Kyckr Limited
ABN 38 609 323 257
Annual Report - 30 June 2020
Kyckr Limited
Contents
30 June 2020
Chairman's and Chief Executive Officer's report
Corporate directory
Directors' report
Auditor's independence declaration
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of Kyckr Limited
Shareholder information
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Non-Executive Chairman and CEO Report
Dear shareholders,
On behalf of the Board of Kyckr Limited
(Kyckr or the Company), it is my pleasure
to present the annual report for the year
ended 30 June 2020.
The past year has presented a unique
and challenging set of circumstances
with the onset of the COVID-19
pandemic. Kyckr has quickly adapted
during this unprecedented period,
ensuring the safety of employees while
carefully working with clients to ensure
business continuity.
The pandemic has confirmed the need
for more robust customer verification
solutions and an increased reliance on
digital financial solutions.
To this extent, we are pleased to
announce that Kyckr reported revenue
growth in FY20 as the Company
delivered on its strategy of building its
Enterprise channel and strategic
partnership model.
The total market for KYC solutions,
comprising services such as business
verification, will only continue to grow
with a projected annual growth rate of
16% and expected to reach $11.8 billion in
20221.
BENNY HIGGINS
Non-Executive
Chairman of the Board
IAN HENDERSON
Chief Executive Officer
1 OWI Labs Report 2018
https://oneworldidentity.com/kyb-market-approach-12-
billion-2022-owi-research-finds/
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Increased demand for Know Your
Customer (KYC) solutions as
regulators tighten requirements
for the provision of financial
services
It’s quite remarkable to think that Kyckr has
developed the largest platform for corporate
identification globally and is also the only
platform with the ability to consistently
access Know Your Customer information in
real-time - from more than 180 regulated
primary sources in over 120 countries.
What the Kyckr platform allows businesses to
do is eliminate time-consuming manual
regulatory compliance checks whilst bringing
speed and accuracy to Know-Your-Customer
authentication.
Digitised customer verification products are
proving to be a critical solution for financial
services providers and many other industries
in light of tightening regulations globally
relating to Anti-Money Laundering and
Countering Terrorist Finance.
The recent implementation of the European
Union’s Fifth Anti-Money Laundering
Directive (5AMLD) in January 2020 requiring
companies to undertake tighter client on-
boarding and ongoing monitoring
requirements to prevent financial crime, has
led to a positive increase of activity for Kyckr.
To capitalise on regulatory tailwinds from
5AMLD, Kyckr made the strategic decision to
expand from purely data sales driven
customer authentification to ongoing
compliance monitoring of customers with
the launch of the Company Watch SaaS
product, a first of its kind automated online
monitoring solution for enterprises.
Financial Overview
For Kyckr, the financial year saw overall client
and revenue growth, albeit with a slowdown
in new customer onboarding by our clients in
the final two months of the financial year as a
result of COVID-19 impacting revenues in May
and June, after a very strong April, which was
the best monthly performance in the
Company’s history (A$260,000, up 39% on the
prior year). Offsetting the related slowdown,
the pandemic has confirmed the positive
shift towards post-onboarding monitoring.
Looking at FY20, Kyckr delivered an increase
in total revenue of 12.2% to $2.4 million.
Growth was driven by the Enterprise division,
with revenue up 20% to $805k as a result of
contracts signed with global tier-one banks,
such as Citi Commercial Bank, in addition to a
positive trend towards post-onboarding
monitoring in the division.
Revenue for Kyckr for Business was up 14% to
$1.238 million, also on the back of a contract
with Germany’s second largest bank,
Commerzbank.
Kyckr online revenue was down 6% to $394k,
due to weaker customer demand as a direct
result of COVID-19. The Company launched
the new and enhanced Kyckr.com platform
during FY20 with initial strong uptake and a
record 9,000 new registrations to the site.
COVID-19 has impacted the demand for sole
users to access the KYC online database –
albeit this was offset by the strong adoption
from Enterprise clients.
The Company remains confident that the
online platform will play a key role in
supporting our plans to increase leads, users
and sales.
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The Company reported a reduced Net Loss
After Tax of $4.9m (FY19 $6.1m) during the
financial year.
To strengthen our balance sheet and provide
growth funding, Kyckr completed two capital
raisings. In September 2019 A$5.2 million was
raised, which saw Richard White, prominent
technology entrepreneur, become a major
investor in Kyckr, taking up a 19.6% stake in
the Company, while in May 2020 the
Company raised a further A$8.7 million. Both
raisings have allowed Kyckr to expand its
sales team to take advantage of the
opportunities ahead.
Kyckr is in a solid financial position to
progress its current operations and strategy
with cash on hand at end of July 2020 of
$9.2m, allowing the Company to fund its
future growth and to manage the uncertain
market conditions resulting from COVID-19.
During the year Non-Executive Directors Mr
Robert Leslie and Mr Ben Cronin stepped
down from the Kyckr Board to pursue other
executive and business responsibilities. The
Company also appointed a new company
secretary, Mr Bill Hundy replacing Mr Karl
Pechmann. Together with the rest of the
Board, I would like to thank Rob, Ben and
Karl’s contributions to Kyckr.
Our Achievements
Strengthened team
A key focus of the leadership team was to
build our Sales and Marketing functions to
allow the business to enhance its offering and
grow its enterprise channel. To this end, Kyckr
strengthened its London office with key hires
in Business Development, Account
Management, Sales and Marketing.
Significant marketing investments are being
made to raise brand awareness and generate
quality inbound leads.
The changes also allowed the Company to
complete phase one of the cost reduction
plan with the closure of the Dublin and
Sydney sales offices to refocus on the
European market where regulatory tailwinds
are particularly strong.
Contracts signed with global tier-one banks
Citi Commercial Bank and Commerzbank
Kyckr made solid progress in its Enterprise
and Kyckr for Business divisions resulting in
contracts with global banks.
Citi Commercial Bank
Citi Commercial Bank, part of long-standing
customer Citigroup, signed an agreement to
adopt Kyckr’s services across additional
business units. The value of the services is
USD$300,000 (A$496,000) over a 12 to 18
months period, with the Kyckr technology to
be used in 15 key countries where the bank
operates. As part of the extension of services,
Citi Commercial Bank will use our customer
verification platform during the critical stage
of client verification when bringing a new
customer onboard.
Citigroup has been a long-standing customer
of Kyckr, and we remain positive on further
developing our relationship with the bank.
The fact that our technology has been
embedded into a number of Citi’s core
divisions, reaffirms the strength, reliability
and importance of our solution, bringing
speed and accuracy to regulatory compliance
checks.
Commerzbank
We also strengthened our relationship with
Germany’s second largest bank,
Commerzbank, shifting from a month-to-
month pay as you go agreement to an annual
contract with a minimum value of A$100,000
over an initial 12 month period. The Kyckr
technology will be used to provide automatic
access to primary source data and
documents during the critical stage of
customer verification, primarily for the bank’s
operations in the UK.
These contracts are a further demonstration
of the continued uptake of our technology by
major banks.
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Launch of Company Watch ongoing
monitoring solution
discussions with 30 other potential partner
organisations.
A strategic decision was made during the
year to shift the Company’s revenue mix
further in the direction of higher-margin,
recurring subscription revenue, by expanding
the Kyckr offering to provide not only
customer verification but also ongoing
customer monitoring, also known as
Perpetual KYC, through the Kyckr Company
Watch product.
Onboarding new clients when starting a new
relationship is the first stage in customer
verification, involving gathering vital
information on the customer and conducting
identity checks to comply with Know-Your-
Customer regulations. This is then followed
by the ongoing monitoring of those
customers through Kyckr’s new Company
Watch product, enabling clients to perform
ongoing monitoring of entities and
facilitating continuing compliance.
Kyckr sees an extremely large opportunity
with ongoing monitoring as firms have an
obligation to continuously monitor customers
to ensure their records are up to date.
Therefore, the Perpetual KYC platform
provides an enterprise solution combining
one-off data remediation projects (Verify &
Validate) with annual recurring revenue via
ongoing monitoring of entities (Company
Watch).
Increased Strategic Partnerships
Under the leadership of CEO Ian Henderson
and his team, establishing strategic
partnerships is part of Kyckr’s strategy to fast
track exposure to new customers and
revenue growth, and during the year we’ve
been pleased in the partnership portfolio
built.
Kyckr sees strategic partners acting as
resellers, embedding the Kyckr solution in
their software and as a means to connect to
large customer networks and speed up time
to revenue.
Eight agreements have been signed this year
with strategic partners and the Company is in
Reseller agreement with illion
On that note, a reseller agreement was
signed with leading Australasian data and
analytics services provider illion Australia Pty
Ltd (illion). illion leverages its consumer and
commercial credit registries, which comprise
data on more than 25 million individuals and
2.5 million active companies.
The agreement enables illion to resell Kyckr’s
market-leading technology and solutions to
new and existing customers across Australia
and New Zealand.
Agreement with DemystData
Kyckr also signed a 2-year data provider
agreement with global data platform
DemystData, a leading provider and platform
for integrating data. This agreement allows
the Kyckr application programming-interface
(API) to be accessible by DemystData’s API
customers, helping seamlessly evaluate, test
and use the Kyckr network.
For Kyckr, the focus on partnerships is
expected to help create market-leading
propositions across multiple industries and
sectors.
We see strategic partnerships as a natural,
progressive step in capitalising on Kyckr’s
breadth of technologies and real-time global
data and as a means to expand into a
number of sectors.
Through these partners, a number of pilots
are currently underway with major banks,
although the purchase cycle may take longer
in these large organisations and is
additionally subject to COVID-19 related
delay.
Agreement with AXA Singapore
Kyckr signed an agreement with one of the
world’s leading insurance companies, AXA
Insurance Pte Ltd. The agreement is for AXA
Singapore to adopt Kyckr’s API to establish
greater automation in the development of
new insurance-related services, with initial
revenue of $380,000 SGD ($400,000 AUD).
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We look forward to further developing our
position in the KYC space and deliver our
innovations across the financial markets.
Benny Higgins
Non-Executive Chairman, Kyckr
31 August 2020
Ian Henderson
Chief Executive Officer, Kyckr
31 August 2020
Technological Advancements
Kyckr continues to place strong emphasis on
technological enhancements, and was
pleased to have received ISO 27001
accreditation, which validates the Company’s
technology systems in handling sensitive
data.
Outlook
Kyckr will continue to build on its strategy to
drive its enterprise pipeline and extend
strategic partnerships into FY2021; whilst
raising awareness on the Kyckr Company
Watch offering.
As evidenced by the latest regulations
introduced, the need for strengthened Know
Your Customer practices for online business
verification is now more important than ever
in the current COVID-19 environment.
We see robust longer-term opportunities for
Kyckr; and we’ve been pleased that growth
has continued with the Enterprise division
experiencing an 11% revenue growth in the
last two months post period-end with four
new contracts signed. Kyckr also has a
number of Perpetual KYC pilots currently
underway with major banks as they
accelerate their digital transformation
journeys.
The Company has a clear strategy to deliver
integrated technology and data solutions to
help clients with compliance requirements.
We are well positioned for FY21, and the
investments made in our sales and marketing
team will allow us to take full advantage of
the sales opportunities ahead to drive
revenue acceleration and diversification.
We remain cognisant of the ongoing
potential impacts from COVID-19 and we
continue to work closely with clients to
minimise disruption and ensure strong
business advancements.
On behalf of the Board, I would like to thank
all of our shareholders, staff and clients for
their continued support of our growing
business.
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Kyckr Limited
Corporate directory
30 June 2020
Directors
Benny Higgins
John Van Der Wielen
Karina Kwan
Jacqueline Kilgour
Company secretary
Bill Hundy
Notice of annual general meeting
The details of the annual general meeting of Kyckr Limited are:
Monday, 16 November 2020, 9:00am, at:
Level 16, 1 Market Street
Sydney
NSW 2000
Registered office
Principal place of business
Share register
Auditor
Level 12, 680 George Street
Sydney
NSW 2000
ArcLabs Research Centre,
W.I T. Campus, Carriganore,
Waterford, Ireland,
X91 P20H
Boardroom Pty Limited
Level 12, 225 George Street
Sydney
NSW 2000
Nexia Sydney Partnership
Level 16, 1 Market Street
Sydney
NSW 2000
Stock exchange listing
Kyckr Limited shares are listed on the Australian Securities Exchange (ASX code:
KYK)
Business objectives
Corporate Governance Statement
Kyckr Limited has used cash and cash equivalents held at the time of listing and the
time since listing to provide technology solutions to help protect against money
laundering, fraud and tax evasion, in a way consistent with its stated business
objectives. Kyckr aims to provide the pre-eminent automated technology solution to
maintain up to date critical company identity information, in place of the traditional
error and fraud prone manual people based processes.
