We believe
that the future is direct
to consumer. It will be
relationship driven and
technology enabled.
Doing things differently
is the business we are
in. Here are the results
of our journey to date.
Annual Report 2021.
HARMONEYANNUAL REPORT 2021 Contents
04
06
08
10
13
19
28
29
66
72
74
78
2021 highlights
Our timeline
From the Chair
From the CEO
Getting started with Harmoney
Review of operations
Directors’ responsibility statement
Consolidated Group Financial
Statements
Independent auditor’s report
Shareholder information
Corporate information
Directory
PAGE 3
2021
highlights
Group loan book grew to a
record NZ$501 million.
Break even pro forma Cash
NPAT delivered thanks to
attractive net lending margin
and scalable platform.
Personalised rates driven by
Libra’s scorecard is produc-
ing an industry leading net
interest margin.
$ 501mG R O U P L O A N B O O K
Break
even
P R O F O R M A C A S H N P A T .
10.6 %
N E T I N T E R E S T M A R G I N
HARMONEYANNUAL REPORT 2021
Our Australian loan book
reached a new milestone
of AU$135 million.
Group arrears continue
to perform ahead of
expectation and are at
historical lows.
Harmoney’s strong Net
Lending Margin of 6.8%
takes into account all lending
related costs, including
losses (charge-offs),
demonstrating strength of
underlying profit drivers.
$ 135mA U S T R A L I A N L O A N B O O K ( A U D )
0.69%
G R O U P 9 0 + A R R E A R S
6.8%
N E T L E N D I N G M A R G I N
PAGE 5
Our journey.
Start up
JUL 2013
Harmoney founded
by Neil Roberts.
Expansion
SEP 2014
Launch
Official NZ launch. Secured $85m in
wholesale funding, including a $50m
committed facility.
SEP 2016
$300m
In cumulative loan
originations.
JAN 2014
Harmoney team assembles
with five employees.
JAN 2016
$17m Series B capital
raise. Major improvements
to Stellare™.
CUMULATIVE VOLUME GROWTH
$100m
$300m
$500m
2013
2014
2015
2016
2017
AUG 2014
Beta launch.
First loan funded.
JAN 2015
$10m Series A capital raise.
FEB 2017
Australia
Brisbane pilot launched.
JUL 2014
First peer-to-peer licence
in New Zealand granted
by the FMA to Harmoney.
AUG 2015
$100m
Loan originations
under 12 months.
AUG 2017
Implemented industry-leading
machine learning scorecard.
HARMONEYANNUAL REPORT 2021 Expansion
OCT 2019
$25 million Series C
capital raise.
NOV 2020
HMY
Successful dual listing on
ASX and NZX.
NOV 2018
$1b
In cumulative loan
originations.
NOV 2019
$1.5 billion in cumulative
loan originations.
APR 2020
Closure of NZ peer-to-
peer for retail lenders.
MAR 2021
$2b
In cumulative loan
originations.
$500m
$1b
$1.7b
$2b
2018
2019
2020
2021
MAR 2020
$200m
Loan originations
reached in Australia.
JAN 2020
AU Warehouse
First Australian Warehouse Facility.
DEC 2018
NZ Warehouse
First New Zealand Warehouse Facility.
JUL 2021
100,000th
Loan issued.
PAGE 7
INTRODUCTION From
the Chair
DAVID FLACKS
Dear Shareholder.
When Neil Roberts founded Harmoney in 2014
as an ambitious peer-to-peer lending startup,
I was invited to join its Board. Neil had a
pioneering vision for the company: to connect
Kiwis who wanted to lend money with Kiwis
who wanted to borrow it.
That seemingly simple proposition was encouraged by the government and
represented a radical shake-up of New Zealand’s personal lending market.
It was an attempt to challenge the status quo and give New Zealander
borrowers access to fairer, risk-based interest rates on loans that would
help them get ahead; and New Zealand lenders access to retail funding
opportunities.
At that point, Harmoney was basically Neil and a few other people (most of
whom are still with the company) in a small office together. Seven years on,
Harmoney’s transformation is remarkable: loans totalling over NZ$2.1bn; over
80 employees in New Zealand and Australia; and a dual listing on the ASX
and the NZX.
An important moment in Harmoney’s journey came in late 2019, when
Neil handed the CEO role to David Stevens. Dave brought a wealth of
experience in the Australasian non-bank lending space and was instrumental
in our successful IPO. This also freed Neil up to concentrate on Harmoney’s
continuing technological innovation, in his role as Chief Product Officer.
Like any startup that aims to disrupt an established market, we’ve
faced significant headwinds to get to where we are today. We needed to
educate the public and the regulators on what we were trying to achieve
HARMONEYANNUAL REPORT 2021 for New Zealanders. It’s taken time for us to be able to move on from the
specific regulatory challenges we faced, but happily, those are now behind
us. The entire Harmoney team also did an extraordinary job of getting
through the initial shockwaves of Covid-19 in 2020.
Some of those headwinds contributed to us reshaping our business, away
from a peer-to-peer model and towards simpler on-balance sheet lending.
Nonetheless, the business is still based on its foundational principles of fair,
risk-based interest rates, market-leading technology and direct-to-customer
lending. We see tremendous opportunities to build on these foundations as
we push deeper into the Australian market.
Harmoney is ideally placed for growth in Australia because of several key
competitive advantages. First, we’re the largest 100% consumer-direct
money platform in Australia/New Zealand. By not using brokers, we achieve
higher margins and can generate repeat business at minimal additional cost.
Our new Australian scorecard has also given us a distinct customer data
advantage. Not only is this increasing conversion, but it enables us to build
more targeted and efficient digital marketing and communications.
Our tech-first credit scoring means most of our conversion process is
automated as well as providing world-class accuracy, allowing us to achieve
scale without significant increases in overhead costs. And after building a
great brand presence in New Zealand, we are now focusing our efforts on
Australia in the coming months, to build significant brand awareness.
Most of these strategic focuses were outlined in our IPO prospectus.
I am proud of the way the company has executed its plan and strategy since
listing. We are very grateful to our shareholders, and excited about
the growth potential ahead of us.
With a view to our potential for expansion in Australia, we welcomed
Paul Lahiff to Harmoney’s Board this year. Paul has significant governance
experience in the Australian financial services sector. Just as Neil recognised
the ideal moment to hand the reins to David Stevens, I believe that this
is the right time to step down as Chair, while remaining on the Board until
a replacement Independent Director is appointed, and hand over to Paul.
It has been a privilege to help establish Harmoney as one of Australasia’s
leading personal lenders. Paul is the ideal person to chair the company
through the exciting growth phase ahead.
Finally, my thanks to David, Neil, my other fellow board members, and
the Harmoney team for their hard work and dedication; and to all our
shareholders for your support of Harmoney.
David Flacks,
Chair.
PAGE 9
INTRODUCTION From the
Chief Executive
DAVID STEVENS
The transition from private ownership to a
public listing is a huge moment for any company.
Harmoney’s dual listing on the ASX and NZX last
November was the next step in our continuing
expansion, all the more pleasing because it came
against the backdrop of an unprecedented global
pandemic.
So I’d like to start by acknowledging the entire Harmoney team for the
enormous effort and commitment they showed in achieving the IPO.
Harmoney’s momentum grows.
Australia has been our core focus since going public, and demand for
Harmoney’s unique 100% direct-to-consumer model has been gratifyingly
strong—loan originations in Australia increased 22% ($23m) from the
previous year to $125m. But the real story is our momentum: our Australian
originations grew 93% from $43m in the first half to $82m in the second
half. This momentum was due to Harmoney’s two key strategic advantages:
our unequalled commitment to direct-to-consumer marketing, and Libra 1.7,
our first behavioural scorecard designed specifically for the Australian
market.
This is our unique point-of-difference: we are solely focused on a direct-to-
consumer model. By building direct relationships with our consumers rather
than relying on brokers, we are able to generate subsequent business from
them for little or no additional marketing expense. We call this our “3R”
approach: Repeat, Return, Renew. In New Zealand “3R” customers now
make up a high proportion of total originations. We expect
HARMONEYANNUAL REPORT 2021 From the
Chief Executive
the same in Australia as our portfolio grows. Better yet, our direct model also
gives Harmoney direct consumer insights: we’re simultaneously building data
superiority that means every new Libra release is creating better-than-ever
conversions and credit performance. As you’ll see later in the report,
because Libra automates so much of the credit scoring process very
accurately, we can scale growth without scaling costs. It’s a powerful model
that’s allowed us to dominate the New Zealand online personal lending
market in a few short years.
A year of two halves.
This year was for us as it was for everyone else, a tale of two halves. During
the first half, in response to the uncertainty of early COVID-19, tightened
credit criteria and marketing expenditure slowed originations. Even so, our
execution prior to that led to first-half originations of $194m, which was a
29% increase on the prior half. Then as economic conditions improved and
Our direct model also
gives Harmoney direct
consumer insights:
we’re simultaneously
building data superiority
that means every new
Libra release is creating
better-than-ever
conversions and credit
performance.
marketing returned to normal levels
our second half originations reached
$250m, a further 29% increase on the
first half of the year. For the year ended
30 June 2021 the Group reported
break even pro forma Cash NPAT. Net
lending margin improved by $2.8m (9%)
to $33m. Post IPO we increased our
investment in origination growth and
development of our Stellare platform.
The loan portfolio ended the year at
$501m, with Australia contributing
strongly and New Zealand returning to
growth in Q4. The portfolio movement
largely tracked originations, with growth
partly impacted by borrowers repaying
their loans early, taking advantage
of the low interest environment to refinance through home mortgages,
particularly in New Zealand where historically low fixed rates were available.
Harmoney’s continued focus on balanced business fundamentals to support
long-term growth has enabled us to maintain a strong net interest margin of
10.6% and, with lower credit losses as a percentage of the portfolio, increase
our net lending margin to 6.8% from 5.8% last year.
We end the year with significant capacity to fund expansion, with NZ$205
million in undrawn capacity—$99m in Australia capacity (supported by a
Big-4 Bank backed warehouse). In January 2021, a UK-based global insurer
provided our second New Zealand warehouse. This ongoing support of our
warehouse funders points to our prudent management and strong credit
performance.
PAGE 11
INTRODUCTION With strong brand momentum our 100%
consumer-direct model and scale, Harmoney has
an extremely positive growth trajectory for FY22
and beyond.
The opportunities ahead.
With strong brand momentum our 100% consumer-direct model and scale,
Harmoney has an extremely positive growth trajectory for FY22 and beyond.
It’s worth noting that while the pandemic has created massive challenges
for the global economy, it has also rapidly accelerated consumers’ online
adoption across all categories. It also saw them continue to abandon
traditional banks for fast, simple, online personal lending, so there is no end
to category growth in sight. This category growth combined with Harmoney’s
fundamental strategic advantages has meant constant improvements in book
growth, revenue growth and conversion. As we further expand Harmoney’s
presence and brand awareness in Australia from 2022 onwards, we see
significant opportunities ahead.
David Stevens,
CEO and Managing Director.
HARMONEYANNUAL REPORT 2021
Getting started
with Harmoney
Customer case studies
CASE STUDIES
PAGE 13
Case Study
Hope’s big days
Back in 2020, Hope had planned
on two things: having her dream
wedding with the love of her life,
and the dog she’d always wanted.
Making both of these things come
true turned out to be a little more
tricky than expected.
That is, until Hope turned to
Harmoney for help.
HARMONEYANNUAL REPORT 2021 Day Before Wedding
Surprise Call 📞
After 5 years of waiting a Corgi was available 🐕
How To Get
Funding?
Had previously seen
Harmoney’s ads on TV
Went to her long-term
bank first.
Bank
All Online
Had To Go Into a Branch
Money Secured Quickly
No Urgency
24 Hour Funding
Long Wait For Funding
Quincy 🐕
+
Wedding Day 💗
Newest member
joins the family
Day goes ahead,
as planned
Gets her dream day
CASE STUDIES
PAGE 15
Case Study
A creative
space for kids
When his parents’ old house came
up for sale, Robert purchased it with
a bank loan and converted it into
studios where the passion and creative
energy of young people
are harnessed to host events and
create videos for children.
It’s both a tribute to his late wife and a
way to help children in the community.
When he needed to fund more work to
the property, he applied online with
Harmoney and had an approved loan
the next day.
HARMONEYANNUAL REPORT 2021 Converted his house into an outreach centre for children
and young people in the community 🏡
From this, studios and a YouTube channel are created,
where kids share their creative ideas and energy 🎥
Needs funds to do more work to the property
How to Get
Funding?
Bank
Applied Online
Bank Steps Back
Approved Loan < 24hrs
Work to Property ✅
The studios and YouTube channel
continue to gain momentum
CASE STUDIES
PAGE 17
HARMONEYANNUAL REPORT 2021
Review
of opera-
tions.
FINANCIAL REPORT
PAGE 19
Review of Operations
Pro forma financial performance
The table below sets out the pro forma financial performance for the year compared with the prior year pro forma financial
performance, as presented in the Company’s prospectus dated 30 October 2020 (‘Prospectus’). The pro forma results are
intended to provide a more meaningful view of the Group’s operating performance, normalising for differences in accounting
treatment between warehouse and peer-to-peer funded loans. A reconciliation of the statutory consolidated statement of profit
and loss is set out on page 25.
Interest income
Other income
Total income
Interest expense
Incurred credit losses
Net lending margin
Movement in expected credit loss provision
Net lending margin after loss provision
Marketing expenses
Verification and servicing expenses
Net operating margin
Personnel expenses
Share based payment expenses
Technology expenses
General and administrative expenses
Depreciation and amortisation expenses
Total indirect expenses
Loss before income tax
Income tax benefit
Loss after income tax
Non-cash and other normalisation adjustments
Movement in expected credit loss provision
Share based payment expenses
Depreciation and amortisation expenses
Borrower establishment fee rebate
IPO Expenses
Year ended
Year ended
30 June 2021
30 June 2020
Pro forma
$'000
Pro forma
$'000
Change
Change %
78,560
85,220
(6,660)
505
79,065
27,410
18,626
33,029
(436)
33,465
16,475
4,006
12,984
9,241
4,078
3,245
7,728
1,046
806
(301)
86,026
31,394
24,382
30,250
8,268
(6,961)
(3,984)
(5,756)
2,779
(8,704)
21,982
11,483
12,601
3,874
3,428
578
5,953
7,031
6,499
2,742
760
3,331
3,458
1,617
3,318
(86)
4,270
(571)
(8%)
(37%)
(8%)
(13%)
(24%)
9%
N/A
52%
31%
17%
118%
42%
437%
(3%)
123%
(35%)
25,338
15,665
9,673
62%
(12,354)
(9,712)
(2,642)
(27%)
3,459
2,719
740
27%
(8,895)
(6,993)
(1,902)
(27%)
(436)
4,078
1,046
4,000
3,172
8,268
(8,704)
760
3,318
N/A
437%
1,617
(571)
(35%)
3,000
1,000
-
3,172
33%
-
13%
N/A
0%
Income tax impact of adjustments
(3,321)
(3,821)
500
Cash NPAT
(356)
2,831
(3,187)
Loan book (period end)
500,831
499,346
1,485
HARMONEY
ANNUAL REPORT 2021
For the year ended 30 June 2021 the Group reported a pro forma Cash NPAT of -$0.4m (2020: $2.8m), a reduction of $3.2m.
