
Extensive experience in operating and investing in high
growth technology businesses in both Australia and
the United States. Previously founded and was CEO
of WinGuides, which later became PC Tools and was
acquired by Symantec Corporation in October 2008.
Currently the sole director of Startive Ventures, a
specialised technology venture fund that actively
maintains investments in a number of companies
globally.
Relevant interest in 163,658,998 fully paid ordinary
shares, including a relevant interest in 3,158,998 fully
paid ordinary shares by virtue of having a voting power of
over 20% in the Company, which has a relevant interest
as a result of trading restrictions over shares issued
under the Employee Share Plan.
Beneficial interest in 160,500,000 fully paid ordinary
shares (representing 35.42% of issued capital).
Member of the Nomination and Remuneration
Committee and Audit Committee.
FREELANCER LIMITED ANNUAL REPORT 2020 DIRECTORS’ REPORT
Company Secretary
Principal activities
Mr Neil Katz held the position of Company Secretary during and
The principal activity of the consolidated entity (the Group)
at the end of the financial year (appointed 9 March 2012). He has
during the financial year was the provision of an online
been with the Group since 2009 and is also the Chief Financial
outsourcing marketplace and escrow payment services.
Officer.
There were no significant changes in the nature of the principal
activities during the financial year.
REVIEW OF RESULTS AND OPERATIONS
The Group’s loss attributable to equity holders of the Company, after providing for income tax, was nearing breakeven at $646,000
(2019 loss: $1,591,000).
Key Performance Highlights
Year ended 31 December
Financial metrics:
Gross Payment Volume1
Net Revenue2
047
Gross Profit
Gross margin (%)
Operating EBITDA3,4
Operating EBIT3
Operating NPAT3
Operating Cash Flow5
Operational metrics:
New Jobs6 (millions)
Total Jobs Posted (millions)
New Registered Users (excluding Escrow, millions)
Total Registered Users5 (millions)
Notes:
FY20
$m
892
59
49.0
83.3%
(0.4)
(0.7)
(0.5)
7.9
2.2
19.1
8.9
50.8
FY19
$m
788
58
48.5
83.7%
(1.1)
(1.4)
(1.3)
(2.1)
1.9
17
9.1
41.7
% Change
+13%
+1%
+1%
-0.4%
nm
nm
nm
+285%
+17%
+13%
-2%
+22%
1 Gross Payment Volume (GPV) is calculated as the total payments to Freelancer and
Escrow users for products and services transacted through the Freelancer and Escrow
5 From FY19 lease payments in respect of office leases have been accounted for in
accordance with AASB 16 Leases. The impact is that lease payments are are now
websites plus total Freelancer and Escrow revenue. GPV is an unaudited metric.
recorded in the cash flow statement as interest payments, disclosed in operating
Marketplace segment FY20 GPV A$192.1 million (up 5.9% on prior corresponding period),
activities and capital payments, disclosed in financing activities.
Payments segment GPV A$699.7 million (up 15.4% on prior corresponding period).
2 Net Revenue excluding Escrow.com for FY20 was $50.5m (up 0.2% on prior
corresponding period).
3 Excludes non-cash share based payments expense of $192k in FY20 and $329k
in FY19.
4 From FY19 lease expenses in respect of office leases have been accounted for in
accordance with AASB 16 Leases. The impact is that lease expenses are no longer
reflected in the P&L but are brought into account as depreciation on the right of use asset
and interest paid on the corresponding lease liability. Depreciation of $4.5m (FY19:$2.9m)
and finance costs of $1.8m(FY19:$0.2m) relating to office leases (accounted for in
accordance with AASB 16 Leases) are included in the EBITDA calculation.
6 Total Projects and Contests Posted was redefined in January 2016 to Total Jobs Posted
(filtered). Jobs Posted (Filtered) is defined as the sum of Total Posted Projects and Total
Posted Contests, filtered for spam, advertising, test projects, unawardable or otherwise
projects that are deemed bad and unable to be fulfilled.
7 User and project/contest data includes all users and projects/contests from acquired
marketplaces. Prior to May 2009, all data was from acquired marketplaces. Includes
Escrow.com unique users.
FREELANCER LIMITED ANNUAL REPORT 2020 DIRECTORS’ REPORT
FREELANCER.COM
The Company’s revenue is primarily generated from new and
In the year, Freelancer Gross Payment Volume hit an all-
existing users posting and fulfilling projects and contests in the
time record of $192.1 m, which was up 5.9% on the previous
Freelancer marketplace.
corresponding period. The second half of the year ended
stronger with 2H20 GMV hitting an all-time record of $51.8
In FY20, Freelancer ended the year with 50.8 million registered
million (up 17.7%) or AU$71.9m (up 11.6%).
users, adding 8.9 million (up 22%). The number of jobs posted
(filtered) totalled 19.1 million at 31 December 2020, adding 2.2
Moving into FY21, GMV is currently growing at 27.5% in USD
million for the year (up 17%).
on pcp on a 28 day rolling basis (17 February 21).
048
FIG.1
TOTAL REGISTERED USERS AND JOBS (FILTERED) BY YEAR ON FREELANCER.COM
FIG.2
MULTI-YEAR GROSS MARKETPLACE VOLUME (USD)
FREELANCER LIMITED ANNUAL REPORT 2020 DIRECTORS’ REPORT
FREELANCER.COM
Net revenue for Freelancer.com was $50.5 m, which was flat
Also negatively affecting revenue in this segment was Startcon,
on the previous corresponding period. In 1Q20, Freelancer
a conference which was discontinued in FY20. This was a
experienced a negative impact on revenue due to Chinese
$675k drag on revenue, although a positive boost to EBITDA
freelancers having troubles with work continuity during Covid.
of about $600k, as the conference in recent years was not
From 2Q through 4Q20 however, segment revenue was up 10%
operating profitably. We do not see Startcon running again for
on pcp in USD, our primary operating currency.
the foreseeable future.
For the full year, underlying project fee growth was at 9.4% on
Throughout FY20, the product and engineering teams primarily
pcp and core marketplace revenue growth was at 7.1% on pcp,
focused on overhauling the mobile experience of the website.
both beating the headline GPV growth.
In July, we replaced our legacy, standalone mobile website
with our new responsive frontend, and in December we entered
Negatively affecting revenue growth in FY20 was enterprise
beta testing with a new, fully-featured mobile app, built using
services (consulting) revenue, which fell $2.4m to $2.8m,
the same codebase as our responsive frontend and the wider
primarily due to cycling the largest Arrow services work in FY19.
website. We believe this will pay dividends across multiple
The activity within the enterprise division, however, continues to
areas, including a superior mobile experience for customers,
grow strongly. Enterprise GMV (USD) grew 67% in FY20 on pcp.
and faster development times due to heavily reduced
In the year, we also signed a record number of Master Services
redundancy and complexity. After removing the legacy mobile
Agreements with major brands in the technology, aerospace,
web experience, in 2H20 revenue from customers viewing the
telecommunications, field services, professional services,
site in a mobile browser increased by 51.5% on pcp.
advertising, defense and healthcare industries. We also launched
double the number of pilot projects with enterprises around the
world compared to the previous year. Our default agreements do
049
not include a minimum volume commitment.
Of note, we delivered a number of enhancements to Deloitte
MyGigs, a custom talent marketplace. Over 20,000 consultants
have been onboarded and over 100,000 consultant hours logged
In terms of outlook, we have never been in a better position
with regards to product. We are at the tail end of the front end
overhaul work, with most of the product migrated. Mobile web
is now running from the same codebase as desktop (2H20
mobile web fees up 51.5% on pcp since). We expect similarly
for iOS and Android with new apps in beta and full production
imminent. In terms of product development, in FY21 we will
to date. In 2Q21 we will integrate the MyGigs to the Freelancer.
initially be focusing on the core experience, UX, design, API &
com cloud workforce.
collaboration.
Also of note in enterprise in FY20, we jointly won a US$25M
NASA tender, of which the first two task orders successfully
obtained are a US$365,000 power engineering challenge for
the US Bureau of Reclamation hydroelectric power authority
and a US$474,500 data science challenge in child morbidity
prevention for the US National Institute of Child Health.
ESCROW.COM
For the full year 2020, Escrow.com achieved an all-time record
2H20 GPV was an all-time record $275m (up 34.1% on pcp) or
Gross Payment Volume of $699.7m (up 15.4% on pcp), or
AU$379m (up 26.7% on pcp). The last four months of trading
US$486.1 million (up 15.2% on pcp). For the full year, Escrow.
were particularly strong (inclusive of September), with 4Q20
com net revenue was $8.2 million (up 9% on pcp).
Escrow.com GPV of US$156.6 million (up 56.2% on pcp), or
AU$213.6 million (up 45.7% on pcp). Fourth quarter revenue was
AU$2.4m (up 33.4%) or US$1.75m (up 43.3% on pcp).
FREELANCER LIMITED ANNUAL REPORT 2020 DIRECTORS’ REPORT
050
FIG.3
GROSS PAYMENT VOLUME BY QUARTER FOR ESCROW.COM (USD)
In FY20 Escrow.com was chosen as the exclusive escrow
In early FY21 we appointed Raffaela Maiorano as Director
provider for eBay Motors and luxury watches valued at $10,000
of Legal & Compliance for the Group and Money Laundering
and above, as part of eBay’s new Authenticity Guarantee service.
Reporting Officer (MLRO) of Escrow for the United Kingdom
We look forward to announcing further growth in this relationship
Authorised Payments Institution license. Raffaela has 18 years
across multiple verticals throughout FY21.
experience in regulatory compliance, asset management, private
Escrow.com’s FY20 integrations with vehicle marketplaces have
and Australia. She has previously worked at the Royal Bank
put us in a strong position going into FY21. In FY20 motor vehicle
of Scotland, Bank of America Merrill Lynch, Deutsche Asset
GPV (USD) was up 285% on pcp.
Management (UK) and GLG Partners (formerly Societe Generale
equity and capital markets in the UK, Europe, USA, Hong Kong
AM (UK) Limited).
Looking forward into FY21 we see increased demand for
luxury and collectible items. Attention from our new integration
In terms of licensing, we are in the final stages of obtaining
with eBay has led to an increase in the number of jewellery
licenses for the three remaining US states. We have been given
transactions, and we are actively integrating with three additional
verbal approval in Hawaii, conditional on a banner indicating we
marketplaces signed in FY20.
do not transact in real estate escrow. The API application for the
United Kingdom is also in process. We expect that the remaining
Escrow.com’s geographic expansion into Europe with new partner
licenses will be granted in FY21. After that, we will pursue a
marketplaces has driven a 22% increase in Gross Payment
license for the EU and money transmission licenses in the states
Volume in Euros with additional focus on this region in FY21.
where we have escrow licenses.
FREELANCER LIMITED ANNUAL REPORT 2020 DIRECTORS’ REPORT
REVIEW OF FINANCIAL
PERFORMANCE
The Company achieved Net Revenue of $58.8 million in FY20 (up
1.5% on the previous corresponding period), and an all-time record
Gross Payment Volume of $891.8 million (up 13% on the previous
corresponding period). Revenue excluding Escrow.com was $50.5
million (flat on the previous corresponding period). Escrow.com
revenue was $8.3 million (up 9% on the previous corresponding
period).
GPV excluding Escrow.com was an all-time record at $192.1
million (up 5.9% on the previous corresponding period).
051
FIG.4
NET REVENUE FOR THE FREELANCER
GROUP BY FINANCIAL YEAR
FIG.5
GROSS PAYMENT VOLUME (GPV) FOR THE
FREELANCER GROUP BY YEAR
Notes:
1.
2.
3.
Gross Payment Volume (GPV) is calculated as the total payments to Freelancer
or Escrow users for products and services transacted through the Freelancer
or Escrow websites plus Net Revenue. Based on Freelancer’s unaudited
management accounts which have not been subject to an auditor’s review.
Take rate for the Marketplace segment is 3% employer commission and 10%
freelancer commission, which has not changed since 2010.
3. Core Freelancer FY20 GPV of A$192.1m. Escrow FY20 GPV of US$486.1m,
average AUD/USD FX of 0.694708= A$700m
FREELANCER LIMITED ANNUAL REPORT 2020
DIRECTORS’ REPORT
The Company’s gross margin of 83.3% in FY20 decreased
$1.4m in rental income from subleasing expansion space in the
marginally by 0.4% compared to the previous corresponding
new premises (These leases were finalised pre Covid-19).
period (FY19: 83.7%), but remains within a consistent range
since 2011. The Company’s cost of sales predominantly
Overall NPAT (loss) was $(0.6) million in FY20, which included a
consists of transaction costs that are incurred from the various
tax benefit of $0.2 million (FY19: $(1.6) million).
gateways relied upon to process user payments, as well as
various provisions taken for credit card chargebacks and fraud
Cash Flow and Balance Sheet Strength
risks. Cost of sales also includes direct labour costs incurred in
generating enterprise services revenue.
The Company posted a positive operating cash flow of $7.9
The Company reported an Operating NPAT (loss)
excludes $2.7 million (FY19: $3.1 million) of lease payments
of $(0.5) million in FY20 (FY19: $(1.3) million).
associated with office premises, which have been reflected as
million in FY20 up from (FY19 of $2.1 million). Operating cash
Operating NPBT (loss) was $(0.7) million in FY20
(FY19: $(1.4) million)).
finance costs in accordance with AASB 16 Leases.
Trade and other receivables include receivables from various
payment gateways in relation to partially completed transactions
Operating expenses were 1.5% higher than the prior
as well as amounts due from enterprise customers.
corresponding period. Payroll costs, which represent 45% of
operating costs were lower by 2%. As of 31 December 2020,
As at 31 December 2020, the Company held cash and
the company had 419 FTE staff. Occupancy costs rose due to
equivalents of $34.3 million and no net debt, up 7% on FY19.
relocation and expansion of the Sydney office and is offset by
Dividends paid or recommended
Environmental regulations
052
There have been no dividends paid or provided for the financial
The operations of the Group do not involve any activities that
year ended 31 December 2020 (2019: nil).
have a marked influence on the environment. As such, the
Directors are not aware of any material issues affecting the
The Company has established a Dividend Reinvestment Plan
Group or its compliance with the relevant environment agencies
(DRP). The full terms and conditions of the DRP are available
or regulatory authorities.
on the Company’s website, www.freelancer.com.
Significant changes in state of affairs
There have been no significant changes in the state of affairs
for the current financial year.
Subsequent Events
Insurance and indemnification
of Directors and Officers
During the financial year, the Group paid premiums based on
normal commercial terms and conditions to insure all directors,
officers and employees of the Group against the costs and
expenses in defending claims brought against the individual
while performing services for the Group. The premium paid
As at the date of this report, the Directors are not aware of
any circumstance that has arisen since 31 December 2019
has not been disclosed as it is subject to the confidentiality
provisions of the insurance policy.
that has significantly affected, or may significantly affect the
Group’s operations in future financial years, the results of those
The Company has in place Deeds of Indemnity, Insurance and
operations in future financial years, or the Group’s state of
affairs in future financial years.
Access with each of its current Directors and such other officers
that the Directors determine are entitled to receive the benefit of
an indemnity.
Future developments
In future financial years, the Group expects to further its growth
through expansions to other territories organically and by
The Company is an entity to which ASIC Corporations Instrument
acquisition, and forming strategic alliances and partnerships.
2016/191 applies. Accordingly amounts in the financial report
Rounding off of amounts
have been rounded off to the nearest thousand dollars, unless
otherwise stated.
FREELANCER LIMITED ANNUAL REPORT 2020
DIRECTORS’ REPORT
Meetings of Directors
During the financial year five meetings of Directors were held.
The following persons acted as Directors of the Company
Other matters arising during the year were resolved by circular
during the financial year, with attendances to meetings of
resolutions.
