2020
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For personal use only THIS PAGE LEFT INTENTIONALLY BLANK
For personal use only C O N T E N T S
CONTENTS
2020 HIGHLIGHTS
29
SHARES UNDER OPTION
74
DIRECTORS’ DECLARATION
4
5
6
CORPORATE DIRECTORY
CHAIRMAN AND MANAGING
DIRECTOR'S LETTER
8
DIRECTORS' REPORT
10
INFORMATION ON DIRECTORS
30
INSURANCE OF OFFICERS
AND INDEMNITIES
31 NON-AUDIT SERVICES
32 DECLARATION OF
INDEPENDENCE
75
79
INDEPENDENT AUDITOR’S
REPORT
REPORT ON THE
REMUNERATION REPORT
80 SHAREHOLDER INFORMATION
33 CORPORATE GOVERNANCE
80 Distribution of equity securities
81 Equity security holders
82 Substantial holders
82 Voting rights
18 MEETINGS OF DIRECTORS
STATEMENT
19
REMUNERATION REPORT
(AUDITED)
19 Key management personnel
covered in this report
20 Remuneration policy and link
to performance
21 Elements of remuneration
22 Link between remuneration
and performance
23 Remuneration expenses for
executive KMP
24 Contractual arrangements with
executive KMP
24 Non-executive Director
arrangements
24 Additional statutory information
37
FINANCIAL REPORT
38 Consolidated statement of
profit or loss and other
comprehensive income for the
year ended 30 June 2020
39 Consolidated balance sheet
As at 30 June 2020
40 Consolidated statement of
changes in equity For the year
ended 30 June 2020
41 Consolidated statement of
cash flows For the year
ended 30 June 2020
42 NOTES TO THE FINANCIAL REPORT
42 Note 1
Summary of significant
accounting policies
58 Note 10 Investments
66 Note 20 Cash flow information
58 Note 11 Trade and other
68 Note 21 Share-based payments
52 Note 2 Parent information
receivables
53 Note 3 Revenue
59 Note 12 Plant and equipment
70 Note 22 Events after the
reporting date
53 Note 4 Loss for the year
60 Note 13 Leases
71 Note 23 Related party transactions
54 Note 5
Income tax expense
60 Note 14 Intangible assets
72 Note 24 Contingent Assets
56 Note 6
Key Management
Personnel Compensation
56 Note 7 Auditor’s Remuneration
57 Note 8 Earnings per share
58 Note 9
Cash and cash
equivalents
62 Note 15 Trade and other payables
62 Note 16 Provisions
63 Note 17 Contributed equity
65 Note 18 Reserves
65 Note 19 Operating segments
and liabilities
72 Note 25 Commitments
72 Note 26 Financial risk
management
3
For personal use only 2 0 2 0 H I G H L I G H T S
(NON INTERNATIONAL FINANCIAL REPORTING STANDARDS MEASURES)
C O N T R A C T E D S U B S C R I B E R S
C O N T R A C T E D A R R
14,531
$1,955,000
M I L E S T O N E O F 2 0 , 0 0 0
A N N U A L R E C U R R I N G R E V E N U E
N O W I N S I G H T
E X C E E D E D
U P 5 3 . 7 % Y O Y
U P 6 2 . 3 % Y O Y
C O N T R A C T E D C U S T O M E R S
C A S H R E C I E P T S
109
O P E R A T I N G I N 1 5
G L O B A L C O U N T R I E S
U P 5 1 Y O Y
$1,501,000
C A S H G E N E R A T E D
F R O M C U S T O M E R S
U P 1 2 6 % Y O Y
G L O B A L R E V E N U E
A V E C O N T R A C T E D C U S T O M E R A R R
25.1%
NEW ZEAL AND, US, CANADA, EUROPE, UK,
THAIL AND, PHILIPPINES, INDIA AND SING APORE + MORE
$17,938
A N N U A L R E C U R R I N G
R E V E N U E
T O T A L C U S T O M E R L I F E T I M E V A L U E
N E T P R O M O T E R S C O R E
$12,676,875
4
74
Annual Report2020For personal use only
CORPORATE DIRECTORY
C O R P O R AT E
D I R E C T O R Y
DIRECTORS
G Baynton M.Econ St, MBA, B.Bus, P.G.Dip. Applied Fin & Inv.
A Bellas B.Econ, DipEd, MBA, FAICD, FCPA, FAIM
A Bignell B.Bus, MBA, CPA
R Bromage B.Bus, CAHRI
N Cook B.Arts, MBA, GAICD
J Duffield MAICD
D Slocomb B.Bus (Fin), LLB (Hons I), MFin
SECRETARY
S M Yeates CA, B.Bus
PRINCIPAL PLACE OF
BUSINESS
REGISTERED
OFFICE
SHARE REGISTER
AUDITOR
SOLICITORS
Level 28, 345 Queen Street, Brisbane QLD 4000
Level 28, 345 Queen Street, Brisbane QLD 4000
Link Market Services Limited
Level 21, 10 Eagle Street
Brisbane QLD 4000
www.linkmarketservices.com.au
BDO Audit Pty Ltd
Level 10, 12 Creek Street
Brisbane QLD 4000
www.bdo.com.au
Atkinson Corporate Lawyers
Level 8
99 St Georges Tce
Perth, WA, 6000
BANKERS
Commonwealth Bank of Australia
STOCK EXCHANGE LISTING intelliHR Limited shares are listed on the Australian Securities Exchange (ASX:IHR).
WEBSITE ADDRESS
www.intellihr.co
5
For personal use only CHAIRMAN AND MANAGING DIRECTOR'S LET TER
CHAIRMAN AND
MANAGING
DIRECTOR'S LET TER
It is our pleasure to present the Annual
Report of intelliHR Limited for the year
to 30 June 2020.
Tony Bellas
Rob Bromage
Having commenced operations in 2014, intelliHR commercialised
its product in 2016 and listed on the Australian Stock Exchange
worldwide, signing up and supporting a further 49 organisations
with thousands of their employees in a matter of weeks.
in 2018. “Product Market Fit” was established in 2019 and today
intelliHR is an exciting global scale up.
intelliHR did not lose focus on its business plan, continuing with
its growth agenda to deliver important scale opportunities. It
FY 2020 presented unprecedented operating conditions with
achieved significant business milestones including securing its
the COVID-19 global pandemic gripping the world in a health
crisis, simultaneously crippling economies worldwide due to
significant disruption to organisations caused by lengthy lock
down restrictions. Many organisations were forced to scale
back their workforces and pause all planned investments as
they moved into a state of conservation and survival. In large
numbers, organisations also responded by quickly transitioning
to distributed workforces creating a seismic shift in the way
they work. This disruption served to increase the relevance of
intelliHR as an essential tool to assist organisations in managing
the engagement and effectiveness of their greatest asset,
their people.
intelliHR successfully navigated the impact of the pandemic,
with decisive actions to protect both its team members and
cash reserves. The business demonstrated agility and innovation
to support its customers by creating a COVID-19 HR Essentials
capability rolling it out late March 2020 to existing customers.
It also proudly made the solution free for any organisation
100th paying customer, launch of three new products under
a value based pricing model and the establishment of an
embryonic sales force in North America, a key target market
which is 15 times larger than the Australia-New Zealand market.
In December 2019, a leading Australian mid-market private
equity firm, Colinton Capital Partners, invested $2.74 Million to
cornerstone intelliHR, becoming its largest investor recognising
the global growth opportunity and differentiated product
offering of customisability and analytical capabilities.
Still an early stage technology business, intelliHR is in a very
exciting growth phase having recorded its strongest 12 month
period of customer cash receipts and revenue growth. The
Company successfully grew revenue by 161%, almost tripling
from $478,838 in FY2019 to $1,250,471 in FY2020 year. Cash
receipts increased 126% to $1.5 Million. Revenue retention for
the 12 months to June 2020 was also excellent at 113%, up from
111% as at June 2019.
6
Annual Report2020For personal use only CHAIRMAN AND MANAGING DIRECTOR'S LET TER
Key drivers of performance have included the Company’s
Slattery through the Slattery Family Trust. The investment of
investment into growth of the sales pipeline and continued
$2.5 million was made through a placement of shares at 7.5 cents
optimisation to win new business faster in the mid-market
per share. This placement formed the cornerstone for a 1 for
through its direct sales channel and integration partners,
including notable global brands such as Xero the global small
5 rights issue, also at 7.5 cents per share, to existing investors
to raise a further $3.0 million. The rights issue was jointly
business platform with intelliHR receiving certification of its
underwritten by Colinton Capital Partners and Bevan Slattery.
payroll on-boarding app.
This capital raising has strengthened the company’s balance
intelliHR has also honed its product and market focus upon
sheet and will provide additional funds to: accelerate intelliHR’s
People Management to better leverage the competitiveness of
global expansion strategy; increase its marketing investment
our Performance HR capabilities. A key competitive advantage
in the North American market; and support ongoing R&D and
is our SaaS technology which delivers our best-in-breed people
product development.
management systems, allowing organisations to maintain a
real-time handle on performance, create a culture aligned with
business strategy and contribute to strategic decision-making
with data-driven insights.
intelliHR continues to deliver results for our 153 high profile
customers (109 paying) including lower costs, higher productivity
and improved revenues. The value of intelliHR’s people
management platform to its customers is reflected in its strong
customer retention to date. intelliHR’s global relevance is also
evidenced by the expansion of subscribers into 15 countries
and 25% of revenue is now accounted for by our global
subscriber base.
In the year ahead, the Company’s growth strategy will be intensely
focused on continuing to build scale and leverage the strong
relationships being built with partners. It will continue to focus on
high value integrations to support new customer lead generation
opportunities and fast track the building of an ecosystem of
integrated best in class HR tools, centred around intelliHR as the
essential core people management platform for business.
A significant post-balance day development has been the
investment in intelliHR by Australian tech entrepreneur, Bevan
In closing, we would like to thank the talented and energetic
team at intelliHR for their efforts over the year. As well, we would
like to thank our other Independent Directors, Greg Baynton,
Alan Bignell, Jamie Duffield, Nicole Cook and David Slocomb for
their diligence and support in guiding the Company through this
exciting phase in its development.
TONY BELLAS
Chairman
ROB BROMAGE
Managing Director
7
For personal use only DIRECTORS' REPORT
DIRECTORS' REPORT
Your Directors present their report on the consolidated entity consisting of intelliHR Limited
and the entities it controlled at the end of, or during, the year ended 30 June 2020.
Throughout the report, the consolidated entity is referred to as the Group.
DIRECTORS AND COMPANY SECRETARY
to keep their staff connected and engaged during this period
The following persons were Directors of intelliHR Limited during
the whole of the financial year or from the date of appointment
and up to the date of this report.
of significant workplace disruption. The COVID-19 product
functionality was added to existing customer platforms and was
then subsequently made free to organisations globally.
A Bellas
R Bromage
G Baynton
J Duffield
A Bignell
D Slocomb
N Cook
REVIEW OF OPERATIONS
The Company Secretary is Suzanne Yeates. Suzanne was
appointed to the position of Company Secretary in 2016. She is
a Chartered Accountant, Founder and Principal of Outsourced
Accounting Solutions Pty Ltd. She holds similar positions with
other public and private companies.
PRINCIPAL ACTIVITIES
The principal activities of the Group during the financial year
were the development of an innovative, cloud-based people
management platform.
No significant change in the nature of these activities occurred
during the period.
DIVIDENDS
FY2020 delivered continued levels of growth. Despite the broader
impact of the COVID-19 pandemic, intelliHR executed its strongest
12 month period of customer cash receipts and revenue growth,
efficiently leveraging capital to continue to execute a high growth
strategy and position well for future scaling opportunities.
Financial Performance
161% Revenue growth, an increase of $772,000 over FY2019
126% Customer Cash Receipts growth, an increase of $835,863
over FY2019
37% or $1,165,082 improvement in net cash outflow from operating
activities reducing from ($3,177,654) in FY 2019 to ($2,012,572) in
FY 2020
35.5% or $621,006 improvement in net cash outflow from investing
activities reducing from ($1,750,664) in FY 2019 to ($1,129,658) in
FY 2020.
The Directors do not recommend the payment of a dividend.
Customer Growth
No dividend was paid during the year.
COVID 19 IMPACT
intelliHR responded to the unprecedented conditions created
by COVID-19 by taking measures to preserve its business,
including reviewing its budgets, tightly controlling cash flow
and successfully deploying measures to protect both its existing
customer portfolio and sales pipeline. The business created a
new “freemium” platform capability aimed at assisting businesses
Global expansion with users now extending across 15 countries;
25% of revenue is accounted for by our Global Activities, and this is
expected to continue rapidly expanding
$1.96M Contracted ARR, 109 paying customers and 14,531 paying
subscribers contracted as at 30 June 2020 with significant milestone
of 100 paying customers contracted achieved in May 2020.
61% Annual Recurring Revenue (ARR) growth contracting $738,661
ARR over FY2020
Launch of Freemium COVID-19 HR Essentials platform signing up 49
customers in addition to the 109 paying customers on platform
Increased traction was achieved across key established industries
including Professional Services, Technology, Financial Services,
8
Annual Report2020For personal use only Engineering, Not For Profit and General Industry, whilst growing strongly
in new sectors of Medical, Pharmacy, Pathology and Allied Health.