Net lending margin1 improved by $2.8m (9%), but was outweighed by increases to marketing ($3.9m), personnel ($2.7m) and
administrative expenses ($1.5m). The increase in marketing expenses was driven by increased activity post the Group’s initial
public offering (‘IPO’) including the Group’s rapid expansion in the Australian market. The increase in personnel costs was driven
by investment in additional developers for the Group’s proprietary StellareTM platform, post the Group’s IPO. The increase in
administrative expenses was driven by costs associated with establishing more efficient funding structures and additional public
company costs.
Loan originations
Originations ($'000)
Number of originations
444,044
420,107
23,937
18,164
17,008
1,156
Average value of originations ($)
24,446
24,701
(255)
6%
7%
(1%)
Year ended
Year ended
30 June 2021
30 June 2020
Change
Change %
Loan originations for the year were $444m, an increase of $24m (6%) on the prior year. During the first half, in response to
COVID-19, tightened credit criteria and marketing expenditure restrictions remained in place, slowing originations. These
measures were progressively unwound as economic conditions improved, with marketing returning to normal levels in the
second half of the year. First half originations were $194m, a 29% increase on the prior half. Second half originations were
$250m, a further 29% increase on the first half of the year.
In the first half of the year, particularly in the first quarter, originations were focused on 3Rs2 customers, reducing marketing
expenditure, with the size and maturity of the New Zealand portfolio in particular, continuing to generate significant originations.
Loan origination by geography
$180M
$120M
$60M
-
H1-FY21
NZ
H2-FY21
H1-FY21
AU
H2-FY21
3Rs
New
Loan originations in New Zealand were $319m, an increase of $1m on the prior year. First half originations were $151m, increasing
11% to $168m in the second half. As normal marketing activity resumed in the second half of the year, the proportion of
originations from 3Rs customers reduced from 83% in the prior half to 72%.
1 Net lending margin is interest income less interest expense and incurred credit losses.
2 3Rs is a retention strategy involving direct communication with existing and former customers.
FINANCIAL REPORT
PAGE 21
Loan originations in Australia were $125m, an increase of $23m on the prior year. First half originations were $43m, increasing
93% to $82m in the second half as Harmoney’s direct to customer marketing program accelerated in Australia post its IPO and
with the successful implementation of Harmoney’s Libra 1.7 scorecard in February 2021. In the second half of the year new
customer originations in Australia were $50m, comprising 60% of total Australian originations. This provides a strong pipeline
for 3Rs originations, which lag new originations, as those new customers later return, seeking to borrow for further needs. As
the Australian portfolio grows and matures it is expected to trend towards the New Zealand New/3Rs origination mix.
Pro forma portfolio
Loan book (period end) ($'000) 1
Loan book (average) ($'000) 1
1 Includes warehouse and peer-to-peer funded loans
Year ended
Year ended
30 June 2021
30 June 2020
Change
Change %
500,831
499,346
1,485
480,623
505,928
(25,305)
0%
(5%)
The loan portfolio ended the year at $501m, up $1.5m on the prior year, but with a substantial variance between the COVID-19
impacted first half, where the portfolio contracted by $31m, and the post IPO second half, where the portfolio grew by $33m.
The portfolio movement largely tracked originations however portfolio growth was also impacted by an elevated loan
amortisation rate, being the rate at which loans are repaid, with an increase in borrowers refinancing with home mortgages,
particularly in New Zealand where historically low fixed rates were available.
Pro forma net lending margin
Average interest rate (%)
Funding debt (period end) ($'000)
Funding debt (average) ($'000)
Warehouse funded % of book (period end) ($'000)
Warehouse funded % of book (average) ($'000)
Average funding rate (%)
Net interest margin (%)
Incurred credit loss ($'000)
Year ended
Year ended
30 June 2021
30 June 2020
Change
Change %
16.3%
16.8%
(50bps)
482,192
486,065
(3,873)
473,376
499,483
(26,107)
61%
44%
5.8%
10.6%
27%
20%
6.3%
10.6%
34%
24%
(50bps)
0bps
N/A
(1%)
(5%)
N/A
N/A
N/A
N/A
18,626
24,382
(5,756)
(24%)
Incurred credit loss to average gross loans (%)
Net lending margin (%)
3.9%
6.8%
4.8%
5.8%
(90bps)
100bps
N/A
N/A
Interest income for the year was $78.6m, a decrease of $6.7m on the prior year driven by the lower average portfolio size over
the period, due to the impacts of COVID-19 in the second half of FY20 and the first half of FY21.
The average interest rate, which represents interest income as a percentage of the portfolio, decreased to 16.3%, from 16.8%
in the prior year, with growth in the Australian proportion of the portfolio, where interest rates (and funding costs) are lower.
The average funding rate, which represents interest expense as a percentage of the average funding debt, decreased to 5.8%
from 6.3% in the prior year driven by continuation of the Group’s transition to warehouse funding, reaching 61% of the portfolio
being warehouse funded at 30 June 2021.
Incurred credit loss, which represent actual losses on loans written off during the period, were $18.6m, a decrease of $5.8m
(24%) from the prior year. Incurred credit loss to average loan portfolio, which represents incurred credit loss as a percentage
of the portfolio, decreased to 3.9% from 4.8% in the prior year.
HARMONEY
ANNUAL REPORT 2021
Harmoney increased its net lending margin to $33.0m, up from $30.3m in the prior year, with funding efficiencies and improved
credit performance outweighing lower interest income.
Pro forma credit provisioning
Movement in expected credit loss provision ($'000)
(436)
8,268
(8,704)
Provision rate (%)
5.6%
5.7%
(10bps)
N/A
N/A
Year ended
Year ended
30 June 2021
30 June 2020
Change
Change %
The Group’s expected credit loss (ECL) provision at 30 June 2021 was $28.3m, representing 5.6% of the portfolio, down from
5.7% of the portfolio at 30 June 2020.
The reduction in the ECL provision rate was primarily driven by improvement in the credit performance of the portfolio over the
year. The ECL provision was also moderated by a reduction in the overlay applied by management to adjust for future
macroeconomic factors not incorporated within the base provisioning model. This reduction in the economic overlay adjustment
was in response to the easing of economic uncertainty associated with COVID-19 from the circumstances persisting at 30 June
2020, however the adjustment remains higher than pre-COVID-19 levels reflecting management's assessment that economic
uncertainty remains elevated.
Pro forma direct expense metrics
Marketing to origination ratio
Verification & servicing to origination ratio
Marketing to income
Verification & servicing to income
Year ended
Year ended
30 June 2021
30 June 2020
Change
3.7%
0.8%
20.8%
4.6%
3.0%
0.8%
14.6%
4.0%
0.7%
0.0%
6.2%
0.6%
Change %
N/A
N/A
N/A
N/A
The Groups direct expenses are those that drive, or are driven by, the level of customer activity, being marketing and customer
verification and servicing.
Marketing expenses increased to $16.5m in the year from $12.6m in the prior year. This was primarily driven by the Group’s rapid
post IPO scale up in the Australian market with average quarterly origination growth of 40% achieved during the year.
Customer verification and serving costs increased to $3.6m in the year from $3.4m in the prior year on increased originations.
A consequence of Harmoney’s direct to consumer model is that marketing expenses are recognised when incurred, rather than
over the expected life of the loan, causing these costs to significantly lead the associated interest income. Accordingly,
Harmoney believes that for marketing expenditure the cost to origination ratio is a better measure of efficiency, comparing the
expenditure in the period to the loans originated in the period.
For Harmoney, the timing difference between marketing expenditure and the revenue that it generates is compounded with
Harmoney’s successful 3Rs strategy, which generates subsequent originations from existing customers for little or no additional
marketing expense, due to the direct relationship with the customer. The chart below illustrates that in the longer established
New Zealand portfolio where 3Rs originations are a much higher proportion of total originations, the marketing expense to total
originations ratio is significantly lower.
FINANCIAL REPORT
PAGE 23
Marketing to originations ratio
8.0%
6.0%
4.0%
2.0%
Covid Impacted
0.0%
Q1-FY21
Q2-FY21
Australia
Q3-FY21
New Zealand
Q4-FY21
Pro forma indirect expense metrics
Personnel to income ratio
Technology to income ratio
General and administrative to income
Year ended
Year ended
30 June 2021
30 June 2020
Change
12%
4%
6%
8%
4%
4%
4%
0%
2%
Change %
N/A
N/A
N/A
Personnel expenses (excluding share based payments) increased to $9.2m in the year from $6.5m in the prior year on increased
investment in Harmoney’s proprietary StellareTM technology platform, following its IPO in November.
Administrative expenses increased to $4.9m in the year from $3.5m in the prior year with the increase primarily driven by
additional public company costs and costs associated with establishing more efficient funding structures, with three warehouse
facilities currently operating across New Zealand and Australia and an additional New Zealand and Australian facility in advanced
negotiations.
HARMONEY
ANNUAL REPORT 2021
Statutory to pro forma reconciliation
The table below sets out the pro forma adjustments applied to the statutory consolidated income statement, for the year ended
30 June 2021 and the prior comparative period. The pro forma adjustments are consistent with those made in the Prospectus
and are intended to provide a more meaningful view of the Group’s operating performance, normalising for differences in
statutory accounting treatment between warehouse and peer-to-peer funded loans.
Year ended 30 June 2021
Year ended 30 June 2020
Statutory
Pro forma
Pro forma
Statutory
3 Month
Pro forma
Pro forma
Adjustments
15 Months Adjustment Adjustments
$'000
$'000
$'000
$'000
$'000
$'000
Year
$'000
Interest income 1
Fee income 2
Other income 3
Total income
37,643
40,917
659
(659)
845
(340)
39,147
39,918
Interest expense 4
9,647
17,763
Impairment expense 5
13,072
5,118
Marketing expenses
16,475
4,006
13,248
3,245
-
-
71
-
1,046
-
Verification and servicing
expenses
Personnel expenses 6
Technology expenses
Depreciation and
amortisation expenses 7
General and administrative
expenses 8
78,560
-
505
79,065
27,410
18,190
16,475
4,006
13,319
3,245
1,046
21,552
(2,521)
66,189
85,220
13,829
(7,240)
(6,589)
-
2,099
-
(1,293)
806
37,480
(9,761)
58,307
86,026
5,698
(553)
26,249
31,394
8,898
(638)
24,390
32,650
15,085
(2,484)
-
12,601
4,185
(757)
-
3,428
13,151
(2,730)
(3,162)
7,259
4,135
(804)
-
3,331
977
(173)
813
1,617
7,728
-
7,728
5,339
(692)
(1,189)
3,458
Loss before income tax
(29,320)
16,966
(12,354)
(19,988)
(930)
11,206
(9,712)
Income tax benefit 9
2,286
1,173
3,459
4,616
616
(2,513)
2,719
Loss after income tax
(27,034)
18,139
(8,895)
(15,372)
(314)
8,693
(6,993)
Notes:
1.
2.
3.
4.
5.
6.
7.
8.
9.
In the statutory income statement, loans funded via warehouse facilities are recorded on-balance sheet, while loans funded via the Group’s peer-to-peer trusts are
off-balance sheet for accounting purposes. As the Group is transitioning to full warehouse funding, this creates income statement comparability issues between
periods. As such a pro forma adjustment has been made to present the income statement consistently with recognition of peer-to-peer funded loans on-balance
sheet, indifferent to funding sources. In the statutory income statement, for loans funded by the Group’s peer-to-peer trusts, expected lifetime fee income is
recognised on loan origination, in contrast with warehouse funding where interest income and interest expense are recognised over the life of the loan. The interest
income adjustment recognises interest income earned during the period from peer-to-peer funded loans.
For the reasons set out in note 1, the fee income adjustment removes fees earned from peer-to-peer funded loans with establishment fees being recognised in the
pro forma income statement through interest income over the expected life of the loan and peer-to-peer lender fees being recognised in the pro forma as a
deduction from interest expense. The fee income adjustment also reclassifies borrower dishonour and late fees to other income.
The other income adjustment reclassifies borrower dishonour and late fees from fee income in the statutory income statement to other income in the pro forma
income statement and, for consistency with the pro forma income statement presented in the Prospectus, removes non-recurring benefit of the Wage Subsidy
Scheme in New Zealand and the JobKeeper wage subsidy in Australia and in the prior comparative period removes grant income which the Group expects on a go
forward basis it would not be eligible to receive on the revised application of its accounting policy for the capitalisation of eligible research and development applied
from the current period.
For the reasons set out in note 1, the interest expense adjustment recognises net interest paid to peer-to-peer lenders after deducting impairments and fees owed
to the Group and, for consistency with the pro forma income statement presented in the Prospectus, removes the interest expense relating to the corporate debt
facility, which was repaid prior to the IPO.
For the reasons set out in note 1, the impairment expenses adjustment recognises, for peer-to-peer funded loans, both actual impairment costs and the movement
in expected credit loss provision during the period.
For consistency with the pro forma income statement presented in the Prospectus, the personnel expenses have been adjusted to remove the impact of the salary
reductions taken by employees and, in the prior comparative period, remove the portion of costs that the Group estimates could have been capitalised had the
current period application of the Group's accounting policy for the capitalisation of eligible research and development expenditure applied.
For consistency with the pro forma income statement presented in the Prospectus, the depreciation and amortisation expenses for the prior comparative period
adds the Group's estimate of amortisation of capitalised research and development expenditure had the Group's current period application of its accounting policy
for the capitalisation of eligible research and development expenditure been applied in prior periods.
For consistency with the pro forma income statement presented in the Prospectus, the general and administrative expenses adjustment in the prior comparative
period removes the establishment costs relating to the corporate debt facility, which was repaid prior to the IPO, and adds the Group’s estimate of additional public
company costs associated with being a publicly listed entity.
The income tax benefit adjustment represents the cumulative income tax expense on the pro forma adjustments at an effective income tax rate of 28%.
FINANCIAL REPORT
PAGE 25
Director’s Report
The Directors present their report, together with the financial statements, on the consolidated entity consisting of Harmoney
Corp Limited and the entities it controlled at the end of, or during the year ended, 30 June 2021 (“the Group”).
Directors
The Directors of Harmoney Corp Limited at the date of this report are:
David Flacks
Tracey Jones
Paul Lahiff
Neil Roberts
Independent Chairman
Independent Director
Independent Director
Founder, Chief Product Officer and Executive Director
David Stevens
Chief Executive Officer and Managing Director
For details of Directors during the year refer to the Company Information.
Principal activities
Harmoney provides customers with unsecured personal loans that are competitively priced using risk-adjusted interest rate and
accessed 100% online. The Group operates across New Zealand and Australia.