Directors as follows:
Director meetings
Audit Committee meetings
Nomination and
Remuneration meetings
Eligible to attend
Attended
Eligible to attend
Attended
Eligible to attend
Attended
R.M. Barrie
S.A. Clausen
D.N.J. Williams
6
6
6
6
6
6
2
2
2
2
2
2
-
-
-
-
-
-
Non-audit services
Details of amounts paid or payable to the auditor for non-audit
services provided during the year by the auditor and its related
parties amounted to $29,000 (2019: $29,000).
Officers of the Company who are
former audit partners of the auditor
There are no officers of the Company who are former audit
partners of Hall Chadwick.
053
The Directors are satisfied that the provision of non-audit
services in the form of tax compliance services during the year
by the auditor (or another person or firm on the auditors’ behalf)
is compatible with the general standard of independence for
auditors imposed by the Corporations Act.
The Directors are of the opinion that the services as disclosed
in Note 21 to the financial statements do not compromise the
external auditor’s independence, based on advice received from
the Audit Committee, for the following reasons:
Auditor’s independence declaration
The auditor’s independence declaration is included on page 58
and forms part of the Directors’ Report for the year ended 31
December 2020.
Shares issued under Employee Share
Plan (ESP)
•
all non-audit services have been reviewed and approved to
No ESP shares have been granted to Directors during the
ensure that they do not impact the integrity and objectivity
financial year. No ESP shares have been granted to Directors
of the auditor; and
since the end of the financial year.
•
none of the services undermine the general principles
relating to auditor independence as set out in Code
of Conduct APES 110 Code of Ethics for Professional
Accountants issued by the Accounting Professional &
Ethical Standards Board, including reviewing or auditing
the auditors own work, acting in a management or decision
making capacity for the Company, acting as advocate for
the Company or jointly sharing economic risks and rewards.
Proceedings on behalf of Company
No proceedings have been brought or intervened in on behalf
of the Company, nor have any applications for leave to do so
been made in respect of the Company, under section 237 of the
Corporations Act 2001.
FREELANCER LIMITED ANNUAL REPORT 2020 DIRECTORS’ REPORT
REMUNERATION REPORT
This audited Remuneration Report for the Group which forms
Non-Executive Director remuneration
part of the Directors’ Report for the financial year ended 31
December 2020, details the nature and amount of remuneration
for each Director and the Executives.
Key management personnel (KMP) comprise:
Fees and payments to Non-Executive Directors reflect the
demands which are made of the Directors in fulfilling their
responsibilities. Non-Executive Director fees are reviewed
annually by the Board. The Constitution of the Company provides
that the Non-Executive Directors of the Company are entitled to
•
•
•
•
R.M. Barrie – Executive Chairman
such remuneration, as determined by the Board, which must not
exceed in aggregate the maximum amount determined by the
S.A. Clausen – Non-Executive Director
Company in general meeting. The most recent determination
was at a General Meeting held on 9 October 2013 where the
D.N.J. Williams – Non-Executive Director
shareholders approved an aggregate remuneration of $300,000.
N.L. Katz – Chief Financial Officer and Company Secretary
by the Company are $25,000 (2018:$25,000) to S.A. Clausen and
Annual Non-Executive Directors’ fees currently agreed to be paid
D.N.J. Williams inclusive of superannuation.
Remuneration Policy
Executive and Executive Director remuneration
The performance of the Group depends upon the quality of
Fixed remuneration consists of base remuneration (which is
its directors and executives. The Group recognises the need
calculated on a total cost basis and includes any fringe benefits
to attract, motivate and retain highly skilled directors and
tax charges related to employee benefits, including motor
executives.
vehicles), as well as employer contributions to superannuation
The Board of Directors, through its Nomination and
funds.
054
Remuneration Committee, accepts responsibility for determining
Executive and Executive Director remuneration levels are
and reviewing remuneration arrangements for the Directors
reviewed annually by the Nomination and Remuneration
and Executives. The Nomination and Remuneration Committee
Committee through a process that considers the overall
assesses the appropriateness of the nature and amount of
performance of the Group. The Executive Directors are not
remuneration of Directors and Executives on a periodic basis by
paid any director fees in addition to their fixed remuneration as
reference to relevant employment market conditions, giving due
Executives.
consideration to the overall profitability and financial resources of
the Group, with the objective of ensuring maximum stakeholder
Performance based remuneration
benefit from the retention of a high-quality Board and executive
team.
Performance based remuneration is at the discretion of the
Nomination and Remuneration Committee. These can take
the form of cash bonuses or invitations to participate in the
Company’s Employee Share Plan (ESP).
FREELANCER LIMITED ANNUAL REPORT 2020 DIRECTORS’ REPORT
Remuneration of Directors and Executives
Remuneration shown below relates to the period in which the Director or Executive was a member of key management personnel.
Amounts below have either been paid out or accrued in the period.
Short-term benefits
Post employment
benefits
Share based
payments
Total
Directors’
fees
Cash salary
and fees
Other
Superannuation
Shares
Non-Executive Directors
$
S.A. Clausen
2020
2019
D.N.J. Williams
2020
2019
Executive Directors
R.M. Barrie
2020
2019
Other KMP
N.L. Katz
2020
2019
Total
2020
2019
055
$
-
-
-
-
$
-
-
-
-
569,096
17,056
569,096
7,289
317,400
16,420
317,400
7,023
25,000
25,000
22,884
22,884
-
-
-
-
47,884
47,884
886,496
886,496
33,476
14,312
$
-
-
2,174
2,174
25,904
25,904
27,600
27,600
55,678
55,678
$
-
-
-
-
-
-
$
25,000
25,000
25,058
25,058
612,056
602,289
46,844
93,422
408,264
445,445
46,844
1,070,378
93,422
1,097,792
The remuneration of key management personnel in the years ended 31 December 2020 and 2019 were 100% fixed,
and there is no link between remuneration and the market price of the Company’s shares.
ESP shares
Details of ESP shares in the Company held directly, indirectly or beneficially, by KMP, including their related parties, is as follows:
2020
Directors
R.M. Barrie
D.N.J. Williams
Other KMP
N.L. Katz
Total
2019
Directors
R.M. Barrie
D.N.J. Williams
Other KMP
N.L. Katz
Total
Balance at the
start of the year
Granted /
issued
Released from
restrictions
Forfeited /
cancelled
Balance at
the end of
the year
Balance of
unvested ESP
shares
Balance of
vested ESP
shares
-
-
-
-
-
-
-
-
-
-
-
-
-
-
685,539
440,539
685,539
440,539
-
-
885,539
885,539
-
-
-
-
-
-
-
-
(200,000)
(200,000)
(440,539)
685,539
(440,539)
685,539
501,790
501,790
183,749
183,749
-
-
-
-
-
-
-
-
-
-
685,539
685,539
232,635
232,635
452,904
452,904
FREELANCER LIMITED ANNUAL REPORT 2020
DIRECTORS’ REPORT
Ordinary share capital
Details of ordinary shares in the Company held directly, indirectly or beneficially, by KMP, including their related parties, is as follows:
2020
Directors
R.M. Barrie1
S.A. Clausen
D.N.J. Williams2
Other KMP
N.L. Katz3
Total
2019
Directors
R.M. Barrie1
S.A. Clausen
D.N.J. Williams2
Other KMP
N.L. Katz3
Total
Balance at the start
of the year
Received as part
of remuneration
Purchase
of shares
Sale of
shares
Balance at the
end of the year
194,696,431
160,350,000
10,758,165
350,000
366,154,596
194,696,431
160,000,000
10,758,165
150,000
365,604,596
-
-
-
-
-
-
-
-
585,500
150,000
-
-
735,500
-
350,000
-
200,000
550,000
195,281,931
160,500,000
10,758,165
350,000
366,890,096
194,696,431
160,350,000
10,758,165
350,000
366,154,596
-
-
-
-
-
-
-
-
-
Loans to directors and key management personnel
056
The following loan balances are outstanding at the reporting
As the ESP is considered in substance a share option, the
date in relation to remuneration arrangements with Executive
ESP shares issued and corresponding loan receivable are
Directors and KMP in respect of shares issued under the
not recognised by the Group in its financial statements. The
Employee Share Plan (ESP).
Directors:
R.M. Barrie
S.A. Clausen
D.N.J. Williams
Other KMP:
N.L. Katz
Total loans to Directors and KMP
ESP shares will not be considered issued to participants until
the corresponding loan has been repaid, at which time there
will be an increase in the issued capital and increase in cash.
Further information relating to the ESP is set out in Note 24 of
the financial statements.
2020
$000
-
-
-
334
334
2019
$000
-
-
-
828
828
¹ 1,279,500 shares as at 31 December 2020 (2019: 1,279,500) are held directly or indirectly by related parties.
² 131,000 shares as at 31 December 2020 (2019: 131,000) are held directly or indirectly by related parties.
³ 40,000 shares as at 31 December 2020 (2019: 40,000) are held directly or indirectly by related parties.
FREELANCER LIMITED ANNUAL REPORT 2020
DIRECTORS’ REPORT
Executive service agreements
The employment terms and conditions of Group Executives and KMP are formalised in service agreements.
Position
Key terms of service agreements
Chief Executive
Officer
•
•
•
•
Term: unspecified.Base remuneration: Reviewed annually by the Nomination and Remuneration Committee.
Bonus entitlements: Determined annually by the Nomination and Remuneration Committee (capped at 50% of the base
remuneration).
Termination notice period: 6 months’ notice or alternatively in Freelancer’s case, payment in lieu of notice.
Restraint of trade period: 12 months.
Other Executives
Other Executives are employed under individual executive services agreements. These establish, amongst other things:
•
•
•
total compensation;
eligibility to participate in the ESP;
variable notice and termination provisions of up to 3 months, or by the Group without notice in the event of serious
misconduct; and
•
restraint and confidentiality provisions.
057
Other transactions with KMP or their related parties
There were no other transactions conducted between the Group and KMP or their related parties, other than those disclosed above
relating to equity, compensation and loans, that were conducted other than in accordance with normal employee, customer or
supplier relationships on terms no more favourable than those reasonably expected under arm’s length dealings with unrelated
persons, apart from related party transactions disclosed in Note 25 of the financial statements.
This concludes the Remuneration Report.
The Directors’ Report, incorporating the Remuneration Report,
is signed in accordance with a resolution of the directors made
pursuant to s298(2) of the Corporations Act 2001.
On behalf of the Directors
Matt Barrie
Chairman
23 February 2021
FREELANCER LIMITED ANNUAL REPORT 2020
058
FREELANCER LIMITED ANNUAL REPORT 2020
CONSOLIDATED STATEMENT
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
Revenue
Cost of sales
Gross profit
Other income
Employee expenses
Administrative expenses
Marketing related expenses
Occupancy expenses
Foreign exchange losses
Depreciation and amortisation expenses
Share based payments expense
Finance costs
Loss before income tax
Income tax benefit
Loss after tax
Exchange differences on translation of foreign operations
059
Total Comprehensive loss for the year
Loss is attributable to:
Owners of Freelancer Limited
Non-controlling interests
Total comprehensive income for the year is attributable to:
Owners of Freelancer Limited
Non-controlling interests
Earnings per share
Basic earnings per share
Diluted earnings per share
Note
5
5
6
6
6
6
6
19
6
7
19
32
32
2020
$000
58,771
(9,786)
48,985
1,561
(21,797)
(11,557)
(10,709)
(316)
(374)
(4,712)
(192)
(1,751)
(862)
216
(646)
(320)
(966)
(646)
-
(646)
(966)
-
(966)
Cents
(0.14)
(0.14)
2019
$000
57,911
(9,455)
48,456
98
(22,295)
(12,764)
(10,080)
(285)
(1,086)
(3,214)
(329)
(219)
(1,718)
127
(1,591)
128
(1,463)
(1,591)
-
(1,591)
(1,463)
-
(1,463)
Cents
(0.35)
(0.35)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
FREELANCER LIMITED ANNUAL REPORT 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
CONSOLIDATED STATEMENT
Note
2020
$000
2019
$000
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Non-current assets
Trade and other receivables
Plant and equipment
Intangible assets
Right of use assets
Other assets
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Borrowings
Current tax liabilities
Provisions
Contract liabilities
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Provisions
Lease liabilities
Contract liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Non-controlling interests
Total equity
8
9
10
9
11
12
13
10
7
14
13
15
7
16
17
7
16
13
17
18
19
34,341
5,593
2,030
41,964
1,003
367
26,457
22,418
517
10,965
61,727
103,691
39,166
5,628
286
87
2,417
586
48,170
5,957
758
19,094
547
26,356
74,526
29,165
38,446
4,329
(13,630)
20
29,165
060
32,014
4,003
1,309
37,326
1,103
482
26,429
26,964
592
5,129
60,699
98,025
36,607
3,248
121
57
2,322
629
42,984
443
1,030
23,134
495
25,102
68,086
29,939
38,446
4,457
(12,984)
20
29,939
The above statement of financial position should be read in conjunction with the accompanying notes.
FREELANCER LIMITED ANNUAL REPORT 2020
CONSOLIDATED STATEMENT
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
Attributable to owners of Freelancer Limited
Contributed
Equity
Share Based
Payments
Balance at 1 January 2019
38,106
Note
$000
$000
4,382
Foreign
currency
translation
reserve
$000
(Accumulated
loses)
Non-
controlling
interests
Total
Equity
$000
$000
$000
(382)
(11,051)
20
31,075
Cumulative adjustment upon change in
accounting policies – AASB 16 Leases
-
-
-
(342)
-
(342)
Balance at 1 January 2019 restated
38,106
4,382
(382)
(11,393)
20
30,733
Loss for the year
Exchange differences on translation of
foreign operations
19
Total comprehensive loss for the year
-
-
-
Transactions with owners in their capacity as owners:
Contributions of equity arising from
repayment of ESP loans
Share based payments
Balance at 31 December 2019
18
24
340
-
38,446
-
-
-
-
329
4,711
-
(1,591)
128
128
-
-
-
(1,591)
-
-
-
-
-
-
-
(1,591)
128
(1,463)
340
329
(254)
(12,984)
20
29,939
061
Attributable to owners of Freelancer Limited
Contributed
Equity
Share Based
Payments
Note
$000
38,446
$000
4,711
Foreign
currency
translation
reserve
$000
(Accumulated
losses)
Non-
controlling
interests
Balance at 1 January 2020
Loss for the year
Exchange differences on translation of
foreign operations
Total comprehensive loss for the year
Transactions with owners
in their capacity as owners:
Share based payments
-
19
24
-
-
-
-
Balance at 31 December 2020
38,446
$000
(254)
(12,984)
-
(646)
(320)
(320)
-
(646)
-
-
-
192
4,903
-
-
(574)
(13,630)
Total
Equity
$000
29,939
(646)
(320)
(966)
192
29,165
$000
20
-
-
-
-
20
The above statement of changes in equity should be read in conjunction with the accompanying notes.
FREELANCER LIMITED ANNUAL REPORT 2020
CONSOLIDATED STATEMENT
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
Note
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Income taxes paid
Net cash inflow from operating activities
31
Cash flows from investing activities
Payments for plant and equipment
Payments for intangible assets
Net cash (outflow) from investing activities
Cash flows from financing activities
Contributions of equity arising from repayment of ESP loans
18
Repayment of lease liabilities
Proceeds from borrowings
Net cash (outflow) / inflow from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of year
8
The above statement of cash flows should be read in conjunction with the accompanying notes.
Notes to the financial statements
2020
$000
58,301
(49,467)
49
(856)
(114)
7,913
(221)
(28)
(249)
-
(2,721)
176
(2,545)
5,119
32,014
(2,792)
34,341
2019
$000
56,972
(54,668)
38
(195)
(91)
2,056
(226)
(1)
(227)
340
(3,091)
-
(2,751)
(922)
33,211
(275)
32,014
062
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
NOTES TO THE FINANCIAL STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020
Contents of the notes to the
consolidated financial statements
NOTE
CONTENTS
PAGE
NOTE
CONTENTS
01.
Reporting Entity
02.