Operational Performance
Reorganisation of the product and engineering teams to achieve
deeper innovation, product leadership and velocity
Expansion of the public API - giving flexibility to connect intelliHR with
other technologies used across business operations
Continued R&D investment into Analytics & AI notably intelliHR’s beta
insight generation capabilities were released to select customers
for testing, together with a variety of key IP development initiatives
being progressed
Significant technology transformation projects were undertaken and
completed to increase platform performance for enterprise data
sets and improving user experience
Continued expansion of the Partner Program to over 40
consulting service providers and technology vendors including
notable certification by the Xero and admission into the Xero App
Marketplace for intelliHR’s payroll onboarding app
Successful repricing of Professional Services fees resulting in an
increase in revenue from implementation services
Growth of sales pipeline. As at 30 June 2020 the qualified sales
pipeline had 376 active customer sales opportunities with potential
total ARR estimated to be in excess of $16.4m.
Strategic and Outlook
In December 2019, leading Australian mid-market private equity
firm Colinton Capital Partners invested $2.74 Million to cornerstone
intelliHR, becoming intelliHR’s largest investor recognising the global
growth opportunity and differentiated product offering of the business
In March 2020, the introduction of a freemium product created
community goodwill during the pandemic whilst demonstrating the
configurability of the platform and adding a new lead generation
source. An evergreen freemium product is currently in development
In May 2020, launched a value-based pricing model offering
three different plans to suit individual customer requirements and
positioning the business to execute a genuine land- and-expand
strategy. The greater level of sophistication in the way intelliHR
packages its offering increases the range of customer size and
complexity by targeting different audiences at different price points
with different emergent problems to solve
In June 2020, subsidiary intelliHR America’s Ltd was established,
initially employing 2 sales people based in Toronto Canada to service
North America expanding operating hours to 21 hours coverage.
Market reach subsequently is now increased by a 15x multiple.
Overall, intelliHR has achieved positive growth and momentum
during unprecedented times. It has continued to invest
DIRECTORS’ REPORT
into efficiently scaling sales operations through a range of
development initiatives including product refinement and
market expansion with the establishment of the America's
sales team. Our technology has demonstrated proven results
for customers and continues to successfully compete with
incumbent technologies, locally and globally. intelliHR’s business
model is becoming more sophisticated and will continue to be
developed with a healthy balance of disruptive innovation and
customer feedback.
We are very pleased with our progress over the year and excited
by what we expect to achieve in 2021.
As disclosed in the financial report, the Group achieved a net loss of
$4,820,837 (2019: $5,432,113) and net operating cash outflows of
$2,012,572 (2019: $3,177,654) for the year ended 30 June 2020.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
In December 2019, $2.74 million was raised through the
placement of 36,500,000 shares.
LIKELY DEVELOPMENTS AND EXPECTED
RESULTS OF OPERATIONS
Comments on likely developments and expected results of
operations are included in the review of operations above.
EVENTS SINCE THE END OF THE FINANCIAL YEAR
Since the 30 June 2020, the Company has :
a. Announced a $5.5 million capital raising, consisting of
a $2.5 million placement (of which 2,731,956 fully paid
ordinary shares were issued on 10 August 2020, the
balance is subject to Shareholder approval) and a 1 for 5
fully underwritten non-renounceable rights issue which will
raise $3 million. Shares under both the placement and the
rights issue will be issued at $0.075 per share.
b.
c.
Issued 4,181,888 fully paid ordinary shares on the exercise
of options held by employees and Directors.
Issued 1,375,758 fully paid ordinary shares on the vesting of
performance rights.
No other matters or circumstances have arisen since the
end of the financial year which significantly affected or could
significantly affect the operations of the company, the results of
those operations or the state of affairs of the company in future
financial years.
9
For personal use only INFORMATION ON DIRECTORS
"intelliHR’squickresponse
totheunprecedented
challengesofCovid-19
hasassistedorganisations
toreshapetheir
workplaces."
A BELLAS
Chair – Non-executive
EXPERIENCE AND EXPERTISE
OTHER CURRENT DIRECTORSHIPS
Mr Bellas brings over 30 years of experience in the public
Chairman of NOVONIX Limited (ASX: NVX) and Director of State
and private sectors. Tony was previously CEO of the Seymour
Gas Limited (ASX: GAS).
Group, one of Queensland’s largest private investment and
development companies. Prior to joining the Seymour Group,
Tony held the position of CEO of Ergon Energy, a Queensland
Government- owned corporation involved in electricity
distribution and retailing. Before that, he was CEO of CS
Energy, also a Queensland Government-owned corporation
and the State’s largest electricity generation company,
operating over 3,500 MW of gas-fired and coal-fired plant at
four locations.
Tony had a long career with Queensland Treasury, achieving the
position of Deputy Under Treasurer.
Tony is a Director of the following unlisted companies:
Loch Explorations Pty Ltd, Colonial Goldfields Pty Ltd,
Burlington Mining Pty Ltd, Healthcare Logic Pty Ltd,
West Bengal Resources (Australia) Pty Ltd and the
Endeavour Foundation. He is also a director of the following
FORMER LISTED DIRECTORSHIPS IN
LAST 3 YEARS
Corporate Travel Management Ltd (ASX: CTD)
- Ceased March 2019
ERM Power Ltd (ASX: EPW)
- Ceased February 2019
Shine Corporate Ltd (ASX: SHI)
- Ceased June 2020.
SPECIAL RESPONSIBILITIES
Chairman of the Board
Member of the Audit Committee
Member of the Risk Committee
INTERESTS IN SHARES AND OPTIONS
listed companies:
4,131,288 ordinary shares
10
Annual Report2020For personal use only INFORMATION ON DIRECTORS
"Respondingtothe
uncertaintyof2020has
beenoneofintelliHR's
finesthours,witha
‘freemium’COVID-19
EssentialsHRproduct,
whilegrowingits
customerbase."
G BAYNTON
Non-Executive Director
EXPERIENCE AND EXPERTISE
OTHER CURRENT DIRECTORSHIPS
Mr Baynton is Founder and Managing Director of ORBIT
Non-executive Director of Superloop Limited (ASX: SLC).
CAPITAL, an investment and advisory firm and holder of an
Australian Financial Services Licence. He has been a Director
of ASX-listed companies for over 20 years, in sectors including
technology, infrastructure and resources.
Mr Baynton has experience in investment banking, merchant
banking, infrastructure investment, IPOs, public company
directorships, Queensland Treasury and the Department
of Mines and Energy. He holds a Bachelor of Business, a
Postgraduate Diploma in Applied Finance and Investment,
a Masters of Economic Studies, and a Masters of Business
Administration. He is a Fellow of the Geological Society
Executive Director of State Gas Limited (ASX: GAS) and
NOVONIX Limited (ASX: NVX).
FORMER LISTED DIRECTORSHIPS IN
LAST 3 YEARS
None
SPECIAL RESPONSIBILITIES
Chairman of the Audit Committee
Member of the Risk Committee
of London.
INTERESTS IN SHARES AND OPTIONS
5,719,742 ordinary shares
11
For personal use only INFORMATION ON DIRECTORS
"Inayearfullof
unpredictablechallenges,
intelliHRhasthrived
duetothestrongand
adaptablecommitment
ofourpeople."
A BIGNELL
Non-Executive Director
EXPERIENCE AND EXPERTISE
OTHER CURRENT DIRECTORSHIPS
Mr Bignell served as COO and CFO of simPRO Software
None
(an Australian SaaS software business) from 2012 to 2019
as it grew to become a successful global SaaS business.
Mr Bignell has experience in operations management,
finance, international capital raising, banking and finance.
He holds a Masters of Business Administration and Bachelor
of Business (Accountancy).
FORMER LISTED DIRECTORSHIPS IN
LAST 3 YEARS
None
SPECIAL RESPONSIBILITIES
Member of the Audit Committee
INTERESTS IN SHARES AND OPTIONS
206,630 ordinary shares
1 2
Annual Report2020For personal use only INFORMATION ON DIRECTORS
"TheintelliHRleadership
teamnavigated
unprecedentedchallenging
timesresultingina
pivotalyearofgrowth
andestablishingthe
foundationsforthenext
phaseofthebusiness."
N COOK
Non-Executive Director
EXPERIENCE AND EXPERTISE
OTHER CURRENT DIRECTORSHIPS
Ms Cook is currently an independent advisor to growing
scaleup and start-up businesses in Australia. Formerly
the Managing Director of innovative global outsourced
recruitment and HR firm PeopleScout, she oversaw the
delivery and growth of their solutions in the APAC region
Non-Executive Director, AMA Group Ltd (ASX: AMA)
Chair, Advisory Board, Sydney School of Entrepreneurship
FORMER LISTED DIRECTORSHIPS IN
LAST 3 YEARS
as well as the development of their recruitment platform,
Springboard. Ms Cook has over 20 years of experience
None
growing SaaS based technology businesses, is a trusted
management consultant and has deep domain expertise in
human resources, energy efficiency, supply chain, fin tech
and more. As the former CEO for Jobs for NSW, Ms Cook
remains focused on driving innovation through growing
Australian businesses in order to create the jobs and skills
of the future . She holds a bachelor in French from the
Catholic University of America, studied business at the School
of European Business in Paris, France, completed a Senior
Executive MBA at Melbourne Business School and is
a graduate of the Australian Institute of Company Directors.
SPECIAL RESPONSIBILITIES
None
INTERESTS IN SHARES AND OPTIONS
Pursuant to a Call Option Deed with Colinton Capital Partners
I (A) Pty Ltd (ACN 620 748 718) as Trustee for Colinton Capital
Partners Fund I (A) Trust (CCP) dated 17 January 2020, Nicole
Cook has an option to acquire 1,200,000 of the IHR ordinary
shares (Cook Option Shares) held by CCP as the registered
holder for an exercise price of $0.075, exercisable at any time
before 17 January 2023, subject to certain vesting conditions.
13
For personal use only INFORMATION ON DIRECTORS
"FY20wasastrongyearfor
intelliHRwithrecordsales
andaverystrongand
happycustomerbase."
J DUFFIELD
Non-Executive Director
EXPERIENCE AND EXPERTISE
OTHER CURRENT DIRECTORSHIPS
Mr Duffield has over 20 years of experience in the IT industry
None
and is the CEO and a Director of Revolution IT, a leading quality
assurance consulting firm which he co-founded in 2004. He
has strong risk, governance and commercial experience with
expertise in driving growth through sales, marketing, mergers
and acquisitions.
Jamie is also a Director of www.crowdsprint.com and a
graduate of the Australian Institute of Company Directors.
FORMER LISTED DIRECTORSHIPS IN
LAST 3 YEARS
None
SPECIAL RESPONSIBILITIES
Chairman of the Risk Committee
Member of the Audit Committee
INTERESTS IN SHARES AND OPTIONS
3,462,986 ordinary shares
14
Annual Report2020For personal use only INFORMATION ON DIRECTORS
"Iamsoproudofhow
ourteamstoodupto
supportourcustomersand
communitythisyear.
Wehavesuchahigh
calibreandqualitygroup
ofpeople."
R BROMAGE
Managing Director
EXPERIENCE AND EXPERTISE
OTHER CURRENT DIRECTORSHIPS
Mr Bromage is a HR Professional with 22 years in the industry.
None
An experienced businessman his entrepreneurial flair and
continuous, forward-thinking improvement is fueled by his
passion for HR and high-performing business. His career has
FORMER LISTED DIRECTORSHIPS IN
LAST 3 YEARS
centered around the field of building validated performance
None
prediction models, developing his expertise in human capital
management analytics. He actively researches the future of
SPECIAL RESPONSIBILITIES
people management, which drives intelliHR’s evolution.
Managing Director
INTERESTS IN SHARES AND OPTIONS
22,563,978 ordinary shares
4,728,875 options over ordinary shares
Career highlights include:
Founder and current CEO of intelliHR – an Australian HR
technology business developing and currently marketing a
next-generation cloud-based people management Platform
Founder of APRG - a Human Capital Management
Consulting organisation focused on delivering leading
consulting services to Australian businesses.
Specialties:
People and Culture Strategy Alignment, Performance
Management Frameworks, HR Process Design, Attrition
Reduction, HR Software Development, HR Technology
Implementation, HR Metrics and Predictive Analytics.
15
For personal use only INFORMATION ON DIRECTORS
"intelliHRdeliveredrobust
growthinFY20despite
COVID-19andiswell
positionedtobenefitfrom
thestructuralshiftto
remoteworking."
D SLOCOMB
Non-Executive Director
EXPERIENCE AND EXPERTISE
OTHER CURRENT DIRECTORSHIPS
Mr Slocomb is a Junior Partner/Managing Director at
None
Australian mid-market private equity firm, Colinton Capital.
Mr Slocomb has significant prior experience in private equity
and investment banking with former roles at global investment
FORMER LISTED DIRECTORSHIPS IN
LAST 3 YEARS
firms The Carlyle Group, Oaktree Capital and Macquarie
Group. He was also previously CFO at Guzman y Gomez. He
None
holds a Masters of Finance from INSEAD Business School and a
SPECIAL RESPONSIBILITIES
Bachelor of Business (Finance)/Bachelor of Laws (Hons I) from
None
the Queensland University of Technology.
INTERESTS IN SHARES AND OPTIONS
None
16
Annual Report2020For personal use only Our purpose is to have a meaningful
and positive impact on people’s lives
at work so they can do their best.