Dividends
There were no dividends paid, recommended, or declared during the current or previous financial year.
For and on behalf of the Directors’
David Flacks
Chairman
Auckland
30 August 2021
HARMONEY
ANNUAL REPORT 2021
Financial
Report
FINANCIAL REPORT
PAGE 27
Directors’ Responsibility Statement
The directors are pleased to present the consolidated financial statements of Harmoney Corp Limited for the year ended 30
June 2021.
The directors are responsible for ensuring that the consolidated financial statements give a true and fair view of the financial
position of the Group as at 30 June 2021 and its financial performance and cash flows for the year ended on that date.
The directors consider that the consolidated financial statements of the Group have been prepared using appropriate
accounting policies consistently applied and supported by reasonable judgements and estimates and that all the relevant
financial reporting and accounting standards have been followed.
The directors believe that proper accounting records have been kept which enable, with reasonable accuracy, the determination
of the financial position of the Group and facilitate compliance of the consolidated financial statements with the Financial
Reporting Act 2013.
Harmoney Corp Limited's directors do not have the power to amend these consolidated financial statements after issue.
The Board of Directors of Harmoney Corp Limited authorised the financial statements set out on pages 29-65 for issue on 30
August 2021.
For and on behalf of the Board
David Flacks
Director
30 August 2021
Tracey Jones
Director
HARMONEY
ANNUAL REPORT 2021
Consolidated Group
Financial Statements
Consolidated Statement of Profit or
Loss and Other Comprehensive
Income
For the year ended 30 June 2021
Interest income
Fee income
Other income
Total income
Interest expense
Impairment expense
Marketing expenses
Personnel expenses
Verification and servicing expenses
Technology expenses
General and administrative expenses
Depreciation and amortisation expenses
Loss before income tax
Income tax benefit
Loss for the period attributable to shareholders of Harmoney Corp
Limited
Other comprehensive gain/(loss)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Gain/(loss) on cash flow hedge
Other comprehensive income/(loss) for the period, net of tax
Total comprehensive loss for the period attributable to shareholders of
Harmoney Corp Limited
Earnings per share for loss attributable to the ordinary equity holders of the
Company:
Basic earnings per share
Diluted earnings per share
FINANCIAL REPORT
PAGE 29
Year ended
15 months ended
30 June 2021
30 June 2020
Notes
$'000
$'000
6
7
8
6
9
10
12
14
13
13
37,643
659
845
39,147
9,647
13,072
16,475
13,248
4,006
3,245
7,728
1,046
21,552
13,829
2,099
37,480
5,698
8,899
15,085
13,150
4,185
4,135
5,339
977
(29,320)
(19,988)
2,286
4,616
(27,034)
(15,372)
898
841
(250)
(818)
1,739
(1,068)
(25,295)
(16,440)
Cents
Cents
(29.0)
(29.0)
(20.6)
(20.6)
Consolidated Statement
of Financial Position
As at 30 June 2021
Assets
Cash and cash equivalents
Trade and other assets
Finance receivables
Property and equipment
Intangible assets
Deferred tax assets
Total assets
Liabilities
Payables and accruals
Borrowings
Provisions
Lease liability
Derivative financial instruments
Total liabilities
Net assets
Share capital
Foreign currency translation reserve
Share based payment reserve
Cash flow hedge reserve
Accumulated losses
Equity
Notes
$'000
$'000
30 June 2021
30 June 2020
15
16
17
18
19
12
20
21
22
18
14
23
24
14
24
76,464
1,894
34,779
5,223
294,821
129,222
642
3,455
11,490
1,448
-
9,548
388,766
180,220
7,324
3,263
291,541
132,630
13,405
717
85
12,832
1,684
926
313,072
151,335
75,694
28,885
131,399
56,686
564
216
(85)
(334)
2,825
(926)
(56,400)
(29,366)
75,694
28,885
THE ABOVE CONSOLIDATED STATEMENT OF FINANCIAL POSITION SHOULD BE READ IN CONJUNCTION WITH THE ACCOMPANYING NOTES.
HARMONEY
ANNUAL REPORT 2021
Consolidated Statement
of Changes in Equity
For the year ended 30 June 2021
Share
capital
Foreign
currency
translation
reserve
Share
based
payment
reserve
Cash
flow
hedge
reserve
Accumulated
losses
Total
Notes
$'000
$'000
$'000
$'000
$'000
$'000
Balance at 31 March 2019
33,092
(84)
2,386
(108)
(13,994)
21,292
Loss for the 15 month period ended 30 June
2020
Other comprehensive loss for the 15 month
period ended 30 June 2020, net of income
tax
Total comprehensive loss for the 15 month
period ended 30 June 2020
Recognition of share based payments
Transfer to capital
Issue of share capital
-
-
-
-
125
23,469
24
24
23
-
-
-
(15,372)
(15,372)
(250)
-
(818)
-
(1,068)
(250)
-
(818)
(15,372)
(16,440)
-
-
-
564
(125)
-
-
-
-
-
-
-
564
-
23,469
Balance at 30 June 2020
56,686
(334)
2,825
(926)
(29,366)
28,885
Loss for the year ended 30 June 2021
Other comprehensive loss for the year
ended 30 June 2021, net of income tax
Total comprehensive loss for the year
ended 30 June 2021
Recognition of share based payments
Transfer to share capital
Issue of share capital, net of transaction
costs
-
-
-
-
7,162
67,551
24
24
23
-
898
898
-
-
-
-
-
-
-
(27,034)
(27,034)
841
-
1,739
841
(27,034)
(25,295)
4,553
(7,162)
-
-
-
-
-
-
-
4,553
-
67,551
Balance at 30 June 2021
131,399
564
216
(85)
(56,400)
75,694
THE ABOVE CONSOLIDATED STATEMENT OF CHANGES IN EQUITY SHOULD BE READ IN CONJUNCTION WITH THE ACCOMPANYING NOTES.
FINANCIAL REPORT
PAGE 31
Consolidated Statement
of Cash Flows
For the year ended 30 June 2021
Year ended
15 months ended
30 June 2021
30 June 2020
Notes
$000
$000
Cash flows from operating activities
Interest received
Interest paid
Other income
Payments to suppliers and employees
Net cash (used in)/generated by operating activities
Cash flows from investing activities
Net advances to customers
Payments for intangibles and equipment
Net cash (used in) investing activities
Cash flows from financing activities
Net proceeds from finance receivables borrowings
Net (repayment) / proceeds of debt financing
Proceeds from share issue, net of transaction costs
Principal element of lease payments
Net cash generated by financing activities
Cash and cash equivalents at the beginning of the period
Net increase / (decrease) in cash and cash equivalents
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the period
15
36,760
(9,773)
6,809
20,650
(5,576)
32,712
(35,384)
(41,616)
(1,588)
6,170
(180,044)
(99,209)
(3,694)
(33)
(183,738)
(99,242)
170,227
(10,694)
67,550
(969)
84,863
10,163
23,469
(189)
226,114
118,306
34,779
40,788
897
76,464
9,531
25,234
14
34,779
HARMONEY
ANNUAL REPORT 2021
Notes to the Consolidated
Financial Statements
For the year ended 30 June 2021
1 Corporate information
Harmoney Corp Limited (the Company) and its subsidiaries (collectively, the Group) are companies whose primary business is
to originate, service and invest in loans. There has been no change in the principal activity of the Group during the period.
The results and position of each Group entity are expressed in New Zealand dollars, which is the functional currency of the
Company and the presentation currency for the consolidated financial statements, unless otherwise stated.
Harmoney Corp Limited is a company incorporated in New Zealand and registered under the Companies Act 1993, whose shares
are publicly traded on both the Australian Stock Exchange (ASX) and New Zealand Exchange (NZX) and is required to be treated
as a reporting entity under the Financial Market Conducts Act 2013 and the Financial Reporting Act 2013 as it is a licensed peer-
to-peer lender. The Company was incorporated on 1 May 2014.
These consolidated financial statements are for the year ended 30 June 2021 while the comparative information is for the 15
month period ended 30 June 2020 and accordingly, the results are not directly comparable.
2 Significant accounting policies
2.1 Basis of preparation
The consolidated financial statements of Harmoney Corp Limited comply with New Zealand equivalents to International Financial
Reporting Standards (NZ IFRS) and have been prepared in accordance with Generally Accepted Accounting Practice in New
Zealand (GAAP). The Company is a for-profit entity for the purposes of complying with GAAP.
The Group has transitioned from NZ IFRS Reduced Disclosure Regime to NZ IFRS and International Financial Reporting
Standards (IFRS). There were no recognition or measurement differences arising from the Group's transition.
The Consolidated group financial statements have been prepared following the historical cost convention, except where
otherwise identified. Financial assets are initially recognised at fair value and are subsequently measured at amortised cost
using the effective interest rate method, less any expected credit loss allowance. The comparatives have been regrouped for
consistency with the current year presentation. The comparatives have not been restated.
The Consolidated Statement of Financial Position has been prepared in order of liquidity, including the comparatives. All assets
and liabilities are current unless otherwise stated in the notes. The disaggregation of amounts receivable and payable in the
next twelve months and beyond is outlined in the accompanying notes to the financial statements and the maturity profile of
financial liabilities is outlined in note 28.
2.2 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities (including structured
entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:
has power over the investee;
has the ability to use its power to affect its returns.
is exposed, or has rights, to variable returns from its involvement with the investee; and
HARMONEY
PAGE 33
The assets and liabilities of entities whose functional currency is not the New Zealand dollar are translated at the exchange
rates ruling at balance date. Revenue and expense items are translated at the spot rate at the transaction date or a rate
approximating that rate. Exchange differences are taken to the foreign currency translation reserve.
All intragroup assets and liabilities, equity, income, expenses, and cash flows relating to transactions between members of the
Group are eliminated in full on consolidation.
2.3 Goods and services tax
Revenue, expenses, assets, and liabilities are recognised net of the amount of goods and services tax (GST) except:
where the amount of GST incurred is not recovered from the taxation authority, the unrecoverable GST expense is
included in the related expense item in the income statement.
receivables and payables which are recognised inclusive of GST (the net amount of GST recoverable from or payable
to the taxation authority is included as part of receivables or payables).
cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to, the taxation authority, are presented as operating cash flows.
2.4
Application of new and revised accounting standards
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2021 reporting
periods and have not been early adopted by the Group. These standards are not expected to have a material impact on the
Group in the current or future reporting periods and on foreseeable future transactions. The Interest Rate Benchmark Reform
– Amendments to IFRS 7, IFRS 9 and IAS 39 will have no impact as the Group does not have any IBOR-based contracts.
3 Significant changes in the current reporting period
ASX Listing and Initial Public Offering (IPO)
On 19 November 2020, the Company completed an IPO and listed on the ASX with a secondary listing on the NZX. Refer to
note 23 for further details.
4 Significant accounting judgements, estimates and assumptions
The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of assets and liabilities, income and expenses and actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future
periods if the revision affects both current and future periods.
Expected credit loss provision
4.1
The Group has estimated the provision for expected credit losses (ECL) based on historically observed patterns of borrower
behaviour adjusted for current and future economic outcomes. These are discussed in detail in note 17 and have a significant
impact on these financial statements.
The Group measures the allowance for ECL using an expected credit loss impairment model as required by NZ IFRS 9 Financial
Instruments (NZ IFRS 9). The Group’s accounting policy for the recognition and measurement of the allowance for ECL is
described at note 17.
HARMONEY
ANNUAL REPORT 2021
4.2 Determination of transaction price for distributing services
In respect of peer-to-peer funded loans, the Group has estimated the transaction price for distributing services, being the
amount to which the Group expects to be entitled for matching peer-to-peer lenders with borrowers that meet their lending
criteria. The transaction price includes a component of variable consideration as the amount of certain payments is correlated
with borrower behaviour over which the Group has no control. The Group has estimated the transaction price based on
historically observed patterns of borrower behaviour. The assumptions made regarding the rate of default and early repayment
by borrowers has a significant impact on these financial statements.
The Group measures the transaction price including variable consideration to determine income as required by NZ IFRS 15
Revenue from Contracts with Customers (NZ IFRS 15). The Group's accounting policy for the recognition and measurement of
this income is described in note 7. The transaction price is determined based on models of expected customer behaviour which
are informed by historical experience. An overlay has been applied to reduce the amount of income recognised to accommodate
for the expected deviation from that base given current uncertainties.
4.3 Treatment of development costs incurred in the period
The Group has incurred and will continue to incur significant costs on software development projects. The directors believe that
the costs fall within the definition of research and development within NZ IAS 38 Intangible Assets. Judgement has been applied
in assessing these costs against the recognition and measurement criteria in that standard. The costs have been recorded as
Intangible Assets on the balance sheet where the Group believes that they have met all the requirements of the recognition
criteria outlined in the accounting policy (note 19) and expensed where they have not been met.
4.4 Deferred tax asset relating to tax losses
NZ IAS 12 Income Taxes allows the capitalisation of tax losses as deferred tax assets only to the extent that there is convincing
evidence that future taxable profit will be available against which the unused tax losses can be utilised. The tax loss position of
the Group arose from significant one-off costs, including those related to the IPO, that will not re-occur and a strategic
repositioning. The Group is transitioning to originating loans on balance sheet, and while in the growth phase, this creates a tax
profile of high costs being incurred in the short-term and income over time. The Group has estimated the amount of deferred
tax assets for which there is convincing evidence that utilisation will occur in the medium term and disclosed the remainder as
unrecognised deferred tax assets.
5 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Chief Executive Officer (considered to be the CODM).
5.1 Description of segments
The CODM considers the business from a geographical operating perspective and has identified two reportable segments: New
Zealand and Australia. This is a change from previous segment reporting, where there was a third segment for centrally incurred
costs allocated to Head Office. The CODM considers performance for New Zealand and Australia with costs allocated as the
Australian business has now matured. This change has been reflected in the comparative period.
The CODM assesses the business on a Cash NPAT basis. Cash NPAT is a non-GAAP measure and consists of profit/(loss) after
income tax, adjusted for determined non-cash and abnormal items. It is intended as a supplementary measure of operating
performance for readers to understand the cash generating ability of the Group. Cash NPAT does not have a standard meaning
prescribed by GAAP and therefore may not be compared to information presented by other entities.
Intersegment revenue is not considered by the chief operating decision maker and is accordingly excluded from segment
reporting.
5.2 Major customers
There are no customers who account for more than 10% of the Group’s revenue for the year ended 30 June 2021 (2020: 10%
of the Group’s revenue was received from transactions with a single external customer).
HARMONEY
PAGE 35
The following tables present income and loss information for the Group’s operating segments.