Basis of Preparation
03.
Financial risk management
04.
Operating segments
063
05.
Revenue
06.
Expenses
07.
Income tax
08.
Cash and cash equivalents
064
064
065
068
070
071
072
074
09.
Trade and other receivables
074
10.
Other assets
11.
Plant and equipment
12.
Intangible assets
13.
Leases
14.
Trade and other payables
15.
Borrowings
16.
Provisions
17.
Contract liabilities
18.
Contributed equity
076
076
077
079
081
081
082
083
083
19.
Equity – reserves
20.
Key management personnel
disclosures
21.
Remuneration of auditors
22.
Contingent liabilities
23.
Commitments for expenditure
24.
Share based payments
25.
Reated party transactions
26.
Parent Entity Information
27.
Business Combinations
28.
Interests in controlled entities
29.
Fair value measurements
30.
31.
Events occurring after
the reporting date
Reconciliation of loss after tax to
net cash flow from operating
activities
32.
Earnings per share (EPS)
33.
Other significant
accounting policies
PAGE
084
085
085
086
086
087
090
090
091
092
093
093
093
094
095
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
01. Reporting Entity
Freelancer Limited (the Company) is a company domiciled in
marketplace for services and providing escrow payment
Australia. The address of the Company’s registered office is
services. The separate financial statements of the parent
Level 37, Grosvenor Place, 225 George Street, Sydney, NSW,
entity, Freelancer Limited, have not been presented within this
2000. The consolidated financial statements of the Company
financial report as permitted by the Corporations Act 2001.
as at and for the year ended 31 December 2020 comprise
the Company and its subsidiaries (together referred to as
The consolidated financial statements were authorised for
the Group and individually as Group entities). The Group is a
issue by the Board on 23 February 2021
for-profit entity and primarily is involved in operating an online
02. Basis of Preparation
These general purpose financial statements have been prepared
statements are disclosed in Note 33(g).
in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards
(e) Significant accounting policies
Board and the Corporations Act 2001.
The Directors believe that there are reasonable grounds that the
company is able to pay its debts as and when they fall due. The
Group has a significant cash balance at year end and has projected
a profitable financial year for the period ending 31 December 2021
based on increased revenue and a planned reduction in expenses.
The principal accounting policies adopted in the presentation
of these consolidated financial statements are set out in the
relevant notes. The policies have been consistently applied to
all the years presented, unless otherwise stated.
(f) Rounding of amounts
(a) Compliance with International
Financial Reporting Standards
The Company has applied the relief available to it under ASIC
Corporations Instrument 2016/191. Accordingly, amounts
in the financial statements and Directors’ Report have been
064
The consolidated financial statements of the Group comply
with International Financial Reporting Standards (IFRS) as
issued by the International Accounting Standards Board
(IASB).
rounded off to the nearest $1,000.
(g) New Accounting Standards
(b) Historical cost convention
The consolidated financial statements have been prepared on
the historical cost basis unless otherwise stated in the notes.
Except for the cash flow information, the financial statements
have been prepared on an accrual basis, modified, where
applicable, by the measurement at fair value of selected non-
current assets, financial assets and financial liabilities.
(c) Functional and presentation currency
The Group has not adopted any new or amended Accounting
Standards and Interpretations this year that have had a
material impact on the Group or the Company.
(h) Materiality
These consolidated financial statements have included information
that is deemed to be material and relevant to the understanding of
the financial statements. Disclosure may be considered material
and relevant if the dollar amount is significant due to size or nature,
or the information is important to understand the:
These consolidated financial statements are presented in
• Group’s current year results;
Australian dollars, which is the Company’s functional currency.
(d) Critical accounting estimates
The preparation of financial statements 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 areas involving
a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial
•
impact of significant changes in the Group’s business; or
• aspects of the Group’s operations that are important to
future performance.
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
03. Financial risk management
Financial risk management policies
The Group’s activities expose it to a variety of financial risks:
Risk management is carried out by senior finance executives
market risk (including currency risk), credit risk and liquidity
(Finance) under policies approved by the Board of Directors
risk. The Group’s overall risk management program focuses on
(Board). These policies include identification and analysis of
the unpredictability of financial markets and seeks to minimise
the risk exposure of the Group and appropriate procedures,
potential adverse effects on the financial performance of the
controls and risk limits. Finance identifies, evaluates and
Group. The Group uses different methods to measure different
hedges financial risks within the Group’s operating units.
types of risk to which it is exposed. These methods include
sensitivity analysis in the case of interest rate and other price
risks and ageing analysis for credit risk.
The Group holds the following financial instruments:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
Financial Liabilities
Trade and other payables
Lease liabilities
065
Total financial liabilities
Note
8
9
14
13
2020
$000
34,341
6,596
40,937
39,166
26,382
63,888
2019
$000
32,214
5,106
37,120
36,607
26,382
62,989
The carrying value of the assets and liabilities disclosed in the
Amortised cost is calculated as the amount at which the
table above closely approximates or equals their fair value.
financial asset or financial liability is measured at initial
The carrying amounts of trade receivables and trade and other
recognition less principal repayments and any reduction for
payables are assumed to approximate their fair values due to
impairment, and adjusted for any cumulative amortisation of
their short-term nature.
Initial recognition and measurement
the difference between that initial amount and the maturity
amount calculated using the effective interest method.
Financial assets and financial liabilities are recognised when
The effective interest method is used to allocate interest
the entity becomes a party to the contractual provisions of the
income or interest expense over the relevant period and is
instrument. For financial assets, this is equivalent to the date
equivalent to the rate that exactly discounts estimated future
that the Group commits itself to either purchase or sell the
cash payments or receipts (including fees, transaction costs
asset (i.e. trade date accounting is adopted).
and other premiums or discounts) through the expected life (or
Financial instruments are initially measured at fair value plus
transaction costs, except where the instrument is classified
“at fair value through profit or loss”, in which case transaction
costs are expensed to profit or loss immediately.
when this cannot be reliably predicted, the contractual term)
of the financial instrument to the net carrying amount of the
financial asset or financial liability.
Revisions to expected future net cash flows will necessitate
an adjustment to the carrying amount with a consequential
Classification and subsequent measurement
recognition of an income or expense item in profit or loss.
Financial instruments are subsequently measured at fair
value, amortised cost using the effective interest method, or
The Group does not designate any interests in subsidiaries,
cost. Where available, quoted prices in an active market are
used to determine fair value. In other circumstances, valuation
techniques are adopted.
associates or joint venture entities as being subject to the
requirements of Accounting Standards specifically applicable
to financial instruments.
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
Loans and receivables
Loans and receivables are non-derivative financial assets
When the terms of financial assets that would otherwise have
with fixed or determinable payments that are not quoted in an
been past due or impaired have been renegotiated, the Company
active market and are subsequently measured at amortised
recognises the impairment for such financial assets by taking
cost. Gains or losses are recognised in profit or loss through
into account the original terms as if the terms have not been
the amortisation process and when the financial asset is
renegotiated so that the loss events that have occurred are duly
derecognised.
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets
considered.
(a) Market risk
that have fixed maturities and fixed or determinable payments,
Foreign currency risk
and it is the Company’s intention to hold these investments
The Group operates internationally and is exposed to foreign
to maturity. They are subsequently measured at amortised
exchange risk arising from various currencies.
cost. Gains or losses are recognised in profit or loss through
the amortisation process and when the financial asset is
Foreign exchange risk arises when future commercial
derecognised.
Financial liabilities
transactions and recognised assets and liabilities are
denominated in a currency that is not the entity’s functional
currency. The risk is measured using sensitivity analysis and
Non-derivative financial liabilities other than financial guarantees
cash flow forecasting.
are subsequently measured at amortised cost. Gains or losses
are recognised in profit or loss through the amortisation process
The Group has not entered into forward foreign exchange
and when the financial liability is derecognised.
contracts to protect against exchange rate movements. The
Impairment
Directors are of the view that the cost of hedging the Group’s
short-term foreign exchange exposure outweighs the risk of
At the end of each reporting period, the Group assesses whether
adverse currency movements.
there is objective evidence that a financial asset has been
impaired. A financial asset (or a group of financial assets) is
deemed to be impaired if, and only if, there is objective evidence
of impairment as a result of one or more events (a “loss event”)
having occurred, which has an impact on the estimated future
cash flows of the financial asset(s).
The Group’s exposure to foreign currency exchange risk at the reporting date, expressed in each currency, was as follows:
2020
Currency exposure:
AUD
USD
NZD
GBP
HKD
SGD
PHP
EUR
CAD
INR
Other
Denominated in:
AUD
000’s
USD
000’s
NZD
000’s
Cash
4,244
17,525
Trade receivables
1,735
2,232
Other financial assets
1,726
97
Payables
(285)
(2,625)
145
19
-
-
GBP
000’s
1,261
189
10
(25)
HKD
000’s
SGD
000’s
PHP
000’s
EUR
000’s
CAD
000’s
INR
000’s
AUD
000’s
755
291
-
-
457
23,008
23
-
13
1,414
13,984
(3,530)
948
387
-
-
755
221
8
68,407
27,129
283
223
382
-
(88)
(722)
(15)
User obligations
(2,406)
(17,413)
(183)
(1,351)
(926)
(285)
(2,626)
(2,816)
(1,076)
(63,562)
(386)
Net exposure
5,014
(184)
(19)
84
120
208
32,250
(1,484)
(107)
31,535
204
2019
Currency exposure:
AUD
USD
NZD
GBP
HKD
SGD
PHP
EUR
CAD
INR
Other
Denominated in:
AUD
000’s
USD
000’s
NZD
000’s
GBP
000’s
HKD
000’s
SGD
000’s
PHP
000’s
EUR
000’s
CAD
000’s
INR
000’s
AUD
000’s
066
Cash
2,403
15,565
Trade receivables
1,339
1,705
Other financial assets
1,037
109
Payables
(854)
(1,990)
108
26
-
-
858
144
9
(24)
882
279
-
-
359
18,850
1,393
1,021
298
27
-
14,284
(19)
(3,390)
-
-
975
201
1
58,328
21,287
99
255
278
-
(13)
(1,552)
(13)
User obligations
(2,222)
(15,093)
(173)
(1,059)
(984)
(292)
(2,676)
(2,438)
(840)
(50,767)
(473)
Net exposure
1,703
296
(39)
(72)
177
75
28,089
(747)
342
27,395
(47)
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
The Group had net liabilities of $3,961,000 denominated
The analysis below reflects management’s view of possible
in foreign currencies as at 31 December 2020 (comprising
movements in relevant foreign currencies against the
assets of $32,613,000 less liabilities of $36,574,000). The
Australian dollar in the short term subsequent to 31 December
Group had net assets of $705,000 denominated in foreign
2020. The table summarises the range of possible outcomes
currencies as at 31 December 2019 (comprising assets of
that would affect the Group’s net profit and equity as a
$34,751,000 less liabilities of $34,046,000)
result of foreign currency movements on year end foreign
denominated assets and liabilities.
The impact of potential movements in exchange rates on the profit or loss is as follows:
(Range +5% to -5%)
(Range +5% to -5%)
(Range +5% to -5%)
(Range +5% to -5%)
(Range +5% to -5%)
(Range +5% to -5%)
(Range +5% to -5%)
(Range +5% to -5%)
(Range +5% to -5%)
2020
$000
2019
$000
High
11
1
(7)
(1)
(9)
(42)
112
5
(27)
43
Low
(13)
(1)
8
1
10
46
(124)
(6)
30
(49)
High
35
2
22
(2)
(4)
(52)
56
(7)
(26)
24
Low
(39)
(2)
(24)
2
4
58
(62)
7
29
(27)
AUD to USD
AUD to NZD
AUD to GBP
AUD to HKD
AUD to SGD
AUD to PHP
AUD to EUR
AUD to CAD
AUD to INR
Net movement
Price risk
067
The Group is not exposed to significant equities price risk.
(c) Liquidity risk
Interest rate risk
Liquidity risk management requires the Group to maintain
The Group is not exposed to any significant interest rate risk.
sufficient liquid assets (mainly cash and cash equivalents)
to be able to pay debts as and when they become due and
Cash balances
payable.
As at 31 December 2020 the Group had $34,341,000 (2019:
$32,014,000) held in bank accounts and online wallets. The
The Group manages liquidity risk by maintaining adequate
Group’s cash balances are predominantly held in interest
cash reserves by continuously monitoring actual and forecast
bearing bank accounts. Funds that are excess to short term
cash flows and matching the maturity profiles of financial
liquidity requirements are generally invested in short term
assets and liabilities.
deposits.
(b) Credit risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Group. The maximum exposure to credit risk at the reporting
date to recognised financial assets is the carrying amount, net
of any provisions for impairment of those assets, as disclosed
in the statement of financial position and notes to the financial
statements. The Group does not hold any collateral.
Credit risk is managed by a risk assessment process for all
customers, which takes into account past experience.
Financing arrangements
The Group does not have any borrowing facilities in place at
the reporting date.
Maturities of financial assets
The following table details the Group’s remaining contractual
maturity for its financial instrument liabilities. The table has
been drawn up based on the undiscounted cash flows of
financial liabilities based on the earliest date on which the
financial liabilities are required to be paid. The tables include
both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ
from their carrying amount in the statement of financial
position.
FREELANCER LIMITED ANNUAL REPORT 2020
2020
Note
$000
$000
$000
$000
1 year
or less
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
Remaining
contractual
maturities
$000
NOTES TO THE FINANCIAL STATEMENT
Non-derivatives
Non-interest bearing
Trade Receivables
1,986
1,986
2,064
2,064
5,362
5,362
2,696
2,696
12,108
12,108
Maturities of financial liabilities
The following table details the Group’s remaining contractual maturity for its financial instrument liabilities. The table has been drawn
up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required
to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these
totals may differ from their carrying amount in the statement of financial position.
2020
Non-derivatives
Non-interest bearing
Trade and other payables
Lease liabilities
Total
2019
Non-derivatives
Non-interest bearing
Trade and other payables
Lease liabilities
Total
1 year
or less
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
Note
$000
$000
$000
$000
Remaining
contractual
maturities
$000
14
13
14
13
39,166
5,628
44,794
36,607
3,248
39,855
-
5,519
5,519
-
13,376
13,376
-
199
199
39,166
24,722
63,888
068
-
5,652
5,652
-
14,308
14,308
-
3,174
3,174
36,607
26,382
62,989
Trade and other payables are payable as and when they are due.
The cash flows in the maturity analysis above are not expected to occur significantly earlier than disclosed.
04. Operating segments
Operating segments are reported in a manner consistent with
The CODM assess the performance of the operating segments
the internal reporting provided to the chief operating decision
based on a measure of revenue and operating EBITDA (earnings
maker. These include items directly attributable to a segment
before share based payments, interest, tax, depreciation and
as well as those that can be allocated on a reasonable basis.
amortisation). The accounting policies adopted for internal
Unallocated items comprise mainly corporate assets (primarily
reporting to the CODM are consistent with those adopted in the
the Company’s headquarters), head office expenses, and
financial statements.
income tax assets and liabilities. The Board of Directors are
identified as the chief operating decision makers (CODM).
The Group operates predominantly in Australia, where the
Identification of reportable operating segments
the Group has staff and operations in Philippines, United
The Group is organised into two operating segments: namely
an online marketplace and online payment services. These
segments are based on the internal reports that are reviewed
Kingdom, Argentina, the United States and Canada in addition to
Australia, these geographic operations are considered, based on
internal management reporting and the allocation of resources
and used by the CODM in assessing performance and in
by the Group's CODM, as one geographic segment.
majority of online revenues and expenses are incurred. Although
determining the allocation of resources (AASB 8 para. 5(b)).
The information reported to the CODM is at least on a monthly
basis.