Our vision is to be the # 1 people
technology platform in the world,
renowned for transforming workplaces
for the better one at a time.
Our mission is to be the most
valuable, addictive and must-have
technology for every person, leader
and enterprise worldwide.
17
For personal use only DIRECTORS’ REPORT
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors and of each board committee held during the year ended 30 June
2020, and the number of meetings attended by each Director were:
FULL MEETINGS OF DIRECTORS
MEETINGS OF AUDIT COMMITTEE
A Bellas
G Baynton
J Duffield
A Bignell
D Slocomb
N Cook
R Bromage
A
6
7
6
4
3
3
7
B
7
7
7
4
3
3
7
A
2
2
2
N/A
N/A
N/A
N/A
B
2
2
2
N/A
N/A
N/A
N/A
A = Number of meetings attended
B = Number of meetings held during the time the Director held office or was a member of the committee during the year
18
Annual Report2020For personal use only REMUNERATION REPORT
REMUNER ATION REPORT (AUDITED)
The Directors present the intelliHR Limited 2020 remuneration report, outlining key aspects of our remuneration policy and
framework, and remuneration awarded this year.
The report is structured as follows:
(a)
(b)
(c)
(d)
Key management personnel (KMP) covered
in this report
Remuneration policy and link to performance
Elements of remuneration
Link between remuneration and performance
(e)
(f)
(g)
(h)
Remuneration expenses for executive KMP
Contractual arrangements for executive KMP
Non-executive Director arrangements
Additional statutory information
(A) KEY MANAGEMENT PERSONNEL COVERED IN THIS REPORT
NON-EXECUTIVE AND EXECUTIVE DIRECTORS, AND OTHER KEY MANAGEMENT PERSONNEL
(See pages 10 to 16 for details about each Director)
NON-EXECUTIVE DIRECTORS
A Bellas (Non-executive Chairman)
G Baynton (Non-executive Director)
J Duffield (Non-executive Director)
A Bignell (Non-executive Director) (Appointed 9 September 2019)
D Slocomb (Non-executive Director) (Appointed 8 January 2020)
N Cook (Non-executive Director) (Appointed 17 January 2020)
EXECUTIVE DIRECTORS
R Bromage (Managing Director)
OTHER KEY MANAGEMENT PERSONNEL
P Trappett (Chief Operating Officer)
19
For personal use only REMUNERATION REPORT
(B) REMUNERATION POLICY AND LINK TO PERFORMANCE
The role of a remuneration committee is performed by the full Board of Directors. The Board reviews and determines
the remuneration policy and structure annually to ensure it remains aligned to business needs and conforms with our
remuneration principles. In particular, the Board aims to ensure that remuneration practices are:
competitive and reasonable, enabling the Group to attract and retain key talent
aligned to the Group’s strategic and business objectives and the creation of shareholder value
transparent and easily understood, and
align with shareholder interests and are acceptable to shareholders
ELEMENT
PURPOSE
PERFORMANCE METRICS
POTENTIAL VALUE
CHANGES FOR FY 2020
Fixed remuneration (FR)
Provide competitive
market salary including
superannuation and
non-monetary benefits
Nil
Positioned at median
market rate
None
STI
LTI
Reward for in-year
performance
Based on individual KPIs. 50% of TFR
Introduction of STIs
Alignment to long-term
Performance vesting
shareholder value
conditions
50% of TFR
Introduction of formal
LTIs
Long term incentives are assessed periodically and are designed to promote long-term stability in shareholder returns.
Assessing performance
The Board of Directors is responsible for assessing performance against KPIs and determining the LTI to be paid.
20
Annual Report2020For personal use only REMUNERATION REPORT
(C) ELEMENTS OF REMUNERATION
(i) Fixed annual remuneration (FR)
Executives receive their fixed remuneration as cash. FR is reviewed annually and is benchmarked against market data
for comparable roles in companies in a similar industry and with similar market capitalisation. The Board has the
flexibility to take into account capability, experience, value to the organisation and performance of the individual.
The Group has not engaged an external remuneration consultant during FY2020.
Superannuation is included in FR for executives.
(ii) Short term incentives
Short term incentives for all key management personnel (excluding non-executive Directors) have been implemented
for FY2020. They are eligible to receive a cash bonus of up to 50% of their total fixed remuneration at the end of the
financial year subject to the executive achieving the KPIs set for them during the financial year.
The Group reserves the right to pay any STI in either cash, fully paid ordinary shares or performance rights at the Board
of Director’s sole discretion.
If an executive does not achieve each of the KPIs during the financial year, the Board shall determine the appropriate
pro rate STI to be received by the Executive. The Board of Directors shall make this determination for both the
Managing Director and the Chief Operating Officer.
For the year ended 30 June 2020, key performance indicators were based on the Group objectives focusing on
customer growth. Achievement against KPIs is reviewed annually by the Board of Directors.
For each KMP eligible for short-term incentive, the percentage split of the available bonus awarded and forfeited is
disclosed in the following table.
NAME
R Bromage
P Trappett
2020
2019
AWARDED
%
75%**
64%*
FORFEITED
%
AWARDED
%
FORFEITED
%
25%
36%
0%
54%
100%
46%
*
STI awarded for 2020 will be settled in shares.
**
STI awarded to be settled in shares subject to shareholder approval.
2 1
For personal use only REMUNERATION REPORT
(iii) Long-term incentives
Executive KMP participate, at the Board’s discretion, in a performance based long term incentive program (LTI)
with a maximum annual benefit of 50% of TFR, which is assessed over a three year period and is payable in shares
or performance rights at the discretion of the Board. Performance is assessed against an earnings per share growth
hurdle, unless otherwise agreed.
Options
There were no options granted to KMP during FY2020.
(D) LINK BETWEEN REMUNERATION AND PERFORMANCE
During the year, the Group has generated losses from its principal activity. As the Group is still growing the business, the link
between remuneration, Group performance and shareholder wealth is difficult to define. Share prices are subject to the
influence of fluctuation in the domestic and global economy, and as such, increases and decreases may occur independently
of executive performance.
Given the nature of the Group’s activities and the consequential operating results, no dividends have been paid. There have
been no returns of capital in the current or previous financial periods. The details of market price movements are as follows:
Year end 30 June 2020
Year end 30 June 2019
On admission to ASX - 23 January 2018
SHARE PRICE
5.2 cents
7.7 cents
30 cents
2 2
Annual Report2020For personal use only (E) REMUNERATION EXPENSES FOR EXECUTIVE KMP
The following table shows details of the remuneration expense recognised for the Group’s executive key management
personnel for the current and previous financial year measured in accordance with the requirements of the
accounting standards.
REMUNERATION REPORT
FIXED REMUNERATION
VARIABLE REMUNERATION
CASH
SALARY
$
NON-
MONETARY
BENEFITS
$
ANNUAL
AND LONG
SERVICE
LEAVE**
$
POST-
EMPLOYMENT
BENEFITS
$
OPTIONS*
$
STI
$
TOTAL
$
RELATED TO
PERFORMANCE
%
NAME
YEAR
EXECUTIVE DIRECTORS
R Bromage
2020
J Fong
2019
2020
2019
300,000
300,000
-
220,546
NON-EXECUTIVE DIRECTOR
A Bellas
2020
2019
G Baynton
2020
2019
J Duffield
2020
A Bignell
2019
2020
2019
30,000
30,000
30,000
30,000
30,000
30,000
24,318
-
D Slocomb
2020
15,793
N Cook
2019
2020
2019
-
13,615
-
OTHER KEY MANAGEMENT PERSONNEL
P Trappett
2020
2019
180,000
175,846
TOTAL KMP REMUNERATION EXPENSED
7,042
7,314
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
16,843
23,360
-
28,500
28,500
-
69,693
-
27,846
112,500
(54,619)
16,442
(87,686)
-
-
-
-
-
-
-
-
-
-
-
-
2,850
2,850
2,850
2,850
2,850
2,850
2,310
-
-
-
1,293
-
7,685
53,969
7,631
53,686
7,685
53,969
-
-
-
-
-
-
4,766
6,203
17,100
16,705
106,286
119,977
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
492,731
428,867
-
94,683
40,535
86,819
40,481
86,536
40,535
86,819
26,628
15,793
28.5%
16.3%
-
(92.6%)
19.0%
62.2%
18.9%
62.0%
19.0%
62.2%
0%
-
0%
-
14,908
0%
-
-
308,152
318,731
34.5%
37.6%
-
-
2020
2019
623,726
786,392
7,042
7,314
21,609
(25,056)
57,753
157,133
112,500 979,763
70,197
263,608
-
1,102,455
*
**
Options/performance rights granted under the executive options or performance rights Incentive plan are expensed over the performance period, which includes the
year in which the options / performance rights are granted and the subsequent vesting period.
Other long-term benefits as per Corporations Regulation 2M.3.03(1) Item 8. The amounts disclosed in this column represent the movements in the associated provision.
They may be negative where a KMP has taken more leave than accrued during the year.
23
For personal use only REMUNERATION REPORT
(F) CONTRACTUAL ARRANGEMENTS WITH EXECUTIVE KMP
COMPONENT
Fixed remuneration
Contract duration
Notice by the individual / Company
Termination benefits
MD
$328,500
Ongoing
6 months
-
COO
$197,100
Ongoing
6 months
-
(G) NON-EXECUTIVE DIRECTOR ARRANGEMENTS
All non-executive Directors receive fees of $30,000 per annum plus superannuation. Fees are reviewed annually by the
Board taking into account comparable roles. The current base fees were reviewed with effect from 23 January 2018. The
maximum annual aggregate non-executive Directors’ fee pool limit is $300,000 and was set out in the 2017 Prospectus.
All non-executive Directors enter into a service agreement with the Group in the form of a letter of appointment. The letter
summarises the Board policies and terms, including remuneration relevant to the office of Director.
(H) ADDITIONAL STATUTORY INFORMATION
(i)
Performance based remuneration granted, exercised and forfeited during the year
The table below shows for each KMP the value of options that were granted, exercised and forfeited during FY2020. The
number of options and percentages vested/forfeited for each grant are disclosed on page 25.
LTI OPTIONS
2020
A Bellas
G Baynton
J Duffield
A Bignell
D Slocomb
N Cooke
R Bromage
P Trappett
VALUE GRANTED*
$
VALUE EXERCISED**
$
-
-
-
-
-
-
-
-
-
-
90,174
-
-
-
-
-
*
**
The value at grant date calculated in accordance with AASB 2 Share-based Payment of options granted during the year as part of remuneration
The value at the exercise date of options that were granted as part of remuneration and were exercised during the year has been determined as the intrinsic value of
the options at that date.
LTI PERFORMANCE RIGHTS
2020
P Trappett
VALUE GRANTED*
$
VALUE EXERCISED**
$
81,818
14,878
*
**
The value at grant date calculated in accordance with AASB 2 Share-based Payment of options granted during the year as part of remuneration
The value at the exercise date of performance rights that were granted as part of remuneration and were exercised during the year has been determined as the
intrinsic value of the performance rights at that date.
24
Annual Report2020For personal use only REMUNERATION REPORT
(ii) Terms and conditions of the share-based payment arrangements
Options
The terms and conditions of each grant of options affecting remuneration in the current or a future reporting period are
as follows:
GRANT DATE
VESTING DATE
EXPIRY DATE
EXERCISE PRICE
VALUE PER
OPTION AT GRANT
DATE
PERFORMANCE
ACHIEVED
% VESTED
23/11/2016
23/11/2016
23/11/2016
23/11/2016
23/11/2016
23/11/2016
23/11/2016
23/11/2016
23/11/2016
23/11/2016
23/11/2016
23/11/2016
23/11/2016
23/11/2016
23/11/2016
23/11/2016
23/11/2016
23/11/2016
16/12/2016
16/12/2016
16/12/2016
16/12/2016
16/12/2016
16/12/2016
05/01/2017
05/01/2017
05/01/2017
05/01/2017
05/01/2017
05/01/2017
30/09/2018
31/12/2018
31/03/2019
30/06/2019
30/09/2019
31/12/2019
31/03/2020
30/06/2020
30/09/2020
30/09/2018
31/12/2018
31/03/2019
30/06/2019
30/09/2019
31/12/2019
31/03/2020
30/06/2020
30/09/2020
30/09/2018
31/12/2018
31/03/2019
30/06/2019
30/09/2019
31/12/2019
30/09/2018
31/12/2018
31/03/2019
30/06/2019
30/09/2019
31/12/2019
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
1/12/2021
$0.01
$0.01
$0.01
$0.01
$0.01
$0.01
$0.01
$0.01
$0.01
$0.20
$0.20
$0.20
$0.20
$0.20
$0.20
$0.20
$0.20
$0.20
$0.01
$0.01
$0.01
$0.01
$0.01
$0.01
$0.04
$0.04
$0.04
$0.04
$0.04
$0.04
$0.1294
$0.1298
$0.1301
$0.1304
$0.1307
$0.1309
$0.1311
$0.1313
$0.1314
$0.1055
$0.1071
$0.1084
$0.1096
$0.1108
$0.1117
$0.1126
$0.1134
$0.1140
$0.1293
$0.1297
$0.1300
$0.1303
$0.1306
$0.1308
$0.1202
$0.1213
$0.1222
$0.1230
$0.1238
$0.1244
100%
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
The number of options over ordinary shares in the Company provided as remuneration to key management personnel is shown
in the table on page 26. The options carry no dividend or voting rights. There are no other conditions that must be satisfied for
the options to vest.
