MySale Group Plc
Corporate directory
30 June 2014
Directors
David Mortimer AO - Independent Non-Executive Chairman
Jamie Jackson - Executive Director and Vice Chairman
Carl Jackson - Executive Director and Chief Executive Officer
Andrew Dingle - Executive Director and Chief Financial Officer
Adrian MacKenzie - Independent Non-Executive Director
Head office
5/111 Old Pittwater Rd, Brookvale, NSW 2100, Australia
Company secretary
Prism Cosec Limited, 10 Margaret Street, London, W1W 8RL
Registered office
Ogier House, The Esplanade, St. Helier, JE4 9WG, Jersey
Principal place of business
United Kingdom: 959 Fulham Rd, London SW6 6HY
Australia: 5/111 Old Pittwater Rd, Brookvale, NSW 2100
United States: 1107 S.Boyle Avenue, Los Angeles, CA 90023
Auditor
Solicitors
PricewaterhouseCoopers,1 Embankment Place, London WC2N 6RH
United Kingdom: Linklaters LLP, One Silk Street, London, EC2Y 8HQ
Australia: Clayton Utz, Level 15, 1 Bligh Street, Sydney, NSW 2000
Jersey: Ogier, Ogier House, The Esplanade, St Helier, Jersey, JE4 9WG
Website
www.mysalegroup.com
Nominated brokers
Macquarie Capital (Europe) Ltd, Level 7, 28 Ropemaker Street,
London, EC2Y 9HD
Zeus Capital Limited, 23 Berkeley Square, Mayfair, London, W1J 6HE
Company registrars
Computershare Investor Services (Jersey) Limited
Queensway House, Hilgrove Street, St Helier, Jersey JE1 1ES
Company number
115584
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MySale Group Plc
Contents
30 June 2014
Contents
Strategic report
Corporate governance
Directors' remuneration report
Directors' report
Directors' responsibility statement
Independent auditors' report to the members of MySale Group plc
Statement of profit or loss and other comprehensive income
Balance sheet
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Parent company balance sheet
Notes to the parent company financial statements
Notice of Annual General Meeting
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MySale Group Plc
Strategic report
30 June 2014
Business review
During the financial year ended 30 June 2014, an internal reorganisation took place in preparation of the admission
of the group on the Alternate Investment Market (’AIM’), a market regulated by London Stock Exchange Plc. This
resulted in a newly incorporated company, MySale Group Plc (previously known as MySale Group Limited
(‘MySale’ or the ‘company’), together with its subsidiaries, the ‘group’. becoming the legal parent of the group.
The commentary below is therefore based on the group’s performance for the entire financial year.
Total revenue for the year ended 30 June 2014 was A$224.4 million. This was in line with internal forecasts and
represents an increase of 23.3% on the prior year.
Highlights for the year:
The membership base has increased from 8.3 million to 12.5 million during the year with active members
(customers purchasing in the last 12 months) increasing from 696,281 to 826,654;
Active customer spend for the year has increased from A$261 in FY13 to A$280 in FY14;
New Buying offices were opened in New York, Florence and London and a new warehouse was opened in
Orlando, Florida;
Acquisition of Cocosa Lifestyle Limited completed May 2014;
22% pre-IPO investment by Shelton Capital Limited, which is ultimately owned by Lady Cristina Green (owner
of the Arcadia group); and
4.8% post-IPO investment by the Sports Direct Group.
Financial Review
Gross margin in our core ANZ market remains strong at 28.3%. Overall gross margin is also strong at 26.9%
particularly as the company is aggressively expanding the business into Asia. Gross margins remain robust for a
business of this nature reflecting its marketplace model and very low inventory risk. Revenue in Asia has increased
from A$11.7 million to A$22 million in 2014.
The business has continued to focus aggressively on international expansion outside the ANZ region leveraging
the sourcing and operational investment already made in the US and UK. With all the planned websites
successfully launched, the focus is on acquiring new members in those markets, identifying which markets are
performing ahead of the our forecast and scaling rapidly.
During 2014, the company significantly increased its international expansion plans, in particular, investing in buying
and management teams, opening new facilities and developing relationships with key suppliers, ahead of entering
into new markets. Operating costs are within our forecast range, we continue to be vigilant on managing expense
growth in the business.
A one-off non-recurring cost related to the AIM admission of A$9.8 million was booked to the profit or loss this
financial year. The results were also affected by a non-cash fair value adjustment loss for the preference shares of
A$51.2 million.
Investment in capital expenditure for the year was A$3.5 million, an increase of A$1 million in FY13. The company
has continued to expand its IT development teams internationally with the key focuses being on mobile platform,
data, digital marketing and the ERP system. Additional investment in the company’s warehouse and office facilities
has also occurred as part of the company’s global expansion program.
As at 30 June 2014, MySale had cash balances (including cash equivalents) of A$77.3 million.
Strategy
MySale is pursuing six growth strategies:
1. Continue to grow active membership base
The business has significantly increased its investment in acquiring new members through the use of Google
and Facebook marketing during the year. Additional focus in the region on above the line strategies in the first
half of FY15 will support the continued growth in the membership base.
2. Expansion into new geographies
Since the listing, the company has opened new MySale online sites in the UK, US, Korea and Hong Kong. In
addition, it has relaunched the Cocosa brand, which was acquired in May 2014, in the UK market. Plans are at
an advanced stage to launch this brand in the ANZ region.
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Strategic report
30 June 2014
3.
Implement initiatives to increase member activation, repeat purchase, average basket and retention
The company is currently working on initiatives to broaden its activation channels and has implemented a new
program focused on member reactivation. We expect to see the benefit of these initiatives in the first half of
FY15.
4. Broaden and deepen supplier base and online flash sales events
During the financial year, the group introduced a new travel category on the ANZ websites and also increased
the range of products sourced from the UK, US and other European markets. The company also launched
flash sale campaigns with the Arcadia group, including Burton Menswear, British Home Stores and TOPSHOP
and Sports Direct International. It has completed the integration of Sports Direct and is now powering Sports
Direct e-commerce business into the ANZ region.
5. Continue to invest in its mobile platform
The group continues to upgrade the functionality of its mobile platforms to improve the user experience. Recent
improvements include push notifications, Android applications and the launch of the new Windows App.
6. Pursue acquisitions and joint venture partner opportunities
Having recently completed the acquisition of Cocosa Lifestyle Ltd and acquiring a controlling stake in a Nordic
flash sale business, the group continues to review a number of opportunities.
Current trading and outlook
We remain committed to our strategy of working with our international brand partners providing them with a
marketplace solution to access the MySale membership base and dispose of excess inventory. The group’s global
membership footprint allows brands to take advantage of Northern and Southern hemisphere contra-seasons
opportunities. Strategically the Central hemisphere South East Asia region remains at the core of the long term
growth strategy. The business has continued to focus aggressively on international expansion outside the ANZ
region leveraging the sourcing and operational investment already made in the US and UK.
Our long term growth prospects are further underpinned by the 22% Pre-IPO investment by Shelton Capital Limited
and the 4.8% post-IPO investment by the Sports Direct Group. We are now in the process of leveraging the
commercial opportunities with flash sales campaigns launched with Arcadia brands including TOPSHOP. The
company is providing e-commerce support and other services to Sports Direct, to support the growth of the Sports
Direct brands in ANZ.
The group has executed its strategy in terms of opening new websites and now operates 14 websites in 10
countries, including the launch in the UK and US markets. The UK performance will be further underpinned by the
roll-out of the recently acquired Cocosa brand.
The group has also acquired a 60% share in the Danish flash sale website Invitetobuy which gives it a platform to
expand the MySale brand into the Nordic markets Denmark, Norway, Sweden and Finland.
Principal risks and uncertainties
The management of the business and the execution of the group’s growth strategies are subject to a number of
risks which could adversely affect the group’s future development. The following is not an exhaustive list or
explanation of all risks and uncertainties associated with the group, but those considered by management to be the
principal risks:
Membership base
The group needs to attract new ‘active’ members, in sufficient numbers, especially in markets where the group
already has a degree of market penetration, such as ANZ. In order to expand its membership base, the group is
appealing to members who have historically used other methods to purchase products, such as in-store, retailers’
own websites or the websites of the group’s competitors. The ‘flash sales’ model operated by the group needs to
continue to be successful. The group’s strategies require existing members to make repeat purchases of products
from the group. The group’s current ‘lapsed client strategy’ uses personalised emails, vouchers and prompting
emails to attempt to re-engage members to purchase product regularly. If these strategies fail, the group’s
membership base may be reduced which could have an adverse effect on the group’s results of operations,
financial condition and financial results.
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MySale Group Plc
Strategic report
30 June 2014
Cost efficiencies
The group targets a ‘cost per acquisition’ (‘CPA’) that is acceptable based on the expected member value and the
group’s likelihood of recovering the acquisition costs. Increasing the group’s membership base is necessary to
avoid the group incurring significantly higher marketing expenses and as a result, higher CPA, which could have an
adverse effect on the group’s results of operations, financial condition and financial results.
Strategies and expansion plans
The group’s strategies and expansion plans, particularly into new geographies, may result in unforeseen costs or
require significant management attention or resources. The group may not perform to expectations and, in the case
of new geographies, prove to be unsuccessful. In new markets, the group is required to develop banking and
merchant solutions, delivery solutions and expand its infrastructure of people and information systems and train
and manage its expanding employee base. In new jurisdictions, the group may compete with companies already
operating in the relevant market, and these companies may understand the local market better than the group.
Unsuccessful attempts at expansion into new jurisdictions could damage the group’s reputation, incur significant
unanticipated costs and as a result, adversely affect the group’s business, prospects, results of operations and
financial results.
Product inventory
The group requires a continuous source of inventory, from existing suppliers or new suppliers, at favourable prices,
on favourable terms, in a timely manner and/or in sufficient volume. A key driver for the group’s success is its ability
to source product from a wide variety of brands, styles, categories and product types at discounted prices. The
group does not have contractual assurances of continued supply, pricing or access to new products from existing
suppliers. However, the group maintains strong relationships with suppliers and provide them with an effective
mechanism to distribute their products. To maintain its reputation, the group depends on suppliers to provide high
quality, genuine, product merchandise that meets with members’ expectations. If the group is unable to continue to
source such products, member engagement and purchases would likely reduce while costs increase and as a
result, the group’s results of operations, financial condition and financial results could be adversely affected.
Growth in e-commerce and flash sales
The business of selling products over the internet, particularly on the flash sales model, is dynamic and relatively
new. The market segment for the flash sales model has grown significantly, and this growth may not be
sustainable. If members cease to find the flash sales model shopping experience fun, entertaining and good value,
or otherwise lose interest in shopping in this manner, the group’s member base and buying patterns may decline.
Global economy
The group’s performance is subject to global economic conditions. Deterioration in these conditions may reduce
consumer spending, particularly on discretionary items, which includes the group’s merchandise. Adverse
economic changes in any of the regions in which the group sells its products could reduce consumer confidence
and could negatively affect net sales and have an adverse effect on the group’s operating results.
Technology and emails
The group’s IT systems are integral to its operations. The technology supports the group’s websites and mobile
applications, logistics management, product information management, administration management systems,
security systems and a third-party data centre hosting facility. If the IT systems do not function properly there could
be system disruptions, corruptions in databases or other electronic information, delays in sales events, delays in
transaction processing, website slowdown or unavailability, loss of data or the inability to accept and fulfil member
orders which, if sustained or regular, could adversely affect the group’s business, results of operations, financial
condition and financial results.
The group’s business is highly dependent on engaging with members via daily emails and other messaging
services. These inform members of the day’s sales events, prompting them to visit the relevant website and
purchase products. The group relies on the successful delivery of emails or other messages to members and also
that members actually open and read the emails. Webmail prioritisation, ‘spam’ and blocking filters and local laws
on sending emails could affect the group’s business, prospects, results of operations and financial results.
Competition
Competitive pressures, changes in product and fashion and hence consumer demand are continuing risks which
could result in the loss of sales. The group manages this risk by the continuous sourcing of new products, adding
new sales categories and marketing to stimulate customer interest and by maintaining strong relationships with
customers.
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MySale Group Plc
Strategic report
30 June 2014
The group does not take delivery of products from supplier until after it has been ordered by members and
therefore delivery times may be longer than other competitors. If the group seeks to decrease delivery times in
order to tackle the competition and meet member demand, additional shipping costs are likely to be incurred.
These costs may not be able to be passed on in full or at all to members. Alternatively, the group may be required
to change its operations to carry additional inventory and face additional inventory risk.
Logistics and distribution networks
The group uses a third-party logistics provider to manage and process product sourced from China and to ship
product directly to members. There is a risk that the group may experience network interruptions (including third
parties’ delivery services) which may prevent the timely or proper delivery of products. These could damage the
group’s reputation, deter repeat customers, deter suppliers from dealing with the group and adversely affect its
business, results of operations and financial results.
Loss of people
The group’s senior executive team is instrumental in implementing the group’s business strategies and executing
business plans which support the business operations and growth. The buying teams have strong supplier
relationships which are central to the group’s ability to source discounted, quality products. Service agreements are
in place and the risk of the loss of key personnel is mitigated by regular reviews of remuneration packages
(including long term incentive schemes) and succession planning within the team.
Trademarks and brand reputation
Maintaining and enhancing the brand is critical to the group’s strategies going forward. If the group fails to meet
member (and supplier) expectations, negative publicity, unfavourable member reviews and complaints on social
media platforms could damage the brand and reduce consumer use of the group’s websites. If the group fails to
maintain the brand or if excessive expenses are incurred in this effort, the group’s business, results of operations,
financial condition and financial results may be materially and adversely affected. As with all brands, the group is
exposed to risk from unauthorised use of the group’s trademarks and other intellectual property. Any infringement
could lead to a loss in profits and have a negative impact on image and continued success. Trademarks are
registered and where any infringements are identified, appropriate legal action is taken.
Changes in indirect tax rules
Changes in local indirect tax, such as the Goods and Services Tax (‘GST’) in Australia, and duty treatment of any
of the markets in which the group operates could have an impact on the sales of imported brands in those markets.
Reducing the indirect tax threshold on imported goods could reduce the attractiveness of the group’s offers and
have a material and adverse effect on the group’s financial condition and financial results.
Cash
The management of cash is of fundamental importance. The increase in cash in the year reflects the additional
funds raised in the listing net of Joint Broker and Joint Bookrunner costs (£35.2 million) less funds used in the
business. At the reporting date the group had a cash balance of A$77.3 million (2013: A$15.1 million). As
mentioned above, the group was admitted to the AIM and this provided the group with sufficient working capital to
carry out its expansion plans. The group is on a firm financial footing and confident of its ability to continue as a
going concern.
Corporate social responsibilities
The group’s approach is to make a positive difference to the people, environment and communities in which it
works. Examples of our approach include engaging not for profit employment agencies, to motivate and upskill the
local unemployed community to sustain employment with MySale and investing in warehousing training programs
such as a Certificate 3 in Warehousing and Logistics for our Australian staff. To reduce waste and the impact on
our environment we do not put copies of customer invoices in our parcels, but rather provide them online.