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
Year end 31 December 2020
Online Marketplace
Online Payments
Total
Segment revenue
Segment revenue
Total segment revenue
Segment result
Segment profit / (loss)
Share based payments
Depreciation and amortisation expenses
Interest paid
Loss before income tax
Income tax benefit
Loss for year
Segment Assets
At 31 December 2020
Segment assets
Intergroup eliminations
Deferred tax assets
Intangibles
Total assets
Segment liabilities
At 31 December 2020
Segment liabilities
Intergroup eliminations
Deferred tax liabilities
Total liabilities
069
50,526
50,526
5,868
(192)
(4,483)
(1,740)
(496)
-
63,874
(2,973)
-
-
60,901
8,244
8,244
(75)
-
(229)
(11)
(369)
58,770
58,770
5,793
(192)
(4,712)
(1,751)
(862)
-
216
(646)
6,768
-
-
-
70,642
(2,973)
10,965
25,057
6,768
103,691
(67,140)
(4,402)
(71,542)
-
-
(67,140)
2,973
2,973
-
(1,429)
(5,957)
(74,526)
Year end 31 December 2019
Online Marketplace
Online Payments
Total
Segment revenue
Segment revenue
Total segment revenue
Segment result
Segment profit
Share based payments
Depreciation and amortisation expenses
Loss before income tax
Income tax benefit
Loss for year
Segment Assets
At 31 December 2019
Segment assets
Intergroup eliminations
Deferred tax assets
Intangibles
Total assets
Segment liabilities
At 31 December 2019
Segment liabilities
Intergroup eliminations
Deferred tax liabilities
Total liabilities
50,446
50,446
1,921
(329)
(2,984)
(1,392)
-
65,405
(2,898)
-
-
62,507
(66,183)
-
-
7,563
7,563
96
-
(230)
(326)
-
5,577
-
-
-
5,577
(4,574)
2,898
-
58,009
58,009
1,825
(329)
(3,214)
(1,718)
127
(1,591)
70,982
(2,898)
5,128
25,028
98,240
(70,757)
2,898
(443)
(66,183)
(1,676)
(68,302)
NOTES TO THE FINANCIAL STATEMENT
05. Revenue
The Company’s net revenues result from transaction and other
appropriate measure of progress for the completion of the
fees generated in its online marketplaces and in providing online
performance obligation. The cost-to-cost method is based on
escrow services. Revenues are recognised when evidence of
the proportion of costs incurred for work performed to date
an arrangement exists, the fee is fixed and determinable, no
relative to the estimated total contract costs.
significant obligation remains and collection of the receivable is
reasonably assured. Amounts disclosed as revenue are net of
refunds and amounts collected on behalf of third parties. Where
services have not been provided but the Company is obligated
to provide the services in the future, revenue recognition is
deferred. Provision for doubtful accounts and transaction
losses are made at the time of revenue recognition based on
the Company’s historical experience. The provision for doubtful
accounts and transaction losses are recorded as charges to
cost of sales.
A customer is billed for the project services when a certain
series of milestones have been achieved. A contract asset is
recognised for revenue recognised but not yet billed due to
the milestone billing arrangement. Once an invoice is issued,
the corresponding contract asset is reclassified to trade
receivables. A contract liability is recognised if the milestone
payment exceeds the revenue recognised to date under the
cost-to-cost method. No significant financing components have
been identified in the contracts with customers, as the period
between the payment and the recognition of revenue (cost-to-
Revenue is recognised for the major business activities as
cost method) is always less than 12 months.
follows:
Marketplace Services
The Group enters into short-term contracts with customers for
marketplace services. Such contracts are entered into before
the delivery of the service which is paid in advance of receipt
of the service. The performance obligation is the delivery of the
service which is recognised by the system controls. The system
does not draw fees from the customer until the delivery of the
service. Therefore, revenue is recognised at a point in time upon
delivery of the service when the system recognizes that the
service has completed. No rebates or volume discounts are
provided to customers.
Enterprise Services
The enterprise services revenue stream focuses on projects
negotiated with customers to meet their needs on short to
long-term contracts. Revenue is recognised when milestones
as determined in the contact are completed. Under AASB
15: Revenue from Contracts with Customers, this happens
over time. The Group has an enforceable right to payment for
work completed to date and therefore, revenue is recognised
over time. The Group considers the cost-to-cost method an
Interest income
Interest revenue is recognised using the effective interest rate
method, which, for floating rate financial assets, is the rate
inherent in the instrument.
Government grants
Government grants are recognised at fair value where there
is reasonable assurance that the grant will be received and all
grant conditions will be met. Grants relating to expense items
are recognised as income over the periods necessary to match
070
the grant to the costs it is compensating.
Sublease rent
Sublease rental income of office space is recognised on a
straightline basis over the term of the sub-lease. The Company
recognises the right-of-use asset resulting from the head lease.
Refer to Note 13.
All revenue is stated net of the amount of goods and services
tax (GST) and Valued Added Tax (VAT). The timing of revenue
recognition is when the products and services are transferred to
customers.
Sales revenue
Marketplace and payment services
Payment services
Enterprise services
Other revenue
Interest income
Government grants
Other
Total revenue
2020
$000
47,742
8,244
2,785
58,771
44
1,375
142
1,561
2019
$000
45,171
7,563
5,177
57,911
39
-
59
98
60,332
58,009
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
06. Expenses
Loss before income tax benefit includes the following specific net losses and expenses:
2020
$000
20,305
2,030
22,335
6,411
1,237
1,240
931
710
1,028
11,557
9,019
830
860
10,709
223
4,489
-
4,712
161
161
374
1
1,750
2019
$000
21,035
2,331
23,366
5,822
1,171
1,181
675
834
3,081
12,76
8,491
1,198
391
10,080
282
2,909
23
3,214
285
285
1,353
24
195
2 From FY19 lease expenses in respect of office leases have been accounted for in
accordance with AASB 16 Leases. The impact is that lease expenses are no longer
reflected in the P&L and are brought into account as depreciation on the right of use asset
and interest paid on the corresponding lease liability.
Employee expenses
Wages and salaries (including superannuation)
Other employment costs
Total employee expenses1
Administrative expenses
Hosting
Subscriptions
Professional fees
Insurances
Office Expenses
Other
Total Administrative expenses
Marketing related expenses
Search marketing
Advertising
Other marketing costs
Total marketing related expenses
071
Depreciation and amortization
Plant and equipment
Right of use assets 2
Leasehold improvements
Total depreciation and amortisation expenses
Rental expense relating to operating leases 2
Plant and equipment
Total rental expense relating to operating leases
Net foreign exchange losses
Finance costs
Interest expense
Interest expense on lease liability2
1 Inclusive of employee expenses included in cost of sales
Total employee benefits expenses are inclusive of:
Short-term obligations
Employee benefits that are expected to be settled within 12
months have been measured at the amounts expected to
be paid when the liabilities are settled, plus related on-costs.
The liability for annual leave is recognised in the provision
for employee benefits. All other short-term employee benefit
obligations are presented as payables.
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
Other long–term employee benefit obligations
Short-term incentive plans
Employee benefits payable later than 12 months have been
The Group recognises a liability and an expense for bonuses
measured at the present value of the estimated future cash
payable under short term incentive plans. Short term
outflows to be made for those benefits. In determining the
incentive plans are based on the achievement of targeted
liability, consideration is given to employee wages increases
performance levels that may be set at the beginning of each
and the probability that the employee may satisfy any vesting
financial year. The Group recognises a liability to pay out short
requirements. Those cash flows are discounted using market
term incentives when contractually obliged based on the
yields on national government bonds with terms to maturity
achievement of the stated performance levels, or where there
that match the expected timing of cash flows attributable to
is a past practice that has created a constructive obligation.
employee benefits.
07. Income tax
The income tax expense or revenue for the period is the tax
amount of its assets and liabilities.
payable on the current period’s taxable income based on the
applicable tax rate for each jurisdiction adjusted by changes
Deferred tax is measured at the tax rates that are expected to be
in deferred tax assets and liabilities attributable to temporary
applied to temporary differences when they reverse, using tax
differences and to unused tax losses.
rates enacted or substantively enacted at the reporting date.
The current income tax charge is calculated on the basis of
Deferred tax assets and liabilities are offset if there is a legally
the tax laws enacted or substantively enacted at the end of
enforceable right to offset current tax liabilities and assets,
the reporting period in the countries where the Company’s
and they relate to taxes levied by the same tax authority on the
subsidiaries operate and generate taxable income. Management
same taxable entity, or on different tax entities, but they intend
periodically evaluates positions taken in tax returns with respect
to settle current tax liabilities and assets on a net basis or their
072
to situations in which applicable tax regulation is subject to
tax assets and liabilities will be realised simultaneously.
interpretation. It establishes provisions where appropriate on
the basis of amounts expected to be paid to the tax authorities.
A deferred tax asset is recognised for unused tax losses, tax
Deferred tax is recognised in respect of temporary differences
that it is probable that future taxable profits will be available
between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is not recognised for:
against which they can be utilised. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent
that it is no longer probable that the related tax benefit will be
credits and deductible temporary differences, to the extent
•
•
•
realised.
temporary differences on the initial recognition of
assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor
taxable profit or loss
temporary differences related to investments in
subsidiaries, associates and jointly controlled entities to
In determining the amount of current and deferred tax the
Group takes into account the impact of uncertain tax positions
and whether additional taxes and interest may be due. This
assessment relies on estimates and assumptions and may
involve a series of judgements about future events. New
information may become available that causes the Group to
the extent that the Group is able to control the timing of
change its judgement regarding the adequacy of existing tax
the reversal of the temporary differences and it is probable
liabilities; such changes to tax liabilities will impact the tax
that they will not reverse in the foreseeable future
expense in the period that such a determination is made.
taxable temporary differences arising on the initial
recognition of goodwill.
The measurement of deferred tax reflects the tax consequences
that would follow the manner in which the Group expects, at
the end of the reporting period, to recover or settle the carrying
The Company and its wholly-owned Australian resident entities
are part of a tax consolidated group. As a consequence, all
members of the tax-consolidated group are taxed as a single
entity. The head entity within the tax-consolidated group is
Freelancer Limited.
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
(a) Income tax
Current tax
Deferred tax
Income tax (benefit)
Deferred income tax expense included in income tax benefit comprises:
Decrease / (Increase) in deferred tax assets
(Decrease) / Increase in deferred tax liability
Total deferred income tax
(b) Numerical reconciliation of income tax benefit to prima facie income tax payable
Loss from ordinary activities before income tax expense
Tax at the Australian rate of 30%
Tax effect amounts which are not deductible / (taxable) in calculating taxable income:
R&D tax incentive
Difference in tax rate
Share based payments
Over provision in prior years
Future benefit of foreign losses
Timing differences not recognized as deferred tax asset
Other non-allowable items
Income tax (benefit)
(c) Deferred tax assets
073
The balance comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Employee benefits
Provision for user disputes & refunds
Prepayments
Foreign exchange losses
Provision for impairment of receivables
Audit fees
Lease liabilities
Future benefit of tax losses
Future benefit of foreign tax losses
Total amounts recognised in profit or loss
Net deferred tax assets
Movements:
Opening balance at beginning of year
Opening balance adjustment upon change in accounting policies – AASB 16
(Debited) / Credited to the profit or loss statement
Exchange differences
Closing balance at end of year
(e) Deferred tax liabilities
The balance comprises temporary differences attributable to:
Foreign exchange gains
Right of use assets
2020
$000
134
(350)
(216)
(5,885)
5,535
(350)
(862)
(258)
(11)
(136)
58
52
-
99
(20)
(216)
288
162
(9)
34
1,055
43
6,746
2,370
276
10,965
10,965
5,129
-
5,885
(49)
10,965
-
5,957
2019
$000
107
(234)
(127)
333
(567)
(234)
(1,718)
(515)
(26)
115
99
31
117
22
30
(127)
303
175
(9)
285
1,063
46
398
2,492
376
5,129
5,129
4,674
788
(333)
-
5,129
135
308
FREELANCER LIMITED ANNUAL REPORT 2020 Net deferred tax liabilities
Movements:
Opening balance at beginning of year
Opening balance adjustment upon change in accounting policies – AASB 16
(Debited) / Credited to the profit or loss statement
Exchange differences
Closing balance at end of year
(f) Current tax assets
Current tax assets
(g) Current tax liabilities
Current tax liabilities
(h) Franking credits
Franking credits available at the reporting date based on a tax rate of 30%
NOTES TO THE FINANCIAL STATEMENT
2020
$000
5,957
443
-
5,535
(21)
5,957
-
87
66
2019
$000
443
246
764
(567)
-
443
-
57
66
Freelancer Limited and its wholly-owned Australian entities elected to form an income tax consolidated group as of 12 April 2010.
08. Cash and cash equivalents
For cash flow statement presentation purposes, cash and
readily convertible to known amounts of cash and which are
cash equivalents includes cash on hand, deposits held at
subject to an insignificant risk of changes in value, and bank
call with banks, other short term highly liquid investments
overdrafts.
with original maturities of three months or less that are
074
Current
Cash at bank and on hand
Term deposits
Total cash and cash equivalents
2020
$000
31,638
2,703
34,341
2019
$000
31,210
804
32,014
09. Trade and other receivables
Trade receivables are recognised initially at fair value and
considered indicators that the trade receivable is impaired.
subsequently measured at amortised cost using the effective
In addition, the trade receivables balances are considered for
interest method, less provision for impairment. This provision
credit notes that are expected to be raised against individual and
includes amounts that are not considered to be recoverable from
collective balances.
debtors and amounts that are expected to be credited to debtors.
Trade receivables are generally due for settlement no more than
The Group applies the simplified approach to providing for
30 days from the date of recognition. They are presented as
expected credit losses prescribed by AASB 9, which permits the
current assets unless collection is not expected for more than 12
use of the lifetime expected loss provision for all trade receivables.
months after the reporting date.
To measure the expected credit losses, trade receivables have
been grouped based on shared credit risk characteristics and the
Collectability of trade receivables is reviewed on an ongoing basis.
days past due. The loss allowance provision as at 31 December
A provision for impairment of trade receivables is established
2020 is determined as follows; the expected credit losses also
when there is objective evidence that the Group will not be able
incorporate forward-looking information.
to collect all amounts due according to the original terms of
the receivables. Significant financial difficulties of the debtor,
probability that the debtor will enter bankruptcy or financial
reorganisation, and default or delinquency in payments are
The "amounts written off" are all due to customers declaring
bankruptcy, or term receivables that have now become
unrecoverable.
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
Current
Trade receivables
Payment gateway receivables
Less: provisions for impairment of receivables
Current trade receivables net of provisions for impairment
Other receivables
Total current trade and other receivables
Non-Current
Payment gateway receivables
Total trade and other receivables
(a) Provision for impaired trade receivables
Opening balance
Increase / (Decrease) in provisions for impairment during the year
Exchange differences
Closing balance
(b) Ageing of current trade receivables
1 – 30 days
31 – 60 days
61 – 90 days
90+ days
Provision for impairment
075
Total trade receivables net of provision for impairment
(c) Expected losses
2020
Expected loss rate
Gross carrying amount
Loss allowing provision
2019
Expected loss rate
Gross carrying amount
Loss allowing provision
2020
$000
7,125
1,711
(3,518)
5,318
275
5,593
1,003
6,596
3,543
294
(319)
3,518
3,596
891
1,649
2,700
(3,518)
5,318
31 – 60
days
$000
95.76%
2,586
2,586
1 – 30
days
$000
0.09%
3
3
31 – 60
days
$000
31 – 60
days
$000
-
-
-
-
-
-
1 – 30
days
$000
31 – 60
days
$000
31 – 60
days
$000
31 – 60
days
$000
1.02%
0.28%
0.45%
82.73%
27
27
2
2
4
4
2,575
2,575
2019
$000
5,725
1,704
(3,543)
3,886
117
4,003
1,103
5,106
2,814
737
(8)
3,543
2,685
769
862
3,113
(3,543)
3,886
31 – 60
days
$000
95.86%
2,589
2,589
31 – 60
days
$000
84.48%
2,608
2,608
FREELANCER LIMITED ANNUAL REPORT 2020 10. Other assets
Current
Prepayments
Other
Total current other assets
Non-current
Security deposits
Total non-current other assets
Total other assets
NOTES TO THE FINANCIAL STATEMENT
2020
$000
1,959
71
2,030
517
517
2,547
2019
$000
1,292
17
1,309
592
592
1,901
11. Plant and equipment
Plant and equipment is stated at historical cost less
The carrying amount of plant and equipment is reviewed
depreciation, amortisation and impairment losses. Historical
annually by directors to ensure it is not in excess of the
cost includes expenditure that is directly attributable to the
recoverable amount from these assets. The recoverable
acquisition of the items.
amount is assessed on the basis of the expected net cash
flows that will be received from the asset’s employment and
subsequent disposal. The expected net cash flows have not
been discounted in determining recoverable amounts.