When exercisable, each option is convertible into one ordinary share of intelliHR Limited.
25
For personal use only REMUNERATION REPORT
Performance Rights
The terms and conditions of each grant of performance rights affecting remuneration in the current or a future reporting
period are as follows:
GRANT DATE
VESTING DATE
EXPIRY DATE
EXERCISE PRICE
VALUE PER
PERFORMANCE
RIGHT AT GRANT
DATE
PERFORMANCE
ACHIEVED
% VESTED
1/ 7/2018
1/9/2019
1/ 7/2021
1/ 7/2020
1/ 7/2022
1/9/2022
N/A
N/A
$0.20
$0.075
-
64%
-
64%
The number of performance rights over ordinary shares in the Company provided as remuneration to key management personnel is
shown on page 27. The performance rights carry no dividend or voting rights. The performance rights vest as follows:
a)
367,347 vest on 1 July 2021 if the relative total shareholder return is at or above the 3-year average of the S&P ASX
small ordinaries Ex A-REIT Franking Credit Adjusted Annual Total Return Index Cap Index
b)
1,090,909 vest on achievement of mutually agreed KPIs that relate to FY2020.
When exercisable, each performance right is convertible into one ordinary share of intelliHR Limited.
If an executive ceases employment before the rights vest, the rights will be forfeited, except in limited circumstances that are
approved by the Board on a case-by-case basis.
(iii) Reconciliation of options, performance rights and ordinary shares held by KMP
The table below shows a reconciliation of options held by each KMP from the beginning to the end of FY2020.
No options were forfeited during the year.
26
Annual Report2020For personal use only REMUNERATION REPORT
Options
2020
NAME & GRANT
DATES
BALANCE AT THE
START OF THE YEAR
UNVESTED
VESTED
PLACEMENT
BONUS
OPTIONS
GRANTED
AS
COMPENSATION
VESTED
EXERCISED
VESTED AND
EXERCISABLE % VESTED UNVESTED
BALANCE AT THE
END OF THE YEAR
A BELLAS
16/12/2016
G BAYNTON
16/12/2016
05/01/2017
J DUFFIELD
16/12/2016
A BIGNELL
-
D SLOCOMB
-
N COOK
-
R BROMAGE
23/11/2016
P TRAPPETT
462,432
1,618,512
410,000 1,435,000
52,432
183,512
462,432
924,864
-
-
-
-
-
-
1,217,362
2,678,181
833,332
-
-
-
Performance Rights
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
462,432
410,000
52,432
-
-
-
2,080,944
100
1,845,000
235,944
100
100
-
-
-
-
-
-
-
-
462,432
1,387,896
-
-
-
973,884
-
-
-
-
-
-
4,485,397
95%
243,478
-
-
-
The table below shows how many performance rights were granted and vested during the year. No performance rights were
forfeited during the year:
BALANCE AT THE
START OF THE YEAR
NAME & GRANT DATES
UNVESTED
VESTED
VESTED
DURING
THE YEAR
FORFEITED
DURING
THE YEAR
GRANTED
AS
COMPENSATION
BALANCE AT THE
END OF THE YEAR
UNVESTED
VESTED
MAXIMUM
VALUE YET
TO VEST*
$
P TRAPPETT
2020
2019
734,694
-
-
-
198,367
(168,980)
1,090,909
1,458,256
-
-
734,694
734,694
-
-
24,534
49,002
*
The maximum value of the performance rights yet to vest has been determined as the amount of the grant date fair value of the rights that are yet to be expensed.
The minimum value of deferred shares yet to vest is nil, as the shares will be forfeited if the vesting conditions are not met.
27
For personal use only REMUNERATION REPORT
Shareholdings
2020
NAME
BALANCE AT THE START
OF THE YEAR
ISSUED ON EXERCISE OF
OPTIONS
OTHER CHANGES DURING
THE YEAR
BALANCE AT THE END OF
THE YEAR
ORDINARY SHARES
A Bellas
G Baynton
J Duffield
A Bignell
D Slocomb
N Cook
R Bromage
P Trappett
1,383,678
3,638,798
2,075,690
-
-
-
21,471,075
478,540
-
-
1,387,296
-
-
-
-
198,367
666,666**
-
-
206,630*
-
-
1,092,903***
347,126**
2,050,344
3,638,798
3,462,986
206,630
-
-
22,563,978
1,024,033
*
Shareholding at date of appointment.
**
Participation In August 2019 placement.
***
833,333 shares acquired In April 2019 placement and 259,570 acquired on market.
(iv) Other transactions with key management personnel
R Bromage, acting as trustee for The Bromage Family Investment Trust, loaned the Group $100,000 on the
2nd of May 2019. The loan was interest free and represents an advance on funds to acquire shares.
The loan was repaid 3 days after the Extraordinary General Meeting held on the 5th August 2019 when shareholder
approval was given to issue 833,333 fully paid ordinary shares with one attaching April Placement Option and one
attaching April Placement Bonus Option for every 2 shares issued under the April Placement.
END OF REMUNERATION REPORT (AUDITED)
28
Annual Report2020For personal use only SHARES UNDER OPTION
SHARES UNDER OPTION
Unissued ordinary shares
Unissued ordinary shares of intelliHR Limited under option at the date of this report are as follow:
SECURITIES
OPTIONS
23/11/2016
16/12/2016
05/01/2017
23/11/2016
01/04/2017
11/08/2017
27/02/2018
23/07/2018
PERFORMANCE RIGHTS
03/09/2018
09/11/2018
03/09/2019
EXPIRY DATE
EXERCISE PRICE
NUMBER UNDER OPTION
01/12/2021
01/12/2021
01/12/2021
01/12/2021
31/03/2022
11/08/2022
14/02/2023
30/06/2023
01/07/2022
01/11/2022
01/09/2022
$0.01
$0.01
$0.04
$0.20
$0.04
$0.02
$0.32
$0.30
N/A
N/A
N/A
377,778
5,313,240
298,838
3,895,543
32,000
693,000
294,000
370,000
367,347
250,000
1,878,788
Unissued ordinary shares of intelliHR Limited under performance right at the date of this report total 2,496,135. 1,458,256 of these
performance rights are the performance rights granted as remuneration to Mr Trappett. The remaining 1,037,879 performance
rights were granted to other employees during the prior financial year. Details of the performance rights granted to key management
personnel are disclosed on page 27 above.
No performance right holder or option holder has any right to participate in any other share issue of the Company or any other entity.
No performance rights have been granted since the end of the financial year.
29
For personal use only SHARES UNDER OPTION
INSURANCE OF OFFICERS AND INDEMNITIES
(a)
Insurance of officers
During the financial year, intelliHR Limited paid a premium of $96,134 to insure the Directors and Secretary of
the Company.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers of entities in the Group, and any other payments arising from
liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise
from conduct involving a willful breach of duty by the officers or the improper use by the officers of their position
or of information to gain advantage for themselves or someone else or to cause detriment to the Group. It is not
possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to
other liabilities.
(b)
Indemnity of auditors
intelliHR Limited has not agreed to indemnify their auditors.
(c) Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237
of the Corporations Act 2001.
30
Annual Report2020For personal use only SHARES UNDER OPTION
NON-AUDIT SERVICES
The Group may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise
and experience with the Group are important.
Details of the amounts paid or payable to the auditor (BDO) for audit and non-audit services provided during the year are set
out below.
The Board of Directors has considered the position and, in accordance with advice received from the audit committee, is satisfied
that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not
compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
all non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and
objectivity of the auditor
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants.
During the year, the following fees were paid or payable for non-audit services provided by the auditor of the parent entity, its
related practices and non-related audit firms:
Taxation services
BDO Qld Pty Ltd:
Preparation of Tax and FBT Return, and R&D AusIndustry Return
TOTAL REMUNERATION FOR NON-AUDIT SERVICES
Auditor’s independence declaration
CONSOLIDATED
2020
$
29,725
29,725
2019
$
44,844
44,844
A copy of the auditors independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 32.
This report is made in accordance with a resolution of Directors.
A Bellas
Chairman
Brisbane, 21 August 2020
31
For personal use only DECLARATION OF INDEPENDENCE
32
Annual Report2020Annual Report202032DECLARATION OF INDEPENDENCELevel 10, 12 Creek St Brisbane QLD 4000 GPO Box 457 Brisbane QLD 4001 Australia Tel: +61 7 3237 5999 Fax: +61 7 3221 9227 www.bdo.com.au DECLARATION OF INDEPENDENCE BY R M SWABY TO THE DIRECTORS OF INTELLIHR LIMITED As lead auditor of intelliHR Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been: 1.No contraventions of the auditor independence requirements of the Corporations Act 2001 inrelation to the audit; and2.No contraventions of any applicable code of professional conduct in relation to the audit.This declaration is in respect of intelliHR Limited and the entities it controlled during the year. R M Swaby Director BDO Audit Pty LtdBrisbane, 21 August 2020 BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. For personal use only CORPORATE GOVERNANCE STATEMENT
Corporate governance
statement
intelliHR Limited and the Board are committed to achieving and demonstrating the highest standards of corporate governance.
intelliHR Limited has reviewed its corporate governance practices against the Corporate Governance Principles and Recommendations
(3rd edition) published by the ASX Corporate Governance Council.
The 2020 corporate governance statement is dated as at 30 June 2020 and reflects the corporate governance practices in place
throughout the 2020 financial year. The 2020 corporate governance statement was approved by the Board on 21 August 2020.
A description of the Group’s current corporate governance practices is set out in the Group’s corporate governance statement which
can be viewed at https://intellihr.com.au/investor-relations/#corporate-governance.
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34
Annual Report2020For personal use only 2020
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35
For personal use only FINANCIAL REPORT
These financial statements are for intelliHR Limited.
The financial statements are presented in the Australian currency.
intelliHR Limited is a Company limited by shares, incorporated and domiciled in Australia.
Its principal place of business is:
intelliHR Limited
Level 28, 345 Queen Street
Brisbane QLD 4000
All press releases, financial reports and other information are available at our website: www.intellihr.co.