The directors and management are committed to conducting the business of Kyckr
Limited in an ethical manner and in accordance with the highest standards of
corporate governance. Kyckr Limited has adopted and has substantially complied
with the ASX Corporate Governance Principles and Recommendations (Third Edition)
(‘Recommendations’) to the extent appropriate to the size and nature of its
operations.
The Corporate Governance Statement, which sets out the corporate governance
practices that were in operation during the financial year and identifies and explains
any Recommendations that have not been followed was approved by the Board of
directors at the same time as the Annual Report and can be found on the 'About us'
page at http://www.kyckr.com/
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Kyckr Limited
Directors' report
30 June 2020
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'consolidated entity' or 'Group') consisting of Kyckr Limited (referred to hereafter as the 'company' or 'parent entity') and
the entities it controlled at the end of, or during, the year ended 30 June 2020.
Directors
The following persons were directors of Kyckr Limited during the whole of the financial year and up to the date of this report,
unless otherwise stated:
Mr Benny Higgins - Non-Executive Chairman
Mr John Van Der Wielen - Non-Executive Director
Ms Karina Kwan - Non-Executive Director
Ms Jacqueline Kilgour - Non-Executive Director
Mr Benjamin Cronin - Executive Director (resigned on 24 April 2020)
Mr Robert Leslie - Non-Executive Director (resigned on 7 October 2019)
Principal activities
The principal activity of the Group during the period consisted of the provision of data and technology solutions to accelerate
customer acquisition and protect against money laundering, fraud and tax evasion. Kyckr’s solutions are connected to over
200 regulated primary sources, in over 120 countries, providing real-time company registry information for an estimated 80
million businesses globally. Kyckr provides automated technology solutions to improve the efficiency and effectiveness of
Corporate Know Your Client ('KYC') processes.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the consolidated entity after providing for income tax amounted to $4,907,827 (30 June 2019: $6,125,773).
Refer to the Chairman's and Chief Executive Officer's report for further detail.
Significant changes in the state of affairs
On 7 August 2019, the company issued 32,350,159 ordinary shares at a price of $0.066 per share to institutional and
sophisticated investors. The total proceeds from the issuance of these securities amounted to $2,135,110 (before transaction
costs).
On 13 September 2019, shareholders ratified the issue of securities at the Extraordinary General Meeting. In accordance
with the approval by shareholders, the company issued 46,000,000 ordinary shares at a price of $0.066 per share to
institutional and sophisticated investors. The total proceeds of the issuance of these securities amounted to $3,036,000
(before transaction costs).
On 1 June 2020, the company issued 58,676,527 ordinary shares at a price of $0.08 per share to institutional, sophisticated
and professional investors. The total proceeds from the issuance of these securities amounted to $4,694,122 (before
transaction costs).
On 26 June 2020, the company issued 9,143,750 ordinary shares at a price of $0.08 per share to eligible shareholders
pursuant to a share purchase plan. The total proceeds from the issuance of these securities amounted to $731,500 (before
transaction costs).
There were no other significant changes in the state of affairs of the consolidated entity during the financial year.
Matters subsequent to the end of the financial year
On 9 July 2020, the company issued 41,323,473 ordinary shares at a price of $0.08 per share to institutional, sophisticated
and professional investors. The total proceeds from the issuance of these securities amounted to $3,305,878 (before
transaction costs).
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Kyckr Limited
Directors' report
30 June 2020
The impact of the Coronavirus (COVID-19) pandemic is ongoing and it is not practicable to estimate the potential impact,
positive or negative, after the reporting date. The situation is rapidly developing and is dependent on measures imposed by
the Australian Government and other countries, such as maintaining social distancing requirements, quarantine, travel
restrictions and any economic stimulus that may be provided.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial
years.
Likely developments and expected results of operations
Information on likely developments in the operations of the consolidated entity are included in the Chairman’s and Chief
Executive Officer’s Report on pages 2 to 7.
The directors have identified the following business risks which may impact on the future performance of the Group:
Competition
The Group’s intellectual property rights are not protected by any registered patents in any jurisdiction. This may allow
competitors to develop products functionally similar to the Group’s existing products. The existence of competitors with
products that are functionally similar to the Group’s existing products could result in loss of customers and decline in revenue,
each of which could adversely affect the Group’s business and operating results.
Key Personnel Risk
The successful execution of the Group’s business model depends on a management team with the necessary talent and
experience to integrate and manage the Group’s growth plans. The loss of key management personnel could adversely
affect the Group’s business, results of operations or financial conditions and performance.
Current and Exchange Rate Fluctuations
The financial contribution of the Group will depend on the movement in exchange rates between the Australian Dollar and a
number of other foreign currencies. The exchange rate between various currencies may fluctuate substantially and the result
of these fluctuations may have an adverse impact on the Group’s operating results and financial position. The Group has not
entered into forward exchange contracts to hedge its anticipated purchase and sale commitments denominated in foreign
currencies.
Environmental regulation
The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State
law.
9
Kyckr Limited
Directors' report
30 June 2020
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Mr Benny Higgins
Non-Executive Chairman (previously Executive Chairman from 1 April 2018 to 31
December 2018)
Benny holds a First Class Honour's degree in Mathematics from the University of
Glasgow and is a Fellow of the Faculty of Actuaries. He is a Fellow of the Chartered
Institute of bankers in Scotland and a Fellow of the Royal Society of Edinburgh. In 2018
he was announced as a Visiting Professor at Strathclyde University and the Edinburgh
Business School based in Heriot-Watt University.
Benny has been a prominent international business leader for over 30 years, leading
businesses in financial services and retail.
Benny began his career at Standard Life in 1983 where he joined as an actuarial
student and became a member of the Standard Life Group Executive in 1996. In 1997,
he moved to RBS to become Chief Executive of Retail Banking. He was with RBS until
2015, during which time he led the successful integration of NatWest Retail Banking -
one of the largest mergers ever undertaken in UK banking. He became Chief Executive
Officer of HBOS plc in 2006 before joining Tesco Bank as Chief Executive in 2008.
Under Benny’s leadership, Tesco Bank grew to become one of the most established
‘new’ banks in the UK, serving more than 6 million customers and employing over 4,000
people in Edinburgh, Glasgow and Newcastle. In addition to his role at Tesco Bank,
Benny was also the Group Strategy Director for Tesco PLC and was a member of the
Tesco Executive Committee. Benny retired from Tesco in February 2018.
In September 2017, Benny was asked by the Scottish Government to lead a project
team to establish the creation of a Scottish National Investment Bank. In June 2018,
Benny was announced as the strategic adviser of the Scottish National Investment
Bank, leading its formation.
Outside of financial services, Benny is Chairman of the National Galleries of Scotland,
a Non-Executive Director of Glasgow Life, Non-Executive Director for the Buccleuch
Group and a Prince’s Trust Ambassador.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Member of the Audit and Risk Management Committee and the Nomination and
Remuneration Committee
1,000,000 ordinary shares
2,000,000 options over ordinary shares
None
Interests in shares:
Interests in options:
Interests in rights:
10
Kyckr Limited
Directors' report
30 June 2020
Name:
Title:
Qualifications:
Experience and expertise:
Mr John Van Der Wielen
Non-Executive Director
MBA FAICD
John has over 30 years of experience in insurance, wealth management, private
banking and investments including executive positions within several global financial
services groups, commencing as Chief Executive Officer and Managing Director of
HBF in May 2017. This involved leading a number of acquisitions, integration and
restructuring programs and senior executive board membership of listed ASX, FTSE,
European and Asian entities. John is experienced in fronting stock markets, liaising
with direct investors and meeting analysts on company strategy and performance in
many international markets.
John was previously CEO of Friends Life UK and International in London and prior to
this he was the Managing Director Wealth at ANZ Bank in Sydney.
Most recently John has been a Senior Adviser for Blackstone in the financial services
arena and an independent non-executive on several boards.
He holds an MBA from the University of Western Australia and has studied at London
Business School and Oxford University. He is a Fellow of the Australian Institute of
Company Directors.
John is an Advisory Member of the Business School for the University of Western
Australia and has been appointed as a Non-Executive Director of the Royal Flying
Doctor Service Western Australia.
None
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Chair of the Audit and Risk Management Committee and member of the Nomination
and Remuneration Committee
1,157,109 ordinary shares
2,000,000 options over ordinary shares
None
Interests in shares:
Interests in options:
Interests in rights:
Name:
Title:
Qualifications:
Experience and expertise:
Karina Kwan
Non-Executive Director
Karina holds a Bachelor of Economics from Sydney University, is a CPA Australia
Fellow and a Graduate of the Australian Institute of Company Directors.
Karina has led an accomplished executive career spanning 30 years in the financial
services industry, most recently as General Manager of Group Support Services
Finance at the Commonwealth Bank of Australia. Prior to this, she spent 18 years with
Citi, of which the last 3 years was in the role of Chief Financial Officer for Australia and
New Zealand. During her time at Citi, she performed the role of Corporate Treasurer
for 12 years, during which time she also chaired the Institutional Bank’s New Product
Approval Committee.
Karina is a Non-Executive director of: Nulis Nominees (Australia) Limited (trustee of
the MLC superannuation funds); Newcastle Permanent Building Society Limited; WAM
Active Limited ( a member of the Wilson Asset Management group). She is also an
Advisory Board member of: the University of Sydney Business School; Split Payments
Pty Ltd; 1 Wordflow.
Non-Executive Director of WAM Active Limited (ASX: WAA)
Chair of the Nomination and Remuneration Committee and member of the Audit and
Risk Management Committee
140,000 ordinary shares
279,950 options over ordinary shares
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
11
Kyckr Limited
Directors' report
30 June 2020
Name:
Title:
Qualifications:
Experience and expertise:
Jacqueline Kilgour
Non-Executive Director
Jacqueline qualified as a Solicitor in England and Wales and is a member of the Law
Society of England and Wales, Chartered Institute for Securities & Investment,
Securities Industry and Financial Markets Association (SIFMA) and the Society of Trust
and Estate Practitioners (STEP) and has passed New York Stock Exchange Series 14
(Compliance Official).
Jacqueline brings more than 30 years’ financial services experience in regulatory
compliance, anti-money laundering (AML) and corporate governance matters. She has
successfully dealt with companies and regulators across a number of jurisdictions.
Jacqueline held the role of Managing Director in Citigroup's Corporate and Investment
Banking division in New York where she had responsibility globally for anti-money
laundering, and compliance for Global Transaction Services in over 100 countries plus
a number of central Compliance functions.
In addition to her Citigroup experience, Jacqueline was European General Counsel and
Company Secretary for Instinet, the institutional agency-only broker part of Nomura
Group, where she was responsible for legal, compliance and corporate governance in
Europe and Asia-Pacific. Prior to that, Jacqueline was Co-Head of European
Compliance at Salomon Brothers and also worked in the Legal Department of a large
energy utility.
She has practised law at Cameron Markby Hewitt (now CMS) in London and Blake
Dawson Waldron (now Ashurst) in Melbourne, Australia. Jacqueline is currently is the
Managing Director of a regulatory compliance and governance consultancy firm and
acts as a Non-Executive Directors for two regulated entities in the UK and another in
the US.
Non-Executive Director of WAM Active Limited (ASX: WAA)
Other current directorships:
Former directorships (last 3 years): None
None
Special responsibilities:
None
Interests in shares:
279,950 options over ordinary shares
Interests in options:
Name:
Title:
Experience and expertise:
Mr. Benjamin Cronin (resigned on 24 April 2020)
Executive Director
Ben is the founder of Kyckr Ireland Limited (formerly Global Business Register Limited).
He fulfils the combined roles of managing all operating activities, personnel and
developing prospects and clients.
Ben has established relationships with numerous government registers and registrars
over the last 10 years. His understanding of the Company register domain is extensive
and he has presented at numerous register conferences over the years. Ben was a
professional Rugby Union player, playing for Munster and Ireland.
Prior to setting up GBR, Ben was a successful property developer including bid
management roles on Primary Healthcare Centre Projects and a Co-Location Hospital
(Public Private Partnerships) Project.