076
Depreciation of all fixed assets is calculated using the straight-line method to allocate their cost,
net of their residual values, over their estimated useful lives, as follows:
•
•
•
•
Fixtures and fittings
4 - 5 years
Office and computer equipment
4 - 5 years
Software
3 years
Leasehold improvements
shorter of either the unexpired period of the lease
or the estimated useful lives of the improvements
The assets’ residual values and useful lives are reviewed, and
Gains and losses on disposals are determined by comparing
adjusted if appropriate, at the end of each reporting period.
proceeds with the carrying amount. These gains or losses are
An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater
recognised in the profit and loss in the period in which they
arise. When revalued assets are sold, amounts included in the
revaluation surplus relating to that asset are transferred to
than its estimated recoverable amount.
retained earnings.
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
Non-current
Office and computer equipment – at cost
Accumulated depreciation
Carrying value of office and computer equipment
Fixtures and fittings – at cost
Accumulated depreciation
Carrying value of fixtures and fittings
Software – at cost
Accumulated depreciation
Carrying value of software
Leasehold improvements – at cost
Accumulated amortisation
Carrying value of leasehold improvements
Total carrying value of plant and equipment
2020
$000
2,566
(2,216)
350
497
(481)
16
-
-
-
451
(450)
1
367
Reconciliations
Reconciliations of the carrying amount of plant and equipment and leasehold improvements
at the beginning and end of the current financial year are set out below:
077
Balance at 1 January 2019
Additions
Disposals
Depreciation and amortisation
Balance at 31 December 2019
Additions
Disposals
Depreciation and amortisation
Balance at 31 December 2020
Office and
computer
equipment
$000
481
217
(245)
453
481
200
-
(202)
351
Fixtures and
fittings
Software
Leasehold
improvements
$000
$000
51
12
(35)
28
51
8
-
(21)
15
1
-
(1)
-
1
-
-
-
-
$000
24
-
(23)
1
24
-
-
-
1
2019
$000
2,619
(2,166)
453
527
(499)
28
19
(19)
-
768
(767)
1
482
Total
$000
557
229
(304)
482
557
208
-
(223)
367
12. Intangible assets
Goodwill
Domain Names
Goodwill is initially recorded at the amount by which the
Domain names are valued at cost of acquisition. Domain
purchase price for a business combination exceeds the fair
names are tested for impairment annually or more frequently
value attributed to the interest in the net fair value of identifiable
if events or changes in circumstances indicate that it might
assets, liabilities and contingent liabilities acquired at date of
be impaired, either individually or at the cash generating unit
acquisition. Goodwill is not amortised. Instead goodwill is tested
level. Useful lives are also examined on an annual basis and
for impairment annually or more frequently if events or changes
adjustments, where applicable, are made on a prospective
in circumstances indicate that it might be impaired and is
basis.
carried at cost less accumulated impairment losses.
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
Intellectual Property
Trademarks
Intellectual property is valued at cost of acquisition. Intellectual
Trademarks are valued at cost of acquisition and are
property is tested for impairment annually or more frequently
amortised on a straight-line basis over the period in which the
if events or changes in circumstances indicate that it might
benefits are expected to be realised. Trademarks are tested
be impaired, either individually or at the cash generating unit
for impairment where an indicator of impairment exists, either
level. Useful lives are also examined on an annual basis and
individually or at the cash generating unit level. Useful lives are
adjustments, where applicable, are made on a prospective
also examined on an annual basis and adjustments, where
basis.
applicable, are made on a prospective basis.
Non Current
Domain names – at cost
Accumulated impairment
Carrying value of domain names
Intellectual property – at cost
Accumulated impairment
Carrying value of intellectual property
Goodwill
Accumulated impairment
Carrying value of goodwill
Total carrying value of intangible assets
2020
$000
4,938
(28)
4,910
2,198
-
2,198
19,349
-
19,349
26,457
26,429
Reconciliations
Reconciliations of the carrying amount of intangible assets
at the beginning and end of the current and previous financial year are set out below:
Balance at 1 January 2019
Additions
Adjustment to goodwiil from aquisition
Impairment
Amortisation
Domain
names
$000
4,882
-
-
-
-
Intellectual
property
$000
2,198
-
-
-
-
Goodwill
$000
19,349
-
-
-
-
2019
$000
4,910
(28)
4,882
2,198
-
2,198
19,349
-
19,349
26,429
26,429
Total
$000
26,429
-
-
-
-
078
Balance at 31 December 2019
4,882
2,198
19,349
26,429
Additions
Impairment
Amortisation
28
-
-
-
-
-
-
-
-
28
-
-
Balance at 31 December 2020
4,910
2,198
19,349
26,457
The Directors have determined the useful life of domain names
The recoverable amount of the Group’s intangible assets
is indefinite and subject to an annual test for impairment of the
has been determined by a value-in-use calculation using a
fair value of the domain names. The Directors have assessed
discounted cash flow model, based on a 12 month projection
the recoverability of domain names, intellectual property and
period for the Group approved by management and extrapolated
goodwill based on value in use calculations.
for a further 5 years with a discounted terminal value.
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
Goodwill and other intangibles are allocated to cash-generating
units which are based on the Group’s reporting segments:
Online marketplace
Online payments
Total
2020
$000
14,808
11,649
26,457
2019
$000
14,780
11,649
26,429
The recoverable amount of each cash-generating unit above is
extrapolated using a 2% terminal growth rate. The cash flows
determined based on value-in-use calculations. Value- in-use is
are discounted based on management’s estimate of the time
calculated based on the present value of cash flow projections
value of money and the Group’s weighted average cost of
over a 5 year period with the period extending beyond 5 years
capital adjusted for the risk free rate and the volatility of the
share price relative to market movements.
The following key assumptions were used in the value-in-use calculations:
Online marketplace
Online payments
CAGR
Rate
15.8%
14.4%
Discount
Rate
15%
15%
Management has based the value-in-use calculations on
Discount rates are pre-tax and are adjusted to incorporate
budgets for each reporting segment. These budgets use
risks associated with a particular segment.
historical weighted average growth rates to project revenue.
079
Costs are calculated taking into account historical gross
Based on the above, management is satisfied that there are
margins as well as estimated weighted average inflation
no indicators of impairment to the current carrying value of
rates over the period, which are consistent with inflation rates
intangible assets.
applicable to the locations in which the segments operate.
13. Leases
The Group as lessee
At inception of a contract, the Group assesses if the contract
– fixed lease payments less any lease incentives;
contains or is a lease. If there is a lease present, a right- of-use
asset and a corresponding lease liability are recognised by the
– variable lease payments that depend on an index or
Group where the Group is a lessee. However, all contracts that
rate, initially measured using the index or rate at the
are classified as short-term leases (ie leases with a remaining
term of 12 months or less) and leases of low value assets are
commencement date;
recognised as operating expenses on a straight-line basis over
– the amount expected to be payable by the lessee under
the term of the lease.
residual value guarantees;
Initially the lease liability is measured at the present value of
– the exercise price of purchase options, if the lessee is
the lease payments still to be paid at the commencement
reasonably certain to exercise the options; and
date. The lease payments are discounted at the interest rate
implicit in the lease. If this rate cannot be readily determined,
– payments of penalties for terminating the lease, if the lease
the Group uses the incremental borrowing rate.
term reflects the exercise of an option to
Lease payments included in the measurement of the lease
The right-of-use assets comprise the initial measurement of
liability is as follows:
the corresponding lease liability, any lease payments
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
made at or before the commencement day and any initial
Options to Extend or Terminate
direct costs. The subsequent measurement of the right-
of- use assets is at cost less accumulated depreciation and
The options to extend or terminate are contained in several
impairment losses.
of the Group’s property leases. These clauses provide the
Group opportunities to manage leases in order to align with its
Right-of-use assets are depreciated over the lease term or
strategies. All of the extension or termination options are only
useful life of the underlying asset, whichever is the shortest.
exercisable by the Group. The extension options or termination
Where a lease transfers ownership of the underlying asset
included in the calculation of the right-of-use asset.
options which were probable to be exercised have been
or the cost of the right-of-use asset reflects that the Group
anticipates to exercise a purchase option, the specific asset is
depreciated over the useful life of the underlying asset.
The Group's lease portfolio comprises commercial leases for
office property. As at 31 December 2020 these leases had
remaining lives ranging from 1 month up to 78 months.
(i) AASB 16 related amounts recognised in the balance sheet
Right of use assets
Leased office property:
Opening balance
Addition to right-of-use asset
Depreciation expense for the year ended
Exchange differences
Net carrying amount
Lease liabilities
Current
Non – current
Total
(ii) AASB 16 related amounts recognised in the statement of profit or loss
Depreciation charge related to right-of-use assets
Interest expense on lease liabilities (under finance costs)
(iii) AASB 16 related amounts recognised as cash outflows in the statement of cash
Interest expense on lease liabilities (under finance costs)
Repayment of lease liabilities
2020
$000
26,964
(12)
(4,489)
(45)
22,418
5,628
19,094
24,722
2020
$000
4,489
1,751
2020
$000
856
1,751
080
2019
$000
-
29,845
(2,909)
28
26,964
3,248
23,134
26,382
2019
$000
2,909
195
2019
$000
195
3,091
FREELANCER LIMITED ANNUAL REPORT 2020 NOTES TO THE FINANCIAL STATEMENT
14. Trade and other payables
These amounts represent liabilities for goods and services
when they are due. Trade and other payables are presented as
provided to the Group and amounts outstanding to users of
current liabilities unless payment is not due within 12 months
the Company’s websites at the end of financial year which are
from the reporting date.
unpaid. The amounts are unsecured and are payable as and
Current
Trade payables
Sundry payables and accrued expenses
User obligations
Total trade and other payables
15. Borrowings
081
Current
Working capital loan
Payroll protection loan
Total borrowings
2020
$000
3,172
800
35,194
39,166
2020
$000
121
165
286
2019
$000
3,155
785
32,677
35,898
2019
$000
121
-
121
The working capital loan has been provided from non-
The payroll protection loan has been provided from the US
controlling shareholders of Freightlancer Holdings Pty Limited
Small Business Administration to support US businesses
to provide working capital funding. The loan is unsecured,
during COVID-19. The loan is unsecured, interest free and has
interest free and has no fixed date of repayment.
no fixed date of repayment. If certain conditions are met, this
loan will be eligible for forgiveness.
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
16. Provisions
Provisions are recognised when the Company has a legal
A provision for onerous contracts is recognised when the
or constructive obligation, as a result of past events, for
expected benefits to be derived by the Group from a contract
which it is probable that an outflow of economic benefits will
are lower than the unavoidable cost of meeting the obligations
result, and that outflow can be reliably measured. Provisions
under the contract. The provision is stated at the present value
recognised represent the best estimate of the amounts
of the future net cash outflows expected to be incurred in
required to settle the obligation at reporting date.
respect of the contract.
Current
Provision for user disputes and refunds
Employee benefits
Provision for indirect taxes
Provision for penalties*
Total current provisions
Non-current
Make-good provisions
Employee benefits
Total non-current provisions
Total provisions
2020
$000
539
1,390
216
272
2,417
431
327
758
3,175
2019
$000
538
1,265
103
370
2,322
720
310
1,030
3,352
* At the time of the acquisition of the Escrow.com business in November 2015, it held eight money transmission and/or escrow licences in the US. After the acquisition, the Company
has pursued an aggressive program of applying for money transmission and/or escrow licenses in the remaining states in the US. At 31 December 2020, forty four licences were in
place. As part of this process, regulatory penalties may be payable for unlicensed activity (substantially pre- acquisition). The provision represents an estimate
of probable penalties.
082
Movements
Balance at 1 January 2019
Additional provisions
Amounts used
Unused amounts reversed
Foreign exchange differences
Balance at 31 December 2019
Balance at 1 January 2020
Additional provisions
Amounts used
Unused amounts reversed
Foreign exchange differences
Balance at 31 December 2020
Provision for
User Disputes/
Refunds
$000
Provision
for Indirect
Taxes
Employee
Benefits
Provision for
Penalties
Provision for
Make-good
Total
Provisions
$000
$000
$000
$000
$000
252
270
(353)
-
(66)
103
103
802
(654)
-
(35)
216
1,351
864
(409)
(244)
13
1,575
1,577
683
(259)
(29)
(29)
1,716
256
482
(57)
(86)
(11)
584
584
7
-
-
(53)
538
398
-
-
(28)
-
370
370
-
(14)
(52)
(32)
272
300
994
-
(579)
5
720
720
-
-
(278)
(11)
431
2,557
2,610
(819)
(937)
(59)
3,352
3,352
1,492
(927)
(584)
(160)
3,173
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
17. Contract liabilities
Refer to Note 5 for the accounting policy on marketplace and payment services revenue recognition policy.
Revenue is recognised when these conditions are met.
Amounts received in advance of delivery for services
Total contract liabilities
Current
Non-current
Total contract liabilities
There were no significant changes in the contract liability balances during the 2020 year.
2020
$000
1,133
1,133
586
547
1,133
18. Contributed equity
(a) Share capital
083
Ordinary shares
Fully paid
Total share capital
(b) Movements in ordinary share capital
Note
2020
Number
2019
Number
18(b)
453,123,619
452,756,722
2020
$000
38,446
38,446
Reconciliation to 31 December 2019
Number of shares
Average price
Balance at 1 January 2019
Issue / (cancellation) of ordinary shares:
Issue of ESP shares1
Buy-back and cancellation of ESP shares
Contributed equity arising from repayment of ESP loans
Balance at 31 December 2019
456,835,488
520,560
(2,961,773)
-
452,756,722
$0.71
$0.95
-
Reconciliation to 31 December 2020
Number of shares
Average price
Balance at 1 January 2020
Issue / (cancellation) of ordinary shares:
Issue of ESP shares1
Buy-back and cancellation of ESP shares
Contributed equity arising from repayment of ESP loans
452,756,722
1,179,001
(812,104)
-
$0.48
$1.27
-
2019
$000
1,124
1,124
629
495
1,124
2019
$000
38,446
38,446
$000
38,049
-
-
340
38,446
$000
38,446
-
-
-
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
Balance at 31 December 2020
453,123,619
38,446
(c) Ordinary shares
Ordinary shares have the right to receive dividends as
In order to maintain or adjust the capital structure, the Group
declared, and, in the event of winding up the Company, to
may adjust the amount of dividends paid to shareholders,
participate in the proceeds from the sale of all surplus assets
return capital to shareholders, issue new shares or sell assets
in proportion to the number of and amounts paid up on shares
to reduce debt. The Group would look to raise capital when an
held. Ordinary shares entitle their holder to one vote, either in
opportunity to invest in a business or company was seen as
person or by proxy, at a meeting of the Company.
value adding relative to the current parent entity’s share price
(D) Employee Share Plan (ESP)
at the time of the investment. The Group actively pursues
additional investments as part of its growth strategy.
Information relating to the ESP, including details of shares
The capital risk management policy remains unchanged from
issued under the plan, is set out in Note 24.
the 2019 Annual Report.