36
Annual Report2020For personal use only FINANCIAL REPORT
ANNUAL REPORT 2020
FI N A N C I A L R E P O R T
INTELLIHR LIMITED
ACN 600 548 516
37
FINANCIAL REPORT
74
DIRECTORS’ DECLARATION
80 SHAREHOLDER INFORMATION
75
79
INDEPENDENT AUDITOR’S
REPORT
REPORT ON THE
REMUNERATION REPORT
80 Distribution of equity securities
81 Equity security holders
82 Substantial holders
82 Voting rights
38 Consolidated statement of
profit or loss and other
comprehensive income for the
year ended 30 June 2020
39 Consolidated balance sheet
as at 30 June 2020
40 Consolidated statement of
changes in equity for the year
ended 30 June 2020
41 Consolidated statement of
cash flows for the year ended 30
June 2020
42 NOTES TO THE FINANCIAL REPORT
42 Note 1
Summary of significant
accounting policies
58 Note 10 Investments
66 Note 20 Cash flow information
58 Note 11 Trade and other
68 Note 21 Share-based payments
52 Note 2 Parent information
receivables
53 Note 3 Revenue
59 Note 12 Plant and equipment
70 Note 22 Events after the
reporting date
53 Note 4 Loss for the year
60 Note 13 Leases
71 Note 23 Related party transactions
54 Note 5
Income tax expense
60 Note 14 Intangible assets
72 Note 24 Contingent Assets
56 Note 6
Key Management
Personnel Compensation
56 Note 7 Auditor’s Remuneration
57 Note 8 Earnings per share
58 Note 9
Cash and cash
equivalents
62 Note 15 Trade and other payables
62 Note 16 Provisions
63 Note 17 Contributed equity
65 Note 18 Reserves
65 Note 19 Operating segments
and liabilities
72 Note 25 Commitments
72 Note 26 Financial risk
management
37
For personal use only FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Revenue
Other income
Employee benefits expense
Directors remuneration
Depreciation and amortisation expense
Marketing expense
Finance expense
General and administrative expense
Loss before income tax expense
Income tax expense
Other comprehensive income for the period, net of tax
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
Earnings per share for loss from continuing operations attributable to the ordinary
equity holders of the Company:
Basic earnings per share
Diluted earnings per share
CONSOLIDATED
2020
$
1,250,471
256,876
(2,671,420)
(676,258)
(1,872,281)
(363,581)
(125,635)
(619,009)
(4,820,837)
-
2019
$
478,838
85,957
(2,043,754)
(789,163)
(1,583,302)
(567,325)
(75,094)
(938,270)
(5,432,113)
-
38
-
(4,820,799)
(5,432,113)
Cents
(2.83)
(2.83)
Cents
(5.08)
(5.08)
Notes
3
3
4
4
4
4
4
5
8
8
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
38
Annual Report2020For personal use only CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2020
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Investments
Plant and equipment
Right-of-use asset
Intangible assets
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Lease liability
Loan from related party
Total current liabilities
Non-current liabilities
Provisions
Lease liability
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulates losses
Total equity
The above consolidated balance sheet should be read in conjunction with the accompanying notes
FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
CONSOLIDATED
Notes
2020
$
2019
$
9
11
10
12
13
14
15
13
23
16
13
17
18
2,790,577
319,037
3,109,614
416,838
6,150
2,388,249
2,135,128
4,946,365
1,956,906
316,171
2,273,077
466,838
25,972
2,821,917
2,288,025
5,602,752
8,055,979
7,875,829
1,468,586
404,308
-
1,872,894
7,906
2,240,885
2,248,791
823,820
378,319
100,000
1,302,139
-
2,519,820
2,519,820
4,121,685
3,821,959
3,934,294
4,053,870
18,671,536
2,737,601
(17,474,843)
3,934,294
14,341,235
2,366,641
(12,654,006)
4,053,870
39
For personal use only FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
BALANCE AT 30 JUNE 2018
11,915,456
2,164,992
(7,221,893)
6,858,555
CONTRIBUTED
EQUITY
$
SHARE
BASED
PAYMENTS
RESERVE
$
FOREIGN
CURRENCY
TRANSLATION
RESERVE
$
ACCUMULATED
LOSSES
$
TOTAL
$
Loss for the period
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs
Share-based payments
STI settled in shares
BALANCE AT 30 JUNE 2019
Loss for the period
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Foreign Currency Translation
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs
Share-based payments
BALANCE AT 30 JUNE 2020
-
-
-
2,210,611
-
215,168
14,341,235
-
-
-
-
4,330,301
-
18,671,536
-
-
-
-
416,817
(215,168)
2,366,641
-
-
-
-
-
370,922
2,737,563
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
-
-
-
-
-
-
-
-
-
-
38
-
-
38
(5,432,113)
(5,432,113)
-
(5,432,113)
-
(5,432,113)
-
-
-
(12,654,006)
2,210,611
416,817
-
4,053,870
(4,820,837)
(4,820,837)
-
-
(4,820,837) (4,820,837)
-
-
-
(17,474,843)
38
4,330,301
370,922
3,934,294
40
Annual Report2020For personal use only CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
CONSOLIDATED
Notes
2020
$
2019
$
Cash flows from operating activities
Receipts from customers (GST inclusive)
Payments to suppliers and employees (GST inclusive)
Interest received
Interest paid
Income tax refund
Government incentives
Net cash outflow from operating activities
20(a)
Cash flows from investing activities
Payments for development
Payments for plant and equipment
Proceeds from sale of plant and equipment
Research and development tax incentive refund
Receipts/(Payments) for security deposits
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds on issue of shares
Payment of capital raising costs and listing expenses
Proceeds from loan from related entity
Principal element of lease payments
Net cash inflow from financing activities
1,500,941
(3,578,426)
22,594
(106,826)
-
149,145
(2,012,572)
(1,830,448)
(6,288)
609
656,469
50,000
(1,129,658)
4,338,974
(108,674)
-
(254,247)
3,976,053
665,078
(3,823,193)
36,968
(57,351)
844
-
(3,177,654)
(2,143,144)
(11,018)
500
819,836
(416,838)
(1,750,664)
2,337,499
(126,888)
100,000
(138,747)
2,171,864
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
833,823
(2,756,454)
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on cash and cash equivalents
1,956,906
(152)
4,713,360
-
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
20(b)
2,790,577
1,956,906
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
41
For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements of intelliHR Limited (the Company) as at and for the year ended 30 June 2020 comprise the
company and its controlled entities (the Group).
These general purpose financial statements have been prepared in accordance with the Corporations Act 2001, Australian Accounting
Standards and Interpretations of the Australian Accounting Standards Board and International Financial Reporting Standards as issued by
the International Accounting Standards Board. The Group is a for-profit entity for financial reporting purposes under Australian Accounting
Standards. Material accounting policies adopted in the preparation of these financial statements are presented below and have been
consistently applied unless stated otherwise.
Except for cash flow information, the financial statements have been prepared on an accruals basis and are based on historical costs.
Going Concern
The financial report has been prepared on the going concern basis, which contemplates continuity of normal business activities and the
realisation of assets and settlement of liabilities in the normal course of business.
As disclosed in the financial report, the Group achieved a net loss of $4,820,837 (2019: $5,432,113) and net operating cash outflows
of $2,012,572 (2019: $3,177,654 ) for the year ended 30 June 2020. As at 30 June 2020, the Group has cash of $2,790,577 (2019:
$1,956,906).
The ability of the Group to continue as a going concern is principally dependent upon one or more of the following:
the ability of the Group to raise capital as and when necessary;
the ability to complete successful development and commercialisation of the Group’s software platform.
These conditions give rise to material uncertainty which may cast significant doubt over the Group’s ability to continue as a going concern.
The Directors believe that the going concern basis of preparation is appropriate due to the proven ability of the Group to raise necessary
funding via the issue of shares and also the increased revenues now being achieved through software sales, along with its growing sales
pipeline. The ability of the Group to raise capital is evidenced by the announcement on 6 August 2020 of a $5,500,000 capital raising,
consisting of a fully underwritten non-renounceable rights issue of $3,000,000 and a $2,500,000 placement (to strategic investor, Bevan
Slattery). The rights issue has been underwritten by Bevan Slattery and Colinton Capital (intelliHR’s largest shareholder). $2,300,000 of the
placement is subject to receipt of shareholder approval at the General Meeting of Shareholders scheduled for 10 September 2020 (refer
Note 22). The Directors currently expect that there will be strong participation in the rights issue, given its pricing at $0.075 per share in the
context of the prevailing share price at the time of issue of the Annual Report.
The Director’s have considered the impact of Covid 19 and found that the pandemic has increased sales prospects due to the greater
global need for businesses to manage employees remotely using HR platforms. In response to the onset of COVID-19, the Group has tightly
controlled expenses immediately suspending all non-essential expenditure in March 2020. Savings have been made with the elimination of
business travel, office running costs and the suspension of the establishment of an international office. The business deferred rent payments
for the months April, May and June 2020 with a view to progressively repay in FY 2021. In addition, Covid 19 has not adversely impacted the
collection of Trade Receivables and the Director’s do not expected increased credit losses.
Should the Group be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in
the ordinary course of business, and at amounts that differ from those stated in the financial report.
4 2
Annual Report2020For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
This financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or
the amounts or classification of liabilities and appropriate disclosures that may be necessary should the Group be unable to continue
as a going concern.
The financial statements were authorised for issue by the Directors on 21 August 2020. The Directors have the power to amend and
reissue the financial statements.
a. Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of intelliHR Limited
(‘Company’ or ‘Parent Entity’) as at 30 June 2020 and the results of all subsidiaries for the year then ended. intelliHR
Limited and its subsidiaries together are referred to in these financial statements as the ‘Group’.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly
in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss
and other comprehensive income, statement of financial position and statement of changes in equity of the Group.
Losses incurred by the Group are attributed to the non-controlling interest in full, even if that results in a
deficit balance.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity.
The Group recognises the fair value of the consideration received and the fair value of any investment retained
together with any gain or loss in profit or loss.
43
For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
b.
Income tax
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on
the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods,
where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied
when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively
enacted, except for:
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and
the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the
foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be
available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the
extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
c.
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian dollars,
which is the parent entity’s functional currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items
measure at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary
items measured at fair value are reported at the exchange rate at the date when fair values were determined.
4 4
Annual Report2020For personal use only
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where
deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive
income to the extent that the underlying gain or loss is recognised in other comprehensive income; otherwise the
exchange difference is recognised in profit or loss.
Group companies
The financial results and position of foreign operations, whose functional currency is different from the Group’s
presentation currency, are translated as follows:
Assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
Income and expenses are translated at the average exchange rates for the period; and
Accumulated losses are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars
are recognised in other comprehensive income and included in the foreign currency translation reserve in the balance
sheet. The cumulative amount of these differences is reclassified into profit or loss in the period in which the operation is
disposed of.
d. Revenue from contracts with customers
Measurement and recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net
of returns, trade allowances, rebates and amounts collected on behalf of third parties. Revenue is recognised to the extent
that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.
Service operating fees primarily consists of fees that give customers access to the intelliHR platform and to technical
support. These revenues are recognised over time as they are delivered and consumed concurrently over the contractual
term, beginning on the date the service is made available to the customer. Contracts typically have a term of 1 to 3 years in
duration. Customers are invoiced monthly in advance for service operating fees. Service initiation fees charged to customers for
implementation services are recognised over time and amortised over the life of these contracts, and costs directly attributable
to the implementation services are capitalised and amortised over a period consistent with the term of revenue recognition.
Consulting workshops are provided to customers to assist with redesigning HR processes. These are invoiced at the time of
the delivery and are recognised at a point in time.
Financing components
The Group does not expect to have any contracts where the period between the transfer of the promised services to the
customer and payment by the customer exceeds 1 year. As a consequence, the Group does not adjust any of the transaction
prices for the time value of money. Payments from customers are generally collected in advance of provision of services.
4 5
For personal use only
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In applying AASB 15 to contracts with customers, the Group has determined that there are no material rights offered by
way of options for additional services to be provided at a discount within the contractual terms. Where the Group provides
discounts or rebates to customers, these are factored into the transaction price and are recognised on a systematic basis
in line with the revenue stream to which they relate.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the net carrying amount of the financial asset.
Grant revenue
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will
be received and the Group will comply with all attached conditions.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
e.
Impairment of non-financial assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired.
The assessment will include considering external sources of information and internal sources of information, including
dividends received from subsidiaries, associates or joint ventures deemed to be out of pre-acquisition profits. If such
an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset,
being the higher of the asset’s fair value less costs of disposal and value in use, to the asset’s carrying amount. Any
excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
f.
Development costs
Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are
capitalised only when technical feasibility studies identify that the project will deliver future economic benefits and these
benefits can be measured reliably.
Capitalised development costs are amortised on a straight-line basis over three years, which given the constant and
rapid development of the project, management considers to represent the useful life of the project.
g. Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
46
Annual Report2020For personal use only
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and equipment over
their expected useful lives as follows:
Plant and equipment - 2 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date.
An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
h. Right-of-use assets
Right-of-use assets are measured at cost which includes the lease payments and direct costs incurred over the life of the
lease, plus an estimate of a "make good" payment, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the
shorter of the assets useful life and the lease term.
The lease liability is measured at the present value of the lease payments discounted at the Group’s incremental borrowing
rate. Lease payments include fixed payments, and variable lease payments.
i.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
Other long-term employee benefits
The liability for long service leave not expected to be settled within 12 months of the reporting date are measured
as the present value of expected future payments to be made in respect of services provided by employees up
to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at the reporting
date on corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future
cash outflows.
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, options or performance rights over shares, that are provided to
employees in exchange for the rendering of services.
47
For personal use only
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is determined using various
valuation methods including Black Scholes, Binomial and the Monte Carlo Simulation method that takes into account
the exercise price, the term of the performance right, the impact of dilution, the share price at grant date and expect
price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the
performance right.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts
already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other
conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair
value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated
as a cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the
vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award
is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled
and new award is treated as if they were a modification.
j.
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it
is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions are
measured at the best estimate of the amounts required to settle the obligation at the end of the reporting period.
k. Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value.
For the consolidated statement of cash flows presentation purposes, cash and cash equivalents also includes fixed
term deposits.
48
Annual Report2020For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
l.
Trade and other receivables
Trade receivables include amounts due from customers for goods sold and services performed in the ordinary course of
business and the Group has unconditional rights to payment. Receivables expected to be collected within 12 months of
the end of the reporting period are classified as current assets.
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. The Group has applied the simplified approach to
measuring expected credit losses, which has a lifetime expected loss allowance. To measure the expected credit losses,
trade receivables have been grouped based on days overdue and assessed for recoverability based on historical
payments received. Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
m. Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted.
The amounts are unsecured and are usually paid within 30 days of recognition.
n. Other receivables
Other receivables are recognised at amortised cost, less any provision for impairment.
o. Current and non-current classification
Assets and liabilities are presented in the balance sheet based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in normal
operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a
liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in normal operating cycle; it is held primarily for
the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional
right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are
classified as non-current. Deferred tax assets and liabilities are always classified as non-current.
p.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
49
For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
q.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of intelliHR Limited, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares
and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive
potential ordinary shares.
r.
Goods and Services Tax (‘GST’) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the balance sheet.
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 tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
tax authority.
s. Critical accounting estimates and judgements
Recognition of Development Costs
For the purpose of measurement, AASB 138 allows costs incurred in the development stage to be capitalised if certain
requirements are met, including:
It is technically feasible that the intangible asset will be completed so that it will be available for use;
It is the intention to complete the intangible asset and use it;
It can be demonstrated that the it is probable that the intangible asset will generate future economic benefits;
There are adequate resources to complete the development of the intangible asset;
The expenditure attributable to the intangible asset during its development can be measured reliably.
As the Group meets all of the above requirements, all costs directly attributable and necessary to create, produce and
prepare the asset to be capable of operating in the manner intended, have been capitalised.
All costs to maintain the development asset are expensed as incurred.
50
Annual Report2020For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Share based payment transactions
The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using the binomial tree model
and Hull White model taking into account the terms and conditions upon which the instruments were granted. The
accounting estimates and assumptions, including share price volatility, interest rates and vesting periods would have
no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact the
profit or loss and equity.