People
Equal opportunity
The group is committed to an active equal opportunities policy. It is the group’s policy to promote an environment
free from discrimination, harassment and victimisation, where everyone will receive equal treatment regardless of
gender, colour, ethnic or national origin, disability, age, marital status, sexual orientation or religion. Employment
practices are applied which are fair, equitable and consistent with the skills and abilities of the employees and the
needs of the group.
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MySale Group Plc
Strategic report
30 June 2014
Disabled employees
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the
applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their
employment with the group continues and that appropriate training is arranged. It is the policy of the group that the
training, career development and promotion of disabled persons should, as far as possible, be identical with that of
other employees.
Employee consultation
The group places considerable value on the involvement of its employees and has a practice of keeping them
informed on matters affecting them as employees and on the various factors affecting the performance of the
group, which is achieved through formal and informal meetings. Employee representatives are consulted regularly
on a wide range of matters affecting their current and future interests.
We would like to thank the entire MySale team for their continued hard work during the financial year and welcome
our new shareholders.
By Order of the Board.
_____________________________
David Mortimer AO
Chairman
London
14 September 2014
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MySale Group Plc
Corporate governance
30 June 2014
As the company is admitted to AIM, a market regulated by London Stock Exchange Plc, group is not required to
comply with any particular corporate governance code. However, the directors recognise the value and importance
of high standards of corporate governance and acknowledge the importance of the principles set out in Quoted
Companies Alliance (‘QCA’) Corporate Governance Code for Small and Mid-sized Quoted Companies 2013 (the
‘QCA Code’). The Board will therefore apply the principles of the QCA Code where they consider it appropriate for
a company of MySale’s size and nature.
The Board of Directors
The company was incorporated on 28 April 2014 and was admitted to AIM on 16 June 2014. On admission, and as
at the date of approval of these financial statements, the Board consisted of five directors: three executive and two
non-executives. Both non-executive directors are considered independent under the criteria identified in the QCA
Code and together they bring considerable knowledge, skills and experience to the Board and its deliberations. The
members of the Board are:
David Mortimer AO
Jamie Jackson
Carl Jackson
Andrew Dingle
Adrian Mackenzie
Independent Non-Executive Chairman
Executive Director and Vice Chairman
Executive Director and Chief Executive Officer
Executive Director and Chief Financial Officer
Independent Non-Executive Director
Biographies for each of the directors are set out in the Directors’ report under ‘Directors and their interests’.
On admission, the Board adopted a schedule of matters reserved to its attention which include:
overall business strategy of the group;
review of key operational and commercial matters;
review of key financial matters, including changes to the group’s capital structure, borrowing facilities,
acquisitions, disposals and material capital expenditure;
membership of the Board and its standing Committees, including delegation of authority to the Audit and
Remuneration Committees;
approval of full year and half-year financial statements and any interim management statements or other
financial disclosures;
regulatory and shareholder communications; and
appointment and performance review of key advisors
The Board meets formally on a regular basis to consider strategy, performance and the framework of internal
controls. Prior to each meeting, all directors receive appropriate and timely information including briefing papers
which enable them to discharge their duties. Directors have access to the advice and services of the company
secretary and external legal and financial advisers who together provide guidance and confirmation that Board
procedures are followed and applicable rules and regulations are complied with. With the prior approval of the
chairman, directors are able to obtain independent professional advice in the furtherance of their duties, at the
company’s expense.
Details of the service contracts of the executive directors and the letters of appointment of the non-executive
directors are set out in the Directors’ remuneration report.
In order to facilitate the business of the group, the Board has established an Audit Committee and a Remuneration
Committee and has delegated certain of its responsibilities as appropriate and in line with the recommendations of
the QCA Code.
Audit Committee
The Audit Committee has the primary responsibility for monitoring the adequacy and effectiveness of the group’s
systems of internal financial control and risk management, ensuring that the financial performance of the company
is properly measured and reported on, reviewing and challenging reports from management and the external
auditor relating to the group’s accounting and internal controls and appraising the need for an internal audit
function, in all cases having due regard to the interests of shareholders. The full terms of reference of the Audit
Committee are available on the company’s website.
The members of the Audit Committee are:
David Mortimer AO
Adrian Mackenzie
Chair
Member
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MySale Group Plc
Corporate governance
30 June 2014
The Audit Committee did not meet during the period from admission, being 16 June 2014, to the end of the
financial year. The Audit Committee will meet at least three times a year and otherwise as required by the
company’s financial reporting and audit cycle. The Chief Financial Officer has a standing invitation to attend all
meetings of the Audit Committee. The remaining executive directors, other members of the senior management
team or the company’s advisers may be invited to attend all or part of any Audit Committee meeting where
appropriate and minutes of meetings will be circulated to all Board members unless it would be inappropriate to do
so.
Remuneration Committee
The Remuneration Committee is responsible for reviewing the performance of the executive directors and for
determining the terms and conditions of their employment, level of remuneration including short-term and long-term
incentives, having due regard to the interest of shareholders in all matters. The full terms of reference of the
Remuneration Committee are available on the company’s website.
Details on the structure of the company’s remuneration policy and the emoluments paid to the Board members
during the financial year are set out in the Directors’ remuneration report.
The members of the Remuneration Committee are:
Adrian Mackenzie
David Mortimer AO
Chair
Member
The Remuneration Committee did not meet during the period from admission, being 16 June 2014, to the end of
the financial year. The Remuneration Committee will meet at least twice a year and otherwise as required. The
executive directors, head of human relations or the company’s advisers may be invited to attend all or part of any
Remuneration Committee meeting where required and minutes of meetings will be circulated to all Board members
unless it would be inappropriate to do so.
Internal financial controls
The Board place considerable importance on maintaining full control and direction over appropriate strategic,
financial, organisational and compliance issues, and have put in place an organisational structure with formally
defined lines of responsibility and delegation of authority. There are established procedures for planning and capital
expenditure, for information and reporting systems and for monitoring the group’s business and its performance.
Adherence to specified procedures is required at all times and the Board actively promotes a culture of quality and
integrity. Since admission, compliance is monitored by the Audit Committee which, in turn, reports its findings to the
Board.
The Board, via delegated authority to the Audit Committee, is also responsible for the group’s system of internal
control and for reviewing its effectiveness. Such a system is designed to manage rather than eliminate the risk of
failure to achieve business objectives, and can only provide reasonable and not absolute assurance against
material misstatement or loss. The agreed processes include comprehensive budgeting systems with an annual
budget approved by the Board, monthly consideration of actual operational results compared with budgets,
forecasts and regular reviews by the Board of year end forecasts. The Board reports to shareholders half‑yearly.
The group’s control systems address key business and financial risks. Matters arising are reviewed on a regular
basis.
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MySale Group Plc
Directors' remuneration report
30 June 2014
As a company admitted to AIM, MySale is not required to prepare a Directors’ remuneration report. The following
narrative disclosures are prepared on a voluntary basis for the group and are not subject to audit, unless otherwise
specified.
Principles used to determine the nature and amount of remuneration
The objective of the group's remuneration framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns the remuneration for executive directors and key senior
management with the achievement of strategic objectives and the creation of value for shareholders. The Board of
Directors ('the Board') ensures that the remuneration for executive directors and key senior management satisfies
the following key criteria for good reward governance practices:
aligns executive compensation with company performance and shareholder return; and
is competitive and is acceptable to shareholders;
is transparent.
The Remuneration Committee, as detailed in the Corporate governance, is responsible for reviewing the
performance of the executive directors and senior employees of the group and for determining the terms and
conditions of their employment, level of remuneration including short-term and long-term incentives, having due
regard to the interest of shareholders in all matters.
The Remuneration Committee did not meet during the period from AIM admission, being 16 June 2014, to the end
of the financial year. The Remuneration Committee will meet at least twice a year and otherwise as required.
Remuneration of directors
The fees payable to the directors shall not exceed an aggregate amount of £1,500,000 per annum or such greater
amount as shall be determined by the company by ordinary resolution. This is distinct from any salary,
remuneration or other amount which may be payable to the directors.
The directors are entitled, under the Articles, to be paid all reasonable expenses as they may properly incur in
attending meetings of the directors or of any committee of the directors or shareholders meetings or otherwise in
connection with the discharge of their duties.
Executive directors’ remuneration
The group’s remuneration policy for executive directors considers a number of factors and is designed to:
have regard to the director’s experience and the nature and complexity of their work in order to pay a
competitive salary, in line with comparable companies, that attracts and retains directors of the highest quality;
reflect the director’s personal performance;
link individual remuneration packages to the group’s long term performance and continued success of the
group through the award of annual bonuses and share-based incentive schemes;
provide post‑retirement benefits through contributions to individual’s pension schemes; and
provide employment‑related benefits including the provision of a company car or cash alternative, life
assurance, insurance relating to the director’s duties, housing allowance, medical insurance and permanent
health insurance.
Directors’ service agreements, salaries, bonuses and other incentive schemes
Each executive director has a service contract with the group, dated 10 June 2014. The basic annual salaries and
key benefits are as follows:
Executive director
Base salary
Statutory
superannuation
Motor Vehicle
Allowance
Group entity with which the
contract is with
Jamie Jackson
Carl Jackson
Andrew Dingle
£150,000
A$275,000
A$275,000
-
A$26,125
A$26,125
£18,000 MySale Group Plc
A$30,000 Ozsale Pty Limited
- Ozsale Pty Limited
Executive directors’ salaries will be reviewed annually in line with the remuneration reviews for all other group
employees.
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MySale Group Plc
Directors' remuneration report
30 June 2014
Executive director’s employment contracts are continuous. They may be terminated by either party by 6 months’
written notice. The company may at its sole and absolute discretion terminate the employment of an executive
director by making a payment in lieu of any unexpired notice period equal to their basic salary. Executive directors
have agreed to confidentiality undertakings, without limitation as to time, and has agreed to non-compete, non-
solicitation of staff and non-interference in supply restrictive covenants that apply for a period of 12 months
following termination of employment with the group.
Executive directors are eligible to participate in a discretionary annual bonus scheme on the terms decided by the
Remuneration Committee and may also participate in any benefits arrangements the group has in place for
categories of employees of which he or she is a member, subject to and in accordance with the terms and/or rules
of those arrangements from time to time.
Non-executive directors’ remuneration
The remuneration of non-executive directors is a matter for the Chairman of the Board and the executive directors
and no director is involved in any decisions as to their own remuneration.
David Mortimer AO and Adrian Mackenzie were appointed as non-executive directors on 28 May 2014, and
entered into letters of appointment on 3 June 2014 and 11 June 2014, respectively. Each receives a fee for their
services which takes into account the role undertaken. They do not receive any pension or other benefits from the
group, nor do they participate in any of the share option or bonus schemes.
With effect from AIM admission, the annual fees for non-executive directors are as follows:
Non-executive director
Base Fee
Group entity with which the
contract is with
David Mortimer AO
Adrian MacKenzie
£100,000
£40,000
MySale Group Plc
MySale Group Plc
The appointment of any non-executive director is terminable on three months’ written notice.
The following information is subject to audit.
Directors’ remuneration for the year ended 30 June 2014 was as follows:
Non-executive
directors:
David Mortimer AO *
Adrian MacKenzie *
Executive directors:
Jamie Jackson **
Carl Jackson **
Andrew Dingle **
Basic salary/
Fees
Bonus
Taxable
Benefits
Pension
contributions
Total
2014
Total
2013
-
-
-
-
-
-
-
-
-
-
-
-
A$482,841
A$378,458
A$269,711
A$200,000
-
-
A$44,714
A$12,491
-
-
A$25,000
A$24,948
A$727,555
A$415,949
A$294,659
A$412,284
A$407,677
-
*
**
Remuneration from date of appointment as director
Remuneration for the entire year the group was in operation
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MySale Group Plc
Directors' remuneration report
30 June 2014
The company established two employee share plans prior to the AIM listing: (i) the Executive Incentive Plan (‘EIP’)
and (ii) the Loan Share Plan (‘LSP’).
(i) The Executive Incentive Plan
Andrew Dingle had a previous entitlement to a cash bonus of A$750,000 which became payable on AIM
admission. He agreed to defer the payment and take it in the form of a conditional award under the EIP. The award
converts the cash due to him into ordinary shares at the Placing Price of £2.26 with an A$75,000 enhancement.
Total ordinary shares are 201,115. The award will vest 12 months after AIM admission (16 June 2015) and is not
subject to any performance conditions but is subject to continued employment.
(ii) Loan Share Plan
The emoluments disclosed above do not include any amounts for the value of share awards granted to the
directors who have been selected to participate in the LSP. The LSP enables employees selected to participate to
buy or subscribe for ordinary shares using a loan from the company. The ordinary shares are bought on the market
or are subscribed at market value. The loan is then repayable and the ordinary shares may be sold to repay the
loan on vesting. The loan is interest-free and recourse is limited to the value of the ordinary shares bought with it.
50% of the ordinary shares will vest two years after and the balance three years after AIM admission however
vesting is subject to the Remuneration Committee being satisfied that the underlying performance of the group
justifies vesting. In determining this the Remuneration Committee will have regard to revenue and Earnings Before
Interest, Tax, Depreciation and Amortisation (‘EBITDA’) included in the company’s internal forecasts as at the date
of allocation.
Shares granted under the approved Loan Share scheme are as follows:
Balance 1
July 2013
Granted
Exercised
Balance
30 June
2014
Exercise
price
(£)
Date of
exercise
David Mortimer AO
Adrian MacKenzie
Jamie Jackson
Carl Jackson
Andrew Dingle
-
-
-
-
-
-
-
-
111,499
70,182
-
-
-
-
-
-
-
-
111,499
70,182
-
-
-
£2.26
£2.26
Market
price on
exercise
(£)
-
-
-
-
-
-
Share price information
The market price of MySale Group Plc ordinary shares at 30 June 2014 was £2.13 and the range during the period
from AIM admission, 16 June 2014 to 30 June 2014 was between £1.87 and £2.27.
12
MySale Group Plc
Directors' report
30 June 2014
The directors present their report, together with the financial statements and independent auditor’s report, on the
consolidated entity (referred to hereafter as the 'consolidated entity' or ‘group’) consisting of MySale Group Plc and
its subsidiaries at the end of, or during, the year ended 30 June 2014.
Directors
The directors who have served on the Board of MySale Group Plc during the period from incorporation (28 April
2014) and up to the date of this report are set out below:
David Mortimer AO (appointed on 28 May 2014)
Jamie Jackson (appointed on 28 May 2014)
Carl Jackson (appointed on 28 May 2014)
Andrew Dingle (appointed on 28 May 2014)
Adrian Mackenzie (appointed on 28 May 2014)
Stephen Osmont (appointed on 28 April 2014, resigned on 28 May 2014)
Frances Slattery (appointed on 28 April 2014, resigned on 28 May 2014)
Information on directors and their interests
Biographies for the directors in position as at 30 June 2014 and the date of this report, and their interests in the
ordinary shares of the company, are shown below.