(e) Capital risk management
The Group’s objectives when managing capital are to
safeguard its ability to continue as a going concern, so that
it can provide returns to shareholders and benefits for other
stakeholders and to maintain an optimum capital structure to
reduce the cost of capital.
1 As the ESP is considered in substance a share option, the ESP shares issued and corresponding loan receivables are not recognised by the Group in its financial statements. The
loan receivable does not satisfy the “probable future benefits following to the entity” criteria on the basis that the loan is non-recourse. The ESP shares will not be considered issued to
participants until the corresponding loan has been repaid, at which time there will be an increase in the issued capital and increase in cash.
084
19. Equity – reserves
(a) Movements
Share based payment reserve movements
Balance at the beginning of the period
Share based payment expense
Balance at the end of the period
Foreign currency translation reserve movements
Balance at the beginning of the period
Currency translation differences arising during the period
Balance at the end of the period
2020
$000
4,711
192
4,903
(254)
(320)
(574)
Total reserves
4,329
(b) Nature and purpose of reserves
Share-based payments reserve
Foreign currency translation reserve
This amount represents the value of the ESP share grants to
The foreign currency translation reserve is used to record
employees under the Freelancer Employee Share Plan and
exchange differences arising from the translation of the
other compensation granted in the form of equity.
financial statements of its overseas subsidiaries.
2019
$000
4,382
329
4,711
(382)
128
(254)
4,457
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
20. Key management personnel disclosures
(a) Directors
(b) Other key management personnel
The following persons were Directors of Freelancer Limited
The following persons also had the authority and responsibility
during the financial year:
Mr Robert Matthew Barrie – Executive Chairman
for planning, directing and controlling the major activities of
the Group, directly or indirectly, during the financial year:
Mr Darren Nicholas John Williams – Non-Executive Director
Mr Neil Leonard Katz – Chief Financial Officer and Company
Mr Simon Alvin Clausen – Non-Executive Director
Secretary
(c) Key management personnel compensation
Short-term employee benefits
Share based employee benefits
Other long-term benefits
Total benefits
2020
$000
968
47
56
1,071
2019
$000
949
93
56
1,098
Short-term employee benefits
Share based payments
These amounts include fees and benefits paid to the Non-
These amounts represent the expense related to the
Executive Directors as well as all salary, paid leave benefits,
participation of KMP in equity-settled schemes as measured
fringe benefits and cash bonuses awarded to Executive
by the fair value of the options rights and shares granted on
Directors and other KMP.
grant date.
085
Other long-term benefits
Further information in relation to KMP remuneration can be
These amounts represent long service leave benefits accruing
found in the Remuneration Report, which is included in the
during the year, long-term disability benefits and deferred
Director’s Report.
bonus payments
21. Remuneration of auditors
During the year the following fees were paid for services provided
by the auditor of the parent entity, its related practices and non-related audit firms:
(a) Hall Chadwick
Audit and other assurance services
Audit and review of financial reports
Taxation services
Tax compliance services, including review of Company income tax returns
Total remuneration of Hall Chadwick
2020
$000
121
2
29
152
2019
$000
119
2
37
150
FREELANCER LIMITED ANNUAL REPORT 2020
(b) Audit firms other than Hall Chadwick
Audit and other assurance services
Audit and review of financial reports
Taxation services
Tax compliance services, including review of subsidiary income tax returns
Accounting Services
Total remuneration of audit firms other than Hall Chadwick
Total auditors’ remuneration
NOTES TO THE FINANCIAL STATEMENT
81
14
14
109
261
62
22
104
188
338
22. Contingent liabilities
Except for the items listed below, there are no other contingent
•
included in cash is an amount of $2,608,000 on term
liabilities as at 31 December 2020:
•
•
•
a collateral amount of USD450,000 (2019: USD450,000)
is in place in one of the Group’s PayPal accounts in favour
of PayPal Australia Pty Ltd;
term deposits of $76,852 (2019: $76,852) are secured for
corporate credit card facilities in place;
deposits of $1,003,000 (2019: $1,177,000) are held by
various credit card processing providers, as security
for any contractual compensation arising under these
agreements;
deposits (31 December 2019: $724,000), which is
secured against bank guarantees that have been
provided to lessors in respect of premises occupied by
the Company in Sydney.
•
Included in cash is an amount of USD134,000 (2019:
USD94,000), which is held as a reserve to satisfy
escrow regulatory requirements in respect of credit card
transactions.
086
23. Commitments for expenditure
Leases in which a significant portion of the risks and rewards
(a) Non-cancellable operating services
of ownership are not transferred to the Group as lessee
are classified as operating leases. Leases are made up of
operating leases of property. Payments made under operating
The Group has entered into a commercial agreement for
web hosting services with an annual fee commitment for 2
leases are accounted for in accordance with AASB 16 Leases
years commencing on 1 January 2020. Fees paid under this
and are brought into account as depreciation on the right of
agreement are charged to the income statement on a usage
use asset and interest paid on the corresponding lease liability.
Where the Group acts as lessor in an operating lease
arrangement, rental income from operating leases is
basis over the period of the agreement. This commitment is
fixed in USD. The future minimum fee commitment under this
agreement has been calculated using the spot exchange rate
at 31 December 2020 and may be subject to variation due to
accounted for on a straight-line basis over the period of the
changes in exchange rates. The amounts are as follows:
lease. Lease incentives provided are recognised over the lease
term on a straight-line basis.
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
Less than one year
Between one and five years
More than five years
Total operating lease commitments
(b) Other capital commitments
2020
$000
3,900
-
-
3,900
2019
$000
4,264
4,264
-
8,528
There were no other capital commitments as at 31 December 2020
24. Share based payments
The Group operates an employee share plan. The fair value
ESP share.
of the effective option over the shares granted under the
Company’s Employee Share Plan (ESP) is recognised as an
The fair value of share grants issued outside of the ESP is
employee benefit expense with a corresponding increase in
independently determined based on the value of the shares at
equity. The fair value is measured at grant date and recognised
over the period during which the employees become
grant date less the present value of dividends expected to be
distributed between the grant date and the vesting dates.
unconditionally entitled to the ESP shares.
During the year ended 31 December 2013, the Company
The fair value at grant date is independently determined using
established a share based payment plan, the Employee Share
a Black-Scholes option pricing model that takes into account
Plan (ESP) to assist the Company in retaining and attracting
the exercise price, the term of the ESP shares, the vesting and
current and future employees by providing them with the
087
performance criteria, the impact of dilution, the non-tradeable
opportunity to own shares in the Company. Resolutions to
nature of the ESP share, the share price at grant date and
amend and approve the ESP were passed at the AGM held on
expected price volatility of the underlying share, the expected
17 May 2016.
dividend yield and the risk-free interest rate for the term of the
The key terms of the ESP are as follows:
•
the Board may invite a person who is employed or engaged
by or holds an office with the Group (whether on a full or
part-time basis) and who is declared by the Board to be
eligible to participate in the ESP from time to time (Eligible
Employee) to apply for fully paid ordinary shares under the
plan from time to time (ESP shares);
•
invitations to apply for ESP shares offered to Eligible
Employees subsequent to the Company’s initial public
offering are to be made on the basis of the market price
per share defined as the volume weighted average price at
which the Company’s shares have traded during the 30 days
immediately preceding the date of the invitation;
•
invitations to apply for ESP shares under the ESP will be
made on a basis determined by the Board (including as to the
conditionality on the achievement of any key performance
indicators) and notified to Eligible Employees in the invitation,
or if no such determination is made by the Board, on the basis
that ESP shares will be subject to a 4 year vesting period,
with:10% of ESP shares applied for vesting on the date that is
the first anniversary of the issue date of the ESP shares;
–
10% of ESP shares applied for vesting on the date that
is the first anniversary of the issue date of the ESP
shares;
–
20% of ESP shares applied for vesting on the date that
is the second anniversary of the issue date of the ESP
shares;
–
30% of ESP shares applied for vesting on the date that
is the third anniversary of the issue date of the ESP
shares; and
–
40% of ESP shares applied for vesting on the date that
is the fourth anniversary of the issue date of the ESP
shares.
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
•
Eligible Employees who accept an invitation (ESP
•
ESP Participants will continue to have the right to participate
Participants) may be offered an interest free loan from the
in dividends paid by the Company despite some or all of
Company to finance the whole of the purchase of the ESP
their ESP shares not having vested yet or being subject to
shares they are invited to apply for (ESP Loan). ESP Loans
an ESP Loan. If an ESP Loan has been made to the ESP
will have a term of 4 years and become repayable in full on
Participant, then any dividend due must first be applied to
the earlier of:
–
the fourth anniversary of the issue date of the
Employee Offer Shares; and
–
if the ESP Participant ceases to be an Eligible
Employee, either:
›
the date 30 days after the date of cessation, if the
reducing any outstanding ESP Loan amount applicable to
the ESP shares on which the dividend is paid;
•
ESP shares which have not vested and/or are subject to
repayment of the ESP Loan will be restricted (escrowed)
from trading;
Eligible Employee is a good leaver (as defined in
•
the Company may buy-back at the issue price any ESP
the ESP); or
shares which:
›
that date of cessation, if the Eligible Employee is a
–
have not vested, or are incapable of vesting at any time
bad leaver (as defined in the ESP).
(including as a result of the ESP Participant failing to
•
if the ESP Participant does not repay the outstanding ESP
– meet any key performance indicators on which vesting
Loan, or it notifies the Company that it cannot, then such
of ESP shares is conditional); or
number of ESP shares that equal by value (using the price at
which the ESP shares were issued) the outstanding amount
of the ESP Loan will become the subject of a buy-back
notice from the Company which the ESP Participant must
accept. The buy-back of such number of ESP shares will be
considered full and final satisfaction of the ESP Loan and
the Company will not have any further recourse against the
ESP Participant;
any dividends received by the ESP Participant whilst the
whole or part of the ESP Loan remains outstanding must
be applied to the repayment of the ESP Loan. In addition, an
ESP Participant may make pre-payments at any time;
•
•
the maximum number of ESP shares for which invitations
may be issued under the ESP together with the number of
ESP shares still to be issued in respect of already accepted
invitations and that have already been issued in response
to invitations in the previous 5 years (but disregarding ESP
shares that are or were issued following invitations to non-
•
•
›
the ESP Participant ceasing to be an Eligible
Employee (unless the Board, in its sole and
absolute discretion determines otherwise, subject
to any conditions that it may apply, including the
repayment of any outstanding ESP Loan); or
›
the expiration of the term of the ESP Loan.
any bonus securities issued in relation to ESP shares which
remain unvested or are subject to an ESP Loan which
becomes repayable in full will be the subject of a buy-back
by the Company at the issue price for no consideration;
088
on the death or permanent disability of an ESP Participant,
all ESP shares held by the ESP Participant or their estate
will immediately vest subject to the repayment of any
outstanding ESP Loan by the curator, executor or nominated
beneficiary(ies) (as the case may be) within 30 days of their
appointment (or such longer period as the Company in its
discretion may allow). Failing such repayment, the Company
will buy-back all ESP shares in respect of which there is an
residents, that did not require a disclosure document under
outstanding ESP Loan;
the Corporations Act, or that were issued under a disclosure
document under the Corporations Act) must not exceed
5% of the total number of ordinary shares on issue in the
Company at the time the invitations are made;
•
in the event of a corporate reconstruction, the Board will
adjust, subject to the Listing Rules (if applicable), any one
•
•
the rules of the ESP and any amendment to the rules of the
ESP must be in accordance with the Listing Rules and the
Corporations Act;
if, while the Company’s shares are traded on the ASX or any
other stock exchange, there is any inconsistency between
or more of the maximum number of Shares that may
the terms of the ESP and the Listing Rules, the Listing Rules
be issued under the ESP (if applicable), the subscription
will prevail; and
price, the buy-back price and the number of ESP shares
to be vested at any future vesting date (if applicable), as it
•
deems appropriate so that the benefits conferred on ESP
Participants after a corporate reconstruction are the same
as the benefits enjoyed by the ESP Participants before the
corporate reconstruction. On conferring the benefit of any
corporate reconstruction, any fractional entitlements to
shares will be rounded down to the nearest whole share;
the ESP is governed by the laws of the State of New South
Wales, Australia.
The full terms of the ESP are available on the Company’s
website, www.freelancer.com.
FREELANCER LIMITED ANNUAL REPORT 2020 NOTES TO THE FINANCIAL STATEMENT
(a) ESP share grants
Set out below are summaries of ESP shares granted, issued and that have balances or movement during the year under the plan:
089
Grant date
2020
24 November 2015
7 March 2016
26 April 2016
27 July 2016
4 November 2016
8 December 2017
2 March 2018
18 October 2018
12 November 2018
20 February 2019
6 May 2019
19 February 2020
2 March 2020
30 July 2020
11 December 2020
Total
2019
20 February 2015
10 April 2015
3 June 2015
12 August 2015
15 October 2015
24 November 2015
21 December 2015
7 March 2016
26 April 2016
22 June 2016
27 July 2016
4 November 2016
30 October 2017
8 December 2017
19 December 2017
2 March 2018
18 October 2018
12 November 2018
20 February 2019
6 May 2019
Total
Issue
price
Balance at
the start of
the year
Granted /
issued
Released
from
restrictions
Forfeited /
cancelled
Balance at
the end of
the year
Balance of
unvested
ESP shares
Balance of
vested ESP
shares
$1.76
$1.53
$1.38
$1.59
$1.34
$0.52
$0.40
$0.53
$0.65
$0.53
$0.65
$0.47
$0.45
$0.53
$0.52
$0.66
$1.01
$1.08
$1.40
$1.45
$1.76
$1.76
$1.53
$1.38
$1.55
$1.59
$1.34
$0.48
$0.52
$0.52
$0.40
$0.53
$0.65
$0.53
$0.65
50,000
30,000
50,000
440,539
100,000
505,852
15,150
980,000
100,000
407,226
113,334
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
640,539
200,000
300,000
38,462
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(50,000)
(30,000)
(50,000)
(440,539)
-
-
-
-
-
100,000
-
-
-
-
-
-
-
-
-
100,000
(33,081)
(15,150)
472,771
120,978
351,793
-
-
-
(180,000)
800,000
560,000
240,000
-
-
100,000
70,000
407,226
366,504
(13,334)
100,000
90,000
640,539
640,539
200,000
200,000
300,000
300,000
-
-
-
-
38,462
-
38,462
30,000
40,722
10,000
-
-
-
2,792,101
1,179,001
-
(812,104)
3,158,998
2,348,021
810,977
940,000
200,000
150,000
560,000
200,000
75,000
100,000
30,000
50,000
-
440,539
330,000
-
756,007
825,000
15,150
1,000,000
100,000
-
-
(25,000)
50,000
-
-
-
-
-
-
30,000
50,000
-
-
-
-
-
-
-
-
7,500
12,500
-
-
-
-
-
-
50,000
-
22,500
37,500
-
(425,000)
(515,000)
(200,000)
(150,000)
(560,000)
(200,000)
(100,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
440,539
110,135
330,404
(230,000)
100,000
40,000
60,000
-
-
-
-
(78,382)
(171,773)
505,852
270,431
235,421
(15,000)
(810,000)
-
-
-
-
407,226
113,334
(20,000)
-
-
-
-
-
-
-
-
-
15,150
-
-
980,000
902,000
100,000
90,000
407,226
407,226
113,334
113,334
-
15,150
78,000
10,000
-
-
5,771,696
520,560
(538,382)
(2,961,773)
2,792,101
1,953,126
838,975
FREELANCER LIMITED ANNUAL REPORT 2020 NOTES TO THE FINANCIAL STATEMENT
All Eligible Employees who accepted an offer of ESP shares
granted the participants an option to the ESP shares due to the
were given an interest free loan from the Company to finance
ESP Loans being non-recourse. As such, this arrangement is
the whole of the purchase of the ESP shares they were invited
accounted for under AASB 2.
to apply for (ESP Loan).