Covid 19 Impact on Expected Credit Losses
Whilst there was some reduction in subscriber numbers invoiced as some customers were forced to downsize, this
was offset by increased subscriber numbers through the continued onboarding of new paying customers. Several
customers were granted extended payment terms during the months of April and May 2020 and these accounts
were subsequently paid. As at the signing of the Annual Report, there were no outstanding receivables at risk of non
payment. The Group’s expectation of Credit Losses has not been adversely impacted by Covid 19.
t. New and Amended Accounting Policies Adopted by the Group
Their were no new or amended policies adopted by the Group for the first time.
51
For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 2 PARENT INFORMATION
The following information has been extracted from the books and records of the parent and has been prepared in accordance with
Australian Accounting Standards.
BALANCE SHEET
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Plant and equipment
Intangible assets
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Payables
Total current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulates losses
Total equity
Statement of Profit or Loss and Other Comprehensive Income
TOTAL LOSS AND TOTAL COMPREHENSIVE INCOME
2020
$
2019
$
2,686,260
90,623
2,776,883
6,150
1,231,574
1,237,724
1,816,242
190,854
2,007,096
25,972
2,288,025
2,313,997
4,014,607
4,321,093
80,313
80,313
80,313
267,223
267,223
267,223
3,934,294
4,053,870
18,671,536
2,737,564
(17,474,806)
3,934,294
14,341,235
2,366,641
(12,654,006)
4,053,870
(4,820,800)
(5,659,690)
Guarantees
intelliHR Limited has not entered into any guarantees, in the current or previous reporting period, in relation to the debts of
its subsidiaries.
52
Annual Report2020For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 2
PARENT INFORMATION (CONTINUED)
Contingent liabilities
At 30 June 2020, intelliHR Limited did not have any contingent liabilities (2019: Nil).
Contractual commitments
At 30 June 2020, intelliHR Limited did not have any contractual commitments (2019: Nil).
NOTE 3 REVENUE
2020
AUSTRALIA
REST OF
THE WORLD
TOTAL
AUSTRALIA
833,096
73,690
29,000
935,786
22,594
164,871
69,411
256,876
281,925
30,904
1,856
314,685
1,115,021
104,594
30,856
1,250,471
-
-
-
-
22,594
164,871
69,411
256,876
416,105
37,940
4,500
458,545
36,968
-
48,989
85,957
2019
REST OF
THE WORLD
18,038
2,255
-
20,293
-
-
-
-
TOTAL
434,143
40,195
4,500
478,838
36,968
-
48,989
85,957
Revenue from contracts with customers
Over time (Service Operating Fees)
Over time (Service Initiation Fees)
At a point in time (Workshop Fees)
Total revenue
Other income
Interest received
Government grant income
Other income
Total other income
NOTE 4 LOSS FOR THE YEAR
Loss before income tax from continuing operations includes the following items that are unusual because of their nature, size or incidence:
Amortisation of intangible assets
Depreciation of property, plant and equipment
Depreciation of right-of-use asset
Total
Included in employee benefits expense and Directors remuneration:
Superannuation contributions
Share based payments expense
Loss on foreign exchange
Interest paid on lease liabilities
2020
$
1,411,203
26,110
434,968
1,872,281
241,054
355,398
10,250
106,826
2019
$
1,307,257
61,076
214,969
1,583,302
195,876
442,850
1,449
57,351
53
For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 5
INCOME TAX EXPENSE
This note provides an analysis of the Group’s income tax expense, shows what amounts are recognised directly in equity and how the
tax expense is affected by non-assessable and non-deductible items. It also explains significant estimates made in relation to the
Group’s tax position.
(a) Numerical reconciliation of income tax expense to prima facie tax payable
Loss before income tax expense
Tax at the Australian tax rate of 27.5% (2019: 27.5%)
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Non-deductible items
Adjustment to deferred tax assets and liabilities for tax losses and
temporary differences not recognised
2020
$
2019
$
(4,820,837)
(5,432,113)
(1,325,729)
(1,493,831)
602,060
723,669
464,491
1,029,340
Income tax expense / (benefit)
-
-
(b) Tax losses
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 27.5% (2019: 27.5%)
10,738,895
2,953,196
7,904,349
2,173,696
(c) Tax expense (income) 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 to equity:
Deferred tax: Share issue costs
-
54
Annual Report2020For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 5
INCOME TAX EXPENSE (CONTINUED)
(d) Deferred tax assets
The balance comprises temporary differences attributable to:
Tax losses
Employee entitlements
Share issue costs
Accrued expenses
Rights of use asset
TOTAL DEFERRED TAX ASSETS
Set-off of deferred tax liabilities pursuant to set-off provisions
Deferred tax assets not recognised
Net deferred tax assets
(e) Deferred tax liabilities
The balance comprises temporary differences attributable to:
Development assets
Interest receivable
Prepayments
TOTAL DEFERRED TAX LIABILITIES
2020
$
2,953,196
122,846
112,507
43,326
70,659
2019
$
2,173,696
96,861
130,395
38,016
-
3,302,534
2,438,968
(62,062)
(3,240,472)
(60,708)
(2,378,260)
-
8,535
3,318
50,209
17,358
3,308
40,042
62,062
60,708
Set-off of deferred tax liabilities pursuant to set-off provisions
(62,062)
(60,708)
NET DEFERRED TAX LIABILITIES
-
-
Unused losses which have not been recognised as an asset, will only be obtained if:
(i)
the Group derives future assessable income of a nature and of an amount sufficient to enable the losses to be realised;
(ii)
the Group continues to comply with the conditions for deductibility imposed by the law; and
(iii)
no changes in tax legislation adversely affect the Group in realising the losses.
55
For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 6 KEY MANAGEMENT PERSONNEL COMPENSATION
Refer to the remuneration report contained in the Directors’ report for details of the remuneration paid or payable to each member
of the Group’s key management personnel (KMP) for the year ended 30 June 2020.
The totals of remuneration paid to KMP of the Group during the year are as follows:
Short-term employee benefits
Other long-term benefits
Share-based compensation
TOTAL KMP COMPENSATION
2020
$
652,377
57,753
269,633
2019
$
768,650
70,197
263,608
979,763
1,102,455
Short-term employee benefits
These amounts include fees and benefits paid to the non-executive Directors as well as all salary, paid leave benefits and fringe
benefits paid to Executive Directors and employees.
Other long-term benefits
These amounts are the current-year’s superannuation contributions made during the year and the movement of long service
leave liabilities.
Share-based payments
These amounts represent the expense related to the participation of KMP in equity-settled benefit schemes as measured by the fair
value of the options, performance rights and shares granted on grant date.
Further information in relation to KMP remuneration can be found in the Remuneration report.
NOTE 7 AUDITOR’S REMUNERATION
Remuneration of the auditor for:
Auditing or reviewing the financial reports
Remuneration for non-audit services
Preparation of Tax and FBT Return, and R&D AusIndustry Return
2020
$
82,774
29,725
2019
$
73,385
44,844
TOTAL AUDITOR’S REMUNERATION
112,499
118,229
56
Annual Report2020For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 8 EARNINGS PER SHARE
(a) Basic earnings per share
TOTAL BASIC EARNINGS PER SHARE ATTRIBUTABLE TO THE ORDINARY
EQUITY HOLDERS OF THE COMPANY
(b) Diluted earnings per share
TOTAL DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO
THE ORDINARY EQUITY HOLDERS OF THE COMPANY
(c) Reconciliations of earnings used in calculating earnings per share
BASIC EARNINGS PER SHARE
2020
Cents
(2.83)
2019
Cents
(5.08)
(2.83)
(5.08)
2020
$
2019
$
(Loss) attributable to the ordinary equity holders of the Company used in calculating basic
earnings per share
(4,820,837)
(5,432,113)
DILUTED EARNINGS PER SHARE
(Loss) attributable to the ordinary equity holders of the Company used in calculating diluted
earnings per share
(4,820,837)
(5,432,113)
(d) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used
as the denominator in calculating basic and diluted earnings per share
(e) Information concerning the classification of securities
(i) Options and rights
2020
Number
2019
Number
170,311,424
106,985,988
Options on issue during the year are not included in the calculation of diluted earnings per share because they are antidilutive for the year ended 30
June 2020. These options could potentially dilute basic earnings per share in the future. Details relating to options are set out in note 21.
57
For personal use only
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 9 CASH AND CASH EQUIVALENTS
Cash at bank and on hand
TOTAL CASH AND CASH EQUIVALENTS
NOTE 10 INVESTMENTS
Non-current fixed term cash deposits (restricted)
(Deposits are Bank Guaranteed Security on the leased premises)
TOTAL INVESTMENTS
NOTE 11 TRADE AND OTHER RECEIVABLES
Trade receivables
Other receivables
Prepayments
2020
$
2019
$
2,790,577
1,956,906
2,790,577
1,956,906
CONSOLIDATED
2020
$
416,838
2019
$
466,838
416,838
466,838
2020
$
53,028
12,064
253,945
2019
$
42,440
41,184
232,547
TOTAL CURRENT TRADE AND OTHER RECEIVABLES
319,037
316,171
Credit risk
The Group has no significant concentration of credit risk with respect to any counterparties or on a geographical basis.
From 1 July 2018 the Group now assess impairment on trade and receivables using the simplified approach of the expected credit loss
(ECL) model under AASB 9. Due to the minimal history of bad debt write offs and strong credit approval processes, the Group have
determined that the ECL model will not have a material effect on impairment as at 30 June 2020.
The balance of receivables that remain within initial trade terms are considered to be of high credit quality.
58
Annual Report2020For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 12 PLANT AND EQUIPMENT
PLANT AND EQUIPMENT
At cost
Accumulated depreciation
CONSOLIDATED
2020
$
148,278
(142,128)
2019
$
143,707
(117,735)
TOTAL PROPERTY, PLANT AND EQUIPMENT
6,150
25,972
MOVEMENTS IN CARRYING AMOUNTS
Plant and equipment
Balance at 1 July
Additions
Disposals
Depreciation expense
BALANCE AT 30 JUNE
25,972
6,288
-
(26,110)
6,150
76,031
11,017
-
(61,076)
25,972
59
For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 13 LEASES
The Group is the lessee of an office premises and information about this lease is presented below:
RIGHT-OF-USE ASSET
Balance at Lease Inception
Accumulated Depreciation
Balance at 30 June 2020
LEASE LIABILITIES
Maturity Analysis
Less than one year
One to five years
More than five years
Total Lease Liabilities at 30 June
AMOUNTS RECOGNISED IN PROFIT OR LOSS
Interest on lease liabilities
Depreciation right-of-use-asset
AMOUNTS RECOGNISED IN THE STATEMENT OF CASHFLOWS
Cashflows from operating activities
Interest paid
Cash flows from financing activities
Principal element of lease payments
NOTE 14
INTANGIBLE ASSETS
DEVELOPMENT COSTS
Cost
Accumulated amortisation
TOTAL DEVELOPMENT COSTS
MOVEMENTS IN CARRYING AMOUNTS
Balance at 1 July
Additions – internally developed
Research and development tax incentive
Amortisation charge
BALANCE AT 30 JUNE
60
2020
$
3,038,186
(649,937)
2,388,249
2020
$
404,308
2,240,885
-
2,645,193
2020
$
106,826
434,968
2020
$
106,826
254,247
2019
$
3,036,886
(214,969)
2,821,917
2019
$
378,319
2,259,468
260,352
2,898,139
2019
$
57,351
214,969
2019
$
57,351
138,747
2020
$
6,340,079
(4,204,951)
2019
$
5,081,773
(2,793,748)
2,135,128
2,288,025
2,288,025
1,845,974
(587,668)
(1,411,203)
2,249,518
2,117,111
(771,347)
(1,307,257)
2,135,128
2,288,025
Annual Report2020For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 14
INTANGIBLE ASSETS (CONTINUED)
Impairment testing
The recoverable amount of the Development Asset (Note 14) and the Right of Use Asset (Note 13) is determined based on value-in-
use calculations. These calculations utilised cash flow projections for five years based on the FY2021 and FY2022 budget which has
been risk adjusted and reviewed by management.
On this basis, the Group determined that the recoverable amount of the Development asset of $2,135,128 (2019 $2,288,025) and the
Right of Use Asset $2,388,249 (2019 $2,821,917) exceeded their combined carrying value and no impairment charge was required in
this financial year (2019: Nil).
The value-in-use calculations are sensitive to discount rates, revenue and cash flow forecasts. The Group has performed detailed
sensitivity analysis as part of its impairment testing to ensure that the results of its testing are reasonable.
Key assumptions used for value-in-use calculations
Revenue projections are based on sales for the year ended 30 June 2020 and revenue projections for 2021 to 2022 based on the key
drivers in the current business. Expenses are based on detailed knowledge of the business, historic activity, and projections for 2021
to 2022 based on the key drivers in the current business. These have been extrapolated in years 2023 to 2027 with a growth rate of
25% for FY2023 and 3% for FY2024 to FY2027.
The discount rate applied to cash flow projections is 20% post-tax. Discount rate applied reflects management’s estimate of the time
value of money and the consolidated entities weighted average cost of capital, the risk free rate and the volatility of the share price
relative to market movements.
A terminal rate of 2.4% was used in the value-in-use calculation.
Sensitivity
The directors have made judgements and estimates in respect of impairment testing of the Development asset and the Right of
Use Asset. Should these judgements and estimates not occur, the resulting Development Asset and Right of Use Asset may vary in
carrying value.