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
8,529,129 ordinary shares
Interests in shares:
None
Interests in options:
6,500,000 performance rights over ordinary shares
Interests in rights:
12
Kyckr Limited
Directors' report
30 June 2020
Name:
Title:
Qualifications:
Experience and expertise:
Mr Robert Leslie (resigned on 7 October 2019)
Non-Executive Director
B. Eng. (Electronics)
Robert is an electronics engineer by profession and a co- founder of Kyckr Ireland
Limited (formerly Global Business Register Limited). Robert has worked internationally
for Dell in Japan.
Rob is a mentor with Enterprise Ireland’s network, providing support to high potential
start-up entrepreneurs. He is also the founder of Sedicii, which has developed an
identity platform that allows individuals to prove their identity to organisations without
having to share any personal information in the process.
Rob is a source of innovation and strategy in technology products. He was recently
selected by the World Economic Forum as a Technology Pioneer for 2015 and invited
to talk at Davos.
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
6,619,247 ordinary shares
Interests in shares:
None
Interests in options:
6,500,000 performance rights over ordinary shares
Interests in rights:
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Company secretary
Bill Hundy was appointed company secretary on 16 March 2020, replacing Karl Pechmann. He is a highly experienced
company secretary and has held roles at major listed public companies for over three decades in the mining, energy and
manufacturing industries including as company secretary and legal counsel for Origin Energy Limited, Email Limited, Placer
Pacific Limited and Kidston Gold Mines Limited. He has extensive experience in company secretarial practice, corporate
governance, communications, compliance and risk management.
Bill has been admitted as a solicitor to the Supreme Court of New South Wales and holds a Bachelor of Laws, Bachelor of
Commerce (Economics), a Bachelor of Science (Physics, Geology and Geophysics) and a Diploma of Corporate
Management. He is a Fellow of the Governance Institute of Australia and the Chartered Governance Institute and a Fellow
of the Australian Institute of Company Directors.
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') held during the year ended 30 June 2020, and
the number of meetings attended by each director were:
Full Board
Nomination and
Remuneration Committee
Audit and Risk Management
Committee
Attended
Held
Attended
Held
Attended
Held
Benny Higgins
John Van Der Wielen
Karina Kwan
Jacqueline Kilgour
Benjamin Cronin
Robert Leslie
6
7
7
7
3
-
7
7
7
7
4
1
-
-
-
-
-
-
-
-
-
-
-
-
2
2
2
-
-
-
2
2
2
-
-
-
Held: represents the number of meetings held during the time the director held office.
13
Kyckr Limited
Directors' report
30 June 2020
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the consolidated entity's executive reward framework is to ensure reward for performance is competitive
and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives
and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of
reward. The Board ensures that executive reward satisfies the following key criteria for good reward governance practices:
●
●
●
●
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
The Nomination and Remuneration Committee is responsible for determining and reviewing remuneration arrangements for
its directors and executives. The performance of the consolidated entity depends on the quality of its directors and executives.
The remuneration philosophy is to attract, motivate and retain high performance and high quality personnel.
The reward framework is designed to align executive reward to shareholders' interests. The Board has considered that it
should seek to enhance shareholders' interests by:
●
●
having economic profit as a core component of plan design
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value
attracting and retaining high calibre executives
●
Additionally, the reward framework should seek to enhance executives' interests by:
●
●
●
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Non-executive directors' remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors'
fees and payments are reviewed annually by the Nomination and Remuneration Committee. The Nomination and
Remuneration Committee may, from time to time, receive advice from independent remuneration consultants to ensure non-
executive directors' fees and payments are appropriate and in line with the market. The chairman's fees are determined
independently to the fees of other non-executive directors based on comparative roles in the external market. The chairman
is not present at any discussions relating to the determination of his own remuneration. Non-executive directors are entitled
to receive share options and performance rights.
ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general
meeting. As set out in the IPO Prospectus, total aggregate remuneration available to non-executive directors was set at
$500,000 per annum. Non-executive director fees (directors' fees and committee fees, inclusive of superannuation) proposed
for the year ending 30 June 2021 are summarised as follows:
14
Kyckr Limited
Directors' report
30 June 2020
Name
Benny Higgins
John Van Der Wielen
Karina Kwan
Jacqueline Kilgour
Fees
₤65,000
$65,000
$65,000
$65,000
Executive remuneration
The consolidated entity aims to reward executives based on their position and responsibility, with a level and mix of
remuneration which has both fixed and variable components.
The executive remuneration and reward framework has four components:
●
●
●
●
base pay and non-monetary benefits
short-term performance incentives
share-based payments
other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Nomination and Remuneration Committee based on individual and business unit performance, the overall performance of
the consolidated entity and comparable market remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle
benefits) where it does not create any additional costs to the consolidated entity and provides additional value to the
executive.
The short-term incentives ('STI') program is designed to align the targets of the business units with the performance hurdles
of executives. STI payments are granted to executives based on specific annual targets and key performance indicators
('KPI's') being achieved. KPI's include profit contribution, customer satisfaction, leadership contribution and product
management.
The long-term incentives ('LTI') include long service leave and share-based payments in the form of options and performance
rights.
On 1 September 2016, 4,000,000 unlisted options were granted to key management personnel. The exercise price of the
options of $0.30 was 50% higher than the Initial Public Offering price. The options are exercisable upon meeting certain
revenue targets within four years from the date of grant. The contractual life of each option is four years.
On 1 September 2016, 20,000,000 performance rights were granted to certain directors and key management personnel.
The performance rights are exercisable at nil value. The performance rights vest upon meeting the following conditions:
●
50% of the performance rights automatically convert upon the company achieving a turnover of $5 million or more as
set out in the full year or half-yearly financial statements released to the ASX; and
50% of the performance rights automatically convert upon the company achieving a turnover of $10 million or more as
set out in its yearly or half-yearly financial statements released to the ASX.
●
On 30 November 2016, 3,000,000 unlisted options exercisable at $0.30 were granted to senior executives under the Long
Term Incentive Plan approved by shareholders at the Annual General Meeting held on 30 November 2016. The exercise
price of the options of $0.30 was 22.45% higher than market price of the shares on the date of grant. The vesting of these
options is conditional on continued employment until the vesting date, being two years from grant date. The contractual life
of each option is four years.
On 10 August 2018, 1,000,000 unlisted options were granted to Benny Higgins, a director of the company. The exercise
price of the options of $0.20 was 48% higher than the market price of the shares on the date of grant. The options vested
immediately and the contractual life of each option is four years.
On 10 August 2018, 1,000,000 unlisted options were granted to Benny Higgins, a director of the Company. The exercise
price of the options of $0.26 was 93% higher than the market price of the shares on the date of grant. The options vested on
1 March 2019 and the contractual life of each option is four years.
15
Kyckr Limited
Directors' report
30 June 2020
On 1 January 2019, 3,000,000 unlisted options were granted to Ian Henderson. The exercise price of the options of $0.1005
was 50% higher than the market price of the shares at the date of grant. The vesting of these options is conditional on
continued employment until the vesting date, being 3 years from grant date. The contractual life of each option is 4 years.
On 1 January 2019, 5,391,063 unlisted performance rights were granted to Ian Henderson in lieu of the first year’s cash
salary of £210,000. The performance rights have service-based vesting conditions only. The performance rights vested on
1 January 2020 and were all converted into ordinary shares on 13 March 2020.
On 27 November 2019, 279,950 unlisted options were granted to Jacqueline Kilgour, a director of the company. The exercise
price of the options of $0.29 was 87% higher than the market price of the shares on the date of grant. The options vest on
17 November 2020 and the contractual life of each option is four years.
On 27 November 2019, 279,950 unlisted options were granted to Karina Kwan, a Director of the company. The exercise
price of the options of $0.29 was 87% higher than the market price of the shares on the date of grant. The options vest on
17 November 2020 and the contractual life of each option is four years.
On 1 January 2020, 3,000,000 unlisted options were granted to Ian Henderson, the Chief Executive Officer of the company.
The exercise price of the options of $0.165 was 43% higher than the market price of the shares on the date of grant. The
options vest on 1 January 2023 and the contractual life of each option is four years.
The Nomination and Renumeration Committee reviewed the long-term equity-linked performance incentives specifically for
executives during the year ended 30 June 2020.
Consolidated entity performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the consolidated entity. A portion of cash bonus
and incentive payments are dependent on defined earnings per share targets being met. The remaining portion of the cash
bonus and incentive payments are at the discretion of the Nomination and Remuneration Committee.
The Nomination and Remuneration Committee is of the opinion that the adoption of performance based compensation will
contribute to future improvements in performance and will increase shareholder wealth over the coming years.
Use of remuneration consultants
During the financial year ended 30 June 2020, the company did not engage remuneration consultants to review its existing
remuneration policies and provide recommendations on how to improve both the STI and LTI programs.
Voting and comments made at the company's 2019 Annual General Meeting ('AGM')
At the 2019 AGM, 97.9% of the votes received supported the adoption of the remuneration report for the year ended 30 June
2019. The company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in this section.
The key management personnel of the consolidated entity consisted of the following directors of Kyckr Limited:
●
●
●
●
●
●
Benny Higgins
John Van Der Wielen
Karina Kwan
Jacqueline Kilgour
Benjamin Cronin (resigned on 24 April 2020)
Robert Leslie (resigned on 7 October 2019)
And the following persons:
●
●
●
Ian Henderson - Chief Executive Officer (appointed on 1 January 2019)
Dharmendra Patel - Interim Finance Director (appointed on 23 April 2020)
Karl Pechmann - Chief Financial Officer and Company Secretary (resigned on 16 March 2020)
16
Kyckr Limited
Directors' report
30 June 2020
2020
Non-Executive Directors:
B Higgins
J Van Der Wielen
Karina Kwan
J Kilgour
R Leslie*
Executive Directors:
B Cronin*
Other Key Management
Personnel:
I Henderson
D Patel*
K Pechmann*
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
$
Total
$
84,258
39,574
39,574
43,333
22,178
437,858
197,072
29,538
179,146
1,072,531
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,760
3,760
-
-
-
-
-
14,963
22,483
-
-
-
-
-
-
-
-
-
-
-
-
24,037
24,037
-
84,258
43,334
67,371
67,370
22,178
-
437,858
452,365
255,293
29,538
-
(70,657)
123,452
232,710 1,327,724
*
represents remuneration from the date of appointment and/or up to the date of resignation
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
$
Total
$
160,934
45,662
50,233
36,604
23,507
22,831
239,234
-
220,538
799,543
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,338
-
3,477
-
2,169
-
-
-
-
-
-
-
-
147,014
-
-
-
-
25,855
307,948
50,000
50,233
40,081
23,507
50,855
-
239,234
-
19,950
29,934
-
2,792
2,792
198,784
198,784
222,555
(20,725)
350,928 1,183,197
2019
Non-Executive Directors:
B Higgins
J Van Der Wielen
R Leslie
Karina Kwan*
J Kilgour*
A Wong*
Executive Directors:
B Cronin
Other Key Management
Personnel:
I Henderson*
K Pechmann
*
represents remuneration from the date of appointment and/or up to the date of resignation
17
Kyckr Limited
Directors' report
30 June 2020
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
B Higgins
J Van Der Wielen
K Kwan
J Kilgour
R Leslie
A Wong
Executive Directors:
B Cronin
Other Key Management
Personnel:
I Henderson
D Patel
K Pechmann
Fixed remuneration
2019
2020
At risk - STI
At risk - LTI
2020
2019
2020
2019
100%
100%
64%
64%
100%
-
53%
100%
100%
100%
100%
49%
100%
100%
44%
100%
157%
-
-
109%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
36%
36%
-
-
47%
-
-
-
-
51%
-
-
56%
-
(57%)
100%
-
(9%)
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Ian Henderson
Chief Executive Officer
1 January 2019
No fixed term
Ian receives a base salary of ₤210,000 and is eligible to participate in the long term
incentive plans of the consolidated entity. Either party can terminate the employment
contract by giving 6 months’ notice in writing.
Dharmendra Patel
Interim Finance Director
23 April 2020
No fixed term
Dharmendra receives a base salary of ₤36,000 and is eligible to participate in the long
term incentive plans of the consolidated entity. Dharmendra is entitled to terminate his
employment contract by giving 3 months’ notice in writing. The company is entitled to
terminate his contract by giving 3 months' notice in writing and providing 12 months'
pay.
Benjamin Cronin (resigned on 24 April 2020)
Head of Regulatory Development
6 September 2016
No fixed term
Ben received a base salary of €150,000 and is eligible to participate in the long term
incentive plans of the consolidated entity. Ben was entitled to terminate his employment
contract by giving 3 months’ notice in writing. The company was entitled to terminate
his contract by giving 3 months' notice in writing and providing 12 months' pay.