69
David Mortimer AO
Independent Non-Executive Chairman
Name:
Title:
Age:
Experience and expertise: David was appointed to the Board in May 2014. He has over 40 years of corporate
finance and commercial experience predominantly whilst working in Australia and the
US. Amongst David’s broad experience, notable appointments include current
chairman of Crescent Capital Partners, and former appointments include CEO of TNT
Limited worldwide group, chairman of Australia Post, chairman of Leighton Holdings,
chairman of Sydney Airports and deputy chairman of Ansett Australia Holdings. David
was also appointed an Officer of the Order of Australia in 2005.
Name:
Title:
Age:
Experience and expertise:
Name:
Title:
Age:
Experience and expertise:
Jamie Jackson
Executive Director and Vice Chairman
48
Jamie founded MySale in 2007 having identified the gap in the Asia-Pacific region for
an online flash sales marketplace. Jamie has been involved in the fashion wholesale
business for more than 20 years, including senior roles with French Connection and
President Stone. Jamie also built up extensive experience in managing and operating
his own retail stores in the UK and Australia including liquidating leading brands’
excess stock to retailers including TK Maxx, Costco and Tesco. Building on this
experience, Jamie founded MySale and is currently focused on the group’s
international buying, product development and strategic partnerships.
Carl Jackson
Executive Director and Chief Executive Officer
50
Carl joined MySale in 2009 and has over 25 years of international operational, sales
and commercial management experience gained from a number of retail and
consumer venture capital investments including senior management retail experience
and 15 years in retail and consumer brand private equity. As part of MySale, Carl has
led the group’s expansion into New Zealand and South-East Asia to over 10 million
members and has ongoing responsibility for the group’s day-to-day operations and
new market expansion.
13
MySale Group Plc
Directors' report
30 June 2014
Name:
Title:
Age:
Experience and expertise:
Name:
Title:
Age:
Experience and expertise:
Andrew Dingle
Executive Director and Chief Financial Officer
44
Andrew joined MySale in 2013 having previously served as ANZ CFO for Henry
Schein, a US Fortune 500 company. Andrew started his career with Grant Thornton
initially in tax and business services before moving into insolvency and business
reconstruction where he focused on the retail and manufacturing sectors. A move to
the UK in 1997 enabled Andrew to work in a number of financial accounting roles
across various industries including financial services, entertainment and retail.
Andrew possesses strong financial, strategy and commercial management skills,
including distribution and inventory management experience in multi-warehousing
environments, and is focused on group finance, logistics and warehousing and
strategy. Andrew is a qualified CPA and also holds an MBA from the Australian
Graduate School of Management.
Adrian Mackenzie
Independent Non-Executive Director
43
Adrian was appointed to the Board in May 2014. He possesses significant
directorship experience across a broad range of industries (including IT and retail
industries), largely gained from his 17 years’ experience in private equity as
managing partner of CVC Capital Partners. Adrian’s directorships have included Nine
Entertainment, Carsales.com.au, Jetset Travelworld and Mantra Group, and he is
currently involved in investing in and developing a number of mature and growth
venture capital investments as managing director of 5V Capital.
Directors’ beneficial interests in the shares of the company:
Name
David Mortimer AO1
Jamie Jackson
Carl Jackson
Andrew Dingle
Adrian Mackenzie2
Ordinary
shares
Percentage
holding
165,000
47,469,189
-
-
665,882
0.11%
31.51%
-
-
0.44%
Details of share options or share awards granted to the executive directors are disclosed in the Directors’
remuneration report.
Information on company secretary
Name:
Title:
Experience and expertise:
Prism Cosec Limited
Company Secretary
Prism Cosec Limited is UK incorporated professional corporate company secretary,
providing corporate governance and company secretarial services to quoted and
unquoted companies.
Results and dividends
The results for the year are set out in the statement of profit or loss and other comprehensive income. No dividend
has been paid during the financial year and the directors do not recommend a final dividend in respect of the year
ended 30 June 2014.
In the process of finalising the financial statements for the financial year ended 30 June 2014, MySale identified an
error in the calculation of unearned revenue reported in the financial statements for the year ended 30 June 2013.
The error overstated the revenue and profit before tax by A$1,746,000. There was no impact on the profit or loss
and balance sheet for the current financial year. The comparatives in these financial statements have been
adjusted from the numbers reported in the AIM admission document. The error had no impact on the statement of
cash flows.
1 Held by David Mortimer and Barbara Mortimer as trustees for the Wallaroy Provident Fund
2 Held by Flocolo 1 Pty Limited as trustee for The Flocolo Family Trust
14
MySale Group Plc
Directors' report
30 June 2014
Going concern
The group’s business activities, together with the factors likely to affect its future development, performance and
financial position are given in the Business review and Directors’ report. In addition, the notes to the financial
statements include details on the group’s borrowing facilities and its objectives, policies and processes for
managing its capital; its financial risk management objectives; and its exposures to credit risk and liquidity risk.
The group has considerable financial resources together with a customer base split across different geographic
areas. The group’s forecasts and projections, taking into account reasonably possible changes in trading
performance, show that the group should be able to operate within the level of its current facility. As a
consequence, the directors believe that the group is well placed to manage its business risks successfully.
The directors have, at the time of approving the financial statements, a reasonable expectation that the company
and the group have adequate resources to continue in operational existence for the foreseeable future. Thus they
continue to adopt the going concern basis of accounting in preparing the Annual Report and financial statements.
Substantial shareholdings
At year end the company had been notified of the following interests of 3% or more of the share capital of the
company, other than those of the directors above:
Name
Shelton Capital Limited
FMR LLC
Insight Venture Partners VI3
Sports Direct International
Number of shares
held
Percentage
holding
33,237,124
9,180,000
7,871,137
7,251,065
22.06%
6.09%
5.22%
4.81%
Charitable and political donations
The group made charitable donations of A$112,827 (2013: A$15,570) during the financial year. The group made no
political donations.
Auditor
In the case of each of the persons who are directors of the company at the date when this report was approved:
so far as each of the directors is aware, there is no relevant audit information of which the company’s auditor is
unaware; and
each of the directors has taken all the steps that he ought to have taken as a director to make himself aware of
any relevant audit information and to establish that the company’s auditor is aware of that information.
PricewaterhouseCoopers were appointed auditors during the financial year and have expressed their willingness to
continue as auditor and a resolution to re-appoint them will be proposed at the forthcoming Annual General
Meeting.
By Order of the Board.
David Mortimer AO
Chairman
14 September 2014
3 Held by: (i) Insight Venture Partners VI, L.P. (5,735,901 ordinary shares); (ii) Insight Venture Partners (Cayman) VI, L.P. (1,801,915 ordinary
shares); and (iii) Insight Venture Partners VI (Co-Investors), L.P. (333,321 ordinary shares)
15
MySale Group Plc
Directors' responsibility statement
30 June 2014
The directors are responsible for preparing the financial statements of the group in accordance with applicable law
and International Financial Reporting Standards (‘IFRSs’) as adopted by the European Union and financial
statements of the parent company in accordance with applicable law and United Kingdom Accounting Standards.
The Companies (Jersey) Law 1991 requires the directors to prepare financial statements for each financial year
that they give a true and fair view of the state of affairs of the group and the parent company and of the profit or
loss of the group for that period.
select suitable accounting policies and then apply them consistently;
In preparing those financial statements, the directors are required to:
make judgements and accounting estimates that are reasonable and prudent;
state whether IFRSs as adopted by the European Union and applicable United Kingdom Accounting Standards
have been followed for the group and the parent company respectively, subject to any material departures
disclosed and explained in the group and parent company financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
group and the parent company will continue in business.
The directors confirm they have complied with all the above requirements in preparing the financial statements.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at
any time the financial position of the parent company and the group and enable them to ensure that the financial
statements comply with the Companies (Jersey) Law 1991. They have general responsibility for taking such steps
as are reasonable open to them to safeguard the assets of the parent company and the group and to prevent and
detect fraud and other irregularities.
So far as the directors are aware, there is no relevant audit information of which the parent company and group
auditors are unaware, and each director has taken all steps that he or she ought to have taken as a director in
order to make himself or herself aware of any relevant audit information and to establish that the parent company
and the group’s auditors are aware of that information.
The directors are responsible for the maintenance and integrity of the company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
The directors consider that the annual report and accounts, taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders to assess a company’s performance, business model and
strategy.
Each of the directors, whose names and functions are listed in the Directors’ report confirm that, to the best of their
knowledge:
the group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU,
give a true and fair view of the assets, liabilities, financial position and loss of the group;
the Directors’ report includes a fair review of the development and performance of the business and the
position of the group; and
the Strategic report contains a description of the principal risks and uncertainties that the group faces.
16
MySale Group Plc
Independent auditors' report to the members of MySale Group plc
30 June 2014
Report on the financial statements
Our opinion
In our opinion:
the financial statements, give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 30 June 2014 and of the group’s loss and cash flows for the year then ended;
the group financial statements have been properly prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union;
the parent company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
the financial statements have been properly prepared in accordance with the requirements of the
Companies (Jersey) Law 1991.
This opinion is to be read in the context of what we say below.
What we have audited
The group and parent company financial statements and (the “financial statements”), which are prepared by
MySale Group plc, comprise the:
Balance sheet as at 30 June 2014;
Parent company balance sheet as at 30 June 2014;
Statement of profit or loss and other comprehensive income for the year then ended;
Statement of cash flows for the year then ended;
Statement of changes in equity for the year then ended; and
Notes to the financial statements, which include a summary of significant accounting policies and other
explanatory information.
The financial reporting framework that has been applied in the preparation of the group financial statements
comprise applicable law and IFRSs as adopted by the European Union. The financial reporting framework that has
been applied in the preparation of the parent company financial statements is applicable law and United Kingdom
Accounting Standards.
In applying the financial reporting framework, the directors have made a number of subjective judgements, for
example in respect of significant accounting estimates. In making such estimates, they have made assumptions
and considered future events.
What an audit of financial statements involves
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) (“ISAs (UK &
Ireland)”). An audit involves obtaining evidence about the amounts and disclosures in the financial statements
sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether
caused by fraud or error.
This includes an assessment of:
whether the accounting policies are appropriate to the group’s and the parent company’s circumstances and
have been consistently applied and adequately disclosed;
the reasonableness of significant accounting estimates made by the directors; and
the overall presentation of the financial statements.
In addition, we read all the financial and non-financial information in the Annual Report and Financial Statements
and the company financial statement to identify material inconsistencies with the audited financial statements and
to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the
knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for our report.
17
MySale Group Plc
Independent auditors' report to the members of MySale Group plc
30 June 2014
Opinion on other matter prescribed by the Companies (Jersey) Law 1991
In our opinion the information given in the Strategic report, Corporate governance, Directors’ remuneration report
and Directors’ report for the financial year for which the financial statements are prepared is consistent with the
financial statements.
Other matters on which we are required to report by exception
Adequacy of accounting records and information and explanations received
Under the Companies (Jersey) Law 1991 we are required to report to you if, in our opinion:
we have not received all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Responsibilities for the financial statements and the audit
Our responsibilities and those of the directors
As explained more fully in the Directors’ responsibility statement set out on page 16, the directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law
and ISAs (UK & Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical
Standards for Auditors.
This report, including the opinions, has been prepared for and only for the company’s members as a body in
accordance with Article 113A of the Companies (Jersey) Law 1991 and for no other purpose. We do not, in giving
these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Christopher Burns (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
14 September 2014
18
MySale Group Plc
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2014
Revenue
Sale of goods
Postage revenue
Cost of sale of goods
Gross profit
Other operating gains/(loss), net
Expenses
Selling and distribution expenses
Administration expenses
Listing costs
Preference shares fair value loss
Contingent consideration fair value gain
Share of loss of joint venture accounted for using the equity method
Finance income, net
Note
2014
A$'000
2013
A$'000
4
4
5
199,624
24,738
224,362
(163,942)
161,590
20,286
181,876
(126,982)
60,420
54,894
535
840
(36,497)
(26,034)
(9,818)
(51,263)
304
-
209
(30,632)
(19,253)
-
(350)
573
(273)
1
41
6
Profit/(loss) before income tax (expense)/benefit
(62,144)
5,800
Income tax (expense)/benefit
8
3,602
(1,350)
Profit/(loss) after income tax expense for the year attributable to the
owners of MySale Group Plc
30
(58,542)
4,450
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Net change in the fair value of cash flow hedges taken to equity, net of tax
Foreign currency translation
29
29
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners of
MySale Group Plc
(719)
612
(107)
-
(726)
(726)
(58,649)
3,724
Cents
Cents
Basic earnings per share
Diluted earnings per share
42
42
(58.28)
(58.28)
4.63
3.06
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
19
MySale Group Plc
Balance sheet
As at 30 June 2014
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments
Income tax refund due
Other
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Deferred tax
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Derivative financial instruments
Income tax payable
Provisions
Deferred revenue
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Redeemable preference shares
Total non-current liabilities
Total liabilities
Net assets/(liabilities)
Equity
Share capital
Share premium account
Other reserves
Accumulated losses
Total equity/(deficiency)
Note
2014
A$'000
2013
A$'000
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
77,344
3,817
12,803
-
1,962
16,044
111,970
3,219
22,439
5,396
31,054
15,072
3,297
8,392
40
-
7,430
34,231
2,679
19,407
1,822
23,908
143,024
58,139
30,118
1,613
705
295
4,883
15,616
53,230
262
2,966
-
3,228
16,007
1,370
-
3
1,407
11,498
30,285
393
713
42,680
43,786
56,458
74,071
86,566
(15,932)
27
28
29
30
-
306,363
(133,595)
(86,202)
12,460
-
(732)
(27,660)
86,566
(15,932)
The financial statements of MySale Group Plc (company number 115584) were approved by the Board of
Directors and authorised for issue on 14 September 2014. They were signed on its behalf by:
__________________________ ___________________________
David Mortimer AO Jamie Jackson
Director Director
The above balance sheet should be read in conjunction with the accompanying notes
20
MySale Group Plc
Statement of changes in equity
For the year ended 30 June 2014
Share
capital
A$'000
Share
premium
account
A$'000
Other
reserves
A$'000
Accumulated
losses
A$'000
Total
deficiency
A$'000
Balance at 1 July 2012
12,381
Profit after income tax
(expense)/benefit 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:
Business combination – contingent
consideration with shares to be issued
Balance at 30 June 2013
-
-
-
79
12,460
-
-
-
-
-
-
(6)
(32,110)
(19,735)
-
4,450
4,450
(726)
-
(726)
(726)
4,450
3,724
-
-
79
(732)
(27,660)
(15,932)
Share
capital
A$'000
Share
premium
account
A$'000
Other
reserves
A$'000
Accumulated
losses
A$'000
Total
equity
A$'000
Balance at 1 July 2013
12,460
-
(732)
(27,660)
(15,932)
-
-
-
-
(58,542)
(58,542)
(107)
-
(107)
(107)
(58,542)
(58,649)
Loss after income tax (expense)/benefit
for the year
Other comprehensive income for the
year, net of tax
Total comprehensive income for the
year
Transactions with owners in their
capacity as owners:
Contributions of equity, net of
transaction costs (note 27)
Capital reorganisation (notes 27 and
28)
-
-
-
-
67,204
-
(12,460)
239,159
(132,756)
-
-
67,204
93,943
Balance at 30 June 2014
-
306,363
(133,595)
(86,202)
86,566
The above statement of changes in equity should be read in conjunction with the accompanying notes
21
MySale Group Plc
Statement of cash flows
For the year ended 30 June 2014
Cash flows from operating activities
Profit/(loss) before income tax expense for the year
Adjustments for:
Depreciation and amortisation
Net loss on disposal of property, plant and equipment
Share of loss in joint ventures
Fair value loss on redeemable preference shares
Fair value loss/(gain) on contingent consideration
Loss on revaluation of long-term incentive plan
Gain on business combination - bargain purchase
Interest income
Interest expense
Change in operating assets and liabilities:
Increase in trade and other receivables
Decrease/(increase) in inventories
Increase in other operating assets
Increase in trade and other payables
Increase/(decrease) in other provisions
Increase in deferred revenue
Interest received
Interest and other finance costs paid
Income taxes paid
2014
A$'000
2013
A$'000
(62,144)
5,800
1,865
182
-
51,263
(304)
4,888
(932)
(337)
128
1,137
24
273
350
(572)
5
-
(182)
181
(5,391)
7,016
(517)
(4,335)
(8,575)
14,046
841
4,118
187
337
(128)
(2,046)
(2,295)
4,467
(2,511)
3,122
(304)
2,252
11,747
182
(181)
(1,027)
Net cash from/(used in) operating activities
(1,650)
10,721
Cash flows from investing activities
Payment for purchase of business, net of cash acquired
Payments for property, plant and equipment
Payments for intangibles
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from borrowings
Repayment of borrowings
Payments for security deposits
Proceeds from return of security deposits
Share issue transaction costs
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash
39
15
16
27
27
487
(1,789)
(1,813)
-
(1,177)
(1,330)
(3,115)
(2,507)
72,267
317
(532)
-
-
(5,063)
-
1,073
(220)
(688)
38
-
66,989
203
62,224
15,072
48
8,417
6,614
41
Cash and cash equivalents at the end of the financial year
9
77,344
15,072
The above statement of cash flows should be read in conjunction with the accompanying notes
22
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 1. General information
MySale Group Plc is a group consisting of MySale Group Plc (the 'company' or 'parent entity') and its subsidiaries
(the 'group'). The financial statements, in line with the location of the majority of the group's operations and
customers, are presented in Australian dollars and generally rounded to the nearest thousand.