The assessed weighted average fair value at grant date of
The ESP Loans are provided to participants on a non-recourse
the effective share options granted during the financial year
basis and upon vesting must be repaid in order to remove
is $0.19 per option (2019: $0.27). Options were priced using a
trading restrictions on vested ESP shares. The term of the
Black-Scholes option pricing model that takes into account the
ESP Loan is four years; however, participants may forfeit their
exercise price, the term of the option, the impact of dilution,
ESP shares if they do not repay the ESP Loan or leave the
the share price at grant date and expected price volatility of
Company. As the ESP removes the risk to participants from
the underlying share, the expected dividend yield and the risk
decreases in the share price by limiting the maximum loan
free interest rate for the term of the option. The expected
amount repayable to the value of the ESP shares disposed
price volatility of the Company’s shares is based on the
and waiving the ESP Loan should the participant forfeit their
historical volatility of ASX listed companies considered to be
ESP shares, whilst still allowing participants the rewards
comparable to Freelancer Limited.
of any increase in share price, the Company has effectively
25. Reated party transactions
(a) Parent entity
(d) Transactions with related parties
Freelancer Limited is the parent entity and ultimate
Receivable from and payable to related parties
controlling entity.
There were no receivables from or payable to related parties
at reporting date in relation to transactions with related parties
(b) Interests in controlled entities
detailed above.
090
Interests in subsidiaries are set out in Note 28.
Loans to / from related parties
There were no loans to or from related parties
(c) Transactions with key management personnel
at the reporting date.
Disclosures relating to key management personnel are
Terms and conditions
set out in Note 20 and the Remuneration Report.
All transactions were made on normal commercial
terms and conditions and at market rates.
26. Parent Entity Information
The financial information for the parent entity, Freelancer
Freelancer Limited (as the head entity) and its wholly-owned
Limited has been prepared on the same basis as the
Australian entities (as members of the Freelancer income
consolidated financial statements, except as set out below.
tax consolidated group) account for their own current and
Investments in subsidiaries
deferred tax amounts. These tax amounts are measured as if
each entity in the income tax consolidated group continues to
Investments in subsidiaries are accounted for at cost in the
be a standalone taxpayer in its own right.
financial statements of Freelancer Limited. Investments in
subsidiaries are tested for impairment whenever changes in
In addition to its own current and deferred tax amounts,
events or circumstances indicate that the carrying amount
Freelancer Limited also recognises the current tax liabilities (or
may not be recoverable.
assets) assumed from its wholly-owned entities in the income
tax consolidated group.
Income tax consolidation legislation
Freelancer Limited and its wholly-owned Australian entities
have elected to form an income tax consolidated group.
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
Set out below is the supplementary information about the parent entity.
Statement of comprehensive income
Loss after Tax
Total comprehensive loss
Statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net assets
Contributed equity
Reserves
Accumulated losses
Total equity
Contingent liabilities
2020
$000
(861)
(861)
9,244
32,713
41,957
5,895
5,895
36,062
38,446
4,904
(7,288)
36,062
2019
$000
(655)
(655)
3,619
33,224
36,843
112
112
36,731
38,446
4,712
(6,427)
36,731
The parent entity had no contingent liabilities at 31 December
Significant accounting policies
2020 and 31 December 2019.
Capital commitments
The accounting policies of the parent entity are consistent
with those of the Group, except for investments in subsidiaries
which are accounted for at cost, less any impairment.
091
The parent entity had no capital commitments as at 31
December 2020 and 31 December 2019.
27. Business Combinations
Business combinations occur where an acquirer obtains
initial recognition, contingent consideration classified as equity
control over one or more businesses.
is not remeasured and its subsequent settlement is accounted
A business combination is accounted for by applying the
acquisition method, unless it is a combination involving
entities or businesses under common control. The business
combination will be accounted for from the date that control
is attained, whereby the fair value of the identifiable assets
acquired and liabilities (including contingent liabilities)
assumed is recognised (subject to certain limited exceptions).
When measuring the consideration transferred in the business
combination, any asset or liability resulting from a contingent
consideration arrangement is also included. Subsequent to
for within equity. Contingent consideration classified as an
asset or liability is remeasured each reporting period to fair
value, recognising any change to fair value in profit or loss,
unless the change in value can be identified as existing at
acquisition date.
All transaction costs incurred in relation to the business
combination are expensed to the statement of profit or loss
and comprehensive income. The acquisition of a business
may result in the recognition of goodwill or a gain from a
bargain purchase.
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
28. Interests in controlled entities
The consolidated financial statements incorporate the assets, liabilities and results
of the following subsidiaries in accordance with the accounting policy described in Note 33:
Name of entity
Subsidiaries of Freelancer Limited:
Freelancer International Pty Ltd
Freelancer Technology Pty Ltd
Freelancer India Pty Ltd
Warrior Forum Pty Ltd
Warrior Technology Pty Ltd
Payments Pty Ltd
Payments International Pty Ltd
Payments Australia Pty Ltd
Payments IP Pty Ltd
StartCon Pty Ltd
Freightlancer Holdings Pty Ltd **
Freightlancer Technology Pty Ltd **
Freightlancer Pty Ltd **
Freelancer Networks (Canada), Inc.
Freelancer Outsourcing, Inc.
Canadian Payments, Inc
Freelancer.com Pte Limited
Freelancer International GmbH
Freemarket (Switzerland) GmbH
Freelancer Online India Private Limited
Freelancer.com Philippines, Inc.
Freelancer Outsourcing UK Limited
Payments Europe Limited
Freelancer (Shanghai) Information Technology Co., Ltd.
Westmor Management, Inc. *
Escrow.com, Inc. *
EC Services Corporation*
IES International, Inc. *
Internet Escrow Services, Inc. *
Freightlancer, Inc. **
* Escrow.com group
** Freightlancer group
Country of
incorportation
Percentage
Owned (%)
2020
Percentage
Owned (%)
2019
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Canada
Canada
Canada
Singapore
Switzerland
Switzerland
India
Philippines
United Kingdom
United Kingdom
China
United States
United States
United States
United States
United States
United States
100
100
100
100
100
100
100
100
100
100
50
50
50
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
50
100
100
100
100
100
100
100
100
100
100
50
50
50
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
50
092
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
29. Fair value measurements
All assets and liabilities are recorded at their fair value.
30. Events occurring after the reporting date
There are no other matters or circumstances that have arisen
•
the aggregated entity’s operations in the future financial
since 31 December 2020 that have significantly affected, or
years, or
may significantly affect:
•
•
the results of those operations in future financial years, or
the aggregated entity’s state of affairs in the future
financial affairs.
31. Reconciliation of loss after tax to net cash
flow from operating activities
093
Loss for the year
Non-cash items in operating loss:
Depreciation and amortisation
Share based payments expense
Net exchange differences
Changes in operating assets and liabilities:
(Increase) / Decrease in trade and other receivables
Decrease / (Increase) in deferred tax assets
(Increase) in other assets
Increase in trade and other creditors
(Decrease) / Increase in provision for income tax
Increase in deferred tax liabilities
Increase in provisions for employee benefits
(Decrease) / Increase in other provisions
Net cash inflow / (outflow) from operating activities
Non cash information
During the period, the group recognised $895K of interest
charge relating to rent free period under AASB 16: Leases.
2020
$000
2019
$000
4,712
192
(1,439)
(501)
(5,794)
(647)
6,355
28
5,540
142
(29)
7,913
3,214
329
(196)
152
333
(554)
573
(13)
(564)
224
149
2,056
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
32. Earnings per share (EPS)
Basic earnings per share
Diluted earnings per share
Basic earnings per share is calculated by dividing:
Diluted earnings per share adjusts the figures used in the
•
the profit attributable to owners of the Company, excluding
any costs of servicing equity other than ordinary shares
•
the after income tax effect of interest and other financing
costs associated with dilutive potential ordinary shares,
determination of basic earnings per share to take into account:
•
by the weighted average number of ordinary shares
and
outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year and
•
the weighted average number of shares assumed to have
excluding treasury shares.
been issued for no consideration in relation to dilutive
potential ordinary shares.
(a) Basic earnings per share
From operations attributable to the ordinary equity of the Company
Total basic earnings per share attributable to the ordinary equity holders of the Company
(b) Diluted earnings per share
From operations attributable to the ordinary equity of the Company
Total basic earnings per share attributable to the ordinary equity holders of the Company
(c) Reconciliation of earnings used in calculating earnings per share
Basic earnings per share:
Loss from continuing operations
Diluted earnings per share:
2020
Cents
(0.14)
(0.14)
(0.14)
(0.14)
$000
2019
Cents
(0.35)
(0.35)
(0.35)
(0.35)
$000
(646)
(1,591)
094
Loss attributable to the ordinary equity holders of the Company
(646)
(1,591)
2020
Shares
2019
Shares
(d) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used in calculating basic earnings per share
449,964,621
449,827,061
Adjustments for calculation of ordinary shares used in calculating diluted earnings per share:
ESP shares
Share grants
3,005,447
4,961,048
-
-
Weighted average number of ordinary shares used in calculating diluted earnings per share
452,970,068
454,788,109
(e) Information on the classification of securities
ESP shares and share grants
ESP shares granted to employees under the ESP and shares
which they are dilutive. The ESP shares and share grants have
granted to employees outside of the ESP are considered to
not been included in the determination of basic earnings per
be potential ordinary shares and have been included in the
share. Details relating to the ESP shares are set out in Note 24.
determination of diluted earnings per share to the extent to
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
33. Other significant accounting policies
(a) Principles of consolidation
The consolidated financial statements incorporate all of the
recoverable from, or payable to, the taxation authority are
assets, liabilities and results of Freelancer Limited and all
presented as operating cash flows included in receipts from
subsidiaries. Subsidiaries are all entities over which the Group
customers or payments to suppliers.
has control. The Group controls an entity when it is exposed
to, or has rights to, variable returns from its involvement with
Commitments and contingencies are disclosed net of the
the entity and has the ability to affect those returns through
amount of GST and VAT recoverable from, or payable to, the
its power to direct the activities of the entity. A list of the
relevant taxation authority.
subsidiaries is provided in Note 28.
(c) Research & development
The assets, liabilities and results of all subsidiaries are fully
consolidated into the financial statements of the Group from
Costs relating to research and development of new software
the date on which control is obtained by the Group. The
products are expensed as incurred until technological
consolidation of a subsidiary is discontinued from the date
feasibility in the form of a working model has been
that control ceases. Intercompany transactions, balances and
established. At such time costs may be capitalised, subject
unrealised gains or losses on transactions between group
to recoverability. Software development costs incurred
entities are fully eliminated on consolidation. Accounting
subsequent to the establishment of technological feasibility
policies of subsidiaries have been changed and adjustments
have not been significant, and the Group has not capitalised
made where necessary to ensure uniformity of the accounting
any software development costs to date.
policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or
(d) Foreign currency transactions and balances
indirectly, to the Group are presented as “non-controlling
Functional and presentation currency
095
interests”. The Group initially recognises non-controlling
The functional currency of each of the Group entities is
interests that are present ownership interests in subsidiaries
measured using the currency of the primary economic
and are entitled to a proportionate share of the subsidiary’s
environment in which that entity operates. The consolidated
net assets on liquidation at either fair value or at the non-
financial statements are presented in Australian dollars, which
controlling interests’ proportionate share of the subsidiary’s
is the parent entity’s functional and presentation currency.
net assets. Subsequent to initial recognition, non-controlling
interests are attributed their share of profit or loss and each
Transactions and balances
component of other comprehensive income. Non-controlling
interests are shown separately within the equity section
Foreign currency transactions are translated into functional
currency using the exchange rates prevailing at the date of the
of the statement of financial position and statement of
transaction. Foreign currency monetary items are translated at
comprehensive income.
(b) Goods and Services Tax (GST) and Valued
Added Tax (VAT)
the period-end exchange rate. Non-monetary items measured
at historical cost continue to be carried at the exchange rate at
the date of the transaction. Non-monetary items measured at
fair value are reported at the exchange rate at the date when
fair values were determined.
Revenues, expenses and assets are recognised net of the
amount of associated GST and VAT, except where the amount
Exchange differences arising on the translation of monetary
of GST and VAT incurred is not recoverable from the relevant
items are recognised in the profit or loss, except where
taxation authority. In these circumstances, the GST and VAT is
recognised as part of the cost of acquisition of the asset or as
deferred in equity as a qualifying cash flow or net investment
hedge.
part of an item of the expense. Receivables and payables are
stated inclusive of the amount of GST and VAT receivable or
payable. The net amount of GST and VAT recoverable from, or
Exchange differences arising on the translation of non-
monetary items are recognised directly in other comprehensive
payable to, the relevant taxation authority is included with other
income to the extent that the underlying gain or loss is
receivables or payables in the statement of financial position.
recognised in other comprehensive income; otherwise the
exchange difference is recognised in profit or loss.
Cash flows are presented in the cash flow statement on a
gross basis. The GST and VAT components of cash flows
arising from investing or financing activities which are
FREELANCER LIMITED ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENT
Group companies
(g) Critical accounting estimates and judgments
The financial results and position of foreign operations whose
functional currency is different from the Group’s presentation
The directors evaluate estimates and judgements incorporated
currency is translated as follows:
into the financial report based on historical knowledge and best
available current information. Estimates assume a reasonable
•
Assets and liabilities are translated at period end
expectation of future events and are based on current trends
exchange rates prevailing at that reporting date.
and economic data, obtained both externally and within the
Group. The resulting accounting estimates will, by definition,
•
Income and expenses are translated at average exchange
seldom equal the related actual results. The estimates and
rates for the period.
judgements that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
•
Retained earnings are translated at the exchange rates
within the next financial year are discussed below.
prevailing at the date of the transaction.
Exchange differences arising on translation of foreign
Following the guidance in AASB 3: Business Combinations,
operations with functional currencies other than Australian
the Group has made assumptions and estimates to determine
dollars are recognised in other comprehensive income and
the purchase price of businesses acquired as well as its
included in the foreign currency translation reserve in the
allocation to acquired assets and liabilities. To do so, the Group
Business Combinations
statement of financial position. The cumulative amount of
these differences is reclassified into profit or loss in the period
in which the operation is disposed of.
(e) Impairment of assets
At the end of each reporting date, the Group reviews
the carrying values of its tangible and intangible assets
is required to determine at the acquisition date fair value of
the identifiable net assets acquired, including intangible assets
such as brand, customer relationships and liabilities assumed.
Goodwill is measured as the excess of the fair value of the
consideration transferred including the recognised amount of
any non-controlling interest over the net recognised amount of
the identifiable assets and liabilities.
096
to determine whether there is any indication that those
The assumptions and estimates made by the Group have
assets have been impaired. If such an indication exists,
an impact on the asset and liability amounts recorded in the
the recoverable amount of the asset, being the higher of
the asset’s fair value less costs to sell and value in use,
is compared to the asset’s carrying value. Any excess of
the asset's carrying value over its recoverable amount is
recognised immediately in the profit or loss.
financial statements. In addition, the estimated useful lives of
the acquired amortisable assets, the identification of intangible
assets and the determination of the indefinite or finite useful
lives of intangible assets acquired will have an impact on the
Group’s future profit or loss.
Impairment testing is performed annually for goodwill and
Impairment of intangible assets
intangible assets with indefinite lives.
The Group assesses impairment at each reporting date by
Where it is not possible to estimate the recoverable amount
of an individual asset, the Group estimates the recoverable
amount of the cash generating unit to which the asset
belongs.
(f) Comparative figures
When required by Accounting Standards, comparative figures
have been adjusted to conform to changes in presentation for
the current financial year.