18
Kyckr Limited
Directors' report
30 June 2020
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Karl Pechmann (resigned on 16 March 2020)
Chief Financial Officer and Company Secretary
6 September 2016
No fixed term
Karl received a base salary of $210,000 plus superannuation and is eligible to
participate in the long term incentive plans of the consolidated entity. Karl was entitled
to terminate his employment contract by giving 3 months’ notice in writing.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the year
ended 30 June 2020.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key
management personnel in this financial year or future reporting years are as follows:
Name
B Higgins
B Higgins
I Henderson
I Henderson
J Kilgour
K Kwan
Number of
options
granted
Grant date
Vesting
and
exercisable date
Expiry date
Exercise price at grant date
Fair value
per option
1,000,000 10/08/2018
1,000,000 10/08/2018
3,000,000 01/01/2019
3,000,000 01/01/2020
279,950 18/11/2019
279,950 18/11/2019
10/08/2018
10/08/2019
01/01/2022
01/01/2023
17/11/2020
17/11/2020
10/08/2022
10/08/2022
01/01/2023
01/01/2024
18/11/2023
18/11/2023
$0.200
$0.260
$0.100
$0.165
$0.290
$0.290
$0.08
$0.07
$0.04
$0.06
$0.14
$0.14
Options granted carry no dividend or voting rights.
All options were granted over unissued fully paid ordinary shares in the company. Options vest based on the provision of
service over the vesting period whereby the executive becomes beneficially entitled to the option on vesting date. Options
are exercisable by the holder as from the vesting date. There has not been any alteration to the terms or conditions of the
grant since the grant date. There are no amounts paid or payable by the recipient in relation to the granting of such options
other than on their potential exercise.
The number of options over ordinary shares granted to and vested in directors and other key management personnel as part
of compensation during the year ended 30 June 2020 are set out below:
Name
B Higgins
I Henderson
J Kilgour
K Kwan
Number of
Number of
Number of
Number of
options
granted
options
granted
options
vested
options
vested
during the
during the
during the
during the
year
2020
year
2019
year
2020
year
2019
-
3,000,000
279,950
279,950
2,000,000
3,000,000
-
-
1,000,000
-
-
-
1,000,000
-
-
-
19
Kyckr Limited
Directors' report
30 June 2020
Performance rights
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of directors and
other key management personnel in this financial year or future reporting years are as follows:
Name
D Cassidy
B Cronin
R Leslie
A Wong
K Pechmann
I Henderson
Number of
rights
granted
Grant date
Expiry date
3,000,000 01/09/2016
6,500,000 01/09/2016
6,500,000 01/09/2016
3,000,000 01/09/2016
1,000,000 01/09/2016
5,391,063 01/01/2019
01/09/2020
01/09/2020
01/09/2020
01/09/2020
01/09/2020
01/01/2023
Performance rights granted carry no dividend or voting rights.
Fair value
per right
at grant date
$0.20
$0.20
$0.20
$0.20
$0.20
$0.07
The number of performance rights over ordinary shares granted to, vested and forfeited by directors and other key
management personnel as part of compensation during the years ended 30 June 2020 and 30 June 2019 are set out below:
Number of
Number of
Number of
rights granted
during the
year
2020
Number of
rights granted
during the
year
2019
rights
exercised
during the
year
2020
rights
exercised
during the
year
2019
Number of
rights forfeited
during the
year
2020
Number of
rights forfeited
during the
year
2019
I Henderson
-
5,391,063
5,391,063
-
-
-
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key management
personnel of the consolidated entity, including their personally related parties, is set out below:
Ordinary shares
B Higgins
J Van Der Wielen
R Leslie
K Kwan
B Cronin
I Henderson
K Pechmann
Balance at Exercise of
the start of performance
the year
rights
Additions
Disposals/
other*
Balance at
the end of
the year
1,000,000
1,100,109
9,619,247
-
8,519,129
-
151,812
20,390,297
-
-
-
-
-
5,391,063
-
5,391,063
-
57,000
-
140,000
916,765
-
-
1,113,765
-
-
(9,619,247)
-
(9,435,894)
(746,317)
(151,812)
(19,953,270)
1,000,000
1,157,109
-
140,000
-
4,644,746
-
6,941,855
*
Disposals/other may represent no longer being designated as a KMP, not necessarily a disposal of holding.
20
Kyckr Limited
Directors' report
30 June 2020
Option holding
The number of options over ordinary shares in the company held during the financial year by each director and other
members of key management personnel of the consolidated entity, including their personally related parties, is set out below:
Options over ordinary shares
B Higgins
J Van Der Wielen
K Kwan
J Kilgour
I Henderson
K Pechmann
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other*
Balance at
the end of
the year
2,000,000
2,000,000
-
-
3,000,000
1,000,000
8,000,000
-
-
279,950
279,950
3,000,000
-
3,559,900
-
-
-
-
-
-
-
2,000,000
-
2,000,000
-
279,950
-
279,950
-
6,000,000
-
(1,000,000)
-
(1,000,000) 10,559,900
*
Expire/forfeited/other may represent no longer being designated as a KMP, it does not necessarily represent options
that have expired or have been forfeited.
Performance rights holding
The number of performance rights over ordinary shares in the company held during the financial year by each director and
other members of key management personnel of the consolidated entity, including their personally related parties, is set out
below:
Performance rights over ordinary shares
R Leslie
B Cronin
I Henderson
K Pechmann
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other*
Balance at
the end of
the year
6,500,000
6,500,000
5,391,063
1,000,000
19,391,063
-
-
-
-
-
-
-
(5,391,063)
-
(5,391,063)
(6,500,000)
(6,500,000)
-
(1,000,000)
(14,000,000)
-
-
-
-
-
*
Expire/forfeited/other may represent no longer being designated as a KMP, it does not necessarily represent options
that have expired or have been forfeited.
This concludes the remuneration report, which has been audited.
Shares under option
Unissued ordinary shares of Kyckr Limited under option at the date of this report are as follows:
Grant date
01/09/2016
01/09/2016
30/11/2016
30/11/2016
02/01/2018
10/08/2018
10/08/2018
01/01/2019
01/01/2020
18/11/2019
Expiry date
01/09/2020
01/09/2020
30/11/2020
30/11/2020
02/01/2022
10/08/2022
10/08/2022
01/01/2023
01/01/2024
18/11/2023
Exercise
price
Number
under option
$0.200
$0.300
$0.300
$0.300
$0.300
$0.200
$0.260
$0.100
$0.165
$0.290
4,000,000
4,000,000
2,722,222
2,000,000
2,000,000
1,000,000
1,000,000
3,000,000
3,000,000
559,900
23,282,122
21
Kyckr Limited
Directors' report
30 June 2020
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the
company or of any other body corporate.
Shares under performance rights
Unissued ordinary shares of Kyckr Limited under performance rights at the date of this report are as follows:
Grant date
01/09/2016
Expiry date
01/09/2020
Number
under rights
4,000,000
No person entitled to exercise the performance rights had or has any right by virtue of the performance right to participate in
any share issue of the company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of Kyckr Limited issued on the exercise of options during the year ended 30 June 2020 and
up to the date of this report.
Shares issued on the exercise of performance rights
The following ordinary shares of Kyckr Limited were issued during the year ended 30 June 2020 and up to the date of this
report on the exercise of performance rights granted:
Date performance rights granted
13 March 2020
Exercise
price
Number of
shares issued
$0.000
5,931,063
Indemnity and insurance of officers
The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director
or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the
company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
company or any related entity against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company
or any related entity.
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.
Non-audit services
There were no non-audit services provided during the financial year by the auditor.
Officers of the company who are former partners of Nexia Sydney Partnership
There are no officers of the company who are former partners of Nexia Sydney Partnership.
22
Kyckr Limited
Directors' report
30 June 2020
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
27 August 2020
Sydney
23
To the Board of Directors of Kyckr Limited
Auditor’s Independence Declaration under section 307C of the Corporations Act 2001
As lead audit partner for the audit of the financial statements of Kyckr Limited for the financial year ended 30
June 2020, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(b)
any applicable code of professional conduct in relation to the audit.
Yours sincerely
Nexia Sydney Partnership
Lester Wills
Partner
Date: 27 August 2020
24
Kyckr Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
Revenue
Other income
Interest revenue calculated using the effective interest method
Expenses
Direct costs and consumables used
Employee benefits expense
Share-based payments expense
Depreciation and amortisation expense
Impairment of intangible assets
Impairment of receivables
Consultancy and professional fees
Platform maintenance and implementation costs
Occupancy expenses
Travel expenses
Net foreign exchange loss
Listing related expenses
Other expenses
Finance costs
Loss before income tax expense
Income tax expense
Consolidated
Note
2020
$
2019
$
5
6
2,399,295
2,138,671
314,980
19,962
1,871,855
84,556
7
7
7
7
10
7
8
(1,044,615)
(3,195,523)
24,483
(400,847)
-
-
(576,377)
(1,182,526)
(126,339)
(66,296)
(41,981)
(368,374)
(652,495)
(11,174)
(886,328)
(2,964,872)
(534,996)
(62,655)
(3,801,663)
(89,196)
(611,441)
-
(142,203)
(207,930)
(5,050)
(248,219)
(653,168)
(13,134)
(4,907,827)
(6,125,773)
-
-
Loss after income tax expense for the year attributable to the owners of Kyckr
Limited
(4,907,827)
(6,125,773)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners of Kyckr
Limited
4,563
4,563
809
809
(4,903,264)
(6,124,964)
Cents
Cents
Basic earnings per share
Diluted earnings per share
34
34
(2.21)
(2.21)
(4.09)
(4.09)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
25
Kyckr Limited
Statement of financial position
As at 30 June 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Employee benefits
Contingent consideration
Total current liabilities
Non-current liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
Note
2020
$
2019
$
9
10
11
12
14
15
16
17
18
19
6,658,129
604,714
235,571
7,498,414
1,448,660
418,286
174,934
2,041,880
21,372
9,389,884
9,411,256
49,035
9,627,372
9,676,407
16,909,670 11,718,287
1,399,918
52,910
57,265
-
-
1,510,093
839,214
158,000
54,348
21,434
214,500
1,287,496
-
-
7,079
7,079
1,510,093
1,294,575
15,399,577 10,423,712
20
21
31,702,245 21,798,633
2,477,342
(13,852,263)
2,457,422
(18,760,090)
15,399,577 10,423,712
The above statement of financial position should be read in conjunction with the accompanying notes
26
Kyckr Limited
Statement of changes in equity
For the year ended 30 June 2020
Consolidated
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2018
20,477,340
1,941,537
(7,726,490) 14,692,387
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 20)
Share-based payments (note 35)
-
-
-
-
809
(6,125,773)
-
(6,125,773)
809
809
(6,125,773)
(6,124,964)
1,321,293
-
-
534,996
-
-
1,321,293
534,996
Balance at 30 June 2019
21,798,633
2,477,342
(13,852,263) 10,423,712
Consolidated
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2019
21,798,633
2,477,342
(13,852,263) 10,423,712
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 20)
Share-based payments (note 35)
-
-
-
-
4,563
(4,907,827)
-
(4,907,827)
4,563
4,563
(4,907,827)
(4,903,264)
9,903,612
-
-
(24,483)
-
-
9,903,612
(24,483)
Balance at 30 June 2020
31,702,245
2,457,422
(18,760,090) 15,399,577
The above statement of changes in equity should be read in conjunction with the accompanying notes
27
Kyckr Limited
Statement of cash flows
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Government grants received
Interest received
Interest and other finance costs paid
Consolidated
Note
2020
$
2019
$
2,347,706
(7,023,820)
2,396,259
(6,067,182)
6
(4,676,114)
46,338
19,962
(11,174)
(3,670,923)
-
84,556
(6,779)
Net cash used in operating activities
32
(4,620,988)
(3,593,146)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
Payments for security deposits
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Repayment of lease liabilities
Proceeds from borrowings
Repayment of borrowings
Net cash from financing activities
12
14
(3,605)
-
(159)
(24,217)
(885,321)
-
(3,764)
(909,538)
20
20
10,596,732
(693,120)
(72,308)
112,317
(109,400)
1,407,878
(86,585)
-
106,601
(52,253)
9,834,221
1,375,641
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
5,209,469
1,448,660
(3,127,043)
4,575,703
Cash and cash equivalents at the end of the financial year
9
6,658,129
1,448,660
The above statement of cash flows should be read in conjunction with the accompanying notes
28
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 1. General information
The financial statements cover Kyckr Limited as a consolidated entity consisting of Kyckr Limited and the entities it controlled
at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Kyckr Limited's
functional and presentation currency.