The principal business of the group is the operating of online shopping outlets for consumer goods like ladies, men
and children’s fashion clothing, accessories, beauty and homeware items.
On 27 May 2014 the company acquired 100% of the ordinary shares of APAC Sale Group Pte. Ltd. from the
existing shareholders and became the immediate and ultimate parent, as well as a controlling party of APAC Sale
Group Pte. Ltd and its subsidiaries.
MySale Group Plc is a public limited company incorporated and registered in Jersey on 28 April 2014 under the
Companies Law. The Company is domiciled in Australia.
The registered office of the company is Ogier House, The Esplanade, St Helier, Jersey JE4 9WG and principal
place of business is at Unit 5, 111 Old Pittwater Road, Brookvale, NSW 2100, Australia.
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.
Basis of preparation
In May 2014, MySale Group Plc (the ‘company’), previously known as MySale Group Limited) acquired 100% of the
ordinary shares of APAC Sale Group Pte. Ltd. (‘APAC’) from the existing shareholders and became an immediate
and ultimate parent, as well as a controlling party of APAC Sale Group Pte. Ltd and its subsidiaries (‘APAC Group’)
in preparation for admission of the company to the Alternative Investment Market (‘AIM’) operated by the London
Stock Exchange. The company determined that this internal restructuring represented a common control
transaction rather than a business combination. The appropriate accounting treatment for recognising the new
group structure is on the basis that the transaction is a form of capital reconstruction and group reorganisation.
Therefore, these financial statements have been prepared using the principles of a reverse acquisition by APAC
and the consolidated financial statements have been prepared as a continuation of the financial statements of the
existing APAC Group. Refer to 'business combination’ accounting policy below for further information
For presentation purposes, the comparative figures presented in these consolidated financial statements represent
those of APAC Group for the financial year ended 30 June 2013 as disclosed in the AIM Admission document
except for a A$1,746,000 non-cash adjustment relating to the calculation of deferred revenue where cash was
received prior to 30 June 2013 and the delivery of these goods occurred after this date. The impact for the year
ended 30 June 2013 is a reduction in group revenue and profit before tax of A$1,746,000, a decrease in the tax
charge of A$524,000, an increase in deferred revenue of A$1,746,000 and a decrease in basic and diluted EPS of
1.27 cents and 0.88 cents respectively. The figures for the current financial year are APAC for the entire year and
MySale from the date MySale legally acquired APAC.
These financial statements are prepared in accordance with International Finance Reporting Standards ('IFRS' or
'IFRSs') as adopted for use in the European Union (the 'EU' and IFRS Interpretations Committee interpretations
(together 'EUIFRS').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for derivative financial
instruments, contingent consideration and redeemable preference shares at fair value.
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 group's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to
the financial statements, are disclosed in note 3.
23
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 2. Significant accounting policies (continued)
New, revised or amending Accounting Standards and Interpretations adopted
The group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
International Accounting Standards Board that are mandatory for the current reporting period.
Any significant impact on the accounting policies of the group from the adoption of these Accounting Standards and
Interpretations are disclosed below. The adoption of these Accounting Standards and Interpretations did not have
any significant impact on the financial performance or position of the group.
The following Accounting Standards are most relevant to the group:
IFRS 10 Consolidated Financial Statements
The group has applied IFRS 10 from 1 July 2013, which has a new definition of 'control'. Control exists when the
reporting entity is exposed, or has the rights, to variable returns (e.g. dividends, remuneration, returns that are not
available to other interest holders including losses) from its involvement with another entity and has the ability to
affect those returns through its 'power' over that other entity. A reporting entity has power when it has rights (e.g.
voting rights, potential voting rights, rights to appoint key management, decision making rights, kick out rights) that
give it the current ability to direct the
activities that significantly affect the investee's returns (e.g. operating policies, capital decisions, appointment of key
management). The group not only has to consider its holdings and rights but also the holdings and rights of other
shareholders in order to determine whether it has the necessary power for consolidation purposes.
IFRS 13 Fair Value Measurement
The group has applied IFRS 13 and its consequential amendments from 1 July 2013. The standard does not
prescribe when to use fair value. Instead it provides a single robust measurement framework, with clear
measurement objectives, for measuring fair value using the 'exit price' and it provides guidance on measuring fair
value when a market becomes less active. The 'highest and best use' approach would be used to measure assets
whereas liabilities would be based on transfer value.
IAS 19 Employee Benefits (September 2011)
The group has applied IAS 19 and its consequential amendments from 1 July 2013. The standard has changed the
definition of short-term employee benefits, from 'due to' to 'expected to' be settled within 12 months. Annual leave
that is not expected to be wholly settled within 12 months is now discounted allowing for expected salary levels in
the future period when the leave is expected to be taken.
Amendments to International Accounting Standards - Disclosures - Offsetting Financial Assets and Financial
Liabilities
The group has applied the amendments from 1 July 2013, which enhanced the disclosure requirements of IFRS 7
'Financial
Instruments:
Presentation') to provide information about netting arrangements, including rights of set-off related to an entity's
financial instruments and the effects of such rights on its balance sheet.
Instruments: Disclosures' (and consequential amendments
'Financial
IAS 32
to
Amendments to International Accounting Standards - Transition Guidance and Other Amendments
The group has applied the amendments from 1 July 2013, which amends IFRS 10 and related standards for the
transition guidance relevant to the initial application of those standards. The amendments clarify the circumstances
in which adjustments to an entity's previous accounting for its involvement with other entities are required and the
timing of such adjustments.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of MySale Group Plc
as at 30 June 2014 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the group has control. The group controls an entity when the group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the group. They are de-consolidated from the date that control ceases.
24
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 2. Significant accounting policies (continued)
Intercompany transactions, balances and unrealised gains on transactions between entities in the group are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the group.
The acquisition of common control subsidiaries is accounted for using the pooling of interest method of accounting.
The acquisition of other 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 group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
group recognises the fair value of the consideration received and the fair value of any investment retained together
with any gain or loss in profit or loss.
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
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars 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 rate at the date of the transaction, 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
Revenue is measured at the fair value of the consideration received, and represents amounts receivable for goods
supplied, stated net of trade discounts, returns and value of gift vouchers used. Revenue is recognised when the
amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the
entity; and when specific criteria have been met for each of the group’s activities, as described below. The group
bases its estimate of return on historical results and provisions are made for goods expected to be returned.
Sale of goods
The group operates an online retail business selling men's, ladies and children's apparel, accessories, beauty and
homeware items. Revenue from sale of goods is recognised when the significant risks and rewards of ownership of
the goods have passed to the buyer and can be measured reliably. Risks and rewards are considered passed to
the buyer when the goods have been delivered to the customer and it is reasonably assured the customer has
accepted the goods. Net sales represent product shipped less actual and estimated future returns, and slotting
fees, rebates and other trade discounts accounted for as reductions of revenue. Online sales are usually by credit
card or online payment.
It is the group's policy to sell its products to the customer with a right of return within 14 days. Accumulated
experience is used to estimate and provide for such returns at the time of sale.
25
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 2. Significant accounting policies (continued)
Postage revenue
Postage revenue is recognised when the associated goods have been successfully delivered to the customer.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
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 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 apply 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 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 balance sheet based on current and non-current classification.
An asset is current when: it is expected to be realised or intended to be sold or consumed in normal operating
cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting
period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for
at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily for the purpose of
trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer
the settlement of the liability for at least twelve 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 provision for impairment.
26
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 2. Significant accounting policies (continued)
Other receivables are recognised at amortised cost, less any provision for impairment.
Inventories
Goods for resale are stated at the lower of cost and net realisable value on a 'weighted average cost' basis. Cost
comprises purchase, delivery and direct labour costs, net of rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs
necessary to make the sale.
A provision is made to write down any slow-moving or obsolete inventory to net realisable value, based on
management assessment of the expected future sales of that inventory, the condition of the inventory and the
seasonality of the inventory.
Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured to their fair value at each reporting date. The accounting for subsequent changes in fair
value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item
being hedged.
Derivatives are classified as current or non-current depending on the expected period of realisation.
Cash flow hedges
Cash flow hedges are used to cover the group's exposure to variability in cash flows that is attributable to particular
risk associated with a recognised asset or liability or a firm commitment which could affect profit or loss. The
effective portion of the gain or loss on the hedging instrument is recognised directly in equity, whilst the ineffective
portion is recognised in profit or loss. Amounts taken to equity are transferred out of equity and included in the
measurement of the hedged transaction when the forecast transaction occurs.
Cash flow hedges are tested for effectiveness on a regular basis both retrospectively and prospectively to ensure
that each hedge is highly effective and continues to be designated as a cash flow hedge. If the forecast transaction
is no longer expected to occur, amounts recognised in equity are transferred to profit or loss.
If the hedging instrument is sold, terminated, expires, exercised without replacement or rollover, or if the hedge
becomes ineffective and is no longer a designated hedge, amounts previously recognised in equity remain in equity
until the forecast transaction occurs.
Joint ventures
A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is
subject to joint control. Investments in joint ventures are accounted for using the equity method. Under the equity
method, the share of the profits or losses of the joint venture is recognised in profit or loss and the share of the
movements in equity is recognised in other comprehensive income. In the consolidated financial information
income/(losses) earned from joint venture entities increase/(reduce) the carrying amount of the investment. When
the group’s share of losses in a joint venture equals to or exceeds its interest in the joint venture, including any
other unsecured non-current receivables, the group does not recognise further losses, unless it has obligations to
make or has made payments on behalf of the joint venture.
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.
Subsequent expenditure relating to plant and equipment that has already been recognised is added to the carrying
amount of the asset only when it is probable that future economic benefits associated with the item will flow to the
group and the cost of the item can be measured reliably. All other repair and maintenance expenses are recognised
in profit or loss when incurred.
27
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 2. Significant accounting policies (continued)
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and
equipment over their expected useful lives as follows:
Leasehold improvements
Plant and equipment
Fixtures and fittings
Motor vehicles
5-7 years
3-7 years
5-10 years
4-5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date.
Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period of the
lease or the estimated useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic
benefit to the group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or
loss.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement
and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific
asset or assets and the arrangement conveys a right to use the asset.
A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially
all the risks and benefits incidental to ownership of leased assets, and operating leases, under which the lessor
effectively retains substantially all such risks and benefits.
Finance leases are capitalised. A lease asset and liability are established at the fair value of the leased assets, or if
lower, the present value of minimum lease payments. Lease payments are allocated between the principal
component of the lease liability and the finance costs, so as to achieve a constant rate of interest on the remaining
balance of the liability.
Leased assets acquired under a finance lease are depreciated over the asset's useful life or over the shorter of the
asset's useful life and the lease term if there is no reasonable certainty that the group will obtain ownership at the
end of the lease term.
Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-
line basis over the term of the lease.
Intangible assets
Externally acquired intangible assets 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. Goodwill is not amortised. Instead, goodwill is tested annually for
impairment, or more frequently if events or changes in circumstances indicate that it might be impaired, and is
carried at cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and
are not subsequently reversed.
Customer relationships
Customer relationships acquired in a business combination are amortised on a straight-line basis over the period of
their expected benefit, being their finite useful life of three years.
28
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 2. Significant accounting policies (continued)
ERP system and software
Acquired enterprise resource planning ('ERP') systems and software costs are initially capitalised at cost which
includes the purchase price, net of any discounts and rebates, and other directly attributable cost of preparing the
asset for its intended use. Direct expenditure including employee costs, which enhances or extends the
performance of these systems beyond its specifications and which can be reliably measured, is added to the
original costs incurred. These costs are amortised on a straight-line basis over the period of their expected benefit,
being their finite useful lives of between three and five years.
Costs associated with maintenance are recognised as an expense when incurred.
Impairment of non-financial assets
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 group prior to the end of the financial
year and which are unpaid. Trade and other payables are initially recognised at fair value and subsequently
measured at amortised cost. Due to their short-term nature they are not discounted. The amounts are unsecured
and are usually paid within 30 days of recognition.