Segmented income statement for the Year ended 30 June 2021 $'000
Interest income
Fee income
Other income
Total income
Interest expense
Incurred credit losses
Movement in expected credit loss provision
Marketing expenses
Verification and servicing expenses
Personnel expenses (excl. share-based payments)
Share-based payments expenses
Technology expenses
Depreciation and amortisation expenses
General and administrative expenses
Loss before income tax
Income tax benefit/(expense)
New Zealand
Australia
Group
29,542
(1,079)
715
8,101
1,738
130
37,643
659
845
29,178
9,969
39,147
5,748
3,974
5,939
8,671
2,937
8,107
3,508
3,240
914
6,377
3,899
813
2,346
7,804
1,069
1,063
570
5
132
1,351
9,647
4,787
8,285
16,475
4,006
9,170
4,078
3,245
1,046
7,728
(20,237)
(9,083)
(29,320)
1,028
1,258
2,286
Loss for the period attributable to shareholders of Harmoney
Corp Limited
(19,209)
(7,825)
(27,034)
Non-cash and other normalisation adjustments
Movement in expected credit loss provision
Share based payments expenses
Depreciation and amortisation expenses
Borrower establishment fee rebate
IPO related expenses
Income tax impact of adjustments
5,939
3,508
914
4,000
3,172
2,346
570
132
-
-
8,285
4,078
1,046
4,000
3,172
(4,908)
(914)
(5,822)
Cash NPAT
(6,584)
(5,691)
(12,275)
HARMONEY
ANNUAL REPORT 2021
Segmented income statement for the 15 months ended 30 June 2020 $'000
Interest income
Fee income
Other income
Total income
Interest expense
Incurred credit losses
Movement in expected credit loss provision
Marketing expenses
Verification and servicing expenses
Personnel expenses (excl. share-based payments)
Share-based payments expenses
Technology expenses
Depreciation and amortisation expenses
General and administrative expenses
Loss before income tax
Income tax benefit
New Zealand
20,473
8,030
2,067
30,570
4,183
2,676
5,036
8,789
3,120
10,865
668
4,131
931
3,212
Australia
1,079
5,799
32
6,910
1,515
-
1,187
6,296
1,065
1,453
164
4
46
2,127
Group
21,552
13,829
2,099
37,480
5,698
2,676
6,223
15,085
4,185
12,318
832
4,135
977
5,339
(13,041)
(6,947)
(19,988)
4,120
496
4,616
Loss for the period attributable to shareholders of
Harmoney Corp Limited
(8,921)
(6,451)
(15,372)
Non-cash and other normalisation adjustments
Movement in expected credit loss provision
Share based payments expenses
Depreciation and amortisation expenses
Borrower establishment fee rebate
Income tax impact of adjustments
5,034
669
931
3,000
(2,697)
1,187
6,221
164
46
-
833
977
3,000
(419)
(3,116)
Cash NPAT
(1,985)
(5,473)
(7,458)
HARMONEY
PAGE 37
The following tables present a disaggregation of the Group’s fees income in operating segments.
Segment fee income statement for the Year ended 30 June 2021 $'000
New Zealand
Australia
Group
Distributing services
Establishment services
Borrower establishment fee rebate
Protect fees
Other fees
Total fee income
1,082
921
(4,000)
893
25
982
752
-
-
4
(1,079)
1,738
Segment fee income statement for the 15 months ended 30 June 2020 $'000
New Zealand
Australia
Distributing services
Establishment services
Borrower establishment fee rebate
Protect fees
Other fees
Total fee income
3,810
4,709
(3,000)
1,553
958
8,030
4,013
1,730
-
-
56
5,799
6
Interest
Interest Income
Interest income
Interest Expense
Interest Expense
Interest on receivables funding
Interest on corporate debt
Interest on lease liability
Total interest expense
Year ended
30 June 2021
$000
37,643
Year ended
30 June 2021
$000
8,960
624
63
9,647
2,064
1,673
(4,000)
893
29
659
Group
7,823
6,439
(3,000)
1,553
1,014
13,829
15 months ended
30 June 2020
$000
21,552
15 months ended
30 June 2020
$000
4,973
628
97
5,698
Interest income and interest expense are recognised in the Income Statement for all financial assets and liabilities measured at
amortised cost using the effective interest method. The effective interest method allocates interest income or interest expense
over the life of the contract, or when appropriate a shorter period, using the effective interest rate. The effective interest rate is
the discount rate at which the present value of the future cash flows equals the net carrying amount of the financial asset or
liability. Where the Group is the lender, origination fees are required to be amortised over the expected life of the finance
receivable in accordance with NZ IFRS 9 Financial Instruments. The deferred amount is recognised as a reduction to the finance
receivable (note 17).
HARMONEY
ANNUAL REPORT 2021
7 Fee Income
Borrower fee income
Establishment services
Borrower establishment fee rebate
Protect fees
Other fees
Total borrower fee income
Lender fee income
Distributing services
Total fee income
Year ended
30 June 2021
$000
15 months ended
30 June 2020
$000
1,673
(4,000)
893
29
(1,405)
2,064
659
6,439
(3,000)
1,553
1,014
6,006
7,823
13,829
Establishment services
Establishment fees are a brokerage fee charged to borrowers on peer-to-peer loans for arranging the loan. The performance
obligation of arranging the loan is fulfilled at the point in time the loan is matched. Given only one material performance obligation
the transaction price is allocated to the single performance obligation. The Borrower establishment fee rebate relates to
movements in the provision for rebate (note 22) and the basis for the rebate is disclosed in note 31.
Protect Fees
In New Zealand, some of the finance receivable assets have the payment protect feature attached. If the borrower under the
loan contract has elected the payment protect feature and makes a successful claim within the required period, principal and
interest repayments covered by the claim will be waived by the lender. No amounts are paid to the borrower in the event of a
waiver.
Protect fee revenue is the amount charged to the borrower for the payment protect feature on finance receivables. This Protect
fee revenue is recognised in the income statement from the attachment date over the period of the contract. Protect fee revenue
is earned in accordance with the pattern of the underlying exposure to risk expected under the payment protect feature of the
loan contract. The portion of Protect fee revenue included in the financial receivable asset but not yet earned as at the balance
date is included in payables and accruals as waiver fee revenue in advance (note 20).
Where the loan is off balance sheet, the Protect fee revenue is the amount charged to the peer-to-peer lender for arrangement
and management of the Protect loan. Given only one material performance obligation, the transaction price is allocated to the
single performance obligation. At the point the performance obligation of matching the lender with a borrower is satisfied, the
Group estimates and records as revenue the amount of variable consideration to the extent that it is highly probable that a
significant reversal in the cumulative revenue recognised will not occur. The Group’s estimate of rebateable amounts is included
in provision as distributing services rebate provision (note 22).
Other fees
Other fees include fees charged when borrower repayments are dishonoured or in arrears. A performance obligation arises
every time the credit event occurs. The Group performs the debt collection activity following every credit event and recognises
revenue at the point in time the follow up activity is undertaken. Given only one material performance obligation the transaction
price is allocated to the single performance obligation. Revenue is recognised only to the extent that it is likely that the amount
will be recovered.
HARMONEY
PAGE 39
Distributing services
Distributing services refer to Harmoney facilitating the matching of credit worthy borrowers with off balance sheet lenders within
criteria chosen by the lender. The fees charged for this service are recognised at the point matching is complete and to the
extent that it is highly probable that a significant reversal will not occur. Given only one material performance obligation the
transaction price is allocated to the single performance obligation.
Payment for distributing services is made by the lender via a combination of fees payable at the point of matching with a borrower
when borrower repayments are received and on a monthly invoice cycle where fees are calculated based on lender portfolio
performance.
Certain fees charged at the point of matching lenders with borrowers are rebateable if the lender does not achieve the required
return on their investment. This is typically due to the borrower loan closing earlier than stated on their contract due to early
repayment or default. At the point the performance obligation of matching the lender with a borrower is satisfied, the Group
estimates and records as revenue the amount of variable consideration to the extent that it is highly probable that a significant
reversal in the cumulative revenue recognised will not occur. The Group's estimate of rebateable amounts are booked as
distributing services rebate provision note 22.
8 Other Income
Grant income
Wage subsidy
Total other income
Year ended
30 June 2021
$000
476
369
845
15 months ended
30 June 2020
$000
1,614
485
2,099
Grant and wage subsidy
Grants from the New Zealand Government are recognised at their fair value where there is reasonable assurance that the grant
will be received, and the Group will comply with all attached conditions. Harmoney received grants related to Research and
Development activity as funded by Callaghan Innovation and the R&D Loss Tax Credit as funded by Inland Revenue. Grants that
compensate the Group for expenses incurred are recognised in profit or loss on a systematic basis in the same periods in which
the expenses are recognised.
The Group received $239,006 (2020: $452,923) of wage subsidies funded by the Ministry of Social Development for New
Zealand operations. The subsidy was part of the New Zealand Government's COVID-19 response plan. The wage subsidy was
predicated on certain criteria which were considered in the Group's application. The Group also received $23,813 (2020:
$32,185) of JobKeeper subsidies and $106,361 (2020: $Nil) of Cash flow boost grant funded by the Australian Tax Office, these
are recognised as wage subsidies above. The subsidy and grant were predicated on certain criteria which were considered in
the Group's application.
HARMONEY
ANNUAL REPORT 2021
9
Impairment expense
Change in expected credit loss provision
Incurred credit loss
Change in protect waiver provision
Impairment expense
Year ended
15 months ended
30 June 2021
30 June 2020
$000
$000
8,285
4,853
(66)
13,072
6,223
2,510
166
8,899
Change in expected credit loss provision
The expense is recognised when there is a movement in the provision due to the composition of the finance receivables (note
17). For example, due to the growth in the finance receivable.
Incurred credit loss
Financial assets are written off when there is no reasonable expectation of recovery, such as the borrower failing to engage in
a repayment plan with the Group. The Group categorises a finance receivable as incurred credit loss when the borrower fails to
make contractual payments more than 120 days past due. Where finance receivables have been written off, the Group continues
to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised
in profit or loss.
10 Depreciation and Amortisation
Depreciation charge on right-of-use assets
Buildings
Equipment
Depreciation charge on Property Plant and Equipment
Furniture and Fixtures
IT Equipment
Amortisation charge
Software development
Total depreciation and amortisation expense
Amounts recognised in the statement of profit and loss relating to leases
Interest expense (included in interest expense)
Expense relating to short-term leases
Cash outflows relating to leases
Cash outflow for leases in the period
HARMONEY
PAGE 41
Year ended
15 months ended
30 June 2021
30 June 2020
$'000
$'000
779
8
9
23
227
1,046
63
4
908
11
14
37
7
977
97
106
1,032
287
11 Research and Development
Research and development costs capitalised
Research and development costs expensed
Total research and development
Year ended
15 months ended
30 June 2021
30 June 2020
$000
3,682
544
4,226
$000
-
6,425
6,425
Research and development costs capitalised are discussed in note 19. Expenditure on research activities is recognised as an
expense in the period in which it is incurred.
12
Income Taxes
Income tax recognised in profit or loss
12.1
The income tax expense for the period can be reconciled to the accounting profit/(loss) as follows:
Current tax
In respect of the current period
Deferred tax
In respect of the current period
Total income tax benefit recognised in the period
Loss before tax from continuing operations
Income tax benefit calculated
Effect of expenses that are not deductible
Research and Development Tax Credits
Movement in temporary differences
Income tax benefit not recognised
Other
Income tax benefit recognised in profit or loss
Year ended
15 months ended
30 June 2021
30 June 2020
$000
27
$000
36
(2,313)
(2,286)
(4,652)
(4,616)
Year ended
30 June 2021
$000
(29,320)
(8,333)
(8,227)
476
263
13,503
32
(2,286)
15 months ended
30 June 2020
$000
(19,988)
(5,698)
453
392
142
-
95
(4,616)
The tax rate used for the reconciliation above is the corporate tax rate of 28% payable by corporate entities in New Zealand
and 30% for those in Australia, on taxable profits under tax law in their respective jurisdictions.
Income tax expense represents the sum of the tax currently payable and deferred tax.
HARMONEY
ANNUAL REPORT 2021
Current tax
The tax currently payable is based on taxable profit for the period. Taxable profit differs from ‘profit/(loss) before tax’ as
reported in the consolidated statement of profit or loss and other comprehensive income because of items of income or expense
that are taxable or deductible in other periods and items that are never taxable or deductible. The Group's current tax is
calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated
financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are
generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible
temporary differences to the extent that there is convincing other evidence that taxable profits will be available against which
those deductible temporary differences can be utilised.
12.2 Deferred tax balances
The following is the analysis of deferred tax assets/(liabilities) presented in the consolidated statement of financial position
Deferred tax assets
Losses
Deferred R&D expenses
Share based payments
Accruals and other
Deferred tax assets
Deferred tax liabilities
Distributing services
Plant & equipment and intangibles
Deferred tax liabilities
Net deferred tax assets
30 June 2021
30 June 2020
$'000
$'000
6,800
2,283
-
5,342
14,425
(2,870)
(65)
(2,935)
11,490
7,494
4,355
901
2,284
15,034
(2,143)
(5)
(2,148)
12,886
The recognised tax losses are subject to meeting the requirements of the applicable tax legislation. The carrying amount of
deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred tax asset recognised to be utilised. The Group has further tax
losses of $11.9m at 30 June 2021 (June 2020: nil) which have not been recognised and are available to offset future taxable
profits.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against
current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
12.3 Amounts recognised directly in equity
Aggregate current and deferred tax arising in the reporting period and not
recognised in net profit or loss or other comprehensive income but directly
debited or credited equity:
Share based payments
371
269
30 June 2021
30 June 2020
$'000
$'000
HARMONEY
PAGE 43
13 Earnings per share
Loss after tax for the period attributable to the owners of the Group
30 June 2021
30 June 2020
$'000
$'000
(27,034)
(15,372)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
93,358,795
74,576,613
Weighted average number of ordinary shares used in calculating diluted earnings per share
93,358,795
74,576,613
Basic earnings per share
Diluted earnings per share
Cents
Cents
(29)
(29)
(21)
(21)
Number
Number
Weighted average number of ordinary shares used as the denominator in calculating basic earnings
per share
93,358,795
74,576,613
Adjustments for calculation of diluted earnings per share:
Options
Weighted average number of ordinary shares and potential ordinary shares used as the
denominator in calculating diluted earnings per share
-
-
93,358,795
74,576,613
Options
Performance rights (zero strike price options) under the Groups Long Term Incentive Plan (‘LTIP’) as detailed in note 24 are considered to be
potentially ordinary shares. They have been included in the determination of diluted earnings per share to the extent to which they are dilutive.
The calculation of diluted earnings per share does not include 4,224,000 options granted on 15 June 2021 because they are antidilutive for the
year ended 30 June 2021. These options could potentially dilute basic earnings per share in the future.
14 Cash flow hedge
Cash flow hedge reserve
The Group borrows funds (note 21) in order to purchase finance receivables (note 17). The interest rate payable on the
borrowings is floating while the interest receivable is fixed at the point the funds are lent. The interest rate risk is managed and
mitigated through the use of interest rate swaps, which exchange floating interest payments with fixed interest payments. The
swaps are entered into to match the maturity profile of estimated repayments of the Group's borrowings. These are accounted
for at trade date.