Kyckr Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and
principal place of business are:
Registered office
Level 12, 680 George Street
Sydney
NSW 2000
Principal place of business
ArcLabs Research Centre,
W.I T. Campus, Carriganore,
Waterford, Ireland,
X91 P20H
A description of the nature of the consolidated entity's operations and its principal activities are included in the directors'
report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 27 August 2020. The
directors have the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
Interpretation 23 Uncertainty over Income Tax
The consolidated entity has adopted Interpretation 23 from 1 July 2019. The interpretation clarifies how to apply the
recognition and measurement requirements of AASB 112 ‘Income Taxes’ in circumstances where uncertain tax treatments
exists. The interpretation requires: the consolidated entity to determine whether each uncertain tax treatment should be
treated separately or together, based on which approach better predicts the resolution of the uncertainty; the consolidated
entity to consider whether it is probable that a taxation authority will accept an uncertain tax treatment; and if the consolidated
entity concludes that it is not probable that the taxation authority will accept an uncertain tax treatment, it shall reflect the
effect of uncertainty in determining the related taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or
tax rates, measuring the tax uncertainty based on either the most likely amount or the expected value. In making the
assessment it is assumed that a taxation authority will examine amounts it has a right to examine and have full knowledge
of all related information when making those examinations. Interpretation 23 was adopted using the modified retrospective
approach and as such comparatives have not been restated. There was no impact of adoption on opening accumulated
losses as at 1 July 2019.
29
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
AASB 16 Leases
The consolidated entity has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees
eliminates the classifications of operating leases and finance leases. Except for short-term leases and leases of low-value
assets, right-of-use assets and corresponding lease liabilities are recognised in the statement of financial position. Straight-
line operating lease expense recognition is replaced with a depreciation charge for the right-of-use assets (included in
operating costs) and an interest expense on the recognised lease liabilities (included in finance costs). In the earlier periods
of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under
AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results improve as the
operating expense is now replaced by interest expense and depreciation in profit or loss. For classification within the
statement of cash flows, the interest portion is disclosed in operating activities and the principal portion of the lease payments
are separately disclosed in financing activities. For lessor accounting, the standard does not substantially change how a
lessor accounts for leases.
When adopting AASB 16 from 1 July 2019, the consolidated entity has applied the following practical expedients:
●
●
●
●
●
applying a single discount rate to the portfolio of leases with reasonably similar characteristics;
accounting for leases with a remaining lease term of 12 months as at 1 July 2019 as short-term leases;
excluding any initial direct costs from the measurement of right-of-use assets;
using hindsight in determining the lease term when the contract contains options to extend or terminate the lease; and
not apply AASB 16 to contracts that were not previously identified as containing a lease.
Impact of adoption
AASB 16 was adopted using the modified retrospective approach and as such the comparatives have not been restated.
The impact of adoption on the statement of financial position as at 1 July 2019 was as follows (increase/(decrease)):
Assets
Right-of-use assets (AASB 16)
Liabilities
Lease liabilities - current (AASB 16)
Lease liabilities - non-current (AASB 16)
Total liabilities
Equity
Accumulated losses
Total equity
1 July 2019
$
174,321
39,508
134,813
174,321
-
-
Reconciliation from operating lease commitments disclosure at 30 June 2019 to the right-of-use assets at 1 July 2019:
Operating lease commitments as at 1 July 2019 (AASB 117)
Operating lease commitments discount based on the weighted average incremental borrowing rate of 10%
(AASB 16)
Right-of-use assets as at 1 July 2019
1 July 2019
$'000
189,635
(15,314)
174,321
30
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
AASB 2020-4 Amendment to Australian Accounting Standards - Covid-19-Related Rent Concessions
The consolidated entity has early adopted the amendment to AASB 16 from 1 July 2019. The amendment provides a practical
expedient for lessees to account for COVID-19-related rent concessions that: result in lease payments that are substantially
the same as, or less than, the consideration for the lease immediately prior to the change; where any reduction in the lease
payments affects only payments originally due on or before 30 June 2021; and where there is no substantive change to other
terms and conditions of the lease. The practical expedient allows an entity not to assess rent concessions meeting the criteria
as a lease modification. As a result, to the extent that lease concessions represent a forgiveness or waiver of lease payments,
such concessions are treated as variable lease payments recognised in profit or loss with a corresponding adjustment to the
lease liability. To the extent that the lease concession in substance represents a delay in lease repayments such that lease
consideration is not changed, the lease liability is not extinguished. Interest continues to accrue for that period. The
consolidated entity has applied the practical expedient to all rent concessions that meet the abovementioned criteria.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or loss.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in note 30.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Kyckr Limited ('company' or
'parent entity') as at 30 June 2020 and the results of all subsidiaries for the year then ended. Kyckr Limited and its subsidiaries
together are referred to in these financial statements as the 'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity
when the consolidated entity 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 consolidated entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity 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 consolidated entity.
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.
Where the consolidated entity 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
consolidated entity 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.
31
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation
of resources to operating segments and assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Kyckr Limited's functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into the entity's functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting
date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange
rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences
are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
The consolidated entity recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to be entitled
in exchange for transferring goods or services to a customer. For each contract with a customer, the consolidated entity:
identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price
which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to
the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to
be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the
transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration
is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues
until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject
to the constraining principle are initially recognised as deferred revenue in the form of a separate refund liability.
Rendering of services
Online revenue is recognised at a point in time when an online document search and purchase service is provided to the
customer. Enterprise revenue is recognised at a point in time when services are provided including automation and perpetual
validation of customer ‘Know your client’ data, timing differences in invoicing for services and completion of performance
obligations are recognised as contract liabilities.
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.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
32
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them
with the costs that they are intended to compensate.
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.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position 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 the
consolidated entity's 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 the consolidated entity's 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.
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.
Trade and other receivables
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. Trade receivables are generally due for settlement within 30
days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days
overdue.
33
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at
either amortised cost or fair value depending on their classification. Classification is determined based on both the business
model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an
accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset, it's carrying value is written off.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a business
model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial
asset represent contractual cash flows that are solely payments of principal and interest.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured
at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon
the consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk
has increased significantly since initial recognition, based on reasonable and supportable information that is available, without
undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit
loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a
default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is
determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within
other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.
Property, plant and equipment
Property, 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.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Computer equipment
2-5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater
than its estimated recoverable amount.
34
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at
the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible
assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising
from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying
amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in
the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or
period.
Goodwill
Goodwill arises on the acquisition of a business and is carried at cost less accumulated impairment losses. Impairment losses
on goodwill are taken to profit or loss and are not subsequently reversed.
Computer software and development
Significant costs associated with computer software and development are deferred and amortised on a straight-line basis
over the period of their expected benefit and once the asset has been brought into use, being their finite life of 5 years.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-
financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity 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.
Contract liabilities
Contract liabilities represent the consolidated entity's obligation to transfer goods or services to a customer and are
recognised when a customer pays consideration, or when the consolidated entity recognises a receivable to reflect its
unconditional right to consideration (whichever is earlier) before the consolidated entity has transferred the goods or services
to the customer.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting date, the
loans or borrowings are classified as non-current.
Loans and borrowings are removed from the statement of financial position when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the carrying amount and any consideration paid is recognised in
profit or loss.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
35
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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 wholly 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 annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured at 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 high quality
corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Liabilities for employee entitlements which have vested in the employee at reporting date are recognised as current liabilities
notwithstanding that they are not expected to be settled within 12 months of reporting date as the consolidated entity does
not have an unconditional right to defer settlement.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
the Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution,
the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk
free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the
consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other
vesting conditions.
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.
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 consolidated entity or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the consolidated entity 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.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair
value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the principal
market; or in the absence of a principal market, in the most advantageous market.
36
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and
best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where
applicable, with external sources of data.
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.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments
or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit
or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic conditions, the consolidated
entity's operating or accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest
in the acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount
is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest
in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the
acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value
of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly
in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement
of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's
previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends
on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information
possible to determine fair value.
37
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Kyckr 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.
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 statement of
financial position.
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.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2020. The consolidated
entity's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the
consolidated entity, are set out below.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and early
adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new guidance
on measurement that affects several Accounting Standards. Where the consolidated entity has relied on the existing
framework in determining its accounting policies for transactions, events or conditions that are not otherwise dealt with under
the Australian Accounting Standards, the consolidated entity may need to review such policies under the revised framework.
At this time, the application of the Conceptual Framework is not expected to have a material impact on the consolidated
entity's financial statements.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
38
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have,
on the consolidated entity based on known information. This consideration extends to the nature of the products and services
offered, customers, supply chain, staffing and geographic regions in which the consolidated entity operates. Other than as
addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements
or any significant uncertainties with respect to events or conditions which may impact the consolidated entity unfavourably
as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
Share-based payment transactions
The consolidated entity 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 Black-Scholes model
which takes into account the terms and conditions upon which the instruments were granted. The accounting estimates and
assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may impact profit or loss and equity.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit
loss rate for each group. These assumptions include recent sales experience, historical collection rates, the impact of the
Coronavirus (COVID-19) pandemic and forward-looking information that is available. The allowance for expected credit
losses, as disclosed in note 10, is calculated based on the information available at the time of preparation. The actual credit
losses in future years may be higher or lower.
Fair value measurement hierarchy
The consolidated entity is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy,
based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted prices
(unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2:
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly;
and Level 3: Unobservable inputs for the asset or liability. Considerable judgement is required to determine what is significant
to fair value and therefore which category the asset or liability is placed in can be subjective.
The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models. These include
discounted cash flow analysis or the use of observable inputs that require significant adjustments based on unobservable
inputs.
Estimation of useful lives of assets
The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its
property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of
technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are
less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will
be written off or written down.
Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate impairment, whether
goodwill and other indefinite life intangible assets have suffered any impairment, in accordance with the accounting policy
stated in note 2. The recoverable amounts of cash-generating units have been determined based on value-in-use
calculations. These calculations require the use of assumptions, including estimated discount rates based on the current
cost of capital and growth rates of the estimated future cash flows.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible
assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that may
lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value
less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.
39
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Income tax
The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required
in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary
course of business for which the ultimate tax determination is uncertain. The consolidated entity recognises liabilities for
anticipated tax audit issues based on the consolidated entity's current understanding of the tax law. Where the final tax
outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax
provisions in the period in which such determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Employee benefits provision
As discussed in note 2, the liability for employee benefits expected to be settled more than 12 months from the reporting
date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all
employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases
through promotion and inflation have been taken into account.
Note 4. Operating segments
The Group operates in one operating segment, being the provision of Know Your Customer ('KYC') services. The operating
segment identified is based on the internal reports that are reviewed and used by the Directors of the Board (who are
identified as the Chief Operating Decision Maker (‘CODM’) in assessing performance and in determining the allocation of
resources. There is no aggregation of operating segments.
The CODM reviews earnings before interest, tax, depreciation and amortisation ('EBITDA'), adjusted for impairment. EBITDA
is a financial measure which is not prescribed by Australian Accounting Standards (‘AAS’) and represents the profit under
AAS adjusted for non-specific non-cash and significant items. The accounting policies adopted for internal reporting to the
CODM are consistent with those adopted in the financial statements.
The information reported to the CODM is on at least a monthly basis.
Major customers
During the year ended 30 June 2020 approximately 36% (2019: 36%) of the consolidated entity's external revenue was
derived from sales to 2 customers (2019: 3 customers).
Geographical information
Australia
Ireland
Sales to external customers
Geographical non-current
assets
2020
$
2019
$
2020
$
2019
$
-
2,399,295
-
2,138,671
8,448,416
1,022,503
8,452,328
1,224,079
2,399,295
2,138,671
9,470,919
9,676,407
A reconciliation of the loss after income tax expense to EBITDA is as follows:
40
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 4. Operating segments (continued)
Loss after tax
add: depreciation and amortisation
add: impairment of goodwill
Less: interest revenue
add: finance costs
EBITDA
Note 5. Revenue
Sales of services
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Major product lines
Online revenue
Enterprise revenue
Consolidated
2020
$
2019
$
(4,907,827)
400,847
-
(19,962)
11,174
(6,125,773)
62,655
3,801,663
(84,556)
13,134
(4,515,768)
(2,332,877)
Consolidated
2020
$
2019
$
2,399,295
2,138,671
Consolidated
2020
$
2019
$
1,594,171
805,124
1,487,492
651,179
2,399,295
2,138,671
Refer to note 4 'Operating segments' for analysis of revenue by geographical region.