Redeemable preference shares
Preference shares, which are mandatorily redeemable on a specific date, at the option of the holder are classified
as liabilities. The dividends on these preference shares are recognised as finance costs, in profit or loss, when
declared. Redeemable preference shares are measured at fair value through profit or loss.
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.
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, including:
● interest on short-term and long-term borrowings
● interest on finance leases
Provisions
Provisions are recognised when the group has a present (legal or constructive) obligation as a result of a past
event, it is probable the group will be required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to
settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the
obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate specific to
the liability. The increase in the provision resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to
be settled within 12 months of the reporting date are measured at the amounts expected to be paid when the
liabilities are settled.
29
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 2. Significant accounting policies (continued)
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 is measured as the present value of expected future payments to be made in respect of services provided by
employees up to the reporting date using the projected unit credit method. 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 national government bonds with terms to maturity and
currency that match, as closely as possible, the estimated future cash outflows.
Long term employee incentive plan
The group operates an employee incentive plan to reward and retain key employees. The group recognises a
provision where contractually obliged or where there is a past practice that has created a constructive obligation.
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. Cash-settled transactions are awards of cash for the exchange of services,
where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently
determined using either the Binomial or 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 group 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.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying
either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on
which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as
follows:
● during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the
expired portion of the vesting period.
● from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the
reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash
paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all
other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been
made. An additional expense is recognised, over the remaining vesting period, for any modification that increases
the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the group or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the group or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period,
unless the award is forfeited.
30
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 2. Significant accounting policies (continued)
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.
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 interest. 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 each reporting date
and transfers between levels are determined based on a reassessment of the lowest level 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.
Share 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
Except for the continuation accounting described in the 'basis of preparation' and further in the 'group
reorganisation' below, the acquisition method of accounting is used to account for all other 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 group assesses the financial assets acquired and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic conditions, the
group's operating or accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the group 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 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.
31
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 2. Significant accounting policies (continued)
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.
Group reorganisation – MySale Group Plc ('MySale') and APAC Sale Group Pte. Ltd. ('APAC')
When MySale (the legal parent and legal acquirer) acquired APAC and its subsidiaries (the legal subsidiary), the
acquisition did not meet the definition of a business combination in accordance with IFRS 3 'Business
Combinations'. Instead, the combination has been treated as a group reorganisation, though an accounting policy
choice using the common control method, as follows:
• The assets and liabilities of the combining entities are reflected at their carrying amounts. No adjustments have
been made to reflect fair values, or recognise any new assets or liabilities, that would otherwise be required under
IFRS 3;
• The retained earnings and other equity balances recognised are the existing retained earnings and other equity
balances of APAC;
• The amount recognised as issued equity instruments are determined by adding the additional equity retained by
the group to the issued equity recorded in APAC’s financial statements immediately before the acquisition;
• No 'new' goodwill has been recognised as a result of the combination. The only goodwill that has been recognised
is the existing goodwill of APAC. The difference between the consideration paid and the equity 'acquired' is
reflected in equity as a 'capital contribution'; and
• The financial statements reflect the results of the combining entities as if they had always been in existence.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of MySale Group Plc,
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.
Value Added Tax ('VAT'), Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated VAT/GST, unless the VAT/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 VAT/GST receivable or payable. The net amount of
VAT/GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the
balance sheet.
Cash flows are presented on a gross basis. The VAT/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.
32
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 2. Significant accounting policies (continued)
Commitments and contingencies are disclosed net of the amount of VAT/GST recoverable from, or payable to, the
tax authority.
Rounding of amounts
Amounts in this report have been rounded off to the nearest thousand dollars, or in certain cases, the nearest
dollar.
New Accounting Standards and Interpretations not yet mandatory or early adopted
International Financial Reporting Standards ('IFRS') and Interpretations that have recently been issued or amended
but are not yet mandatory, have not been early adopted by the group for the annual reporting period ended 30 June
2014. The group's assessment of the impact of these new or amended Accounting Standards and Interpretations,
most relevant to the group, are set out below.
IFRS 9 Financial Instruments
This standard and its consequential amendments are likely to be applicable to annual reporting periods beginning
on or after 1 January 2018 and completes phase I of the IASB's project to replace IAS 39 'Financial Instruments:
Recognition and Measurement'. This standard introduces new classification and measurement models for financial
assets, using a single approach to determine whether a financial asset is measured at amortised cost or fair value.
The accounting for financial liabilities continues to be classified and measured in accordance with IAS 39, with one
exception, being that the portion of a change of fair value relating to the entity’s own credit risk is to be presented in
other comprehensive income unless it would create an accounting mismatch. The group will adopt this standard
from 1 July 2018 but the impact of its adoption is yet to be assessed.
Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)
The amendments are applicable to annual reporting periods beginning on or after 1 January 2014. The
amendments add application guidance to address inconsistencies in the application of the offsetting criteria in IAS
32 'Financial Instruments: Presentation', by clarifying the meaning of "currently has a legally enforceable right of
set-off"; and clarifies that some gross settlement systems may be considered to be equivalent to net settlement.
The adoption of the amendments from 1 July 2014 will not have a material impact on the group.
Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36)
The amendments are applicable to annual reporting periods beginning on or after 1 January 2014. The disclosure
requirements of IAS 36 ‘Impairment of Assets' have been enhanced to require additional information about the fair
value measurement when the recoverable amount of impaired assets is based on fair value less costs of disposals.
Additionally, if measured using a present value technique, the discount rate is required to be disclosed. The
adoption of the amendments from 1 July 2014 may increase the disclosures by the group.
Annual Improvements to IFRSs 2010-2012 Cycle
These amendments are applicable to annual reporting periods beginning on or after 1 July 2014 and affects several
Accounting Standards as follows: Amends the definition of 'vesting conditions' and 'market condition' and adds
definitions for 'performance condition' and 'service condition' in IFRS 2 'Share-based Payment'; Amends IFRS 3
'Business Combinations' to clarify that contingent consideration that is classified as an asset or liability shall be
measured at fair value at each reporting date; Amends IFRS 8 'Operating Segments' to require entities to disclose
the judgements made by management in applying the aggregation criteria; Clarifies that IFRS 8 only requires a
reconciliation of the total reportable segments assets to the entity's assets, if the segment assets are reported
regularly; Clarifies that the issuance of IFRS 13 'Fair Value Measurement' and the amending of IFRS 139 'Financial
Instruments: Recognition and Measurement' and IFRS 9 'Financial Instruments' did not remove the ability to
measure short-term receivables and payables with no stated interest rate at their invoice amount, if the effect of
discounting is immaterial; Clarifies that in IFRS 116 'Property, Plant and Equipment' and IFRS 138 'Intangible
Assets', when an asset is revalued the gross carrying amount is adjusted in a manner that is consistent with the
revaluation of the carrying amount (i.e. proportional restatement of accumulated amortisation); and Amends IFRS
124 'Related Party Disclosures' to clarify that an entity providing key management personnel services to the
reporting entity or to the parent of the reporting entity is a 'related party' of the reporting entity. The adoption of
these amendments from 1 July 2015 will not have a material impact on the group.
33
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 2. Significant accounting policies (continued)
Annual Improvements to IFRSs 2011-2013 Cycle
These amendments are applicable to annual reporting periods beginning on or after 1 July 2014 and affects four
Accounting Standards as follows: Clarifies the 'meaning of effective IFRSs' in IFRS 1 'First-time Adoption of
Accounting Standards'; Clarifies that IFRS 3 'Business Combination' excludes from its scope the accounting for the
formation of a joint arrangement in the financial statements of the joint arrangement itself; Clarifies that the scope of
the portfolio exemption in IFRS 13 'Fair Value Measurement' includes all contracts accounted for within the scope of
IFRS 139 'Financial Instruments: Recognition and Measurement' or IFRS 9 'Financial Instruments', regardless of
whether they meet the definitions of financial assets or financial liabilities as defined in IFRS 132 'Financial
Instruments: Presentation'; and Clarifies that determining whether a specific transaction meets the definition of both
a business combination as defined in IFRS 3 'Business Combinations' and investment property as defined in IFRS
140 'Investment Property' requires the separate application of both standards independently of each other. The
adoption of these amendments from 1 July 2015 will not have a material impact on the group.
Interpretation 21 Levies
This interpretation is applicable to annual reporting periods beginning on or after 1 January 2014. The Interpretation
clarifies the circumstances under which a liability to pay a levy imposed by a government should be recognised, and
whether that liability should be recognised in full at a specific date or progressively over a period of time. The
adoption of the interpretation from 1 July 2014 will not have a material impact on the group.
IFRS 15 Revenue from Contracts with Customers
This standard is expected to be applicable to annual reporting periods beginning on or after 1 January 2017. The
standard provides a single standard for revenue recognition. The core principle of the standard is that an entity will
recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods or services. The group will
adopt this standard and the amendments from 1 July 2017 but the impact of its adoption is yet to be assessed by
the group.
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.
Provision for obsolete and slow moving inventories
The provision for obsolete and slow moving inventories assessment requires a degree of estimation and judgement.
The level of the provision is assessed by taking into account the recent sales experience, the ageing of inventories
and other factors that affect inventory obsolescence.
Fair value and hierarchy of financial instruments
The group 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 financial instruments 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.
34
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Estimation of useful lives of assets
The group 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
The group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether
goodwill has 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. No impairment charge was required in 2014 (2013: A$Nil).
Impairment of non-financial assets
The group assesses impairment of non-financial assets at each reporting date by evaluating conditions specific to
the group 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.
Income tax
The group 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 group recognises liabilities for
anticipated tax audit issues based on the group'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 group considers it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Business combinations
As discussed in note 2, business combinations are initially accounted for on a provisional basis. The fair value of
assets acquired, liabilities and contingent liabilities assumed are initially estimated by the group taking into
consideration all available information at the reporting date. Fair value adjustments on the finalisation of the
business combination accounting is retrospective, where applicable, to the period the combination occurred and
may have an impact on the assets and liabilities, depreciation and amortisation reported.
Note 4. Operating segments
Identification of reportable operating segments
The group's operating segments are determined based on the internal reports that are reviewed and used by the
Board of Directors (being the Chief Operating Decision Makers ('CODM')) in assessing performance and in
determining the allocation of resources.
The CODM reviews contribution by reportable segments, being geographical regions, to revenue and gross profit.
The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in these
financial statements.
The group’s operates separate websites in each country that it sells goods in. Revenue from external customers is
attributed to each country based on the activity on that countries website. Similar types of goods are sold in all
segments.
Intersegment transactions
Intersegment transactions were made at market rates and are eliminated on consolidation.
35
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 4. Operating segments (continued)
Segment assets and liabilities
Assets and liabilities are managed on a group basis. The CODM does not regularly review any asset or liability
information by segment and, accordingly there is no separate segment information. Refer to the consolidated
balance sheet for group assets and liabilities.
Major customers
During the year ended 30 June 2014 there were no major customers (2013: none). A customer is considered major
if its revenues are 10% or more of the group's revenue.
Operating segment information
2014
Revenue
Sales to external customers
Total revenue
Gross Profit
Other operating gains, net
Selling and distribution expenses
Administration expenses
Preference shares fair value adjustment
Contingent consideration fair value adjustment
Finance income, net
Listing costs
Loss before income tax benefit
Income tax benefit
Loss after income tax benefit
2013
Revenue
Sales to external customers
Total revenue
Australia and
New Zealand
A$'000
Asia
A$'000
Total
A$'000
202,343
202,343
22,019
22,019
224,362
224,362
57,336
3,084
60,420
535
(36,497)
(26,034)
(51,263)
304
209
(9,818)
(62,144)
3,602
(58,542)
Australia and
New Zealand
A$'000
Asia
A$'000
Total
A$'000
170,194
170,194
11,682
11,682
181,876
181,876
Gross Profit
Other operating gains, net
Selling and distribution expenses
Administration expenses
Preference shares fair value adjustment
Contingent consideration fair value adjustment
Finance income, net
Share of loss of joint venture accounted for using the equity method
Profit before income tax expense
Income tax expense
Profit after income tax expense
51,761
3,133
54,894
840
(30,632)
(19,253)
(350)
573
1
(273)
5,800
(1,350)
4,450
36
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 5. Other operating gains/(loss), net
Net foreign exchange gain/(loss)
Gain on business combination - bargain purchase
Other income
Other operating gains/(loss), net
2014
A$'000
2013
A$'000
(479)
932
82
535
796
-
44
840
Refer to note 39 for further details on the gain on business combination - bargain purchase.
Note 6. Expenses
Profit/(loss) before income tax includes the following specific expenses:
Sales, distribution and administration expenses:
Staff costs (note 7)
Marketing expenses
Occupancy costs
Merchant and other professional fees
Depreciation and amortisation
Other administration costs
2014
A$'000
2013
A$'000
32,541
15,019
4,218
5,251
1,865
3,637
25,694
12,213
3,493
3,754
1,137
3,594
Total sales, distribution and administration expenses
62,531
49,885
Significant, unusual and other one-off items
Loss on revaluation of preference shares
Gain on revaluation of contingent consideration
Loss on revaluation of long term incentive plan
Acquisition and corporate reorganisation costs
Listing costs
Total significant, unusual and other one-off items
Occupancy costs include:
Minimum operating lease payments
51,263
(304)
4,888
809
9,818
66,474
350
(573)
5
399
-
181
2,541
2,625
Cost of inventories recognised as an expense in cost of sales
125,692
102,000
Finance income, net:
Interest and finance charges paid/payable
Interest income
Total finance income, net
128
(337)
(209)
181
(182)
(1)
37
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 7. Staff costs
Aggregate remuneration:
Wages and salaries
Social security costs
Long term employee incentive plan
Other staff costs and benefits
Total staff costs
The average monthly number of employees (including executive directors and those
on a part-time basis) was:
Sales and distribution
Administration
2014
A$'000
2013
A$'000
22,822
1,488
4,888
3,343
21,116
1,162
5
3,411
32,541
25,694
2014
2013
360
122
482
346
104
450
Details of directors’ remuneration and interests are provided in the audited section of the Directors’ remuneration
report and should be regarded as part of these financial statements.
Note 8. Income tax expense/(benefit)
Income tax expense/(benefit)
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustment recognised for prior periods
Other adjustment
Aggregate income tax expense/(benefit)
Deferred tax included in income tax expense/(benefit) comprises:
Decrease/(increase) in deferred tax assets (note 17)
Numerical reconciliation of income tax expense/(benefit) and tax at the statutory rate
Profit/(loss) before income tax (expense)/benefit
Tax at the statutory tax rate of 19.6% (2013: 26.84%)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Non-deductible expenses
Tax incentive
Revaluation of contingent consideration
Preference share fair value
Adjustment recognised for prior periods
2014
A$'000
2013
A$'000
379
(3,978)
(153)
150
1,556
19
(225)
-
(3,602)
1,350
(3,978)
19
(62,144)
5,800
(12,180)
1,557
142
(73)
(53)
8,715
(3,449)
(153)
123
(8)
(97)
-
1,575
(225)
Income tax expense/(benefit)
(3,602)
1,350
Tax at the statutory tax rate represents the effective rate of income tax across the jurisdictions in which each of
the group entities are domiciled.