The cash flow hedge reserve is used to recognise the effective portion of gains or losses on derivatives (interest rate swaps)
that are designated and qualify as cash flow hedges.
At inception of the hedge relationship, the Group documents the economic relationship between hedging instruments and
hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the
cash flows of hedged items. The Group documents its risk management objective and strategy for undertaking its hedge
transactions.
The valuations for New Zealand were based on market rates at 30 June 2021 of 0.26% for the 1-month BKBM and 1.35% for the
5-year swap rate for (2020: 0.27% and 0.36%) and for Australia 0.01% for the 1-month BBSW and 0.92% for the 5-year swap
rate (2020: 0.09% and 0.27%).
HARMONEY
ANNUAL REPORT 2021
15 Cash and cash equivalents
Cash and cash equivalents at the end of the reporting period as shown in the consolidated statement of cash flows can be
reconciled to the related items in the consolidated statement of financial position as follows:
Cash on hand and demand deposits
Short term deposits
Restricted cash
Total cash and cash equivalents
30 June 2021
$'000
44,343
-
32,121
76,464
30 June 2020
$'000
10,266
17,139
7,374
34,779
No adjustment has been made for counterparty credit risk in cash and cash equivalents as the risk of impairment is not expected
to be material.
Short term deposits are presented as cash equivalents if they have a maturity of three months or less from the date of acquisition
and are repayable with 24 hours notice with no loss of interest.
Restricted cash is held by Harmoney Warehouse Trust No. 1, Harmoney Warehouse No.2 Trust and Harmoney Australia
Warehouse No. 1 Trust, controlled entities (note 26). These funds may only be used for purposes defined in the Trust documents,
and therefore not available for general use by the Group.
Reconciliation of (loss)/profit for the period to net cash generated by operating activities
Year ended 30 June 2021
15 months ended 30 June 2020
$'000
(27,034)
13,072
4,925
1,046
1,471
(497)
2
3,329
(2,316)
4,783
640
(1,009)
(1,588)
$'000
(15,372)
8,899
832
59
268
263
(8)
7,493
(4,651)
2,354
6,546
(513)
6,170
Loss for the period
Non-cash adjustments:
Impairment expense
Share-based payments
Depreciation and amortisation
Change in deferred establishment fee
Warehouse establishment fees
Other movements
Change in operating assets and liabilities:
Decrease in trade and other assets
Increase in deferred tax assets
Increase in payables and accruals
Increase in provisions
Increase in accrued interest
Net cash (used in)/generated by operating activities
HARMONEY
PAGE 45
Non-cash transactions
During the current period, the Group did not enter into any non-cash investing and financing activities (2020: Nil).
Changes in liabilities arising from financing activities
Balance at 1 April 2019
Operating cash flows
Financing cash flows
Non-cash adjustments
New leases
Borrowings
$'000
(36,952)
396
(95,556)
(518)
-
Lease liability
$'000
-
-
287
(97)
Total
$'000
(36,952)
396
(95,269)
(615)
(1,874)
(1,874)
Balance at 30 June 2020
(132,630)
(1,684)
(134,314)
Operating cash flows
Financing cash flows
Non-cash adjustments
Balance at 30 June 2021
16 Trade and other assets
Trade receivables
Prepayments
GST receivable
Current tax assets
Total trade and other assets
985
(159,533)
(363)
(291,541)
-
985
1,030
(158,503)
(63)
(426)
(717)
(292,259)
30 June 2021
$'000
30 June 2020
$'000
1,059
654
87
94
1,894
4,253
327
625
18
5,223
In 2020 trade receivables included $1.25m, which was the portion of distributing services fees held by the lender in a bank
account controlled by them which could only be withdrawn once certain conditions were met. The conditions did not require
further performance obligations to be satisfied by the Group.
No adjustment has been made for counterparty credit risk in the financial assets above as all counterparties are considered to
be of good credit standing and the risk of impairment is expected to be not material.
17 Finance receivables
Finance receivables
Accrued interest
Protect receivables
Deferred establishment fees
Expected credit loss (ECL) provision
Total finance receivables
HARMONEY
ANNUAL REPORT 2021
30 June 2021
$'000
310,124
2,051
389
(2,368)
(15,375)
294,821
30 June 2020
$'000
134,917
1,168
1,109
(897)
(7,075)
129,222
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group.
The Group's main exposure to credit risk arises from finance receivables. The finance receivable credit risk management
framework comprises: underwriting and risk policies; anti-money laundering (AML) and counter-terrorism financing (CTF)
protocols; collection and recovery policies; a proprietary credit scorecard; a risk-based pricing model; and fraud detection
services.
In response to COVID-19 the Group made changes to credit underwriting and collections processes to mitigate the impacts of
economic downturn and the related credit risk. For example, by: directing additional resource towards helping borrowers in
financial hardship, reducing the permitted borrowing limits across all customers, and limiting exposure to high-risk segments.
ECL Provision
The Group measures the allowance for expected credit losses (ECL) using an expected credit loss impairment model as
required by NZ IFRS 9 Financial Instruments (NZ IFRS 9). The estimated impact of COVID-19 has been incorporated into
forward-looking inputs as described below.
Under the ECL model, the Group applies a three-stage approach to measuring the ECL based on credit migration between the
stages. The ECL model is based on loan performance history calculated separately for New Zealand and Australia. As the
product is unsecured personal loans there is no further segmentation. Management then applies a further adjustment to
incorporate future macroeconomic factors using forward looking inputs.
Stage 1: 12 month ECL - No significant increase in credit risk
Finance receivables in this category have not had a significant increase in credit risk since initial recognition. ECL resulting from
default events that are possible within the next 12 months (’12-month ECL’) are recognised for financial instruments that remain
in stage 1.
Stage 2: Lifetime ECL - Significantly increased credit risk
An assessment of whether credit risk has increased significantly since initial recognition is performed at the end of each
reporting period by considering the change in the risk of default occurring over the remaining life of the finance receivable.
Unless identified at an earlier stage, all financial assets are deemed to have suffered a significant increase in credit risk when
30 days past due but less than 90 days past due, or where a payment deferral has been granted following a successful hardship
application. A lifetime ECL provision is recorded for stage 2 receivables.
Stage 3: Lifetime ECL - Credit-impaired
The Group determines that a financial instrument is credit-impaired and in stage 3 by considering relevant objective evidence,
primarily whether contractual payments of either principal or interest are past due for more than 90 days. If such unlikeliness to
pay is not identified at an earlier stage, it is deemed to occur when an exposure is 90 days past due.
Movement between stages
The Group determines that loans may move in both directions through the stages of the impairment model. Loans previously in
Stage 2 may move back to Stage 1 if it is no longer considered that there has been a significant increase in credit risk. Similarly,
loans in Stage 3 may move back to Stage 1 or Stage 2 if they are no longer assessed to be nonperforming.
Forward-looking economic inputs (FLI)
The Group has a process for incorporating forward-looking economic scenarios and determining the probability weightings
assigned to each scenario in determining the overall ECL. The economic overlay is a forward-looking provision in addition to the
standard modelled provision.
The Group has identified a number of key indicators that are considered in modelling the overlay, the most significant of which
are gross domestic product, unemployment rate, employment and hours worked, public demand, household consumption,
income and savings rate, investment and inflation which are obtained from publicly available date (range of market economists
and official data sources). These indicators are assessed semi-annually and judgement is applied in determining the probability
weighting assigned across the four economic scenarios (Base Case, Worst Case, Poor Case and Best Case). The Group’s
Assets and Liabilities Committee provides ultimate approval for FLI inputs and the resulting overlay applied.
HARMONEY
PAGE 47
The Group expects there to be further impacts as a result of the COVID-19 pandemic, including anticipated increases in
delinquencies, as Government stimulus and other measures are progressively removed, and we potentially see continued
outbreaks of the virus leading to Government mandated restrictions on activity. These impacts would flow through to the
modelled expected loss provision, but currently due to the evolving economic impact of the pandemic, may not be fully captured
in the modelled outcome. Over time, it is anticipated the economic overlay will need to be adjusted as additional factors are
embedded into the base case of the modelled provision.
The table below presents the gross exposure and related ECL allowance for finance receivables:
30 June 2021
Expected loss rate
Stage 1
4.18%
$'000
Stage 2
17.32%
$'000
Stage 3
70.50%
$'000
Total
4.92%
$'000
Gross carrying amount
299,200
11,819
1,156
312,175
Expected credit loss provision
(12,513)
(2,047)
Net carrying amount
286,687
9,772
(815)
341
(15,375)
296,800
30 June 2020
Expected loss rate
Stage 1
4.08%
$'000
Stage 2
10.47%
$'000
Gross carrying amount
122,345
12,965
Expected credit loss provision
(4,993)
(1,358)
Net carrying amount
117,352
11,607
Stage 3
93.43%
$'000
775
(724)
51
Total
5.20%
$'000
136,085
(7,075)
129,010
Movements in the expected credit loss provision are as follows:
Opening balance
Additional provision recognised due to:
(Decrease)/Increase in economic overlay
Increase in gross finance receivables
Finance receivables written off during the period as uncollectible
Total provision
30 June 2021
30 June 2020
$'000
7,075
(831)
13,984
(4,853)
15,375
$'000
830
1,900
6,855
(2,510)
7,075
HARMONEY
ANNUAL REPORT 2021
The reconciliation of the provision for ECL and finance receivables by stage are presented below. The key line items in the
reconciliation are:
The “transfers between stages” lines represent transfers between Stage 1, Stage 2 and Stage 3 prior to
remeasurement of the provision for ECL.
The “business activity during the year” line represents new accounts originated during the year net of those that were
derecognised due to final repayments during the year.
The “net remeasurement of provision for ECL” line represents the impact on the provision for ECL due to changes in
credit quality during the year (including transfers between stages) and changes due to forward-looking economic
scenarios.
“Incurred credit loss” represent a reduction in the provision for ECL as a result of derecognition of exposures where
there is no reasonable expectation of full recovery
Total provisions for ECL on loans as at 31 March 2019
Transfers to Stage 1
Transfers to Stage 2
Transfers to Stage 3
Business activity during the year
Net remeasurements of provision for ECL
Incurred credit loss
Exchange rate and other adjustments
Performing Non Performing
Stage 1
Stage 2
$'000
791
$'000
39
2,008
(1,482)
(374)
474
-
(1,851)
3,491
(841)
(82)
-
112
4,336
(270)
-
Stage 3
$'000
-
(526)
(100)
1,851
Total
$'000
830
-
-
-
175
3,778
1,482
4,977
(2,158)
(2,510)
-
-
Total provisions for ECL on loans as at 30 June 2020
4,993
1,358
724
7,075
Transfers to Stage 1
Transfers to Stage 2
Transfers to Stage 3
3,142
(2,460)
(689)
892
(682)
(203)
-
(3,601)
3,601
-
-
-
Business activity during the year
9,685
(158)
-
9,527
Net remeasurements of provision for ECL
(4,553)
6,475
1,685
3,607
Incurred credit loss
Exchange rate and other adjustments
(82)
17
(460)
(4,311)
(4,853)
1
1
19
Total provisions for ECL on loans as at 30 June 2021
12,513
2,047
815
15,375
HARMONEY
PAGE 49
Gross carrying amount as at 31 March 2019
Movements with P&L impact
Transfers from Stage 1 to Stage 2
Transfers from Stage 1 to Stage 3
Transfers from Stage 2 to Stage 1
Transfers from Stage 2 to Stage 3
Transfers from Stage 3 to Stage 1
Transfers from Stage 3 to Stage 2
Stage 1
Stage 2
Stage 3
12-month ECL
Lifetime ECL
Lifetime ECL
$'000
38,363
$'000
100
(11,409)
11,409
-
-
5,317
(5,317)
-
862
-
(4,298)
-
152
$'000
-
-
-
-
4,298
(862)
(152)
Total
$'000
38,463
-
-
-
-
-
-
-
Net of new financial assets and repayments during the year
89,292
11,110
(22)
100,380
FX movements
Incurred credit loss
-
(80)
-
(191)
-
-
(2,487)
(2,758)
Gross carrying amount as at 30 June 2020
122,345
12,965
775
136,085
Movements with P&L impact
Transfers from Stage 1 to Stage 2
Transfers from Stage 1 to Stage 3
Transfers from Stage 2 to Stage 1
Transfers from Stage 2 to Stage 3
Transfers from Stage 3 to Stage 1
Transfers from Stage 3 to Stage 2
(12,334)
12,334
-
-
5,509
(5,509)
-
670
-
(4,770)
-
179
-
-
-
4,770
(670)
(179)
-
-
-
-
-
-
-
Net of new financial assets and repayments during the year
184,067
(2,546)
147
181,668
FX movements
Incurred credit loss
445
(1,502)
3
(837)
-
448
(3,687)
(6,026)
Gross carrying amount as at 30 June 2021
299,200
11,819
1,156
312,175
18 Property and equipment
Right of use asset
Furniture and fixtures
IT equipment
Total property and equipment
30 June 2021
30 June 2020
$'000
$'000
534
62
46
642
1,319
71
58
1,448
Property and equipment is recognised at historic cost less depreciation. Depreciation is calculated on a diminishing balance
method using the following rates:
Furniture and fixtures
IT equipment
13-50%
30-50%
HARMONEY
ANNUAL REPORT 2021
Cost
Depreciation
Net book amount
Opening net book amount
Additions
Depreciation
Closing net book amount
Leases
The balance sheet shows the following amounts relating to leases:
Right of use asset
Buildings
Equipment
Total right of use asset
Lease liabilities
Current lease liabilities
Non-current lease liabilities
Total lease liability
30 June 2021
30 June 2020
$'000
416
(308)
108
129
287
(308)
108
$'000
405
(276)
129
371
34
(276)
129
30 June 2021
30 June 2020
$'000
519
15
534
$'000
1,296
23
1,319
30 June 2021
30 June 2020
$'000
710
7
717
$'000
969
715
1,684
The lease payments are discounted using the incremental borrowing rate, being the rate that the individual lessee would have
to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic
environment with similar terms, security, and conditions.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the amount of the initial measurement of lease liability and any lease
payments made at or before the commencement date less any lease incentives received.
Right-of-use assets are depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.
Payments associated with short-term leases and all leases of low-value assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
HARMONEY
PAGE 51
19
Intangible assets
The intangible assets held consist of internally developed software. The carrying amount of the Groups’ software is:
Cost
Accumulated amortisation
Net book amount
Opening net book amount
Additions - internal development
Amortisation charge
Closing net book amount
30 June 2021
30 June 2020
$'000
4,546
(1,091)
3,455
-
3,682
(227)
3,455
$'000
864
(864)
-
7
-
(7)
-
The Group has incurred and will continue to incur significant costs on software development projects.
Internally developed software is capitalised using an internal framework, which was established in March 2017. Following the
evolution of the Groups’ technical capability and delivery process, the capitalisation criteria is met much earlier in the delivery
process and development phases are now able to be capitalised.