During the financial year ended 30 June 2020 and 30 June 2019, all revenue was recognised based on services provided at
a point in time.
Note 6. Other income
Net fair value gain on financial liability (refer to note 18)
Government grants (COVID-19)
Gain on cancellation of lease
Other income
Consolidated
2020
$
2019
$
214,500
46,338
54,142
1,871,855
-
-
314,980
1,871,855
Government grants (COVID-19) represents grants received from the Government comprising of cash boost support
payments. During the year the consolidated entity received payments from the Australian Government as part of its ‘Boosting
Cash Flow for Employers’ scheme in response to the Coronavirus (‘COVID-19’) pandemic. These non-tax amounts have
been recognised as government grants and recognised as income once there is reasonable assurance that the consolidated
entity will comply with any conditions attached.
41
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 7. Expenses
Loss before income tax includes the following specific expenses:
Depreciation
Right-of-use assets (refer to note 13)
Computer equipment (refer to note 12)
Total depreciation
Amortisation
Computer software and development (refer to note 14)
Total depreciation and amortisation
Impairment
Goodwill
Finance costs
Interest and finance charges paid/payable on borrowings
Interest and finance charges paid/payable on lease liabilities
Unwinding of the discount on contingent consideration (refer to note 17)
Finance costs expensed
Net foreign exchange loss
Net foreign exchange loss
Leases
Minimum lease payments (AASB 17)
Short-term lease payments
Share-based payments expense
Share-based payments expense (refer to note 21)
Employee benefits expense
Employee benefits expense excluding superannuation
Defined contribution superannuation expense
Total employee benefits expense
Consolidated
2020
$
2019
$
120,151
29,908
-
32,811
150,059
32,811
250,788
29,844
400,847
62,655
-
3,801,663
4,875
6,299
-
6,779
-
6,355
11,174
13,134
41,981
5,050
-
52,743
140,859
-
52,743
140,859
(24,483)
534,996
3,171,025
24,498
2,918,590
46,282
3,195,523
2,964,872
42
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 8. Income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 27.5%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Non-deductible expenses
Non-assessable income
Capital deductions
Current year tax losses not recognised
Difference in overseas tax rates
Income tax expense
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences attributable to:
Carried forward tax losses benefit
Temporary differences
Total deferred tax assets not recognised
Consolidated
2020
$
2019
$
(4,907,827)
(6,125,773)
(1,349,652)
(1,684,588)
(6,605)
(58,988)
(63,559)
1,193,363
(514,760)
(24,873)
(1,478,804)
864,587
614,217
(1,030,858)
684,750
346,108
-
-
Consolidated
2020
$
2019
$
3,358,821
65,815
2,437,755
34,618
3,424,636
2,472,373
The above potential tax benefit, which includes tax losses and temporary differences has not been recognised in the
statement of financial position as recovery of this benefit is not probable. There is no expiration date for the tax losses carried
forward. The estimated amount of cumulative tax losses at 30 June 2020 was $18,717,842 (2019: $12,981,159). Utilisation
of these tax losses is dependent on the company satisfying certain tests at the time the losses are recouped.
Note 9. Current assets - cash and cash equivalents
Cash at bank
Consolidated
2020
$
2019
$
6,658,129
1,448,660
43
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 10. Current assets - trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
Other receivables
GST receivable
Consolidated
2020
$
2019
$
521,721
-
521,721
240,681
(3,241)
237,440
39,084
43,909
60,351
120,495
604,714
418,286
Allowance for expected credit losses
The consolidated entity has recognised a loss of $nil (2019: a loss of $83,925) in profit or loss in respect of impairment of
receivables for the year ended 30 June 2020.
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Consolidated
Not overdue
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Expected credit loss rate
2020
%
2019
%
Carrying amount
2019
$
2020
$
Allowance for expected
credit losses
2020
$
2019
$
-
-
-
-
-
-
-
26.19%
155,512
300,217
65,992
-
110,374
106,424
11,508
12,375
521,721
240,681
-
-
-
-
-
-
-
-
3,241
3,241
The consolidated entity has not increased credit risks in relation to the Coronavirus ('COVID-19') pandemic due to the core
client base is in Financial Services or related industry which is not deemed at high risk compared to other industries or
sectors.
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Receivables written off during the year as uncollectable
Closing balance
Consolidated
2020
$
2019
$
3,241
-
(3,241)
8,512
83,925
(89,196)
-
3,241
44
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 11. Current assets - other
Prepayments
Security deposits
Note 12. Non-current assets - property, plant and equipment
Computer equipment - at cost
Less: Accumulated depreciation
Consolidated
2020
$
2019
$
219,207
16,364
158,729
16,205
235,571
174,934
Consolidated
2020
$
2019
$
98,079
(76,707)
104,616
(55,581)
21,372
49,035
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2018
Additions
Exchange differences
Depreciation expense
Balance at 30 June 2019
Additions
Disposals
Exchange differences
Depreciation expense
Balance at 30 June 2020
Computer
equipment
$
56,670
24,217
959
(32,811)
49,035
3,605
(1,970)
610
(29,908)
21,372
Note 13. Non-current assets - right-of-use assets
During the year ended 30 June 2020 and as a direct result of the COVID-19 pandemic, the consolidated entity cancelled the
leases for its Sydney and Dublin offices. At the date the leases were cancelled, the carrying value of the right-of-use asset
($59,663) and the lease liability ($113,805) were derecognised through the statement of profit or loss. The net gain on
cancellation of the leases ($54,142) is included in 'other income' (see note 6).
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
45
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 13. Non-current assets - right-of-use assets (continued)
Consolidated
Balance at 1 July 2019 - initial recognition
Exchange differences
Depreciation expense
Cancellation of lease
Balance at 30 June 2020
Note 14. Non-current assets - intangibles
Goodwill - at cost
Less: Impairment
Computer software and development - at cost
Less: Accumulated amortisation
Land and
buildings
right-of-use
$
174,321
5,493
(120,151)
(59,663)
-
Consolidated
2020
$
2019
$
12,250,079 12,250,079
(3,801,663)
8,448,416
(3,801,663)
8,448,416
1,312,846
(371,378)
941,468
1,292,552
(113,596)
1,178,956
9,389,884
9,627,372
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2018
Additions
Exchange differences
Impairment of assets
Amortisation expense
Balance at 30 June 2019
Exchange differences
Amortisation expense
Balance at 30 June 2020
Computer
software and
development
$
Total
$
Goodwill
$
12,250,079
-
-
(3,801,663)
-
315,124 12,565,203
885,321
885,321
8,355
8,355
(3,801,663)
-
(29,844)
(29,844)
8,448,416
-
-
1,178,956
13,300
(250,788)
9,627,372
13,300
(250,788)
8,448,416
941,468
9,389,884
Impairment testing
For the purpose of impairment testing, goodwill is allocated to the one cash generating unit ('CGU'), Kyckr Ireland Limited.
46
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 14. Non-current assets - intangibles (continued)
The Group tests whether goodwill has suffered any impairment on at least an annual basis or at each reporting period where
an indicator of impairment exists. The Group has performed an impairment test at 30 June 2020. The recoverable amount
of a CGU is determined based on value-in-use calculations which require the use of assumptions. The calculations use cash
flow projections based on financial budgets approved by the Board covering a four year period with revenue growth
assumptions projected to be between 15% and 165% during this period. Cash flows beyond the four year period are
extrapolated into perpetuity using estimated terminal growth rates showing below. The following table sets out the key
assumption used for value-in-use calculations:
●
●
●
One to four year revenue growth rates between 15% and 165% (2019: 30%)
Long term growth rate 5% (2019: 5%)
Weighted average cost of capital 20.5% (2019: 15%)
Impairment charge:
Based on the value-in-use calculation methodology and assumptions stated above, no impairment was recognised at 30
June 2020 (30 June 2019: impairment charge of $3,801,663).
Impact of possible changes in assumptions:
If the weighted average cost of capital was to exceed 23% and all other assumptions remained constant, this would result in
an additional impairment loss to the CGU.
Note 15. Current liabilities - trade and other payables
Trade payables
Accrued expenses
Other payables
Refer to note 23 for further information on financial instruments.
Note 16. Current liabilities - contract liabilities
Contract liabilities
Consolidated
2020
$
2019
$
815,993
453,682
130,243
395,289
273,130
170,795
1,399,918
839,214
Consolidated
2020
$
2019
$
52,910
158,000
Reconciliation
Reconciliation of the written down values at the beginning and end of the current and previous financial year are set out
below:
Opening balance
Payments received in advance
Transfer to revenue
Closing balance
Consolidated
2020
$
2019
$
158,000
225,817
(330,907)
69,800
494,254
(406,054)
52,910
158,000
47
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 16. Current liabilities - contract liabilities (continued)
Performance obligations relating to future periods
The aggregate amount of the transaction price allocated to the performance obligations that are deferred at the end of the
reporting period was $52,910 as at 30 June 2020 ($158,000 as at 30 June 2019) and is expected to be recognised as
revenue in future periods as follows:
Within 6 months
Note 17. Current liabilities - borrowings
Consolidated
2020
$
2019
$
52,910
158,000
Consolidated
2020
$
2019
$
Interest bearing liability - insurance premium funding
57,265
54,348
Refer to note 23 for further information on financial instruments.
Note 18. Current liabilities - contingent consideration
Contingent consideration
Consolidated
2020
$
2019
$
-
214,500
Contingent consideration
Contingent consideration relates to the acquisition of Kyckr Ireland Limited on 1 September 2016 and represents 13,000,000
performance shares that were issued which will convert to fully paid ordinary shares on a one-for-one basis upon meeting
the following vesting conditions:
●
●
50% of the performance shares automatically convert upon the company achieving a turnover of $5 million or more as
set out in the full year or half-yearly financial statements released to the ASX; and
50% of the performance shares automatically convert upon the company achieving a turnover of $10 million or more as
set out in its yearly or half-yearly financial statements released to the ASX.
The performance shares expire four years from the date of acquisition in the event that the above vesting conditions are not
met.
As the contingent consideration vests no earlier than two years from the date of issue, the amount has been discounted by
the two-year government bond rate of 1.46% p.a. The finance costs incurred during the period with respect to the unwinding
of the discount was $nil (2019: $6,355) and is included in finance costs, which in addition to a fair value movement of
$214,500 (2019: $1,871,855) gives a balance at 30 June 2020 of $nil (2019: $214,500).
During the financial year ended 2020, the fair value of the contingent consideration was reduced to $nil as it is no longer
probable that the vesting conditions will be met.
48
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 19. Non-current liabilities - employee benefits
Long service leave
Note 20. Equity - issued capital
Consolidated
2020
$
2019
$
-
7,079
Consolidated
2020
Shares
2019
Shares
2020
$
2019
$
Ordinary shares - fully paid
302,526,389 150,964,890 31,702,245 21,798,633
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
Share placement
less share issue costs (net of taxation)
1 July 2018
10 August 2018
Balance
Shares issued
Shares issued
Shares issued on the exercise of performance rights 13 March 2020
Shares issued
Shares issued
Less: share issue costs (net of taxation)
1 June 2020
26 June 2020
30 June 2019
7 August 2019
19 September 2019
140,908,619
10,056,271
-
150,964,890
32,350,159
46,000,000
5,391,063
58,676,527
9,143,750
-
20,477,340
1,407,878
(86,585)
$0.140
$0.000
21,798,633
2,135,110
3,036,000
-
4,694,122
731,500
(693,120)
$0.066
$0.066
$0.000
$0.080
$0.080
$0.000
Balance
30 June 2020
302,526,389
31,702,245
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company
does not have a limited amount of authorised capital.
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.
Capital risk management
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that
it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to
reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as
value adding relative to the current company's share price at the time of the investment. The consolidated entity is not actively
pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in order to
maximise synergies.
49
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 20. Equity - issued capital (continued)
The consolidated entity is subject to certain financing arrangements covenants and meeting these is given priority in all
capital risk management decisions. There have been no events of default on the financing arrangements during the financial
year.
The capital risk management policy remains unchanged from the 30 June 2019 Annual Report.