The points noted below are sensitivities of these estimates:
The discount rate would need to increase by more than 40% before the assets would be impaired, with all other
assumptions remaining constant.
Revenue growth would need to decrease by 26% annually over the FY2022 to FY2027 period before the assets would be
impaired, with all other assumptions remaining constant.
Management believes that any reasonable change in the key assumptions on which the recoverable amount is based would not cause
the carrying value to exceed its recoverable amount.
61
For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 15 TRADE AND OTHER PAYABLES
UNSECURED LIABILITIES
Trade payables
Other payables
Accrual for annual leave
Accrual for long service leave
2020
$
55,681
966,190
356,801
89,914
2019
$
112,664
358,936
268,060
84,160
TOTAL TRADE AND OTHER PAYABLES
1,468,586
823,820
NOTE 16 PROVISIONS
Provision for long service leave
TOTAL PROVISIONS
2020
$
7,906
7,906
2019
$
-
-
62
Annual Report2020For personal use only NOTE 17 CONTRIBUTED EQUITY
(a) Share capital
FULLY PAID ORDINARY SHARES
(b) Ordinary share capital
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
2020
Shares
193,407,826
2019
Shares
133,042,546
2020
$
18,671,536
2019
$
14,341,235
DATE
DETAILS
NOTE
NUMBER OF SHARES
ISSUE PRICE
1 JULY 2018
July 2018
BALANCE
Exercise of options
Exercise of options
October 2018
Exercise of options
April 2019
May 2019
June 2019
Exercise of options
STI settled shares
Exercise of options
Exercise of options
Exercise of options
Placement shares
Placement shares
Placement shares
Share issue costs
30 JUNE 2019
BALANCE
August 2019
Placement shares
Placement shares
September 2019
STI shares issued
January 2020
Exercise of options
Exercise of options
Placement shares
February 2020
Exercise of options
Share issue costs
30 JUNE 2020
BALANCE
(e)
(e)
(e)
(e)
(f)
(e)
(e)
(e)
(d)
(d)
(c)
(h)
(i)
(e)
(e)
(h)
(e)
103,895,094
697,814
24,000
16,664
16,000
717,227
1,186,875
86,000
49,995
6,071,666
1,428,335
18,852,876
-
133,042,546
21,147,124
833,333
385,867
66,660
45,000
36,500,000
1,387,296
193,407,826
$0.01
$0.02
$0.01
$0.02
$0.30
$0.01
$0.02
$0.04
$0.12
$0.12
$0.075
$0.075
$0.12
$0.01
$0.02
$0.075
$0.01
$
11,915,456
6,978
480
167
320
215,168
11,869
1,720
2,000
728,600
171,400
1,413,966
(126,889)
14,341,235
1,586,035
100,000
-
667
900
2,737,500
13,873
(108,674)
18,671,536
63
For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 17
CONTRIBUTED EQUITY (CONTINUED)
(c)
Issue to sophisticated and institutional investors
The issue of 18,852,876 fully paid ordinary shares to sophisticated and institutional investors at an issue price of $0.075 cash.
(d)
Issue to sophisticated investors
The issue of 7,500,001 fully paid ordinary shares to sophisticated and institutional investors at an issue price of $0.12 cash.
(e) Exercise of options
The issue of fully paid ordinary shares on the exercise of options.
(f) STI shares issued
On 29 October 2018 following receipt of shareholder approval at the 2018 AGM, 717,227 shares were issued to R Bromage
and J Fong as settlement of their FY2018 STI's.
(g)
Issued to sophisticated and institutional investors
The issue of fully paid ordinary shares to sophisticated and institutional investors at an issue price of $0.075 cash.
(h)
Issued to sophisticated and Institutional Investors
The Issue of 57,647,124 fully paid ordinary shares to sophisticated and Institutional Investors at an Issue price of $0.075 cash.
(i) Capital Management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can
continue to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital.
The capital structure of the Company includes equity attributable to equity holders, comprising of issued capital, reserves
and accumulated losses. In order to maintain or adjust the capital structure, the Company may issue new shares, sell assets
to reduce debt or adjust the level of activities undertaken by the company.
The Group monitors capital on the basis of cash flow requirements for operational, and exploration and evaluation
expenditure. The Group will continue to use capital market issues and joint venture participant funding contributions to
satisfy anticipated funding requirements.
The Group has no externally imposed capital requirements.
The Covid 19 pandemic has not impacted the Group’s ability to raise capital as evidenced by the announcement on the 6th
August 2020 of a $5.5 million raising. (Refer Note 22). Based on this, the Group’s strategy for capital risk management is
unchanged from prior years.
64
Annual Report2020For personal use only NOTE 18 RESERVES
Share-based payment reserve
Movements:
Balance 1 July
Share based payments expensed
Share based payments capitalised
STI’s settled in shares
STI’s to be settled in shares
BALANCE 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
2020
$
2019
$
2,737,563
2,366,641
2,366,641
242 898
15,524
-
112,500
2,164,992
442,850
(26,033)
(215,168)
-
2,737,563
2,366,641
The share-based payment reserve records items recognised as expenses on valuation of director, employee and contractor options.
Foreign currency translation reserve
2020
$
38
2019
$
-
Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive income as
described in note 1c and accumulated in a seperate reserve within equity. The cumulative amount is reclassified to profit or loss when
the net investment is disposed of.
NOTE 19 OPERATING SEGMENTS
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors
(Chief Operating Decision Makers) in assessing performance and determining the allocation of resources. The Group is managed
primarily on a geographic basis that is the location where revenue is derived.
Management currently identifies the Group as having only one operating segment, being the development and commercialisation of
a cloud-based people management platform in Australasia. All assets and revenue are derived from the one geographical location,
being Australia. All significant operating decisions are based upon analysis of the Group as one segment. The financial results from the
segment are equivalent to the financial statements of the Group as a whole.
The Group has no customers from which it generates greater than 10% of its revenue. (2019 : One customer was $59,258).
65
For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 20 CASH FLOW INFORMATION
(a) Reconciliation of profit / (loss) after income tax to net
cash inflow from operating activities
PROFIT / (LOSS) FOR THE PERIOD
Adjustments for:
Share based payments
Depreciation and amortisation
Depreciation Right-of-use asset
Profit on sale of plant and equipment
Research and development tax incentive
Change in operating assets and liabilities:
(Increase)/decrease in trade and other receivables
Decrease in other assets
Increase in trade and other payables
Increase in provisions
2020
$
2019
$
(4,820,838)
(5,432,113)
355,398
1,437,313
434,968
(609)
(68,802)
(10,588)
236,160
322,024
102,402
442,850
1,368,333
214,969
(500)
(48,489)
14,603
131,546
99,472
31,675
NET CASH INFLOW (OUTFLOW) FROM OPERATING ACTIVITIES
(2,012,572)
(3,177,654)
(b) Cash and cash equivalents shown in the statement of cashflows
comprises the following:
Cash and cash equivalents
Note
9
TOTAL CASH AND CASH EQUIVALENTS
(c) Non-cash financing and investing activities
Share based payments capitalised
Acquisition of Right of Use Asset by means of a lease
STI settled in shares
CONSOLIDATED
2020
$
2019
$
2,790,577
1,956,906
2,790,577
1,956,906
2020
$
15,524
-
-
2019
$
(26,033)
3,636,886
215,168
66
Annual Report2020For personal use only
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 20
CASH FLOW INFORMATION (CONTINUED)
(d) Net debt reconciliation
This section sets out an analysis of net debt, and the movements in net debt for each period presented.
Cash and cash equivalents
Borrowings – repayable within one year
Borrowings – repayable after one year
Net debt
Cash and cash equivalents
Gross debt – non-interest bearing
Gross debt – fixed interest rates
Gross debt – variable interest rates
Net debt
Net debt as at 30 June 2018
Cashflows
Lease liability
Loan from related party
Other non-cash movements
Net debt as at 30 June 2019
Cashflows
Lease liability
Loan from related party
Other non-cash movements
Net debt as at 30 June 2020
2020
$
2,790,577
(404,308)
(2,240,855)
145,414
2,790,577
-
-
(2,645,163)
145,414
LIABILITIES FROM FINANCING ACTIVITIES
CASH/BANK
OVERDRAFT
$
BORROWINGS DUE
WITHIN 1 YEAR
$
BORROWING DUE
AFTER 1 YEAR
$
4,713,360
(2,856,454)
-
100,000
-
1,956,906
833,671
-
-
-
2,790,577
-
138,747
(321,911)
(100,000)
(195,155)
(478,319)
361,072
25,367
100,000
(412,428)
(404,308)
-
-
(2,714,975)
-
195,155
(2,519,820)
-
(133,463)
-
412,428
(2,240,855)
2019
$
1,956,906
(478,319)
(2,519,820)
(1,041,233)
1,956,906
(100,000)
-
(2,898,139)
(1,041,233)
TOTAL
$
4,713,360
(2,717,707)
(3,036,886)
-
-
(1,041,233)
1,194,743
(108,096)
100,000
-
145,414
67
For personal use only
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 21 SHARE-BASED PAYMENTS
OPTIONS
The intelliHR Limited Employee Option Plan is designed to provide long-term incentives for employees to deliver long-term shareholder returns.
Under the plan, participants are granted options which only vest if certain performance standards are met. Participation in the plan is at the
board’s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits.
Options are granted under the plan for no consideration and carry no dividend or voting rights.
When exercisable, each option is convertible into one ordinary share.
Set out below are summaries of options granted under the plan:
OPTIONS OUTSTANDING AS AT 30 JUNE 2018
Granted
Forfeited
Exercised
Expired
OPTIONS OUTSTANDING AS AT 30 JUNE 2019
Granted
Forfeited
Exercised
Expired
WEIGHTED AVERAGE
EXERCISE PRICE
$0.07
$0.30
$0.06
$0.01
-
$0.09
$0.15
$0.01
NUMBER
15,521,074
440,000
(2,818,327)
(2,077,348)
-
11,065,399
-
(184,229)
(1,498,956)
-
OPTIONS OUTSTANDING AS AT 30 JUNE 2020
9,382,214
$0.10
The weighted average share price on the exercise of options was $0.08 (2019: $0.18).
No options expired during the periods covered by the above table.
68
Annual Report2020For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 21
SHARE-BASED PAYMENTS (CONTINUED)
Share options outstanding at the end of the year have the following expiry date and exercise prices:
DATE OPTIONS GRANTED
EXPIRY DATE
EXERCISE PRICE
SHARE OPTIONS
30 JUNE 2020
23/11/2016
16/12/2016
05/01/2017
23/11/2016
01/04/2017
11/08/2017
27/02/2018
30/06/2018
01/12/2021
01/12/2021
01/12/2021
01/12/2021
31/03/2022
11/08/2022
14/02/2023
30/06/2023
$0.01
$0.01
$0.04
$0.20
$0.04
$0.02
$0.32
$0.30
TOTAL OF SHARE OPTIONS
Weighted average remaining contractual life of options outstanding at end of period
PERFORMANCE RIGHTS
A summary of movements of all performance rights issued is as follows:
PERFORMANCE RIGHTS OUTSTANDING AS AT 30 JUNE 2019
Granted
Vested
Forfeited
Expired
PERFORMANCE RIGHTS OUTSTANDING AS AT 30 JUNE 2020
288,889
3,925,944
298,838
3,895,543
32,000
517,000
200,000
224,000
9,382,214
1.5 years
NUMBER
1,234,694
1,878,788
(385,867)
(231,480)
-
2,496,135
The weighted average remaining contractual life of performance rights outstanding at year end was 2.2 years (2019: 3.1 years).
1,878,788 performance rights were granted to executives on 1 September 2019 (details included in the table below).
GRANT DATE
NUMBER OF
RIGHTS
01/09/2019
1,878,788
VESTING CONDITIONS
VESTING DATE
% VESTED
EXPIRY DATE
FAIR VALUE AT
GRANT DATE
PER RIGHT
Achievement of mutually
agreed KPI’s for FY 2020.
01/07/2020
0%
01/09/2022
$0.075
69
For personal use only
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 21
SHARE-BASED PAYMENTS (CONTINUED)
On 1 September 2019, 1,878,788 performance rights were granted to an employee under the intelliHR Limited Performance Rights
Plan to take up ordinary shares. All performance rights expire on 1 September 2022.
250,000 of the performance rights have been awarded under the Group's STI program and vest on achievement of mutually agreed
KPI’s. The other 250,000 performance rights have been awarded under the Group's LTI program and will vest if the relative total
shareholder return is measured at or above the 3-year average of the P&S ASX small ordinaries Ex A-REIT Franking Credit Adjusted
Total Return Index Cap Index.
The performance rights hold no voting or dividend rights and are not transferable.
The fair value of these performance rights was $70,000. This value was calculated using a Monte Carlo Simulation option
pricing model applying the following inputs:
MONTE CARLO SIMULATION OPTION PRICING MODEL APPLYING THE FOLLOWING INPUTS:
Number of performance rights
Grant date
Expiry date
Volatility*
Dividend yield
Risk-free interest rate
Fair value at grant date
1,878,788
01/09/2019
01/09/2022
108.37%
0%
0.69%
Average of $0.075
* Volatility has been determined by looking at the historical volatility over the same period as the expected life of the option, long term average level of volatility, the
length of time an entity’s shares have been publicly traded, and the appropriate interval for price observations. The company does not have a reasonable history of share
transactions by which to gauge the company’s volatility. Due to this fact an average volatility of comparable companies share transactions over the same period of time
have been used to calculate an appropriate volatility.