38
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 9. Current assets - cash and cash equivalents
Cash at bank
Bank deposits at call
Bank deposits - pledged
2014
A$'000
2013
A$'000
69,144
8,000
200
8,872
6,000
200
77,344
15,072
Short term deposits - pledged
These deposits are pledged in relation to merchant facilities for the group. Refer to note 24.
There is no material difference between the fair value of cash and cash equivalents and the book value stated
above.
Note 10. Current assets - trade and other receivables
Trade receivables
Other receivables
Sales tax receivable
2014
A$'000
2013
A$'000
2,051
1,343
423
3,227
17
53
3,817
3,297
Trade receivables include uncleared cash receipts due from customers and from direct wholesale sales which do
not form part of on-line customers which amounted to A$958,000 (2013: A$8,000).
Impairment of receivables
There was no impairment of receivables during the year ended 30 June 2014 (2013: None)
Past due but not impaired
There were no receivables past due but not impaired.
The group did not consider a credit risk on the aggregate balances after reviewing credit terms of customers
based on recent collection practices.
Note 11. Current assets - inventories
Goods for resale
Obsolete and slow moving inventory provision
2014
A$'000
2013
A$'000
13,668
(865)
8,916
(524)
12,803
8,392
Write-downs of inventories to net realisable value recognised as an expense during the year ended 30 June 2014
amounted to A$341,000 (2013: A$401,000). This expense has been included in cost of sales.
39
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 12. Current assets - derivative financial instruments
Forward foreign exchange contracts - cash flow hedges
-
40
Refer to note 33 for further information on fair value measurement.
Note 13. Current assets - income tax refund due
2014
A$'000
2013
A$'000
Current income tax receivable
Note 14. Current assets - other
Prepayments
Prepaid inventory
Other deposits
Other current assets
2014
A$'000
2013
A$'000
1,962
-
2014
A$'000
2013
A$'000
340
15,090
547
67
90
7,059
246
35
16,044
7,430
Prepaid inventory relates to the costs of goods for resale that have been paid for by the group but not delivered to
its distribution centres for further dispatch to the customers who placed the orders as at the reporting date. The
corresponding cash received in advance from customers are accounted for within deferred revenue which
includes the total amount of cash received for the goods not delivered to customers at the reporting date. Refer to
note 23.
Note 15. Non-current assets - property, plant and equipment
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Fixtures and fittings - at cost
Less: Accumulated depreciation
Motor vehicles - at cost
Less: Accumulated depreciation
40
2014
A$'000
2013
A$'000
794
(341)
453
3,781
(1,701)
2,080
813
(307)
506
445
(265)
180
667
(176)
491
2,581
(1,067)
1,514
679
(216)
463
370
(159)
211
3,219
2,679
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 15. Non-current assets - property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are
set out below:
Leasehold
Plant and
improvements equipment
A$'000
A$'000
Fixtures
and fittings
A$'000
Motor
vehicles
A$'000
Total
A$'000
Balance at 1 July 2012
Additions
Disposals
Exchange differences
Depreciation expense
Balance at 30 June 2013
Additions
Disposals
Exchange differences
Depreciation expense
425
256
(44)
2
(148)
491
163
(30)
(1)
(170)
1,543
654
(56)
(3)
(624)
1,514
1,335
(54)
(2)
(713)
Balance at 30 June 2014
453
2,080
395
186
-
1
(119)
463
254
(94)
(1)
(116)
506
215
81
-
-
(85)
211
37
(4)
2
(66)
180
2,578
1,177
(100)
-
(976)
2,679
1,789
(182)
(2)
(1,065)
3,219
Property, plant and equipment secured under finance leases
Refer to note 37 for further information on property, plant and equipment secured under finance leases.
Depreciation expense is included in the 'administration expenses' in profit or loss.
Note 16. Non-current assets - intangibles
Goodwill - at cost
Customer relationships - at cost
Software - at cost
Less: Accumulated amortisation
ERP system
Less: Accumulated amortisation
2014
A$'000
2013
A$'000
16,849
16,849
2,019
2,819
(709)
2,110
1,948
(487)
1,461
-
1,289
(242)
1,047
1,566
(55)
1,511
22,439
19,407
41
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 16. Non-current assets - intangibles (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are
set out below:
Balance at 1 July 2012
Additions
Amortisation expense
Balance at 30 June 2013
Additions
Additions through business
combinations (note 39)
Amortisation expense
Goodwill
A$'000
Customer
relationships Software
A$'000
A$'000
ERP
system
A$'000
Total
A$'000
16,849
-
-
16,849
-
-
-
-
-
-
-
-
2,019
-
444
726
(123)
1,047
1,512
-
(449)
945
604
(38)
1,511
301
-
(351)
18,238
1,330
(161)
19,407
1,813
2,019
(800)
Balance at 30 June 2014
16,849
2,019
2,110
1,461
22,439
Goodwill is allocated to the group’s cash-generating units ('CGUs') identified according to countries of operation
as follows:
Australia
2014
A$'000
2013
A$'000
16,849
16,849
The recoverable amount of the CGU was determined based on value-in-use. Cash flow projections used in the
value-in-use calculations were based on financial budgets approved by management covering a five year period.
Cash flows beyond the five year period were extrapolated using the estimated growth rates stated below:
Key assumptions used for value-in-use calculations
Budgeted gross margin:
Five year compound growth rate:
Long term growth rate:
Pre-tax discount rate:
28%
12%
2%
9%
(2013: 30%)
(2013: 5%)
(2013: 5%)
(2013: 9%)
These assumptions were used for the analysis of the country based CGU. Management determined budgeted
gross margin based on expectations of market developments. The weighted average growth rates used were
conservative based on industry forecasts. The discount rates used were pre-tax and reflected specific risk relating
to the Australian business.
Based on the assessment, no impairment charge is required. Management have performed a number of
sensitivity tests on the above rates and note that there is no impairment indicators arising from this analysis. The
recoverable amount exceeded the carrying amount by A$170,000,000.
Amortisation expense is included in the 'administration expenses' in profit or loss.
42
(cid:13)
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 17. Non-current assets - deferred tax
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses
Accrued expenses
Provisions
Sundry
Property, plant and equipment
Intangibles
Deferred tax asset
Movements:
Opening balance
Credited/(charged) to profit or loss (note 8)
Additions through business combinations (note 39)
Closing balance
2014
A$'000
2013
A$'000
2,306
1,107
631
2,117
(361)
(404)
826
584
416
(4)
-
-
5,396
1,822
1,822
3,978
(404)
1,841
(19)
-
5,396
1,822
Deferred income tax assets are recognised for tax losses, non-deductible accruals and provisions and capital
allowances carried forward to the extent that realisation of the related tax benefits through future taxable profits is
probable.
Note 18. Current liabilities - trade and other payables
Trade payables
Other payables and accruals
Contingent consideration
Refer to note 32 for further information on financial instruments.
Note 19. Current liabilities - borrowings
Bank loans
Finance lease liability
2014
A$'000
2013
A$'000
19,626
10,277
215
12,951
2,752
304
30,118
16,007
2014
A$'000
2013
A$'000
1,390
223
1,073
297
1,613
1,370
Refer to note 24 for further information on assets pledged as security and financing arrangements.
Refer to note 32 for further information on financial instruments.
43
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 20. Current liabilities - derivative financial instruments
Forward foreign exchange contracts - cash flow hedges
705
-
2014
A$'000
2013
A$'000
Refer to note 32 for further information on financial instruments.
Refer to note 33 for further information on fair value measurement.
Note 21. Current liabilities - income tax payable
Provision for income tax
Note 22. Current liabilities - provisions
Employee benefits provision
Lease make good provision
Gift voucher provision
Sales returns provision
2014
A$'000
2013
A$'000
295
3
2014
A$'000
2013
A$'000
3,593
178
517
595
588
186
355
278
4,883
1,407
Lease make good provision
The provision represents the present value of the estimated costs to make good the premises leased by the group
at the end of the respective lease terms.
Gift voucher provision
The provision represents the estimated costs to honour gift vouchers that are in circulation and not expired.
Sales return provision
The provision represents the expected costs for goods returned by customers.
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out
below:
2014
Carrying amount at the start of the year
Additional provisions recognised
Unused amounts reversed
Carrying amount at the end of the year
Lease make
good
provision
A$'000
Gift vouchers
provision
A$'000
Sales returns
provision
A$'000
186
-
(8)
178
355
2,035
(1,873)
517
278
317
-
595
44
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 23. Current liabilities - deferred revenue
Deferred revenue
2014
A$'000
2013
A$'000
15,616
11,498
Deferred revenue relates to cash received in advance from customers where the goods have not been delivered as
at reporting date.
Note 24. Non-current liabilities - borrowings
Finance lease liability
Refer to note 32 for further information on financial instruments.
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Bank loans
Finance lease liability
2014
A$'000
2013
A$'000
262
393
2014
A$'000
2013
A$'000
1,390
485
1,073
690
1,875
1,763
As of 30 June 2014 the group has A$4,000,000 (2013: A$4,000,000) merchant facility for credit cards transactions.
The group also has a A$5,194,000 (2013: A$3,800,000) borrowing facility with Australia and New Zealand Banking
Group Limited ('ANZ') which is secured by a Corporate Guarantee and Indemnity. It is required to comply with
three main covenants in relation to this facility:
• Borrowings Base Ratio, being the ratio of aggregate facilities to current assets (stock, debtors and cash), must not
exceed 65%. The group is in compliance with the covenant as of the reporting date and its strategy is to maintain
borrowing base ratios well below the 65% requirement;
• Interest cover ratio, being the ratio of earnings before interest and tax (before abnormal and non-recurring items)
over the interest expense, must exceed 3:1 on a quarterly basis. The group is compliant with the covenant as of the
reporting date with significant headroom; and
• Distributions to shareholders must not be made without the written consent of ANZ. The group is in compliance
with this covenant as of the reporting date and at the time of preparation of the financial information.
45
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 24. Non-current liabilities - borrowings (continued)
The borrowing base ratio at the reporting date was as follows:
Debt plus merchant fee facility
Eligible inventory
Eligible debtors *
Cash and cash equivalents
Borrowing base ratio
* Excludes debtors older than 30 days
2014
A$'000
8,609
12,749
2,289
77,344
92,382
9%
The group is in compliance with all externally imposed capital requirements relating to its borrowings for the
financial years ended 30 June 2014 and 30 June 2013.
Assets pledged as security
All bank borrowings of the group are secured by a Corporate Guarantee and Indemnity. Average interest rate
incurred on these bank borrowings was 2.9% (2013: 6%). The borrowings are expected to be repaid within 90
days.
The lease liabilities are effectively secured as the rights to the leased assets, recognised in the balance sheet,
revert to the lessor in the event of default.
The carrying amounts of assets pledged as security for current and non-current borrowings are:
2014
A$'000
2013
A$'000
200
485
685
200
825
1,025
2014
A$'000
2013
A$'000
1,390
1,073
1,390
1,073
-
-
Cash and cash equivalents
Plant and equipment
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities
Bank loans
Used at the reporting date
Bank loans
Unused at the reporting date
Bank loans
46
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 25. Non-current liabilities - provisions
Employee benefits provision
Long term incentive plan
Refer to note 43 for details on the long term incentive plan.
Note 26. Non-current liabilities - redeemable preference shares
Redeemable preference shares
2014
A$'000
2013
A$'000
2,966
713
2014
A$'000
2013
A$'000
-
42,680
Redeemable preference shares
In July 2010, the group issued 35,684,549 preference shares to Insight Ventures Partners, LLC for A$14,600,000.
These preference shares were to be repaid at the earlier of a liquidation event (such as an IPO or trade sale) or on
the sixth anniversary of the issuance of the trade sale. The funds raised were used to increase membership
numbers, invest in online platform and for working capital purposes. Prior to the AIM admission, all redeemable
preference shares were converted into the same number of ordinary shares in May 2014.
Refer to note 33 for further information on fair value measurement.
Note 27. Equity - share capital
2014
Shares
2013
Shares
2014
A$'000
2013
A$'000
Ordinary shares £nil each - issued and fully paid
Ordinary shares - to be issued
150,647,610
-
150,647,610
-
-
-
-
-
-
11,205
1,255
12,460
Authorised share capital
200,000,000 ordinary shares of £nil each. The share capital was converted from £1 per share to no par value at a
general meeting on 23 May 2014, effective from 28 May 2014.
Capital reconstruction - group reorganisation
MySale Group Plc ('MySale') was incorporated on 28 April 2014 and was admitted to the Alternative Investment
Market (‘AIM’) on 16 June 2014. Prior to AIM admission, the group undertook a reorganisation such that MySale
was established as APAC Sale Group Pte. Ltd.’s ('APAC') parent/holding entity. MySale determined that the
acquisition of APAC did not represent a business combination as defined by IFRS 3 'Business Combinations'. The
appropriate accounting treatment for recognising the new group structure has been determined on the basis that
the transaction was a form of capital reconstruction and group reorganisation. The capital reconstruction has been
accounted for using the principles of a reverse acquisition by APAC of MySale.
As a result, the consolidated financial statements of MySale Group Plc have been prepared as a continuation of the
financial statements of the accounting acquirer, APAC. Refer to basis of preparation in note 2. The number of
shares on issue shown reflects those of MySale Group Plc, after the reconstruction.
On 27 May 2014, the company issued 132,948,495 ordinary shares of £1 nominal value. On 28 May 2014 these
shares were converted into ordinary shares of £nil nominal value, on a share-for-share exchange.
47
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 27. Equity - share capital (continued)
Movements in ordinary share capital - issued and fully paid
Details
Balance
Balance
Shares issued on capital reorganisation
Conversion of ordinary shares
Share issued at AIM admission
Date
Shares
A$'000
1 July 2012
30 June 2013
27 May 2014
28 May 2014
16 June 2014
-
11,205
-
132,948,495
-
17,699,115
11,205
227,954
(239,159)
-
Balance
30 June 2014
150,647,610
-
Movements in ordinary shares - to be issued
Details
Balance
Adjustment
Balance
Capital reorganisation
Balance
Movements in share premium account (note 28)
Details
Balance
Balance
Conversion of ordinary shares
Capital received on AIM admission
Transaction costs arising on AIM admission
Balance
Date
Shares
A$'000
1 July 2012
30 June 2013
27 May 2014
30 June 2014
Date
A$'000
1,176
79
1,255
(1,255)
-
-
-
-
-
-
-
1 July 2012
30 June 2013
28 May 2014
16 June 2014
16 June 2014
30 June 2014
-
239,159
72,267
(5,063)
306,363
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.
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 group’s objectives when managing capital is to safeguard the group’s ability to continue as a going concern, so
that it can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital. It is the group’s strategy to maintain borrowing base ratio well
below 65% requirement in order to comply with the borrowing facility covenants. Refer to note 24.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
48
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 28. Equity - share premium account
Share premium account
2014
A$'000
2013
A$'000
306,363
-
The share premium account is used to recognise the difference between the issued share capital at nominal value
and the capital received.