Note 21. Equity - reserves
Foreign currency reserve
Share-based payments reserve
Consolidated
2020
$
2019
$
12,097
2,445,325
7,534
2,469,808
2,457,422
2,477,342
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2018
Foreign currency translation
Share-based payments
Balance at 30 June 2019
Foreign currency translation
Share-based payments
Balance at 30 June 2020
Note 22. Equity - dividends
Foreign
currency
$
Share-based
payments
$
Total
$
6,725
809
-
7,534
4,563
-
1,934,812
-
534,996
1,941,537
809
534,996
2,469,808
-
(24,483)
2,477,342
4,563
(24,483)
12,097
2,445,325
2,457,422
There were no dividends paid, recommended or declared during the current or previous financial year.
50
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 23. Financial instruments
Financial risk management objectives
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price
risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses
on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of
the consolidated entity. The consolidated entity may use derivative financial instruments such as forward foreign exchange
contracts to hedge certain risk exposures, however as at 30 June 2020 and 30 June 2019 there were no derivative financial
instruments in place. The consolidated entity uses different methods to measure different types of risk to which it is exposed.
These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks and ageing
analysis for credit risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board. These policies
include identification and analysis of the risk exposure of the consolidated entity and appropriate procedures, controls and
risk limits. Finance identifies and evaluates financial risks within the consolidated entity's operating units. Finance reports to
the Board on a monthly basis.
Market risk
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign currency
risk through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and
cash flow forecasting.
The consolidated entity's foreign exchange risk is managed to ensure sufficient funds are available to meet foreign
denominated financial commitments in a timely and cost-effective manner. The consolidated entity will continually monitor
this risk and consider entering into forward foreign exchange, foreign currency swap and foreign currency option contracts if
appropriate.
Creditors and debtors as at 30 June 2020 were reviewed to assess currency risk at year end. The value of transactions
denominated in a currency other than the functional currency of the respective subsidiary was insignificant and therefore the
risk was determined as not being significant.
At 30 June 2020, the carrying value of foreign currency denominated cash and cash equivalents are as follows:
Consolidated
US dollars
Euros
Pound Sterling
Assets
Liabilities
2020
$
2019
$
2020
$
2019
$
16,927
51,793
851,097
22,589
69,718
20,488
919,817
112,795
-
-
-
-
-
-
-
-
The consolidated entity had cash denominated in foreign currencies of $919,817 as at 30 June 2020 (30 June 2019:
$112,795). Based on this exposure, had the Australian dollar weakened by 10%/strengthened by 10% (30 June 2019:
weakened by 10%/strengthened by 10%) against these foreign currencies with all other variables held constant, the
consolidated entity's profit after tax for the year would have been $91,982 higher/$91,982 lower (30 June 2019: $11,280
higher/$11,280 lower). The percentage change is the expected overall volatility of the significant currencies, based on
management's assessment of reasonable possible fluctuations.
Price risk
The consolidated entity is not exposed to any significant price risk.
Interest rate risk
The consolidated entity is not exposed to any interest rate risk.
51
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 23. Financial instruments (continued)
Credit risk
The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses to trade
receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are
considered representative across all customers of the consolidated entity based on recent sales experience, historical
collection rates and forward-looking information that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency credit information,
confirming references and setting appropriate credit limits.
The consolidated entity has no significant credit risk exposure and the maximum exposure at the reporting date to recognised
financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement
of financial position and notes to the financial statements. The consolidated entity does not hold any collateral.
Liquidity risk
Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and cash
equivalents) to be able to pay debts as and when they become due and payable.
The consolidated entity manages liquidity risk by maintaining adequate cash reserves by continuously monitoring actual and
forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing - fixed rate
Borrowing
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
815,993
130,243
7.80%
57,265
1,003,501
-
-
-
-
-
-
-
-
-
-
-
-
815,993
130,243
57,265
1,003,501
52
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 23. Financial instruments (continued)
Consolidated - 2019
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Contingent consideration
Interest-bearing - fixed rate
Borrowing
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
-
395,289
170,795
214,500
7.90%
54,348
834,932
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
395,289
170,795
214,500
54,348
834,932
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 24. Fair value measurement
Fair value hierarchy
The following tables detail the consolidated entity's assets and liabilities, measured or disclosed at fair value, using a three
level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly
Level 3: Unobservable inputs for the asset or liability
Consolidated - 2020
Liabilities
Contingent consideration
Total liabilities
Consolidated - 2019
Liabilities
Contingent consideration
Total liabilities
Level 1
$
Level 2
$
Level 3
$
Total
$
Level 1
$
-
-
-
-
-
-
-
-
-
-
Level 2
$
Level 3
$
Total
$
-
-
214,500
214,500
214,500
214,500
There were no transfers between levels during the financial year.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short-term nature.
The fair value of the contingent consideration is estimated using a discounted cash flow model and is based on the probability
of meeting all of the vesting conditions under the terms of the Kyckr (Ireland) Share Purchase Agreement.
Valuation techniques for fair value measurements categorised within level 2 and level 3
The fair value of the contingent consideration is estimated based on a probability of meeting all of the vesting conditions
relating to these shares under the terms of the Share Purchase Agreement.
53
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 24. Fair value measurement (continued)
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2018
Gains recognised in profit or loss
Unwinding of the discount*
Balance at 30 June 2019
Gains recognised in profit or loss
Balance at 30 June 2020
Contingent
consideration
$
2,080,000
(1,871,855)
6,355
214,500
(214,500)
-
*
Included as part of finance costs in the Statement of profit or loss and other comprehensive income
Note 25. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated entity
is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Note 26. Remuneration of auditors
Consolidated
2020
$
2019
$
1,072,531
22,483
-
232,710
799,543
29,934
2,792
350,928
1,327,724
1,183,197
During the financial year the following fees were paid or payable for services provided by Nexia Sydney Partnership, the
auditor of the company:
Audit services - Nexia Sydney Partnership
Audit or review of the financial statements
Note 27. Contingent liabilities
The consolidated entity has no contingent liabilities at 30 June 2020 and 30 June 2019.
Consolidated
2020
$
2019
$
39,700
35,000
54
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 28. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Consolidated
2020
$
2019
$
-
-
-
118,522
71,113
189,635
Operating lease commitments includes contracted amounts for properties under non-cancellable operating leases expiring
within 1 to 2 years with, in some cases, options to extend. The leases have various escalation clauses. On renewal, the
terms of the leases are renegotiated.
Operating lease commitments were disclosed under the requirements of AASB 117 'Leases'. AASB 117 was superseded by
AASB 16 'Leases' effective 1 July 2019. Operating leases commitments are no longer disclosed under AASB 16.
Note 29. Related party transactions
Parent entity
Kyckr Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 31.
Key management personnel
Disclosures relating to key management personnel are set out in note 25 and the remuneration report included in the
directors' report.
Transactions with related parties
There were no transactions with related parties during the current and previous financial year.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Note 30. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit/(loss) after income tax
Total comprehensive income
Parent
2020
$
2019
$
(10,345,314)
222,837
(10,345,314)
222,837
55
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 30. Parent entity information (continued)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Parent
2020
$
2019
$
17,918,848
8,505,132
19,717,375 20,294,257
355,166
458,784
355,166
465,863
31,702,245 21,798,633
2,469,808
(4,440,047)
2,445,325
(14,785,361)
19,362,209 19,828,394
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2020 and 30 June 2019.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2020 and 30 June 2019.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2020 and 30 June 2019.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2, except
for the following:
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
Note 31. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 2:
Name
Kyckr Ireland Limited
Kyckr UK Limited
Principal place of business /
Country of incorporation
Ireland
UK
Ownership interest
2019
2020
%
%
100.00%
100.00%
100.00%
100.00%
56
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 32. Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
(4,907,827)
(6,125,773)
Consolidated
2020
$
2019
$
Adjustments for:
Depreciation and amortisation
Impairment of goodwill
Net loss on disposal of property, plant and equipment
Share-based payments
Foreign exchange differences
Non-cash finance costs
Fair value gain on contingent consideration
Cancellation of lease
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in prepayments
Increase in trade and other payables
Increase/(decrease) in contract liabilities
Increase/(decrease) in employee benefits
Net cash used in operating activities
Note 33. Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2018
Net cash from financing activities
Balance at 30 June 2019
Net cash from/(used in) financing activities
Additions
Other changes
Balance at 30 June 2020
Note 34. Earnings per share
400,847
-
1,970
(24,483)
(3,048)
-
(214,500)
(54,142)
62,655
3,801,663
-
534,996
(8,505)
6,355
(1,871,855)
-
(186,428)
(60,478)
560,704
(105,090)
(28,513)
(52,116)
(50,351)
7,915
88,200
13,670
(4,620,988)
(3,593,146)
Interest
bearing
liability -
insurance
premium
funding
$
Lease
liabilities
$
Total
$
-
54,348
54,348
2,917
-
-
57,265
-
-
-
54,348
-
(72,308)
174,321
(102,013)
54,348
(69,391)
174,321
(102,013)
-
57,265
Consolidated
2020
$
2019
$
Loss after income tax attributable to the owners of Kyckr Limited
(4,907,827)
(6,125,773)
57
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 34. Earnings per share (continued)
Weighted average number of ordinary shares used in calculating basic earnings per share
222,544,764 149,859,806
Weighted average number of ordinary shares used in calculating diluted earnings per share 222,544,764 149,859,806
Number
Number
Basic earnings per share
Diluted earnings per share
Cents
Cents
(2.21)
(2.21)
(4.09)
(4.09)
For the purpose of calculating the diluted earnings per share, the calculation has excluded the number of options and
performance rights as the effect would be anti-dilutive.
58
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 35. Share-based payments
The following options and performance rights were issued during the years ended 30 June 2020, 30 June 2019 and 30 June
2018:
●
On 1 September 2016, 4,000,000 unlisted options were granted to brokers associated with the Initial Public Offering
('IPO') of the company. The exercise price of the options of $0.20 was equal to the IPO price. The contractual life of
each option is four years.
On 1 September 2016, 4,000,000 unlisted options were granted to key management personnel. The exercise price of
the options of $0.30 was 50% higher than the Initial Public Offering price. The options are exercisable upon meeting
certain revenue targets within four years from the date of grant. The contractual life of each option is four years.
On 1 September 2016, 20,000,000 performance rights were granted to certain directors and key management
personnel. The performance rights are exercisable at nil value. 50% of the performance rights automatically convert
upon the company achieving a turnover of $5 million or more as set out in the full year or half-yearly financial statements
released to the ASX; and 5% of the performance rights automatically convert upon the company achieving a turnover
of $10 million or more as set out in its yearly or half-yearly financial statements released to the ASX. The contractual
life of each performance right is four years.
On 30 November 2016, 2,000,000 unlisted options exercisable at $0.30 were granted to senior executives under the
Long Term Incentive Plan approved by shareholders at the Annual General Meeting held on 30 November 2016. The
exercise price of the options of $0.30 was 22.45% higher than market price of the shares on the date of grant. The
vesting of these options is conditional on continued employment until the vesting date, being two years from grant date.
The contractual life of each option is four years.
On 30 November 2016, 3,000,000 unlisted options exercisable at $0.30 were granted to non-executive directors as
approved by shareholders at the Annual General Meeting held on 30 November 2016. The exercise price of the options
of $0.30 was 22.45% higher than market price of the shares on the date of grant.
On 2 January 2018, 2,000,000 unlisted options exercisable at $0.30 were granted to senior executives under the Long
Term Incentive Plan approved by shareholders at the Annual General Meeting held on 30 November 2016. The exercise
price of the options of $0.30 was 42.86% higher than the market price of the shares on the date of grant. The vesting
of these options is conditional on continued employment until the vesting date, being 1 November 2019.
On 10 August 2018, 1,000,000 unlisted options were granted to Benny Higgins, a director of the company. The exercise
price of the options of $0.20 was 48% higher than the market price of the shares on the date of grant. The options
vested immediately and the contractual life of each option is four years.
On 10 August 2018, 1,000,000 unlisted options were granted to Benny Higgins, a director of the company. The exercise
price of the options of $0.26 was 93% higher than the market price of the shares on the date of grant. The options vest
on 1 March 2019 and the contractual life of each option is four years.
On 10 August 2018, 1,000,000 unlisted options were granted to other management personnel. The exercise price of
the options of $0.30 was 122% higher than the market price of the share at the date of the grant. The vesting of these
options is conditional on continued employment until the vesting date, being 18 months from grant date. The contractual
life of each option is four years.