NOTE 22 EVENTS AFTER THE REPORTING DATE
Since the 30 June 2020, the Company has :
a.
b.
c.
Announced a $5.5 million capital raising, consisting of a $2.5 million placement (of which 2,731,956 fully paid ordinary
shares were issued on 10 August 2020, the balance is subject to Shareholder approval) and a 1 for 5 fully underwritten
non-renounceable rights issue which will raise $3 million. Shares under both the placement and the rights issue will be issued
at $0.075 per share;
Issued 4,181,888 fully paid ordinary shares on the exercise of options held by employees and Directors;
Issued 1,375,758 fully paid ordinary shares on the vesting of performance rights.
No other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly
affect the operations of the company, the results of those operations or the state of affairs of the company in future financial years.
70
Annual Report2020For personal use only
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 23 RELATED PARTY TRANSACTIONS
Related Parties
The Group’s main related parties are as follows:
a.
Entities exercising control over the Group
The company does not have an ultimate controlling entity.
b. Key management personnel
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity,
directly or indirectly, including any director (whether executive or otherwise) of that entity is considered key
management personnel.
For details of disclosures relating to remuneration of key management personnel, refer to Note 6.
c. Other related parties
Other related parties include close family members of key management personnel and entities that are controlled or
jointly controlled by those key management personnel, individually or collectively with their close family members.
d.
Transactions with related parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
The following transactions occurred with related parties:
OTHER RELATED PARTIES
Purchase of goods and services:
2020
$
2019
$
A company of which R Bromage is a director provided recruiting services during the year under
normal commercial terms and conditions.
52,163
58,627
Sales of goods and services:
The same company was a customer during the year under normal commercial terms and
conditions.
6,670
12,154
LOAN FROM RELATED PARTY
-
100,000
R Bromage, a director, acting as trustee for The Bromage Family Investment Trust, loaned the Group $100,000 on the 2nd of May 2019.
The loan was repaid 3 days after the Extraordinary General Meeting held on the 5th August 2019 when shareholder approval was given to issue
833,333 fully paid ordinary shares with one attaching April Placement Option and one attaching April Placement Bonus Option for every 2 shares
issued under the April Placement. Due to the short-term nature of the loan the carrying amount is not materially different to the fair value.
7 1
For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 24 CONTINGENT ASSETS AND LIABILITIES
The Group does not have any contingent assets or liabilities as at 30 June 2020.
NOTE 25 COMMITMENTS
The Group does not have any commitments as at 30 June 2020.
NOTE 26 FINANCIAL RISK MANAGEMENT
The Group’s financial instruments consist mainly of deposits with banks and accounts receivable and payable.
The totals for each category of financial instruments, measured in accordance with AASB 9: Financial Instruments as detailed in the
accounting policies to these financial statements, are as follows:
Financial assets
Cash and cash equivalents
Trade and other receivables
Cash deposits
TOTAL FINANCIAL ASSETS
Financial liabilities
Trade and other payables
Loan from a related party
TOTAL FINANCIAL LIABILITIES
Note
9
11
10
15
23
2020
$
2,790,577
65,092
416,838
2019
$
1,956,906
71,594
466,338
3,272,507
2,494,838
1,021,871
-
471,600
100,000
1,021,871
571,600
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies. The overall
objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness
and flexibility.
Credit risk
Credit risk is managed on a Group basis. Credit risk arises primarily from cash and cash equivalents and deposits with banks and
financial institutions. For bank and financial institutions, only independently rated parties with a minimum rating of ‘AA’ are accepted.
Refer to Note 11 for further details on credit risks associated with trade receivables.
72
Annual Report2020For personal use only NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 26
FINANCIAL RISK MANAGEMENT (CONTINUED)
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to meet obligations when due.
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows. No finance facilities were available to the
Group at the end of the reporting period.
Most financial assets and financial liabilities mature within one year.
Market risk
Market risk is the risk that the change in market prices, such as foreign exchange rates, interest rates and equity prices will affect the
Group’s income or the value of its holdings of financial instruments.
The Group is not exposed to market risks other than interest rate risk, and foreign exchange risk.
The Group's exposure to foreign currency risk at the 30 June 2020, expressed in Australian dollars, was:
Cash and cash equivalents – CA $
Trade receivables - US$ and NZ$
Trade Payables – US$
2020
$
4,578
20,378
29,128
2019
$
-
4,347
-
Cash flow and fair value interest rate risk
As the Group has interest-bearing cash assets, the Group’s income and operating cash flows are exposed to changes in market
interest rates. The Group manages its exposure to changes in interest rates by using fixed term deposits.
At 30 June 2020, if interest rates had changed by -/+ 100 basis points from the year-end rates with all other variables held constant,
post-tax profit / (loss) for the year would have been $27,406 (2019: $19,569) lower/higher, as a result of higher/lower interest income
from cash and cash equivalents.
Fair Value
The carrying value of all financial assets and financial liabilities approximate their fair value, due to their short term nature.
73
For personal use only DIRECTORS’ DECLARATION
DIRECTORS’ DECLAR ATION
IN THE DIRECTORS’ OPINION:
(a) the financial statements and notes set out on pages 35 to 73 are in accordance with the Corporations Act 2001, including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements, and
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and of its performance for
the financial year ended on that date, and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
Note 1 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The Directors have been given the declarations by the Managing Director and Chief Financial Officer required by section 295A of the
Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
A Bellas
Chairman
Brisbane, 21 August 2020
74
Annual Report2020For personal use only INDEPENDENT AUDITOR’S REPORT
7 5
75INDEPENDENT AUDITOR’S REPORT BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. INDEPENDENT AUDITOR'S REPORT To the members of intelliHR Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of intelliHR Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors’ declaration. In our opinion the accompanying financial report of the Group, is in accordance with the Corporations Act 2001, including: (i)Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of itsfinancial performance for the year ended on that date; and(ii)Complying with Australian Accounting Standards and the Corporations Regulations 2001.Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Level 10, 12 Creek St Brisbane QLD 4000 GPO Box 457 Brisbane QLD 4001 Australia Tel: +61 7 3237 5999 Fax: +61 7 3221 9227 www.bdo.com.au For personal use only INDEPENDENT AUDITOR’S REPORT
76
Annual Report2020Annual Report202076INDEPENDENT AUDITOR’S REPORT BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. Material uncertainty related to going concern We draw attention to Note 1 in the financial report which describes the events and/or conditions which give rise to the existence of a material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern and therefore the group may be unable to realise its assets and discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this matter. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. Capitalisation of Development Costs Key audit matter How the matter was addressed in our audit The Group capitalises costs incurred in the development of its software, as disclosed in note 14. These costs are then amortised over the estimated useful life of the asset. The capitalisation of development costs was a key audit matter due to the significance of the balance and the judgement involved in assessing whether the criteria set out in AASB 138 Intangible Assets required for capitalisation of such costs have been met and the useful life of the asset is reasonable. The Group’s judgements include whether the costs capitalised, including payroll costs, were directly attributable to development projects, rather than related to research or maintenance operations. Our work on capitalised development costs was focused on the Group’s process in determining the projects which should be capitalised and the determination of the appropriate allocation of overhead and payroll costs to be capitalised in accordance with AASB 138. Our audit procedures included the following; •Assessed the nature of a sample of projects against therequirements of AASB 138 to determine if they were capital innature, including an assessment of whether capitalised costsrelated to the development phase of the project and thegeneration of probable future economic benefits.•On a sample basis, vouched the payroll costs capitalised tosupporting payroll records and assessed the procedures applied bythe Group to appropriately record and allocate staff costs tocapitalised development expenditure.•On a sample basis, vouched overhead costs capitalised tosupporting documentation and assessed the procedures applied bythe Group to appropriately allocate overhead costs to capitaliseddevelopment expenditure.•Assessing the adequacy of disclosures in the financial statements.For personal use only INDEPENDENT AUDITOR’S REPORT
7 7
77INDEPENDENT AUDITOR’S REPORT BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. Impairment of Capitalised Development Costs & Right of Use Asset Key audit matter How the matter was addressed in our audit The Right of Use Asset (note 13) and Development Costs (note 14) make up a significant portion of the Group’s assets. AASB 136 Impairment of Assets requires that finite intangible assets be tested for impairment whenever there is an indication that the intangible assets may be impaired and this assessment requires judgement. The assessment as to whether there are any indicators of impairment requires the consideration of both internal and external sources of information. Given the level of complexity and the judgement exercised by the Group in determining the recoverable amount of the assets, we considered this area to be significant for our audit. The assets are supported by a value in use calculation. Our audit procedures included, but were not limited to the following: •Obtaining an understanding of the 'Value in Use' modeland evaluating management's methodologies and theirkey assumptions•Assessing management’s allocation of assets andliabilities, including corporate assets to CGU's•Evaluating the inputs used in the value in use calculationincluding the growth rates, discount rates and theunderlying cash flows by comparing them to historicalresults, current contracts, economic and industryforecasts•We reviewed the adequacy of the disclosures related tothe impairment assessment by comparing thesedisclosures to our understanding of the matter and theapplicable accounting standards.Other information The directors are responsible for the other information. The other information comprises the information contained in the Group’s annual report for the year ended 30 June 2020, but does not include the financial report and our auditor’s report thereon, which we obtained prior to the date of this auditor’s report. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed 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. For personal use only INDEPENDENT AUDITOR’S REPORT
78
Annual Report2020Annual Report202078INDEPENDENT AUDITOR’S REPORT BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. Responsibilities of the directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the group 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 has no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This description forms part of our auditor’s report. For personal use only REPORT ON THE REMUNERATION REPORT
79
79REPORT ON THE REMUNERATION REPORT BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 19 to 28 of the directors’ report for the year ended 30 June 2020. In our opinion, the Remuneration Report of IntelliHR Limited for the year ended 30 June 2020, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. BDO Audit Pty Ltd R M Swaby Director Brisbane, 21 August 2020 For personal use only SHAREHOLDER INFORMATION
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 17 August 2020.
A
DISTRIBUTION OF EQUITY SECURITIES
Analysis of numbers of equity security holders by size of holding:
1 - 1,000
1,001 – 5,000
5,001 – 10,000
10,001 –50,000
50,001 –100,000
100,001 and over
TOTAL DISTRIBUTION OF EQUITY SECURITIES
There were 40 holders of less than a marketable parcel of ordinary shares.
CLASS OF EQUITY SECURITY
ORDINARY SHARES
14
141
111
344
100
224
934
80
Annual Report2020For personal use only B
EQUITY SECURITY HOLDERS
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
NAME
Colinton Capital Partners Pty Ltd
Mr Robert Jon Bromage
Immanuel Developments Pty Ltd
Intercontinental Pty Limited
Altor Capital Management Pty Ltd
AG & M Bellas Super Fund Pty Ltd
Workforce Guardian Pty Ltd
JD Investments Holding Pty Ltd
K R Khatri (Dental) Pty Ltd
Jodie Ann Slattery
Mr Thomas George Hackett & Mrs Nerida Leith Hackett
Mrs Lori Michele Lowther
J J N A Super Pty Ltd
Mr Adam Patrick Warbrooke
Cassa Trading Pty Ltd
Kokoris Superannuation Pty
Chatterton Pty Ltd
Colinton Capital Pty Limited
Mrs Wendy Laura Hopsick
Ms Marilyn Joan Bromage
TOTAL
Unquoted equity securities
Options over ordinary shares
Performance rights
SHAREHOLDER INFORMATION
ORDINARY SHARES
NUMBER HELD % OF ISSUED SHARES
36,500,000
22,563,978
7,250,001
5,026,094
5,000,000
4,131,288
4,000,000
3,462,986
3,225,277
2,731,956
2,271,400
2,211,300
2,147,533
2,048,394
2,000,000
1,851,000
1,813,744
1,787,880
1,750,000
1,656,103
17.88
11.06
3.55
2.46
2.45
2.02
1.96
1.70
1.58
1.34
1.11
1.08
1.05
1.00
0.98
0.91
0.89
0.88
0.86
0.81
113,428,934
55.57
NUMBER OF
ISSUE
11,095,996
617,347
NUMBER OF
HOLDERS
48
2
81
For personal use only SHAREHOLDER INFORMATION
Holders of more than 20% of unquoted share options on issue
Robert Bromage
Holders of more than 20% of unquoted performance rights on issue
Paul Trappett
Glenn Donaldson
C
SUBSTANTIAL HOLDERS
Substantial holders in the company are set out below:
Ordinary shares
Colinton Capital Partners Pty Ltd
Robert Bromage
D
VOTING RIGHTS
NUMBER
HELD
4,728,875
% OF TOTAL
ON ISSUE
42.62%
NUMBER
HELD
367,347
250,000
% OF TOTAL
ON ISSUE
59.50%
40.50%
NUMBER HELD
PERCENTAGE
38,287,880
22,563,978
19.90%
11.06%
The voting rights attaching to each class of equity securities are set out below:
(a)
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.
(b)
(c)
Performance rights: No voting rights
Share options: No voting rights
82
Annual Report2020For personal use only THIS PAGE LEFT INTENTIONALLY BLANK
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I N T E LLI H R .C O
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