Note 29. Equity - other reserves
Foreign currency reserve
Hedging reserve - cash flow hedges
Capital reorganisation reserve
2014
A$'000
2013
A$'000
(120)
(719)
(132,756)
(133,595)
(732)
-
-
(732)
Foreign currency reserve
The reserve is used to recognise exchange differences arising from translation of the financial statements of foreign
operations to Australian dollars.
Hedging reserve - cash flow hedges
The reserve is used to recognise the effective portion of the gain or loss of cash flow hedge instruments that is
determined to be an effective hedge.
Capital reorganisation reserve
As explained in note 2, the consolidated MySale Group is a continuation of the existing APAC Group. MySale
Group Plc has therefore recorded the net assets of APAC Group at their historic carrying value at the date of
acquisition as a capital reorganisation reserve in equity. The excess of purchase price over the shareholding
acquired of A$132,756,000 has not been capitalised but deducted from equity.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Balance at 1 July 2012
Foreign currency translation
Balance at 30 June 2013
Foreign currency translation
Cash flow hedge
Capital reorganisation
Balance at 30 June 2014
Foreign
currency
A$'000
Hedging
A$'000
Capital
reorganisation
A$'000
Total
A$'000
(6)
(726)
(732)
612
-
-
(120)
-
-
-
-
(719)
-
-
-
(6)
(726)
-
-
-
(132,756)
(732)
612
(719)
(132,756)
(719)
(132,756)
(133,595)
49
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 30. Equity - accumulated losses
Accumulated losses at the beginning of the financial year
Profit/(loss) after income tax expense for the year
Accumulated losses at the end of the financial year
Note 31. Equity - dividends
2014
A$'000
2013
A$'000
(27,660)
(58,542)
(32,110)
4,450
(86,202)
(27,660)
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 32. Financial instruments
Financial risk management objectives
The group’s activities expose it to market risk (including foreign currency risk and interest rate risk), credit risk and
liquidity risk. The group’s overall risk management strategy seeks to minimise any adverse effects from the
unpredictability of financial markets on the group’s financial performance. The group uses financial instruments
such as currency forwards to hedge certain financial risk exposures.
The Board of Directors (the 'Board') is responsible for setting the objectives and underlying principles of financial
risk management for the group.
Financial risk management is carried out by the executive directors and the executive management team in
accordance with the policies set by the Board. They identify, evaluate and hedge financial risks in close co-
operation with the group’s operating units. Regular reports are circulated and reviewed by executive directors.
Market risk
Foreign currency risk
The company is incorporated in Jersey and the group operates from Australia with operations in New Zealand, USA
and Asia (including Malaysia, Thailand and Singapore). Entities in the group regularly transact in currencies other
than their respective functional currencies ('foreign currencies'). The group purchases products in these countries
and other European Union countries.
Currency risk arises within entities in the group when transactions are denominated in foreign currencies. To
manage the currency risk, the executive management team manages the overall currency exposure mainly by
entering into currency forwards with banks.
In addition, the group is exposed to currency translation risk on the net assets in foreign operations with functional
currencies not in Australian dollar. Currency exposure to the net assets of the group’s operations in the United
Kingdom, Singapore, Malaysia and New Zealand were managed primarily through continuous disposal of net
monetary assets in these currencies by entering currency forwards with the bank. US dollar, Pound sterling and
Euros liabilities and funds required are hedged by short term forward contracts, where necessary.
50
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 32. Financial instruments (continued)
The carrying amount of the group's foreign currency denominated financial assets and financial liabilities at the
reporting date was as follows:
US dollars
Euros
Pound sterling
New Zealand dollars
Singapore dollars
Malaysian ringgit
Thai baht
Assets
Liabilities
2014
A$'000
2013
A$'000
2014
A$'000
2013
A$'000
494
776
65,518
369
765
96
575
256
290
213
1,090
340
184
142
4,062
2,791
4,857
814
300
108
-
1,821
360
338
172
732
4
-
68,593
2,515
12,932
3,427
The group had net assets denominated in foreign currencies of A$55,660,000 as at 30 June 2014 (2013: net
liabilities of A$912,000). Based on this exposure, had the Australian dollar weakened by 10% / strengthened by
10% (2013: weakened by 10% / strengthened by 10%) against these foreign currencies with all other variables held
constant, the group's profit before tax for the year would have been A$5,566,000 lower / higher (2013: A$91,000
lower / higher). The percentage change is the expected overall volatility of the significant currencies, which is based
on management’s assessment of reasonable possible fluctuations taking into consideration movements over the
last 6 months each year and the spot rate at each reporting date. The actual foreign exchange loss for the year
ended 30 June 2014 was A$479,000 (2013: gain of A$796,000).
Price risk
The group is not exposed to any significant price risk.
Cash flow and fair value interest rate risk
Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. Fair value interest rate risk is the risk that the fair value of a financial instrument
will fluctuate due to changes in market interest rates.
The group’s exposure to cash flow interest rate risks arises mainly from interest bearing deposits. If the Australian
dollar and New Zealand dollar interest rates had increased / decreased by 50 basis points (2013: 50 basis points)
with all other variables including tax rate being held constant, the profit after tax would have been A$39,000 higher /
lower (2013: A$63,000 higher / lower) as a result of higher / lower interest income on these deposits.
The group’s borrowings at variable rates are denominated in Australian dollars, US dollars and Euros. If the interest
rates had increased / decreased by 50 basis points (2013: 50 basis points) with all other variables including tax rate
being held constant, the profit after tax would have been lower / higher by A$2,000 (2013: A$4,000). The group is
subject to certain debt covenants related to the bank borrowings. The group was not in breach of any of these debt
covenants in 2014.
Credit risk
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to
the group. The major classes of financial assets of the group are bank deposits. For bank deposits, the group
adopts the policy of dealing only with high credit quality financial institutions and major banks. As the principal
business of the group is online cash sale, trade receivables from wholesale business are relatively immaterial and
the group adopts the policy of dealing with customers of appropriate credit history.
The group’s maximum exposures to credit risk at the end of the reporting period in relation to each class of
recognised financial assets is the carrying amount of those assets as indicated in the balance sheet.
51
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 32. Financial instruments (continued)
Concentration of credit risk
There are no significant concentrations of credit risk within the group. The credit risk on liquid funds is limited as the
counterparties are banks with high credit ratings.
Credit risk is managed by limiting the amount of credit exposure to any single counter-party for cash deposits.
Liquidity risk
The group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and
liabilities.
Remaining contractual maturities
Trade payables and other financial liabilities mainly arise from the financing of assets used in the group's ongoing
operations such as plant and equipment and investments in working capital. These assets are considered in the
group's overall liquidity risk.
The following tables detail the group'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
balance sheet.
2014
Non-derivatives
Non-interest bearing
Trade and other payables
Contingent consideration
Interest-bearing - variable
Bank loans
Lease liability
Total non-derivatives
Derivatives
Forward foreign exchange contracts
inflow
Forward foreign exchange contracts
outflow
Total derivatives
Weighted
average
interest rate
%
1 year or less
A$'000
Between 1
and 5 years
A$'000
Over 5 years
A$'000
Remaining
contractual
maturities
A$'000
-%
-%
29,903
215
2.90%
8.00%
1,408
243
31,769
-%
-%
5
(710)
(705)
-
-
-
264
264
-
-
-
-
-
-
-
-
-
-
-
29,903
215
1,408
507
32,033
5
(710)
(705)
52
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 32. Financial instruments (continued)
2013
Non-derivatives
Non-interest bearing
Trade and other payables
Redeemable preference shares
Contingent consideration
Interest-bearing - variable
Bank loans
Interest-bearing - fixed rate
Lease liability
Total non-derivatives
Derivatives
Forward foreign exchange contracts
inflow
Forward foreign exchange contracts
outflow
Total derivatives
Weighted
average
interest rate
%
1 year or less
A$'000
Between 1
and 5 years
A$'000
Over 5 years
A$'000
Remaining
contractual
maturities
A$'000
-%
-%
-%
15,703
-
304
-
42,680
-
6.00%
1,137
-
9.00%
321
17,465
442
43,122
-%
-%
840
(800)
40
-
-
-
-
-
-
-
-
-
-
-
-
15,703
42,680
304
1,137
763
60,587
840
(800)
40
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above.
Unless otherwise stated in note 30, the carrying amounts of financial instruments reflect their fair value. The
carrying amounts of trade receivables and trade payables are assumed to approximate their fair values due to their
short-term nature. The fair value of financial liabilities is estimated by discounting the remaining contractual
maturities at the current market interest rate that is available for similar financial instruments.
Note 33. Fair value measurement
Fair value hierarchy
The following tables detail the group's assets and liabilities, measured or disclosed at fair value, using a three level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at
the measurement date
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices)
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
2014
Liabilities
Contingent consideration
Derivative financial instruments
Total liabilities
Level 1
A$'000
Level 2
A$'000
Level 3
A$'000
Total
A$'000
-
-
-
-
705
705
215
-
215
215
705
920
53
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 33. Fair value measurement (continued)
2013
Assets
Derivative financial instruments
Total assets
Liabilities
Redeemable preference shares
Contingent consideration
Total liabilities
Level 1
A$'000
Level 2
A$'000
Level 3
A$'000
Total
A$'000
-
-
-
-
-
40
40
-
-
-
-
-
40
40
42,680
304
42,984
42,680
304
42,984
There were no transfers between levels during the financial year.
Valuation techniques for fair value measurements categorised within level 2 and level 3
The fair value of the derivative financial instruments, being forward exchange contracts, are determined using
quoted forward exchange rates at the reporting date. These instruments are included in Level 2.
The fair value of financial instruments classified as level 3 is determined by the use of valuation models. These
include discounted cash flow analysis or the use of observable inputs that require significant adjustments based on
unobservable inputs.
In particular, on 30 June 2013 management performed a valuation of the group in order to account for the
preference shares at fair value. Management valued these redeemable preference shares using a Monte Carlo
simulation model. In doing so, management had to determine a number of critical accounting estimates in relation
to the eventual redemption of these preference shares. These estimates were expected time period to redemption,
risk free rate and volatility of APAC Sale Group Pte. Ltd.’s share price.
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current and previous financial year are set out below:
Balance at 1 July 2012
Gains/(losses) recognised in profit or loss
Adjustment to contingent consideration
Balance at 30 June 2013
Additions
Settled
Balance at 30 June 2014
Redeemable
preference
shares
A$'000
Contingent
consideration
A$'000
Total
A$'000
42,330
350
-
42,680
-
(42,680)
-
959
(573)
(82)
304
215
(304)
215
43,289
(223)
(82)
42,984
215
(42,984)
215
Changing one or more inputs would not significantly change the fair value of level 3 financial instruments.
54
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 34. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the group is
set out below:
Short-term employee benefits
Post-employment benefits
2014
A$
2013
A$
2,019
107
2,126
751
47
798
Key management includes directors (executives and non-executives) and key heads of departments.
During the financial year ended 30 June 2014 1,078,584 (2013: 550,000) performance rights were granted to
members of key management personnel under share-based payments plans operated by the group as disclosed
in note 43.
Note 35. Remuneration of auditors
Services provided by the company's auditors and network firms
During the year the company (including its overseas subsidiaries) obtained the following services from the
company's auditors at costs as detailed below:
2014
A$'000
2013
A$'000
Fees payable to the company's auditor and its associates for the audit of the
consolidated financial statements
Fees payable to the company's auditor and its associates for other services:
- the audit of the company's subsidiaries
- audit related assurance services
- non-audit services (of which A$1,038,000 relates to IPO related services in 2014)
- tax advisory services (of which A$331,000 relates to IPO related services in 2014)
- services relating to corporate finance transactions entered into or proposed to be
entered into on behalf of the company
392
310
1,038
423
170
41
-
19
147
201
30
-
2,310
461
Note 36. Contingent liabilities
The group issued a bank guarantee through its banker, ANZ Bank Limited ('ANZ'), in respect of lease obligations
amounting to A$874,000 (2013: A$874,000). The group also issued a bank guarantee through ANZ in respect of a
merchant fee agreement deposit amounting to USD$2,100,000 (2013: USD$440,000).
The group also issued a bank guarantee through its banker ANZ Bank New Zealand Limited, in respect of customs
and duties obligations amounting to NZ$60,000 (2013: NZ$60,000) and Fastway amounting to A$100,000 (2013:
Nil).
55
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 37. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Lease commitments - finance
Committed at the reporting date and recognised as liabilities, payable:
Within one year
One to five years
Total commitment
Less: Future finance charges
Net commitment recognised as liabilities
Representing:
Finance lease liability - current (note 19)
Finance lease liability - non-current (note 24)
2014
A$'000
2013
A$'000
2,677
3,283
1,975
4,191
5,960
6,166
243
264
507
(22)
485
223
262
485
321
442
763
(73)
690
297
393
690
The group leases land and buildings and warehouses from non-related parties under non-cancellable operating
lease agreements. The leases have varying terms, escalation clauses and renewal rights.
The group leases certain plant and equipment, and motor vehicles from non-related parties under finance leases.
The lease agreements do not have renewal clauses but provide the group with options to purchase the leased
assets at nominal values at the end of the lease term.
Included in additions are plant and equipment and motor vehicles acquired under finance leases amounting to A$Nil
(2013: A$Nil) and A$40,000 (2013: A$81,000) respectively.
The carrying amounts of plant and equipment and motor vehicles held under finance leases are A$344,000 (2013:
A$723,000) and A$141,000 (2013: A$102,000) respectively at the reporting date.
Note 38. Related party transactions
Parent entity
MySale Group Plc is the parent company of the group.
Subsidiaries
Interests in subsidiaries are set out in note 40.
Joint ventures
Interests in joint ventures are set out in note 41.
Key management personnel
Disclosures relating to key management personnel are set out in note 34.
Transactions with related parties
In May 2014 the group acquired controlling interests in Cocosa Lifestyle Limited, Chic Global Limited and Simply
Sent It Pty Limited from related parties. Refer to note 39 for further details.
56
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 38. Related party transactions (continued)
Receivable from and payable to related parties
Receivable from joint venture amounted to A$462,000 (2013: A$318,000).
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 39. Business combinations
Cocosa Lifestyle Limited
On 23 May 2014 the group acquired 100% of the ordinary share capital of Cocosa Lifestyle Limited ('Cocosa'), a
UK registered members-only flash sale website selling luxury products on- line. The acquisition of Cocosa resulted
in a bargain purchase of A$932,000 as presented within other operating gains/(loss) in profit or loss. The bargain
purchase was due to:
- the acquisition of the company included a membership database of 761,000 members including their key details
and
email addresses;
- the group has a substantial amount of data to accurately calculate the cost of acquiring members through their
global
operations;
- the group has sufficient data to accurately evaluate the buying history of each of the members; and
- the company has been acquired for a nominal amount of A$1.