An internally-generated intangible asset arising from development is recognised if, and only if, all of the following have been
demonstrated:
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
how the intangible asset will generate probable future economic benefits;
the availability of adequate technical, financial, and other resources to complete the development and to use or sell the
intangible asset; and
the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date
when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can
be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and
accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
For capitalised development costs which are considered work in progress, amortisation of the asset begins when the
development is complete, and the asset is available for use.
The Group amortises development with a limited useful life using straight-line method over 5 years.
HARMONEY
ANNUAL REPORT 2021
20 Payables and accruals
Accruals
Employee benefits accrual
Trade and other payables
Waiver fee revenue in advance
Total payables and accruals
Employee benefits accrual
Current employee incentives
Employee incentive accrual
Annual leave accrual
Long service leave accrual
Total current employee incentives
Non-current employee incentives
Long service leave accrual
Total employee benefits accrual
21 Borrowings
Receivables funding
Corporate debt
Total borrowings
30 June 2021
30 June 2020
$'000
$'000
4,450
1,531
954
389
7,324
1,162
461
531
1,109
3,263
30 June 2021
30 June 2020
$'000
$'000
767
693
63
1,523
8
1,531
17
444
-
461
-
461
30 June 2021
30 June 2020
$'000
$'000
291,541
121,636
-
10,994
291,541
132,630
The receivables funding relates to borrowings specific to the warehouse entities and are secured by their assets. The maturity
profile of the receivables funding borrowings are aligned with the receivables held in the relevant warehouse facilities, and
therefore considered current. As detailed in note 28, the borrowings have a contractual maturity which may be more than 12
months from the reporting date. The contractual maturity date refers to the date until which the Trusts may continue to purchase
further receivables using principal payments of the finance receivables and further drawdowns of the facility. After that date,
unless the agreement terms are extended, the borrowings are required to be paid down as customers make repayments on the
finance receivables.
Under the terms of the receivables funding facilities, the Group is required to comply with financial and non-financial covenants.
The corporate debt borrowings were repaid on 18 November 2020 and the Group has subsequently been released from the
associated guarantees.
HARMONEY
PAGE 53
Warehouse facilities
Total facilities
Used at reporting date
Unused at reporting date
30 June 2021
30 June 2020
$'000
$'000
543,214
338,371
204,843
263,380
140,559
122,821
The unused amount of the warehouse facilities relates to amounts that are available for drawdown from funders but does not
include restricted cash that has already been drawn but has not yet been utilised for funding purposes. Refer to note 15 for
further information.
22 Provisions
Distributing services rebate provision
Borrower establishment fee rebate provision
Protect claims provision
Total provisions
Carrying amount at start of the period
Charged/(credited) to profit or loss
- additional provisions recognised
Amounts used during the period
Carrying amount at end of the period
30 June 2021
30 June 2020
$'000
6,305
7,000
100
13,405
$'000
9,666
3,000
166
12,832
12,832
3,120
6,667
20,777
(6,094)
(11,065)
13,405
12,832
Distributing services rebate provision
The distributing services rebate provision represents an estimate of distributing services revenue which may be rebated as at
reporting date. The estimate has been made on the basis of historical trends across the existing loan portfolio and may vary.
These amounts have not been discounted for the purposes of measuring the provision because the effect is not material.
Borrower establishment fee rebate provision
The basis for the borrower establishment fee rebate is disclosed in note 31.
Protect claims provision
The protect claims provision is measured as the central estimate of the value of expected future payments under payment
protect contracts issued by the Group, with an additional risk margin to allow for inherent uncertainty in the central estimate.
The claims provision has been estimated based on claims history experienced with this product by a similar portfolio of finance
receivables with the same repayment waiver feature attached and an increase for the likely impact of current and future
economic scenarios.
The estimated cost of claims includes direct expenses to be incurred in settling claims i.e., the amount of finance receivable
principal that will be waived. The following table discloses the amount and number of finance receivables with payment protect.
Payment protect receivables
30 June 2021
30 June 2020
Finance receivables with payment protect ($'000)
Number of contracts with payment protect
9,888
610
22,808
1,165
HARMONEY
ANNUAL REPORT 2021
23 Share capital
Fully paid ordinary shares
Fully paid Series A shares
Fully paid Series B shares
Fully paid Series C shares
Total issued capital
Number of shares
Share capital
Number of shares
Share capital
30 Jun 2021
30 Jun 2020
100,912,724
131,399
141,967,409
$'000
-
-
-
-
-
-
26,256,128
33,768,253
58,203,070
100,912,724
131,399
260,194,860
$'000
8,100
8,146
16,971
23,469
56,686
As at 30 June 2020
141,967,409
26,256,128
33,768,253
58,203,070
Ordinary shares
Series A
Series B
Series C
Shares issued under share based
payment arrangements
Share conversion
Share consolidation
Shares issued under share based
payment arrangements
Shares issued upon IPO
As at 30 June 2021
27,397,192
-
-
-
118,227,451
(26,256,128)
(33,768,253)
(58,203,070)
(215,694,035)
9,014,707
20,000,000
100,912,724
-
-
-
-
-
-
-
-
-
-
-
-
Share consolidation and conversion
On 29 October 2020, all Series A, B and C classes of shares were converted to ordinary shares and a 4:1 share consolidation
occurred for no consideration, decreasing the total number of shares held by equity holders.
ASX listing and Initial Public Offering
On 19 November 2020, the Company completed an IPO and listed on the ASX with a secondary listing on the NZX.
Shares issued under share based payment arrangements
27,397,192 shares (6,849,298 shares post 4:1 share consolidation) were issued in settlement of the options on or before 18
September 2020. 9,014,707 shares were issued in settlement of the options on 16 November 2020. The options were net settled
on a cashless basis based on the exercise price of each option. See note 24 for details.
Ordinary shares
Ordinary shares carry a right to one vote per share, to an equal share in dividends, and to a pro-rata share of net assets on wind
up.
HARMONEY
PAGE 55
24 Accumulated losses and reserves
Foreign Currency Translation Reserve
Exchange differences relating to the translation of the results and net assets of the Group's foreign operations from their
functional currencies to the Group's presentation currency (i.e. NZD) are recognised directly in other comprehensive income
and accumulated in the foreign currency translation reserve.
Share Based Payments Reserve
Opening balance
Arising on equity settled benefits
Deferred tax on share based payments
Transferred to share capital
Closing balance
30 June 2021
30 June 2020
$'000
2,825
4,925
(372)
(7,162)
216
$'000
2,386
833
(269)
(125)
2,825
In relation to share options plan settled in the year, the Group recognised an expense of $3.9m within the consolidated income
statement for the year ended 30 June 2021.
Share-based compensation plan
The Group receives services from employees and directors as consideration for equity instruments (zero strike price options)
of the Group. The fair value of the employee services received in exchange for the grant of the options is recognised as an
expense over the relevant vesting period. The total amount to be expensed is determined by reference to the fair value of the
options granted:
- including any market performance conditions;
- excluding the impact of any service and non-market performance vesting conditions; and
- including the impact of any non-vesting conditions.
At the end of each reporting period, the Group revises its estimates of the number of options that are expected to vest based
on the non-market vesting conditions and service conditions. It recognises the impact of the revision to original estimates, if any,
in the income statements, with a corresponding adjustment to equity. When the options are exercised, the company issues new
shares, or purchases shares from the market.
Set out below are summaries of options granted by the Group.
As at the start of the period
Granted during the year
Share consolidation
Exercised during the year
Forfeited during the year
As at 30 June
Year ended 30 June 2021
15 months ended 30 June 2020
Average exercise
price per share
option
Number of options
Average exercise
price per share
option
Number of options
65,524,733
29,287,605
$ nil
8,900,000
$ nil
38,737,794
(27,044,121)
$0.02
$ nil
(38,436,338)
$ nil
(601,500)
(44,274)
$0.01
(1,899,166)
8,900,000
65,524,733
The weighted average share price at the date of exercise of options exercised during the year the year ended 30 June 2021
was $2.64 (2020: $0.38).
No options expired during the periods covered by the table above.
HARMONEY
ANNUAL REPORT 2021
The following table provides details of the options granted by the Group as remuneration to employees and directors.
Exercise
price
Grant
date fair
value
Opening
balance
01/07/2020
Granted
Share
consolidation
Exercised
Forfeited
Number of share options
Closing
balance
30/06/2021
Vested &
exercisable
30 June 2021
Grant date
Post IPO
Scheme
15 Jun 2021
$ nil $ 1.51
- 8,900,000
-
-
- 8,900,000
-
Scheme 2
28 Feb 2020
$ nil $ 0.11 36,103,102
- (27,044,121)
9,014,707 44,274
-
-
Scheme 1
1 Apr 2020
$ nil $ 0.26 1,634,692
24 Feb 2020
$ nil $ 0.26
750,000
21 May 2018
$ 0.16 $ 0.09 2,000,000
21 Aug 2017
$ nil $ 0.17 8,860,423
21 Aug 2017
$ 0.10 $ 0.11 2,384,000
21 Aug 2017
$ 0.17 $ 0.09 1,792,516
Other options
-
-
-
-
-
-
- 1,634,692
-
- 750,000
-
- 2,000,000
-
- 8,860,423
-
- 2,384,000
-
- 1,792,516
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Mar 2014
$ nil $ 0.00 12,000,000
-
- 12,000,000
-
-
-
Total
65,524,733 8,900,000 (27,044,121)
38,436,338 44,274 8,900,000
-
On 29 October 2020, all Series A, B and C classes of shares were converted to ordinary shares and a 4:1 share consolidation
occurred for no consideration.
30 June 2020
Grant date
Scheme 2
Exercise
price
Grant
date fair
value
Opening
balance
01/04/2019
Granted
Exercised
Forfeited
Number of share options
Closing balance
30/06/2020
Vested &
exercisable
28 Feb 2020
$ nil $ 0.11
- 36,103,102
-
- 36,103,102
-
Scheme 1
1 Apr 2020
$ nil $ 0.26
- 1,634,692
-
- 1,634,692
817,346
24 Feb 2020
$ nil $ 0.26
- 1,000,000
250,000
-
750,000
250,000
21 May 2018
$ 0.16 $ 0.09
2,000,000
-
-
- 2,000,000
2,000,000
21 Aug 2017
$ nil $ 0.17
10,938,315
-
351,500 1,726,392
8,860,423
8,860,423
21 Aug 2017
$ 0.10 $ 0.11
2,436,000
21 Aug 2017
$ 0.17 $ 0.09
1,913,290
-
-
-
52,000
2,384,000
2,384,000
- 120,774
1,792,516
-
Other options
1 Mar 2014
$ nil $ 0.00
12,000,000
-
-
- 12,000,000 12,000,000
Total
29,287,605 38,737,794
601,500 1,899,166
65,524,733 26,311,769
HARMONEY
PAGE 57
Current schemes at 30 June 2021
Post IPO Scheme
The Post IPO scheme was approved by the board on 27 April 2021. The plan is designed to provide long-term incentives for
senior managers to attract, motivate and retain talent while also aligning interests of management and shareholders with regards
to Company performance. The Board may determine which persons will be eligible to participate in the plan from time to time
and will invite them to participate.
The amount of performance rights that will vest depends on the achievement of applicable performance hurdles over the
relevant period and continued employment. The performance hurdles are designed to align participants’ objectives with the
fundamental values of the Company and reward achievements which will deliver significant long-term value to the shareholders
of the Company. The hurdles relate to revenue and loan book growth as well as strategic initiatives. The rights expire 5 years
from grant date.
Options are granted under the plan for no consideration and carry no dividends or voting rights.
The fair value at grant date of options granted on 15 June 2021 $1.51 based on the share price at grant date.
Other Options
The Company has granted warrants to an investment group pursuant to an agreement dated 15 February 2016 enabling them
to subscribe for shares at a strike price of $2.03 per share within five years of grant date. The grant of the warrants formed part
of the investment group's remuneration for its services to the Company. Of the 187,587 warrants granted, 6,223 have expired
and the remaining have a final expiration date of 30 June 2022.
Completed schemes at 30 June 2021
Scheme 2
On 28 February 2020 share options were granted under a performance rights based long term incentive plan. The allocation of
rights provided participants with an opportunity to be rewarded for company performance and aligned employee interests with
the interests of shareholders. The fair value at grant date was determined using a Monte Carlo simulation model that took into
account the exercise price, the term of the option, the share price at grant date, the vesting hurdles, the expected price volatility
of the underlying share, the expected dividend yield, and the risk-free interest rate for the term of the option.
Scheme 1
The scheme 1 share option plan was designed to provide long-term incentives for Directors and senior management to deliver
long-term shareholder returns. Under the plan, participants were granted options which vested when certain performance
standards were met.
Options were granted in August 2017, May 2018, February 2020 and April 2020 with their fair value determined using a Black-
Scholes option pricing model which took into account the exercise price, the term of the option, the share price at grant date,
expected price volatility of the underlying share and the risk-free interest rate for the term of the option. For options granted in
August 2017 the share price on grant date was based on a discounted cash flow valuation. For subsequent options granted the
share price on grant date was based on comparable arm's length transactions.
Other options
These options were granted in March 2014. As they carried a nil exercise price their value on grant date was determined as
equivalent to the Company's share price at grant date, which was calculated as a single share of the midpoint of the Company's
net assets and its capital.
HARMONEY
ANNUAL REPORT 2021
25 Related party transactions
Balances and transactions between the Company, its subsidiaries, and controlled entities which are related parties of the
Company, have been eliminated on consolidation and are not disclosed in this note.
Key management personnel (KMP) are defined as those persons having authority and responsibility for planning, directing, and
controlling the activities of the Group, directly or indirectly, and include the Executive Directors, Independent Directors and the
Chief Financial Officer.
The aggregate compensation made to KMP of the Group is set out below:
Short-term employee benefits
Share-based payments
Post-employment benefit
Long-term benefits
30 June 2021
30 June 2020
$'000
2,193
1,698
83
-
$'000
1,805
494
152
-
Total remuneration of key management personal
3,974
2,451
Under the terms of the historical share-based compensation plan, at IPO, vesting of options was accelerated. This resulted in
all unrecognised expense in relation to outstanding options being recognised as an expense in the period. The expense for
option related share-based payments is therefore at an elevated level in 2021.
26 Controlled entities
Details of the Group's material subsidiaries and controlled entities at the end of the reporting period are as follows.