On 17 November 2018, the Board waived the employment condition attaching to performance rights issued to Mr Albert
Wong who resigned as a director of the company. Vesting conditions relating to the turnover of the Company remain
with these rights and remain unvested as at 30 June 2020.
On 3 December 2018, 1,500,000 unlisted options were granted to other management personnel. The exercise price of
the options of $0.129 was 50% higher than the market price of the shares on the date of grant. The vesting of these
options is conditional on continued employment until the vesting date, being 3 years from grant date. The contractual
life of each option is four years.
On 1 January 2019, 3,000,000 unlisted options were granted to Ian Henderson, the Chief Executive Officer of the
company. The options are exercisable at $0.1005 expiring 1 January 2023 under the terms of the Long Term Incentive
Plan approved by shareholders at the Annual General Meeting held on 30 November 2016. The vesting of these options
is conditional on continued employment until the vesting date, being three year from grant date. The exercise price of
$0.1005 was 50% higher than the market price of the shares on the date of grant.
On 1 January 2019, 5,391,063 unlisted performance rights were granted to Ian Henderson in lieu of the first year’s cash
salary of £210,000. The performance rights have service-based vesting conditions only. The performance rights vested
on 1 January 2020 and were all converted into ordinary shares on 13 March 2020.
On 27 November 2019, 279,950 unlisted options were granted to Jacqueline Kilgour, a director of the company. The
exercise price of the options of $0.29 was 87% higher than the market price of the shares on the date of grant. The
options vest on 17 November 2020 and the contractual life of each option is four years.
On 27 November 2019, 279,950 unlisted options were granted to Karina Kwan, a director of the company. The exercise
price of the options of $0.29 was 87% higher than the market price of the shares on the date of grant. The options vest
on 17 November 2020 and the contractual life of each option is four years.
●
●
●
●
●
●
●
●
●
●
●
●
●
●
59
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 35. Share-based payments (continued)
●
On 1 January 2020, 3,000,000 unlisted options were granted to Ian Henderson, the Chief Executive Officer of the
company. The exercise price of the options of $0.165 was 43% higher than the market price of the shares on the date
of grant. The options vest on 1 January 2023 and the contractual life of each option is four years.
Set out below are summaries of options granted under the plan:
2020
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
01/01/2020
27/11/2019
01/01/2019
10/08/2018
10/08/2018
02/01/2018
30/11/2016
30/11/2016
01/09/2016
01/09/2016
01/01/2024
18/11/2023
01/01/2023
10/08/2022
10/08/2022
02/01/2022
30/11/2020
30/11/2020
01/09/2020
01/09/2020
$0.165
$0.290
$0.100
$0.200
$0.260
$0.300
$0.300
$0.300
$0.300
$0.200
-
-
3,000,000
1,000,000
1,000,000
2,000,000
2,722,222
2,000,000
4,000,000
4,000,000
19,722,222
3,000,000
559,900
-
-
-
-
-
-
-
-
3,559,900
-
-
-
-
-
-
-
-
-
-
-
3,000,000
-
559,900
-
3,000,000
-
1,000,000
-
1,000,000
-
2,000,000
-
2,722,222
-
2,000,000
-
4,000,000
-
-
4,000,000
- 23,282,122
Weighted average exercise price
$0.240
$0.185
$0.000
$0.000
$0.233
2019
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
01/01/2019
03/12/2018
10/08/2018
10/08/2018
10/08/2018
02/01/2018
30/11/2016
30/11/2016
01/09/2016
01/09/2016
01/01/2023
03/12/2022
10/08/2022
10/08/2022
10/08/2022
02/01/2022
30/11/2020
30/11/2020
01/09/2020
01/09/2020
$0.100
$0.130
$0.200
$0.260
$0.300
$0.300
$0.300
$0.300
$0.300
$0.200
-
-
-
-
-
2,000,000
2,722,222
2,000,000
4,000,000
4,000,000
14,722,222
3,000,000
1,500,000
1,000,000
1,000,000
1,000,000
-
-
-
-
-
7,500,000
-
-
-
-
-
-
-
-
-
-
-
-
(1,500,000)
-
-
(1,000,000)
-
-
-
-
-
3,000,000
-
1,000,000
1,000,000
-
2,000,000
2,722,222
2,000,000
4,000,000
4,000,000
(2,500,000) 19,722,222
Weighted average exercise price
$0.270
$0.170
$0.000
$0.000
$0.240
Set out below are the options exercisable at the end of the financial year:
Grant date
Expiry date
10/08/2018
02/01/2018
30/11/2016
30/11/2016
10/08/2022
02/01/2022
30/11/2020
01/09/2020
The weighted average share price during the financial year was $0.10.
2020
2019
Number
Number
2,000,000
2,000,000
4,722,222
8,000,000
2,000,000
-
2,722,222
8,000,000
16,722,222 12,722,222
60
Kyckr Limited
Notes to the financial statements
30 June 2020
Note 35. Share-based payments (continued)
The weighted average remaining contractual life of options outstanding at the end of the financial year was 1.31 years (2019:
2.08 years).
Set out below are summaries of performance rights granted under the plan:
2020
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
01/09/2016
01/01/2019
01/09/2020
01/04/2020
$0.000
$0.000
7,000,000
5,391,063
12,391,063
-
-
-
-
(5,391,063)
(5,391,063)
(3,000,000)
-
(3,000,000)
4,000,000
-
4,000,000
2019
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
01/09/2016
01/01/2019
01/09/2020
01/04/2020
$0.000
$0.000
7,000,000
-
7,000,000
-
5,391,063
5,391,063
-
-
-
7,000,000
-
-
5,391,063
- 12,391,063
No performance rights are exercisable at the end of the year.
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 0.17
years (2019: 0.99 years).
For the options granted during the current financial year, the valuation model inputs used to determine the fair value at the
grant date, are as follows:
Grant date
Expiry date
Share price Exercise
at grant date
price
Expected
volatility
Dividend
Risk-free
Fair value
yield
interest rate at grant date
18/11/2019
01/01/2020
18/11/2023
01/01/2024
$0.155
$0.115
$0.290
$0.165
176.76%
87.89%
-
-
0.75%
1.04%
$0.14
$0.06
Note 36. Events after the reporting period
On 9 July 2020, the company issued 41,323,473 ordinary shares at a price of $0.08 per share to institutional, sophisticated
and professional investors. The total proceeds from the issuance of these securities amounted to $3,305,878 (before
transaction costs).
The impact of the Coronavirus (COVID-19) pandemic is ongoing and it is not practicable to estimate the potential impact,
positive or negative, after the reporting date. The situation is rapidly developing and is dependent on measures imposed by
the Australian Government and other countries, such as maintaining social distancing requirements, quarantine, travel
restrictions and any economic stimulus that may be provided.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial
years.
61
Kyckr Limited
Directors' declaration
30 June 2020
In the directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give 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
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
27 August 2020
Sydney
62
Independent Auditor’s Report to the Members of Kyckr Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Kyckr 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, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, and notes to the financial statements,
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 its financial
performance for the year then ended; 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 & 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.
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.
Key audit matter
How our audit addressed the key audit matter
Recoverability of goodwill
Our procedures included, amongst others:
Refer to note 14
We evaluated management’s process for developing the cash
The carrying value of the Group’s
intangible assets included goodwill
of $8,448,416 arising from the
flow forecasts;
We tested the mathematical accuracy of the underlying ‘value-
in-use’ calculations;
We assessed and challenged the appropriateness of the inputs
into management’s calculations as follows:
63
Key audit matter
How our audit addressed the key audit matter
acquisition of Kyckr Ireland during
the 2017 financial year.
The assessment of recoverability
of the goodwill required a
significant degree of management
judgement given the short trading
history of the Group, the early
lifecycle stage, and the inherent
uncertainties in the key
assumptions used in the
assessment of future cash flows in
particular revenues, earnings
before interest and the discount
rate.
- Comparing and calculating revenue and expense cash flows
with historical performance and new business avenues
announced to the market;
- Comparing the forecasted cash flows estimated in prior
periods to financial performance during the current financial
year;
- Comparing growth rates with the performance of other IT
start-ups;
- Recalculating the discount rate using the most current risk
free rates, market alpha, beta and risk premium estimates;
We performed sensitivity calculations for changes to the key
inputs to management’s model;
We compared the net assets of the Group to the Group’s market
capitalisation, including consideration of the factors impacting
the share price and activities undertaken by the Group.
Other information
The directors are responsible for the other information. The other information comprises the information
in Kyckr Limited’s annual report for the year ended 30 June 2020, but does not include the financial report
and the auditor’s report thereon. Our opinion on the financial report does not cover the other information
and we do not express any form of assurance conclusion thereon. In connection with our audit of the
financial report, our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial report or our knowledge obtained in the
audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the other
information we are required to report that fact. We have nothing to report in this regard.
Directors’ responsibility 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 Group’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibility 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,
64
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 Australian
Auditing and Assurance Standards Board website at:
www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our auditor’s
report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 21 of the directors’ Report for the year
ended 30 June 2020.
In our opinion, the Remuneration Report of Kyckr 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.
Nexia Sydney Partnership
Lester Wills
Partner
Dated: 27 August 2020
Sydney
65
Kyckr Limited
Shareholder information
30 June 2020
The shareholder information set out below was applicable as at 26 August 2020.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Equity security holders
Number of
holders of
ordinary
shares
% of holders
of ordinary
shares
Number of
holders of
options and
rights over
ordinary
shares
45
334
515
1,180
313
-
0.34
1.22
12.75
85.69
2,387
100.00
-
-
-
-
18
18
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Mr Richard John White
CS Third Nominees Pty Limited (HSBC Cust Nom Au Ltd 13 A/C)
National Nominees Limited
HSBC Custody Nominees (Australia) Limited
Bell Potter Nominees Ltd (Bb Nominees A/C)
Mr Benjamin Cronin
Dixson Trust Pty Limited
Mr Robert Henry Leslie
Citicorp Nominees Pty Limited
Mr Ian Arthur Henderson
BNP Paribas Nominees Pty Ltd (IB Au Noms Retailclient Drp)
Mr David Cassidy (Cassidy Family A/C)
J P Morgan Nominees Australia Pty Limited
Coolpanda Pty Ltd (Coolpanda Family Super A/C)
Fusheng Investments Limited
Muhlbauer Investments Pty Ltd (Muhlbauer Family A/C)
Mr Giovanni Bernard Stagno
Yucaja Pty Ltd (The Yoegiar Family A/C)
Bnp Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd (Drp A/C)
Mr Peter Howells
Unquoted equity securities
Options over ordinary shares issued
Performance rights over ordinary shares
Ordinary shares
% of total
shares
issued
Number held
55,635,000
25,050,000
21,977,955
21,341,598
9,868,573
9,096,352
7,312,500
7,046,470
5,553,971
5,072,249
4,706,409
4,530,211
3,616,025
3,600,000
3,300,000
2,923,251
2,500,000
2,456,539
2,450,142
2,275,000
16.18
7.29
6.39
6.21
2.87
2.65
2.13
2.05
1.62
1.48
1.37
1.32
1.05
1.05
0.96
0.85
0.73
0.71
0.71
0.66
200,312,245
58.28
Number
on issue
Number
of holders
23,282,122
13,000,000
13
5
66
Kyckr Limited
Shareholder information
30 June 2020
The following persons hold 20% or more of unquoted equity securities:
Name
Mr Robert Leslie
Mr Benjamin Cronin
Mr Ian Henderson
Class
Performance Rights
Performance Rights
Options
Substantial holders
Substantial holders in the company are set out below:
Mr Richard John White
Regal Funds Management Pty Ltd
Voting rights
The voting rights attached to ordinary shares are set out below:
Number held
6,500,000
6,500,000
6,000,000
Ordinary shares
% of total
shares
issued
Number held
55,635,000
25,000,000
16.18
7.27
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
There are no other classes of equity securities.
67
Kyckr Limited
Shareholder information
30 June 2020
The following persons hold 20% or more of unquoted equity securities:
Name
Mr Robert Leslie
Mr Benjamin Cronin
Mr Ian Henderson
Class
Performance Rights
Performance Rights
Options
Substantial holders
Substantial holders in the company are set out below:
Mr Richard John White
Regal Funds Management Pty Ltd
Voting rights
The voting rights attached to ordinary shares are set out below:
Number held
6,500,000
6,500,000
6,000,000
Ordinary shares
% of total
shares
issued
Number held
55,635,000
25,000,000
16.18
7.27
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
There are no other classes of equity securities.
67