Where the Group has retrospectively applied an accounting
policy, made a retrospective restatement or reclassified items
in its financial statements, an additional statement of financial
position as at the beginning of the earliest comparative period
will be disclosed.
evaluating conditions specific to the group that may lead to
impairment of assets. Where an impairment trigger exists, the
recoverable amount of the asset is determined. Value-in- use
calculations performed in assessing recoverable amounts
incorporate a number of key estimates. During the year ended
31 December 2020, no impairment has been recognised in
respect of intangible assets. The Group assessed recoverability
of goodwill based on the present value of cash flow projections
over a 6 year period. Should any of the intangible assets fail
to perform, an impairment loss would be recognised up to the
maximum carrying value of intangible assets at 31 December
2020 of $26,457,000 (2019: $26,429,000).
Provisions for doubtful accounts and transaction losses
Provision is made in respect of the Group’s best estimate of
doubtful accounts and transaction losses based on historical
experience.
FREELANCER LIMITED ANNUAL REPORT 2020 NOTES TO THE FINANCIAL STATEMENT
Share based payments
The Group measures the cost of equity settled transactions
The Group has determined that trust cash is not a resource
with employees by reference to the fair value of the equity
controlled by the Group, nor does the Group derive any
instruments at the date at which they are granted. The
economic benefit from these user funds, and therefore the
fair value is determined with the assistance of an external
Group does not have the risks and rewards of ownership of
valuation with the assumptions detailed in Note 24. The
the funds. Consequently, trust assets are not recognised as
accounting estimates and assumptions relating to equity
an asset in the Group’s financial statements, and neither is
settled share based payments would have no impact on the
the corresponding trust liability recognised as a liability in the
carrying amounts of assets and liabilities within the next
Group’s financial statements.
annual reporting period but may impact expenses and equity.
(h) Changes in accounting policies
Lease term of contracts with renewal options
The Group determines the lease term as the non-cancellable
The accounting policies applied by the Group in this
term of the lease, together with any periods covered by an
consolidated financial report are the same as those applied
option to extend the lease if it is reasonably certain to be
by the Group in its consolidated financial report for the year
exercised, or any periods covered by an option to terminate the
ended 31 December 2019.
lease, if it is reasonably certain not to be exercised. After initial
recognition, the Group reassesses the lease term if there is a
(i) New Accounting Standards for application
significant event or change in circumstances that is within its
in future periods
control and affects its ability to exercise (or not to exercise) the
option to renew.
Income taxes
A number of new accounting standards (including
amendments and interpretations) have been issued but were
not effective in FY20. The Group has not elected to early adopt
The Group is subject to income taxes in Australia and
any of these new accounting standards in these financial
jurisdictions where it has foreign operations. Judgment is
required in determining the worldwide provision for income
taxes. There are transactions and calculations undertaken
statements. Certain amendments were made to the definition
of materiality, which were applicable to AASB 101 Presentation
of Financial Statements and AASB 108 Accounting
097
during the ordinary course of business for which the ultimate
Policies, Changes in Accounting Estimates and Errors and
tax determination is uncertain. The Group estimates its tax
consequential amendments to other AASBs, which: i) use a
liabilities based on the Group’s understanding of the tax law.
consistent definition of materiality throughout AASBs and
Where the final tax outcome of these matters is different from
the amounts that were initially recorded, such differences will
impact the current and deferred tax provisions in the period in
which such determination is made.
the Conceptual Framework for Financial Reporting; ii) clarify
when information is material; and iii) incorporate some of the
guidance in AASB 101 about immaterial information. These
amendments are in issue but are applicable to the Group in
future financial periods.
Deferred tax assets
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses as management considers
that it is probable that future taxable profits will be available
to utilise those temporary differences and unused tax losses.
Significant management judgement is required to determine
the amount of deferred tax assets that can be recognised,
based upon the likely timing and the level of future taxable
profits.
Trust assets and liabilities
The Group’s Online Payments segment, namely the business
of Escrow.com, is a regulated entity that holds funds on behalf
of its users in trust bank accounts. At 31 December 2020
the cash balance in trust amounted to A$36,181,757 (2019:
A$40,222,000), which has a corresponding liability of the same
amount owing to its users.
FREELANCER LIMITED ANNUAL REPORT 2020
DIRECTORS' DECLARATION
DIRECTORS' DECLARATION
In the Directors’ opinion:
(a)
the Financial Statements and notes of the consolidated entity set out on pages 59 to 97
are in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the consolidated entity’s financial position as at
31 December 2020 and of its performance for the financial year ended on that
date; and
(ii)
complying with Australian Accounting Standards, the Corporations Regulations
2001 and other mandatory professional reporting requirements;
(b) Note 2(a) confirms that the Financial Statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board;
098
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they become due and payable; and
(d)
the Directors have been given the declarations by the Chief Executive Officer and Chief
Financial Officer required by section 295A of the Corporations Act 2001 for the financial
year ending 31 December 2020.
This declaration is made in accordance with a resolution of the Directors.
On behalf of the directors
Matt Barrie
Chairman
23 February 2021
FREELANCER LIMITED ANNUAL REPORT 2020
INDEPENDENT AUDITOR'S REPORT
FREELANCER LIMITED
ABN 66 141 959 042
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
FREELANCER LIMITED AND CONTROLLED ENTITES
Opinion
We have audited the accompanying financial report of Freelancer Limited (the Group), which
comprises the consolidated statement of financial position as at 31 December 2020, the
consolidated statement of profit or loss and other comprehensive income, the consolidated
statement of changes in equity, the consolidated statement of cash flows for the year ended
and notes comprising a summary of significant accounting policies and other explanatory
information, and the directors’ declaration.
In our opinion:
(a) the accompanying financial report of the Consolidated Entity is in accordance with
the Corporations Act 2001, including:
i.
giving a true and fair view of the Consolidated Entity’s financial position as
at 31 December 2020 and of its performance for the year ended on that
date; and
complying with Australian Accounting Standards and the Corporations
Regulations 2001
ii.
099
(b) the financial report also complies with International Financial Reporting Standards
as disclosed in Note 2(a).
Basis of Opinion
We conducted our audit in accordance with Australian Auditing Standards. Those standards
require that we comply with relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance about whether the financial report
is free from material misstatement. Our responsibilities under those standards are further
described in the Auditor’s responsibility section of our report. We are independent of the
Consolidated Entity in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code
of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We confirm that the independence declaration required by the Corporations Act 2001 has
been given to the directors of the group.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial report of the current period. These matters were
addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
SYDNEY · PENRITH · MELBOURNE · BRISBANE · PERTH · DARWIN
Liability limited by a scheme approved under Professional Standards Legislation
www.hallchadwick.com.au
FREELANCER LIMITED ANNUAL REPORT 2020
INDEPENDENT AUDITOR'S REPORT
FREELANCER LIMITED
ABN 66 141 959 042
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
FREELANCER LIMITED AND CONTROLLED ENTITITES
Key Audit Matter
Procedures
the Group’s
Reliance on automated process and
controls
Freelancer’s revenue is primarily generated
from new and existing users posting and
the
fulfilling projects and contests on
therefore a
Freelancer.com website and
significant part of
financial
reporting processes are heavily reliant on IT
systems with automated processes and
controls over the capturing, valuing and
recording of transactions. Similarly, other IT
platforms of
includes
the business
Escrow.Com and Warrior Forum are also
heavily reliant on IT systems. This is a key
audit matter because of the:
• Complex IT environment supporting the
that
Group’s business processes
• Mix of manual and automated controls
• Multiple internal and outsource support
arrangements
• Large volume of low value transactions
Impairment of Goodwill and Intangible
Assets
Refer to Note 12 – Intangible Assets and Note
2 (g)
- Critical Accounting Estimates and
Judgements
The Group has recognised intangible assets
of $26.5 million at 31 December 2020
resulting from business combinations and
asset acquisitions.
The assessment of impairment of the Group’s
intangible asset
incorporated
significant judgement in respect of factors
such as general market conditions, discount
rates, revenue growth and cost assumptions.
balances
to amounts
We have focussed on this area as a key audit
matter due
involved being
material; the inherent subjectivity associated
with critical judgements being made in relation
to forecast future revenue and costs; discount
rates; and terminal growth rates.
100
Our procedures included, amongst others:
We understood and tested management’s controls over its systems
relevant to financial reporting.
We involved our IT specialist to conduct general IT controls tests
that related to applications that support the effective functioning of
application controls. This included a review of the policies and
procedures, change management and access security.
Our IT specialist performed application controls testing over the
three main applications. The testing included procedures used to
initiate, record, process and report transactions and other financial
data, with particular focus on recognition and measurement of fee
income, transactions including payment gateways and exception
report testing.
When testing controls was not considered an appropriate or
efficient testing approach, alternative audit procedures were
performed on the financial information.
Our procedures included, amongst others:
We evaluated management’s goodwill and intangible assets
impairment assessment.
Key inputs in the value in use model included forecast revenue,
costs, discount rates and terminal growth rates. We corroborated
those assumptions by comparing forecasts to historical actuals.
We involved our valuation specialists to recalculate management’s
discount rates based on external data where available. The
valuation specialist was also involved in assessing the value in use
model used for valuation methodology including treatment of the
net present value calculations.
We performed sensitivity analysis on the fee income; terminal
growth rate; and discount rate inputs.
We assessed the Group’s disclosures of the quantitative and
qualitative considerations in relation to the carrying value of
goodwill and intangible assets, by comparing these disclosures to
our understanding of this matter.
FREELANCER LIMITED ANNUAL REPORT 2020 INDEPENDENT AUDITOR'S REPORT
FREELANCER LIMITED
ABN 66 141 959 042
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
FREELANCER LIMITED AND CONTROLLED ENTITITES
Other Information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 31 December 2020, but does not
include the financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial report or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of the other information, we are required to report that fact. We have nothing to
report in this regard.
101
Responsibilities of the Directors for the Financial Report
The directors of the Group are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australia Accounting Standards and the Corporations Act
2001 and for such internal control as directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Consolidated
Entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to
liquidate the Consolidated Entity or to cease operations, or have no realistic alternative but to do
so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole
is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with the Australian Auditing Standards will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
–
–
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as
intentional omissions,
involve collusion,
fraud may
misrepresentations, or the override of internal control
forgery,
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
FREELANCER LIMITED ANNUAL REPORT 2020 INDEPENDENT AUDITOR'S REPORT
FREELANCER LIMITED
ABN 66 141 959 042
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
FREELANCER LIMITED AND CONTROLLED ENTITITES
–
–
–
–
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including
the disclosures, and whether the financial report represents the underlying transactions
and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the financial report.
We are responsible for the direction, supervision and performance of the Group audit. We
remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public interest benefits of such communication.
102
FREELANCER LIMITED ANNUAL REPORT 2020 INDEPENDENT AUDITOR'S REPORT
FREELANCER LIMITED
ABN 66 141 959 042
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
FREELANCER LIMITED AND CONTROLLED ENTITITES
Report on the Remuneration Report
We have audited the remuneration report included in pages 54 to 57 of the directors’ report for
the year ended 31 December 2020.
The directors of the Group are responsible for the preparation and presentation of the
remuneration report in accordance with s 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance
with Australian Auditing Standards.
Opinion
In our opinion the remuneration report of Freelancer Limited for the year ended 31 December
2020 complies with s 300A of the Corporations Act 2001.
103
Hall Chadwick (NSW)
Level 40, 2 Park Street
Sydney NSW 2000
SANDEEP KUMAR
Partner
Dated: 23 February 2021
FREELANCER LIMITED ANNUAL REPORT 2020 104
FREELANCER LIMITED ANNUAL REPORT 2020 ADDITIONAL ASX INFORMATION
ADDITIONAL ASX INFORMATION
Shareholder information
Substantial shareholders
Additional information required by the Australian Securities
The names of substantial shareholders who have notified the
Exchange Limited Listing Rules and not disclosed elsewhere in
Company in accordance with section 671B of the Corporations
this report. This additional information was applicable as at 31
Act 2001 are:
March 2021.
Robert Matthew Barrie1
Simon Clausen and Startive Holdings Limited and its related bodies1
1 Includes a relevant interest in 3,158,998 fully paid ordinary shares by virtue of the Director having had a voting power
of over 20% in the Company, which had a relevant interest as a result of trading restrictions over shares issued under the ESP.
Top 20 Shareholders as at 31 March 2021
Number of Shares
197,161,429
163,658,998
Rank
Name
Number of ordinary
shares held
% of ordinary
shares held
105
1
2
3
4
5
8
7
8
9
10
11
12
13
14
15
16
17
18
19
20
MATT BARRIE
HSBC CUSTODY NOMINEES
CITICORP NOMINEES PTY LIMITED
MR DARREN WILLIAMS
BNP PARIBAS NOMS (NZ) LTD
J P MORGAN NOMINEES AUSTRALIA
BNP PARIBAS NOMINEES PTY LTD
CS THIRD NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
3RD WAVE INVESTORS PTY LTD
UBS NOMINEES PTY LTD
MRS RIKA WESTWOOD
MR NICHOLAS PETER DE JONG
CUSTODIAL SERVICES LIMITED
MR RODNEY JOHN SELLICK
MR NEIL LEONARD KATZ
INFILSEC PTY LTD
MR RAM SHANKER KANGATHARAN
MR GREGORY SEGAL
DUNRAY NOMINEES PTY LTD
Total Top 20
Total Remaining
Total of Securities
191,435,150
104,436,514
62,711,108
10,605,660
8,765,331
7,218,774
5,234,724
3,858,803
3,337,905
2,600,000
2,263,761
1,800,000
1,501,849
1,236,253
1,109,833
995,539
978,727
972,000
800,000
800,000
412,661,931
40,461,688
453,123,619
42.2%
23.0%
13.8%
2.3%
1.9%
1.6%
1.2%
0.9%
0.7%
0.6%
0.5%
0.4%
0.3%
0.3%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
91.1%
8.9%
FREELANCER LIMITED ANNUAL REPORT 2020
Distribution of ordinary shareholders as at 31 March 2021
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-999,999,999
1,000,001-9,999,999,999
Totals
ADDITIONAL ASX INFORMATION
Number of shareholders
Number of Shares
537
890
304
445
81
15
2,272
312,410
2,465,683
2,379,204
14,413,774
25,436,883
408,115,665
453,123,619
Restricted securities as at 31 March 2021
There are no restricted securities on issue for the purpose of the ASX Listing Rules.
There are ordinary shares on issue that are subject to trading restrictions pursuant to the ESP.
The table below sets out the number of shares subject to trading restrictions.
Class of restricted securities
Nature of restriction
Number of Shares
Quoted ESP shares
Unquoted ESP shares
Various dates ending no later than 5 May 2023
Various dates ending no later than 10 December 2024
Total shares subjected to trading restrictions
1,879,997
1,279,001
3,158,998
Voting Rights
On-market Buy Back
The voting rights attaching to ordinary shares, set out in the
There is no current on-market buy back.
Company’s Constitution are:
106
a. at meetings of members, each member is entitled
to vote in person or by proxy, attorney or
representative; and
b. on a show of hands, every person present who is
a member has one vote, and on a poll every member
present has a vote for each fully paid share owned.
There are no voting rights attached to unlisted options, voting
rights will be attached to unlisted ordinary shares once issued
and to options upon exercise.
FREELANCER LIMITED ANNUAL REPORT 2020
CORPORATE DIRECTORY
Corporate
Directory
107
Company Directors
Registered Office
Mr Robert Matthew Barrie
Level 37 Grosvenor Place
—
Chairman and Chief Executive Officer
225 George Street
Sydney NSW 2000
Mr Darren Nicholas John Williams
Telephone: +61 (02) 8599 2700
—
Non-Executive Director
Mr Simon Alvin Clausen
—
Share Registry
Non-Executive Director
Boardroom Limited
Company Secretary
Mr Neil Leonard Katz
Level 12
225 George Street
Sydney NSW 2000
External Auditors
Hall Chadwick
Level 40
2 Park Street
Sydney NSW 2000
Securities exchange
listing
Freelancer Limited shares are listed
on the Australian Securities Exchange
(Listing code: FLN)
FREELANCER LIMITED ANNUAL REPORT 2020