Subsidiary
Harmoney Limited
Harmoney Services Limited
Harmoney Investor Trustee Limited
Harmoney Australia Pty Ltd
Harmoney Services Australia Pty Limited
Harmoney Nominee Limited
Harmoney Warehouse Limited
Harmoney Australia Warehouse No.1 Trust
Controlled entity
Harmoney Warehouse Trust No.1*
Harmoney Warehouse No.2 Trust*
Harmoney Collections Trust*
Date of
incorporation
Place of
incorporation
and operation
Proportion of ownership
interest and voting
power held by the Group
2021
2020
15-May-14
New Zealand
16-May-14
New Zealand
9-Jul-14
New Zealand
20-Feb-15
Australia
22-Sep-15
Australia
28-Nov-17
New Zealand
14-Mar-18
New Zealand
4-Dec-19
Australia
3-Dec-18
New Zealand
22-Dec-20
New Zealand
22-Dec-20
New Zealand
100%
100%
100%
100%
100%
100%
100%
100%
n/a
n/a
n/a
100%
100%
100%
100%
100%
100%
100%
100%
n/a
n/a
n/a
* Management have determined that Harmoney Warehouse No.1 Trust, Harmoney Warehouse No.2 Trust, and Harmoney Collections Trust are
controlled entities. Harmoney Group subsidiaries have been appointed Manager, Servicer, and residual income beneficiary in each entity. Under
NZ IFRS 10: Consolidated Financial Statements, an investor controls an investee when the investor is exposed, or has rights, to variable returns
from its involvement with the investee and has the ability to affect those returns through its power over the investee. As the Group controls the
financing and operating activities of the Trusts and is the residual income beneficiary, the controlled entities are controlled by the Group and
are required to be consolidated into the Group financial statements.
HARMONEY
PAGE 59
27 Financial assets and liabilities
The total carrying amount of the Group’s financial assets and liabilities by category are detailed below:
Financial assets at amortised cost
Cash and cash equivalents
Trade and other receivables
Finance receivables
Financial liabilities at amortised cost
Payables and accruals
Borrowings
Lease liability
Derivative financial instruments
Used for hedging
30 June 2021
30 June 2020
$'000
$'000
76,464
1,059
294,821
372,344
5,403
291,541
717
297,661
34,779
4,253
129,222
168,255
2,152
132,630
1,686
136,468
85
926
NZ IFRS 9 requires financial asset debt instruments to be classified based on two criteria:
a)
b)
the business model within which financial assets are managed; and
their contractual cash flow characteristics (whether the cash flows represent solely payment of principal and interest
(SPPI)).
There are three resulting classifications of financial asset debt instruments under NZ IFRS 9:
a) Amortised cost: financial assets with contractual cash flows that comprise SPPI, and which are held in a business model
whose objective is to collect their contractual cash flows are measured at amortised cost;
b) Fair value through other comprehensive income (FVTOCI): financial assets with contractual cash flows that comprise
SPPI, and which are held in a business model whose objective is to both collect their contractual cash flows and to sell
are measured at FVTOCI; and
c) Fair value through profit or loss (FVTPL): financial assets with contractual cash flows that do not represent SPPI, or
which are held under a different business model are measured at FVTPL. Financial assets can also be designated at
FVTPL if doing so eliminates or significantly reduces an accounting mismatch.
Other than derivative financial instruments, which are held at fair value, all other financial assets are held at amortised cost. For
these instruments, the fair values are not materially different to their carrying amounts since the interest receivable/payable is
either close to current market rates or the instruments are short-term in nature.
The following table presents the Group’s financial assets and financial liabilities measured and recognised at fair value on a
recurring basis:
Level 1
Level 2
Level 3
June 2021 $'000
Financial Liabilities
Derivative financial instruments
Hedging derivatives - interest rate swaps
-
85
-
Level 1
Level 2
Level 3
June 2020 $'000
Financial Liabilities
Derivative financial instruments
Hedging derivatives - interest rate swaps
-
926
-
HARMONEY
ANNUAL REPORT 2021
There have been no transfers between levels in the period (June 2020: Nil).
The Group’s policy is to recognise transfers into and out of fair value hierarchy levels as at the end of the reporting period.
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities)
is based on quoted market prices at the end of the reporting period.
The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in
level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives)
is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on
entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in
level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Fair value
The interest rate swaps are initially recognised at fair value through profit and loss on the date the derivative contract is entered
into and are subsequently measured at their fair value at each reporting date. All significant inputs required to measure their
fair value are observable, therefore the swaps are level 2 in the fair value hierarchy.
The fair value of the interest rate swaps are determined from valuations prepared by independent advisors. These are calculated
using a discounted cash flow model using forward interest rates extracted from observable yield curves. Discount rates include
an adjustment for counterparty credit risk.
28 Financial risk management
Financial risk management objectives
The Group’s activities expose it to a variety of financial risks, primarily market risk (including interest rate risk and foreign
currency risk), credit risk and liquidity risk. The Group’s risk management program focuses on understanding drivers of financial
risk and seeks to minimise potential adverse effects on the financial performance of the Group.
The Group uses derivative financial instruments (interest rate swaps) to hedge interest rate risk. Derivatives are exclusively used
for hedging purposes i.e. not as trading or other speculative instruments.
The Board have overall responsibility for the establishment and oversight of the risk management framework. The Board is
responsible for developing and monitoring risk management policies. Risk management procedures are established by the Board
and carried out by management to identify and analyse the risks faced by the Group and to set controls and monitor risks.
Market risk
Market risk is the risk that changes in market prices such as interest rates that will affect the Group’s income or the value of
holdings in its financial instruments. The objective of market risk management is to manage and control market risk exposures
within acceptable parameters, while optimising the return.
Interest rate risk
Interest rate risk is the risk that changes interest rates negatively impact the Group's financial performance. The Group's main
interest rate risk arises from cash at bank, term deposits and borrowings. Cash at bank, term deposits and borrowings obtained
at variable rates expose Harmoney to interest rate risk. Cash at bank and term deposits obtained at fixed rates expose
Harmoney to fair value interest rate risk.
Harmoney originates loans to customers that have fixed interest rates that are repaid over a relatively short period.
HARMONEY
PAGE 61
At 30 June 2021, the Group had the following financial assets and liabilities exposed to variable interest rate risk.
Financial assets
Cash on hand and demand deposits
Short term deposits
Restricted cash
Total financial assets
Financial liabilities
Borrowings
30 June 2021
30 June 2020
$'000
$'000
44,343
10,266
-
17,139
32,121
7,374
76,464
34,779
(291,541)
(121,637)
Receivables funding are variable rate borrowings where the rates are reset monthly to current market rates. Interest rate risk is
managed on these borrowings by entering interest rate swaps, whereby Harmoney pays fixed rate and receives floating rate.
The contracts require settlement monthly of net interest receivable or payable. The settlement dates coincide with the dates on
which interest is payable on the underlying borrowings.
The gain or loss from remeasuring the hedging instruments at fair value is recognised in other comprehensive income and
deferred in equity in the cash flow hedge reserve, to the extent that the hedge is effective. It is reclassified into the Income
Statement when the hedged item effects it. In the year ended 30 June 2021, no amount was reclassified into profit or loss (2020:
Nil) due to hedge ineffectiveness.
Harmoney’s policy is to hedge a portion of the variability in future cash flows attributable to the interest rate risk on floating rate
borrowings using interest rate swaps. As at 30 June 2021, the notional value of swaps was 33% (2020: 64%) of floating rate
borrowings.
The effects of the interest rate swaps on the Group’s financial position and performance are as follows:
Carrying amount held in derivative financial instruments
Notional amount
Hedge ratio
Change in fair value of outstanding hedging instruments during the period
Change in fair value of outstanding hedged item used to determine hedge effectiveness
Year ended
30 June
2021
15 months
ended 30
June 2020
$'000
$'000
(85)
(926)
95,629
77,416
1:1
1:1
841
(818)
841
818
The interest rate sensitivity analysis below has been determined based on the exposure to interest rates for both derivatives
and non-derivative instruments at the end of the reporting period and assumes that the amount of the liability outstanding at the
end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used which represents
management’s assessment of the reasonably possible change in interest rates.
If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Group’s profit for the year
ended 30 June 2020 would decrease/increase by $1.0m (2020: $0.2m). This is attributable to the Group‘s exposure to interest
rates on its variable rate borrowings.
HARMONEY
ANNUAL REPORT 2021
Foreign exchange risk
Foreign currency risk arises on financial instruments that are denominated in a currency other than the functional currency in
which they are measured. The Group's main foreign exchange risk arises from inter-company receivables and payables which
do not form part a net investment in a foreign operation.
The Group has not hedged any foreign exchange risk during the period.
The Group has the following exposure to Australian dollars, expressed in New Zealand dollars. The Group's exposure to foreign
currency changes for all other currencies is not material.
Financial assets
Foreign currency payable
Foreign currency receivable
Net exposure
AUD Exposure
30 June 2021
30 June 2020
$'000
$'000
3,075
6,627
(5,788)
(6,614)
(2,713)
13
The following table demonstrates the sensitivity to a 5% increase or decrease in the Australian dollar exchange rate, which
represents management's assessment of the reasonably possible change in this exchange rate. The impact on the Group's loss
before tax is due to changes in the fair value of monetary assets and liabilities.
NZD/AUD +5%
NZD/AUD -5%
Impact on post-tax profit
Year ended
30 June 2021
15 months
ended 30
June 2020
$'000
136
(136)
$'000
(1)
1
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group has a diversified
funding model and currently comprises of a mix of cash reserves and committed undrawn credit facilities to meet anticipated
funding requirements for new business. In addition, the Group can redraw against its committed credit limits if the principal
outstanding is reduced. Details of unused available loan facilities are set out in note 21.
The Group manages operational liquidity risk by maintaining cash reserves and available borrowing facilities and by continuously
monitoring actual and forecast cash flows. The Group seeks to have sufficient liquidity to meet its liabilities when due, under
both normal and stressed conditions.
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables are 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.
HARMONEY
PAGE 63
Contractual maturities of financial liabilities at June 2021
Less than 1 year
1 to 2 years
More than 2 years
$'000
$'000
$'000
Non-derivatives
Non-interest bearing
Payables and accruals
Interest bearing
Borrowings
Lease liability
Total non-derivatives
Derivatives
Interest rate swaps
Total derivatives
Total
$'000
5,403
296,820
731
302,954
5,403
-
141,229
155,591
722
9
147,354
155,600
-
-
-
-
225
225
(71)
(71)
(70)
(70)
84
84
Contractual maturities of financial liabilities at June 2020
Less than 1
year
$'000
1 to 2
years
$'000
More than
2 years
Total
$'000
$'000
Non-derivatives
Non-interest bearing
Payables and accruals
Interest bearing
Borrowings
Lease liability
Total non-derivatives
Derivatives
Interest rate swaps
Total derivatives
2,152
-
-
2,152
118,599
24,228
14,714
157,541
1,031
728
-
1,759
121,782
24,956
14,714
161,452
550
550
270
270
108
108
928
928
Capital risk management
The Group’s objectives when managing capital are to safeguard the ability to continue as a going concern and to maintain an
optimal capital structure to facilitate growth in the business while reducing the cost of capital. The Group’s capital structure
comprises equity raised by the issue of ordinary shares and external borrowings. There is significant capacity to fund finance
receivables growth with warehouse facility headroom of $205m (2020: $123m).
HARMONEY
ANNUAL REPORT 2021
29 Fees paid to auditors
Fees paid for audit and assurance services
Statutory annual audit fees
Statutory half-year review
Other non-audit assurance services
Total audit and assurance services fees
Fees paid for other services
Investigating Accountant assurance services *
Tax related services paid in respect of the ASX IPO*
Tax related services paid in respect of warehouse facilities
Preparation of tax returns and other services
Total other services fees
Total fees paid to auditors
Year ended
15 months ended
30 June 2021
30 June 2020
$'000
$'000
351
113
95
559
426
283
102
57
868
1,427
248
-
60
308
-
-
-
100
100
408
* The portion of these fees related to the issue of new shares is included within equity transaction costs.
30 Contingent liabilities
There are no contingent liabilities as at 30 June 2021.
31 Events after the reporting period
The New Zealand Commerce Commission filed charges against the Group in 2017, alleging that the loan establishment fee it
charged to borrowers in New Zealand was a credit fee subject to the Credit Contracts and Consumer Finance Act 2003
(CCCFA), and that this fee exceeded the amount of the reasonable costs which were recoverable under the CCCFA.
The proceedings were due to take place in the New Zealand High Court in September 2021. However, the parties entered into
a settlement agreement on 26 August 2021. Under the agreement, the Commerce Commission agreed to discontinue the
proceedings, and to not issue any other legal proceedings against the Group in respect of establishment fees charged up to the
date of this agreement. The Group agreed to: admit breaching the CCCFA and consent to the Court making declarations; pay
total compensation of $7m to eligible borrowers over a two year period; and set its go-forward establishment fee at no more
than $165 for five years.
The compensation amount is fully provided for in these financial statements as the borrower establishment fee rebate (note 22).
There were no other material events subsequent to year end.
HARMONEY
PAGE 65
Independent auditor’s report
Independent auditor’s report
To the shareholders of Harmoney Corp Limited
Our opinion
In our opinion, the accompanying Consolidated Group Financial Statements of Harmoney Corp Limited (the
Company), including its subsidiaries (the Group), present fairly, in all material respects, the financial position of
the Group as at 30 June 2021, its financial performance and its cash flows for the year then ended in accordance
with New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS) and International
Financial Reporting Standards (IFRS).
What we have audited
The Consolidated Group Financial Statements comprise:
•
•
•
•
•
the Consolidated Statement of Financial Position as at 30 June 2021;
the Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year then ended;
the Consolidated Statement of Changes in Equity for the year then ended;
the Consolidated Statement of Cash Flows for the year then ended; and
the Notes to the Consolidated Financial Statements, which includes Significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs NZ) and
International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in
the Auditor’s responsibilities for the audit of the Consolidated Group Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1 International Code of
Ethics for Assurance Practitioners (including International Independence Standards) (New Zealand) (PES 1)
issued by the New Zealand Auditing and Assurance Standards Board and the International Code of Ethics for
Professional Accountants (including International Independence Standards) issued by the International Ethics
Standards Board for Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Our firm carries out other services for the Group in the areas of investigating accountant assurance services and
tax related services in respect of the IPO, warehouse facilities and the preparation of tax returns. The provision of
these other services has not impaired our independence as auditor of the Group.
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
HARMONEY
ANNUAL REPORT 2021
Our audit approach
Overview
Overall Group materiality: $1.94 million, which represents approximately 0.5%
of total assets.
We chose total assets as the benchmark because, in our view, it is the benchmark
against which the performance of the Group is most commonly measured by
users, and is a generally accepted benchmark.
We utilised a 0.5% threshold based on our professional judgement, noting it is
within the range of commonly acceptable thresholds.
We have determined that there are three key audit matters:
●
Expected credit loss provisions on finance receivables (note 17, $15.4m)
● Deferred tax assets (note 12, $11.5m)
●
Interest income (note 6, $37.6m)
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
Consolidated Group Financial Statements. In particular, we considered where management made subjective
judgements; for example, in respect of significant accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of
management override of internal controls, including among other matters, consideration of whether there was
evidence of bias that represented a risk of material misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable
assurance whether the Consolidated Group Financial Statements are free from material misstatement.
Misstatements may arise due to fraud or error. They are considered material if, individually or in aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of the Consolidated
Group Financial Statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the
overall Group materiality for the Consolidated Group Financial Statements as a whole as set out above. These,
together with qualitative considerations, helped us to determine the scope of our audit, the nature, timing and
extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on
the Consolidated Group Financial Statements as a whole.
Audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the
Consolidated Group Financial Statements as a whole, taking into account the structure of the Group, the
accounting processes and controls, and the industry in which the Group operates.
HARMONEY
PAGE 67
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the Consolidated Group Financial Statements of the current year. These matters were addressed in the context of
our audit of the Consolidated Group Financial Statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. Further, any commentary on the outcomes of a particular audit
procedure is made in that context.
Key audit matter
How our audit addressed the key audit matter
Expected credit loss provisions on finance
receivables (note 17, $15.4m)
We have performed the following procedures, amongst
others:
This was a key audit matter because the
determination of the provision was driven by
subjective judgements made by the Group in
predicting expected credit losses (ECL).
The majority of the customer loan balances
were low value and therefore the provision
was modelled and calculated on a collective
basis. Key elements in determining ECL
include:
•
•
•
•
Judgements applied in setting the
assumptions used in the ECL models,
including the application of expected loss
rates applied to each underlying portfolio
segment.
Judgements applied model changes, to
reflect emerging trends or particular
situations which are not otherwise
captured.
Judgements applied in incorporating
forward-looking impacts, which use
macroeconomic forecasts for a range of
scenarios that are weighted to consider
the potential economic outcomes that
may impact ECL
Judgements applied in determining
exposures that have had a significant
increase in credit risk, which is assessed
by the Group based on the delinquency
or hardship status of an account.
•
Together with PwC credit modelling experts
o
o
o
o
examined and assessed the ECL model developed
by the Group in considering key judgements and
assumptions supporting ECL, focusing on changes
and new developments
assessed the appropriateness of modelled outcomes
over time by comparing its outcomes, and
underlying expected loss rates, to actual losses
re-performed the automated calculation for ECL as
at 30 June 2021
assessed the appropriateness of forward-looking
information incorporated into the impairment
calculations by assessing macroeconomic
assumptions and probability weightings applied,
and comparing them to external evidence where
applicable
• Assessed the integrity of data used as inputs into the
models, including delinquency and hardship data, by
tracing a sample of inputs used in the models to
underlying audit evidence
• Assessed the reasonableness of the Group’s disclosures
in the financial report in light of the requirements of
NZ IFRS.
HARMONEY
ANNUAL REPORT 2021
Key audit matter
How our audit addressed the key audit matter
Deferred tax assets (note 12, $11.5m)
The Group was subject to taxation in each
location in which it operated.
The assessment of the amounts expected to
be paid in the future to tax authorities was
considered by the Group in respect of
recognising deferred tax assets (DTAs),
including those related to tax losses, at 30
June 2021.
This was a key audit matter due to the
extent of judgement involved by the Group.
Our procedures included evaluating the tax analysis
performed by the Group, which set out the basis for
judgements made in respect of DTAs by:
• Considering the appropriateness of forecasting methods
used by management to calculate future taxable profits
• Assessing certain judgements and, where relevant,
comparing them to available internal and external data
on a sample basis
• Assessing management's forecasting accuracy over time
by comparing previous forecasts to actual outcomes
• Agreeing relevant input data to supporting records on a
sample basis.
• Assessed the reasonableness of the Group’s disclosures
in the financial report in light of the requirements of NZ
IFRS.
Interest income (note 6, $37.6m)
We performed the following procedures, amongst others:
The Group’s main stream of revenue is
interest income from providing loans to
customers.
The recognition of interest income over time
requires the Group to apply judgement and
determine an effective interest rate to be
applied in accordance with NZ IFRS.
This was a key audit matter because of the
significance of interest income in the
context of the performance of the Group,
and the judgement involved in determining
an effective interest rate.
• Re-performed the automated calculation for 100% of
interest income from loans to customers
• Assessed the Group’s methodology for recognising
revenue in light of the requirements of NZ IFRS
• Inspected that the effective interest rate applied was
determined in line with the methodology used by the
Group and assessed its consistency with internal
information
• Inspected and compared contract data contained in the
product system to a sample of contracts, including
interest rates and loan period.
HARMONEY
PAGE 69
Other information
The Directors are responsible for the other information. The other information comprises the information
included in the Annual Report, but does not include the Consolidated Group Financial Statements and our
auditor’s opinion thereon.
Our opinion on the Consolidated Group Financial Statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the Consolidated Group Financial Statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent with the
Consolidated Group Financial Statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated. If, based on the work we have performed on the other information that we obtained prior
to the date of this auditor’s report, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Consolidated Group Financial Statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of the
Consolidated Group Financial Statements in accordance with NZ IFRS and IFRS, and for such internal control
as the Directors determine is necessary to enable the preparation of Consolidated Group Financial Statements
that are free from material misstatement, whether due to fraud or error.
In preparing the Consolidated Group Financial Statements, the Directors are responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Consolidated Group Financial Statements
Our objectives are to obtain reasonable assurance about whether the Consolidated Group Financial Statements,
as a whole, are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs NZ and ISAs 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 these
Consolidated Group Financial Statements.
A further description of our responsibilities for the audit of the financial statements is located at the External
Reporting Board’s website at: https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-
responsibilities/audit-report-1/. This description forms part of our auditor’s report.
HARMONEY
ANNUAL REPORT 2021
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been undertaken
so that we might state those matters which we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s shareholders, as a body, for our audit work, for this report or
for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Rob Spring.
For and on behalf of:
PricewaterhouseCoopers
Rob Spring
Partner
Sydney
30 August 2021
HARMONEY
PAGE 71
Shareholder Information
The shareholder information set out below was applicable as at 31 July 2021.
Distribution of equitable securities
Analysis of number of equitable holders by size of holding.
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
101,001 and over
Total
Ordinary shares Options over ordinary shares
Number of
holders
% of total
shares issued
Number of
holders
% of total
shares issued
146
310
185
220
48
909
0.07
0.91
1.41
6.14
91.47
100
-
-
-
-
-
-
-
-
-
-
-
-
There were 46 holders of less than a marketable parcel of ordinary shares.
Equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Number of holders
Neil Roberts Trustee Company Limited
Michael Lookman and 187 Bridge Trustees 53 Limited
Kirwood Capital Partners IB Pty Limited
Heartland Group Holdings Limited
Trade Me Limited
National Nominees Limited
Alternative Credit Investments PLC
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
Ventures Harmoney Holdings Limited
Brad Hagstrom, Renai Hagstrom and Guy Hagstrom
CS Third Nominees Pty Limited
David John Stevens and C R Trustees Limited
Heartland Group Holdings Limited
Tap Capital Pty Ltd
Monde Five Limited
Duncan Gross
Andrew Cathie
Mono Lake Trustee Limited
New Zealand Depository Nominee
Total
HARMONEY
ANNUAL REPORT 2021
% of total shares issued
18.44
8.99
8.65
8.44
7.55
5.10
3.90
3.11
2.99
2.19
2.10
1.90
1.85
1.70
1.34
1.08
0.99
0.98
0.90
0.86
83.06
Unquoted equity securities
Options issued under post IPO employee long term incentive scheme
Options issued to Blue Line Ventures, LLC
Number on issue
Number of holders
8,900,000
181,364
17
1
Substantial holders
Substantial holders in the Company are set out below:
Name of holder
Neil Roberts Business Trust
Heartland Group Holdings Limited
Lookman Family Trust
Kirwood Capital Partners IB Pty Limited
Trade Me Limited
Number held
% of total shares
issued
Date of
notice
18,611,152
10,197,693
9,069,618
8,730,461
7,620,959
18.4
10.1
9.0
8.7
7.6
23-Nov-20
7-Jul-21
19-Nov-20
19-Nov-20
19-Nov-20
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and, upon a poll, each share
shall have one vote.
There are no other classes of equity securities.
Securities subject to voluntary escrow
Class
Fully paid ordinary shares
Expiry date 1
4:15pm on the trading day after Harmoney releases its full-year results to ASX
and NZX for the financial year ending 30 June 2021.
Fully paid ordinary shares
4:15pm on the trading day after Harmoney releases its half-year results to ASX
and NZX for the half year ending 31 December 2021.
Fully paid ordinary shares
4:15pm on the trading day after Harmoney releases its full-year results to ASX
and NZX for the financial year ending 30 June 2022.
Total
Number of shares
28,259,331
28,259,328
16,433,356
72,952,015
1.
The expiry date is the day that the escrowed shares can be released.
HARMONEY
PAGE 73
Corporate Information
For the year ended 30 June 2021
Directors
The following persons held office as Directors of the Company and the Company’s subsidiaries during the year ended 30 June
2021.
Harmoney Corp Limited
Richard Dellabarca
David Flacks
Luke Forster
Udhav Goenka
Tracey Jones
Paul Lahiff
Neil Roberts
David Stevens
Andrew Yeadon
(Resigned 30 October 2020)
(Resigned 13 July 2020)
(Appointed 27 July 2020, Resigned 30 October 2020)
(Appointed 15 February 2021)
(Appointed 30 October 2020)
(Resigned 30 October 2020)
Harmoney Australia Pty Ltd
David Nesbitt
Brad Hagstrom
Ben Taylor
Simon Ward
(Appointed 28 April 2021)
Harmoney Services Australia Pty Limited
Brad Hagstrom
David Nesbitt
Ben Taylor
Simon Ward
(Appointed 28 April 2021)
(Appointed 28 April 2021)
Harmoney Investor Trustee Limited
Brad Hagstrom
Neil Roberts
Simon Ward
Harmoney Limited
Brad Hagstrom
Neil Roberts
Simon Ward
Harmoney Services Limited
Brad Hagstrom
Neil Roberts
Simon Ward
HARMONEY
ANNUAL REPORT 2021
Harmoney Nominee Limited
Brad Hagstrom
Neil Roberts
Simon Ward
Harmoney Warehouse Limited
Brad Hagstrom
Neil Roberts
Simon Ward
Employee Remuneration
Remuneration
110,000 - 120,000
120,000 - 130,000
130,000 - 140,000
140,000 - 150,000
150,000 - 160,000
160,000 - 170,000
180,000 - 190,000
200,000 - 210,000
210,000 - 220,000
230,000 - 240,000
260,000 - 270,000
270,000 - 280,000
280,000 - 290,000
310,000 - 320,000
320,000 - 330,000
350,000 - 360,000
400,000 - 410,000
430,000 - 440,000
520,000 - 530,000
570,000 - 580,000
700,000 - 710,000
880,000 - 890,000
2,340,000 - 2,350,000
Number of employees
6
2
4
5
5
1
1
2
4
1
1
1
1
1
1
1
3
1
1
1
1
1
1
Under the terms of the historical share-based compensation plan, at IPO, vesting of options was accelerated. This resulted in
all unrecognised expense in relation to outstanding options being recognised as an expense in the period. The expense for
option related share-based payments is therefore at an elevated level in 2021 and included in the remuneration and other
benefits values reported above.
HARMONEY
PAGE 75
Directors’ Interests
The following are particulars of general disclosures of interest by Directors of Harmoney Corp Limited holding office at 30
June 2021, pursuant to section 140(2) of the Companies Act 1993. Where applicable, the disclosures also include directorships
of subsidiaries of the relevant companies.
David Flacks
AFT Pharmaceuticals Limited
Asteron Life Limited
Collaborative Advanced Genetic Technologies Limited
Flacks & Wong Limited
Harmoney Share Sale Company Limited
Project Janszoon Trust Company
The Todd Corporation Limited
Todd Offshore Limited
Vero Insurance New Zealand Limited
Vero Liability Limited
Zero Invasive Predators Limited
NZX Regulatory Governance Committee
Brad Hagstrom
Hagstrom Family Trust
Tracey Jones
Cove Road Soapworks Limited
Harmoney Share Sale Company Limited
Jones Family Office Partners Ltd
Kepa Investments Ltd
N’Godwi Trust
New Plymouth PIF Guardians Ltd
Nikko Asset Management NZ Limited
Petal Foundation
RC Custodian Ltd
Sandat Consulting Ltd
Tutanekai Investments Ltd
Paul Lahiff
86 400 Holdings Ltd
86 400 Ltd
86 400 Technology Pty Ltd
AUB Group Limited
Lahiff Consulting Australia Pty Ltd
NESS Super Pty Ltd
P&R Lahiff Pty Ltd
RSW Lane Cove Pty Ltd
Sezzle Inc.
David Nesbitt
Chair
Chair
Director
Director
Director
Director
Director
Director
Chair
Chair
Director
Chair (ceased)
Trustee
Director
Director
Director
Director
Trustee
Director (ceased)
Chair
Trustee and Chair
Director
Director
Director
Chair
Director
Director
Director
Director
Chair
Director
Director
Director
Neslan Pty Ltd as trustee for the Nesbitt Family Trust
Trustee
HARMONEY
ANNUAL REPORT 2021
Neil Roberts
Minc Limited
Harmoney Share Sale Company Limited
Neil Roberts Trustee Company Ltd
Neil Roberts Business Trust
Roberts Family Trust
Fintech NZ Executive Council
David Stevens
Harmoney Share Sale Company Ltd
Liquid Asset Enterprises Pty Ltd
Liquid Asset Trust
Ben Taylor
Tap Capital Pty Limited
Simon Ward
Monde Five Ltd
Indemnities and insurance
Director
Director
Director
Trustee
Trustee
Co Chair (Ceased)
Director
Director
Trustee
Director
Director
Pursuant to section 162 of the Companies Act 1993 and the Constitution, Harmoney Corp Limited has entered into insurance
for the directors of the Group to indemnify them, against liabilities which they may incur in the performance of their duties as
directors of any company within the Group.
Remuneration and other benefits received by Directors during the period
Richard Dellabarca
David Flacks
Tracey Jones
Paul Lahiff
Donations
The Group made no donations in the current period (2020: $8,635).
Directors’ fees $
17,417
155,000
74,500
44,083
HARMONEY
PAGE 77
Directory
Registered Office
Harmoney Corp Limited
Ground Floor, 79 Carlton Gore Road
Newmarket, Auckland 2013, New Zealand
Auditor
PricewaterhouseCoopers
One International Towers,
Watermans Quay
Barangaroo
NSW 2000
Australia
Share register
Link Market Services Limited
ACN 083 214 537
Capital Markets Manager,
Link Market Services,
Level 21, 10 Eagle Street,
Brisbane,
QLD 4000,
Australia
Stock exchange listing
Harmoney Corp Limited shares are listed in the Australian Securities Exchange (ASX) and New Zealand Exchange (NZX).
The Company was admitted to the official list of the ASX and NZX on 19 November 2020 (ASX issuer code HMY).
Notice of Annual General Meeting
The Annual General Meeting of Harmoney Corp Limited will be held on 30 November 2021.
Corporate Governance Statement
https://www.harmoney.com.au/investor
HARMONEY
ANNUAL REPORT 2021