The acquired business contributed revenues of A$nil and loss after tax of A$22,000 to the group for the period from
23 May 2014 to 30 June 2014. If the acquisition occurred on 1 July 2013, the full year contributions would have
been revenues of A$8,635,000 and loss after tax of A$8,131,000. The values identified in relation to the acquisition
are provisional as at 30 June 2014.
Chic Global Limited
On 20 May 2014 Ozsale Pty Ltd acquired 50% of the ordinary share capital of Chic Global Limited for GBP50,
which was owned 50:50 between Jamie Jackson (director) and a third party. Chic Global Limited was dormant in
the period ended 30 June 2014 and from July commenced selling fast fashion targeting 18 to 25 year olds on
MySale flash sites.
Simply Send It Pty Limited
On 14 May 2014 the group acquired a 51% interest in Simply Send It Pty Limited for a consideration of A$51 from
a related party.The acquired business contributed revenues of A$nil and loss after tax of A$5,000 to the group for
the period from 14 May 2014 to 30 June 2014. If the acquisition occurred on 1 July 2013, the full year
contributions would have been revenues of A$nil and loss after tax of A$60,000. The values identified in relation
to the acquisition are provisional as at 30 June 2014.
57
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 39. Business combinations (continued)
Details of the acquisitions, in aggregate, is as follows:
Cash and cash equivalents
Trade and other receivables
Inventories
Customer relationships
Trade payables
Other payables
Deferred tax liability
Other loans
Net assets acquired
Discount on acquisition
Acquisition-date fair value of the total consideration transferred
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: cash and cash equivalents
Net cash received
Fair value
A$'000
488
16
76
2,019
(632)
(88)
(404)
(542)
933
(932)
1
2014
A$'000
2013
A$'000
1
(488)
(487)
-
-
-
58
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 40. 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
Principal place of
business / Country
of incorporation
Principal
activities
Parent
Ownership
interest
2014
%
Ownership
interest
2013
%
Non-controlling interest
Ownership
interest
2013
%
Ownership
interest
2014
%
United Kingdom
United States of
America
United Kingdom
United Kingdom
Italy
Australia
Australia
Malaysia
Singapore
APAC Sale
Group Pte. Ltd.
APAC Sale Italy
s.r.l
APAC Sales
Group, Inc.
APAC UK
Procurement Co
Limited
APACSale
Limited
BuyInvite Pty
Limited
Cocosa Lifestyle
Limited
NZ Sale Limited New Zealand
Ozsale Pty
Limited
Ozsale Sdn.
Bhd.
Private Sale Asia
Pacific Pte Ltd
Simply Sent It
Pty Limited
Singsale Pte.
Ltd.
APAC France
SARL
Brand Search
Pty Limited
Chic Global
Limited
Brand Search
Pty Limited
BuyInvite NZ Pty
Limited
Click Frenzy
Australia Pty Ltd
NZ Wine Limited New Zealand
Sales Events Pty
Ltd
Singapore
Singapore
Australia
Australia
Australia
Australia
Australia
Australia
France
United Kingdom
Trading company
Trading company
Trading company
Trading company
Trading company
Trading company
Trading company
Trading company
Trading company
Trading company
Trading company
Trading company
Trading company
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
100.00%
100.00%
100.00%
-%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
51.00%
-%
49.00%
100.00%
100.00%
100.00%
-%
100.00%
100.00%
-%
-%
-%
50.00%
-%
50.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
Summarised financial information for subsidiaries that have non-controlling interests, has not been provided as
they are not material to the group.
59
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 41. Interests in joint ventures
Thaisale.co.th Limited is deemed to be a jointly controlled operation of the group as the appointment of its
directors and the allocation of voting rights for key business decisions require the unanimous approval of its
venturers. This investment has been accounted for using the equity method after initially being recognised at cost.
Name
Principal place of business /
Country of incorporation
Ownership interest
2013
2014
%
%
Thaisale.co.th Limited
Thailand
49.00%
49.00%
Summarised financial information
Summarised balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net liabilities
Summarised statement of profit or loss and other comprehensive income
Revenue
Expenses
Loss before income tax
Other comprehensive income
Total comprehensive income
2014
A$'000
2013
A$'000
175
42
217
935
935
(718)
242
59
301
366
366
(65)
1,855
(2,530)
724
(1,064)
(675)
(340)
-
-
(675)
(340)
The group has not recognised the entire share of its losses of its joint venture interest amounting to A$331,000
(2013: A$67,000) because the group's cumulative share of losses exceeds its interest in that entity and the group
has no obligation in respect of those losses. The cumulative unrecognised losses with respect to this entity
amount to A$398,000 (2013: A$67,000) at the reporting date.
Note 42. Earnings per share
Profit/(loss) after income tax attributable to the owners of MySale Group Plc
Contingent consideration fair value (gain)/loss
Loss on revaluation of long-term incentive plan
Loss on revaluation of preference shares
2014
A$'000
2013
A$'000
(58,542)
-
-
-
4,450
(573)
5
350
Profit/(loss) after income tax attributable to the owners of MySale Group Plc used in
calculating diluted earnings per share
(58,542)
4,232
60
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 42. Earnings per share (continued)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per
share
Adjustments for calculation of diluted earnings per share:
100,448,603
96,197,139
Deferred and contingent considerations
Employee long term incentive plan
Redeemable preference shares
-
1,745,000
4,755,000
-
- 35,684,549
Weighted average number of ordinary shares used in calculating diluted earnings
per share
100,448,603
138,381,688
Basic earnings per share
Diluted earnings per share
Cents
Cents
(58.28)
(58.28)
4.63
3.06
1,247,262 (2013: Nil) employee long term incentives have been excluded from the 2014 (2013) diluted earnings
calculation as they are anti-dilutive for the period.
Note 43. Share-based payments
The existing Long Term Incentive Plan (the 'LTIP') was approved by APAC shareholders in 2012. The LTIP was
designed to provide long-term incentives for key employees to deliver long-term shareholder returns. Under the LTIP,
participants were granted performance rights which only vest if a Capital Event occurs and the participant is a full
time employee at the time of the event occurring. The performance rights were a means to calculate a one-off cash
bonus. Participation in the LTIP was at the Board's discretion and no individual has a contractual right to participate in
the plan or to receive any guaranteed benefits.
Performance rights granted under the LTIP carried no dividend or voting rights.
The LTIP expired on the date of AIM admission on 16 June 2014, where 4,763,913 performance rights were settled.
The company established two new employee share plans prior to the AIM admission: (i) the Executive Incentive Plan
(‘EIP’) and (ii) the Loan Share Plan (‘LSP’).
(i) The Executive Incentive Plan
Selected employees are granted a right to receive ordinary shares in the company in the future subject to remaining
in employment and subject to the satisfaction of any performance conditions. The right (referred to as an ‘award’) can
take the form of:
• A conditional right to free ordinary shares on vesting. A number of employees had entitlements to cash bonuses
which became payable on the AIM admission. Some senior executives agreed to defer the payment and take it in the
form of a conditional award under the EIP. The award converts the cash due to them into ordinary shares at the
Placing Price of £2.26 with a maximum A$75,000 enhancement if they defer 100% of the entitlement. Total ordinary
shares applicable to the conditional award is 684,042. The award will vest 12 months after AIM admission (16 June
2015) and is not subject to any performance conditions but is subject to continued employment; and
• An option to acquire ordinary shares, from the date of vesting, at an exercise price set at the time of grant and
which must be at least the market value of a share at that time. 50% of the options will vest two years after and the
balance three years after AIM admission. Vesting is subject to the Remuneration Committee being satisfied that the
underlying performance of the group justifies vesting. In determining this, the Remuneration Committee will have
regard to revenue and Earnings Before Interest, Tax, Depreciation and Amortisation (‘EBITDA’) included in the
company’s internal forecasts as at the date of allocation.
61
MySale Group Plc
Notes to the financial statements
30 June 2014
Note 43. Share-based payments (continued)
(ii) Loan Share Plan
The emoluments disclosed above do not include any amounts for the value of share awards granted to the directors
who have been selected to participate in the LSP. The LSP enables employees selected to participate to buy or
subscribe for ordinary shares using a loan from the company. The ordinary shares are bought on the market or are
subscribed at market value. The loan is then repayable and the ordinary shares may be sold to repay the loan on
vesting. The loan is interest-free and recourse is limited to the value of the ordinary shares bought with it. 50% of
the ordinary shares will vest two years after and the balance three years after AIM admission. The LSP has only
been offered to Australian employees as it takes advantage of favourable tax treatment in Australia. Vesting is
subject to the Remuneration Committee being satisfied that the underlying performance of the group justifies
vesting. In determining this, the Remuneration Committee will have regard to revenue and EBITDA included in the
company’s internal forecasts as at the date of allocation.
Set out below are summaries of share and options granted under the plans for directors and employees:
2014
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
28/05/2014
28/05/2014
28/05/2014
16/06/2015
16/06/2019
16/06/2019
£2.26
£2.26
£2.26
-
-
-
-
684,042
102,210
461,010
1,247,262
-
-
-
-
-
-
-
-
684,042
102,210
461,010
1,247,262
Award type
Conditional: 684,042
Option: 102,210
Loan share: 461,010
The weighted average remaining contractual life of the share plan outstanding at the end of the financial year was 2
years (2013: 6.5 years).
For the options granted during the current financial year, the Black-Scholes option pricing model inputs used to
determine the fair value at the grant date, are as follows:
(i) options are granted for no consideration and vest based on certain future events occurring
(ii) fair value: £2.26
(iii) grant date: 28 May 2014
(iv) expiry date: 16 June 2019
(v) share price at grant date: £2.26
(vi) expected price volatility of the company's shares: 40%
(vii) expected dividend yield: first three years 0%; 1.5% thereafter
(viii) risk-free interest rate: tranche #1 (vests after 2 years): 3.18%; tranche #2 (vests after 3 years): 3.30%
The share-based payment expense for the year was A$4,888,000 (2013: A$5,000).
Note 44. Events after the reporting period
Subsequent to the reporting date the group entered into a lease agreement for office premises in London. The
group also acquired a 60% share in the Danish flash sale website Invitetobuy.
No other matter or circumstance has arisen since 30 June 2014 that has significantly affected, or may significantly
affect the group's operations, the results of those operations, or the group's state of affairs in future financial years.
62
MySale Group Plc
Parent company balance sheet
As at 30 June 2014
Assets
Cash at bank and in hand
Debtors- amounts falling within one year
Investment in subsidiary
Total assets
Liabilities
Creditors – amounts falling due within one year
Creditors – Amounts falling due after more than one year
Total liabilities
Net assets
Equity
Called up share capital
Share premium account
Other reserves
Accumulated losses
Total equity
Note
2014
A$'000
4
5
6
7
8
9
10
11
12
65,246
1,280
106,403
172,929
7
14
21
172,908
-
306,363
(132,743)
(712)
172,908
The financial statements of MySale Group Plc (company number 115584) were approved by the Board of Directors
and authorised for issue on 14 September 2014. They were signed on its behalf by:
__________________________ ___________________________
David Mortimer AO Jamie Jackson
Director Director
The above balance sheet should be read in conjunction with the accompanying notes
63
MySale Group Plc
Notes to the parent company financial statements
30 June 2014
Note 1. General information
The company was incorporated on 28 April 2014 as MySale Group Limited. The company changed its name to
MySale Group Plc on 28 May 2014 and was admitted onto the Alternative Investment Market ('AIM') on 16 June
2014.
The financial statements functional currency is Pounds Sterling. The presentation currency is Australian dollars, the
most representable currency of the company's operations and generally rounded to the nearest thousand.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below.
Basis of preparation
These separate financial statements of the company are designed to include disclosures sufficient to comply with
those parts of the UK Companies Act 2006 applicable to companies reporting under UK accounting standards even
though the company is incorporated and registered in Jersey. They have been prepared under the historical cost
convention and under the going concern assumption. Further details of the Directors’ considerations in relation to
going concern are included in the Directors’ report.
Foreign currency translation
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars 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.
Functional currency translation
The assets and liabilities of operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of operations are translated into Australian dollars using the average
exchange rates, which approximate the rate at the date of the transaction, for the period. All resulting foreign
exchange differences are recognised in other comprehensive income through the foreign currency reserve in
equity.
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.
Investments in subsidiaries
Investments in subsidiaries are shown at cost less provision for impairment.
Employee benefits
Long term employee incentive plan
The company operates an employee incentive plan to reward and retain key employees. The company recognises
a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company
after deducting all of its liabilities.
Share 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.
64
MySale Group Plc
Notes to the parent company financial statements
30 June 2014
Note 2. Significant accounting policies (continued)
Taxation
Current tax is provided at amounts expected to be paid or recovered using the tax rates and laws that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance
sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay
less tax in the future have occurred at the balance sheet date. Timing differences are differences between the
company’s taxable profits and its results as stated in the financial statements that arise from the inclusion of gains
and losses in tax assessments in periods different from those in which they are recognised in the financial
statements. A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis
of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from
which the future reversal of the underlying timing differences can be deducted. Deferred tax is measured at the
average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse,
based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred
tax is measured on a non-discounted basis. The taxation liabilities are reduced wholly or in part by the surrender of
tax losses by fellow group undertakings for which payment is made.
Cash flow statement
The company is included in the consolidated financial statements of Mysale Group plc, which are publicly available.
Consequently, the company has taken advantage of the exemption from preparing a cash flow statement under the
terms of FRS 1 (revised 1996).
Rounding of amounts
Amounts in this report have been rounded off to the nearest thousand dollars, or in certain cases, the nearest
dollar.
Note 3. Profit for the year
The company has elected not to present its own profit and loss account for the period. MySale Group Plc reported a
loss for the financial period, from incorporation on 28 April 2014 to 30 June 2014 of A$712,000
The auditor's remuneration for audit and other services is disclosed within note 35 to the consolidated financial
statements. The only employees of the company are the directors whose emoluments are disclosed in the
Directors' remuneration report.
Note 4. Cash at bank and in hand
Cash on bank
Note 5. Debtors- amounts falling within one year
Other receivables
Other receivables include refundable IPO costs, which were repaid in July 2014.
2014
A$'000
65,246
2014
A$'000
1,280
65
MySale Group Plc
Notes to the parent company financial statements
30 June 2014
Note 6. Investment in subsidiary
Investment in APAC Sale Group Pte. Ltd. - at cost
A detailed list of subsidiaries is detailed within note 40 to the consolidated financial statements.
Note 7. Creditors – amounts falling due within one year
Accruals
Note 8. Creditors – Amounts falling due after more than one year
Employee benefits - long term incentive plan
2014
A$'000
106,403
2014
A$'000
7
2014
A$'000
14
Long term incentive plan
Information on the company's long term incentive plan and employee share plans (the Executive Incentive Plan
and the Loan Share Plan) are detailed within note 43 to the consolidated financial statements.
Note 9. Equity - called up share capital
2014
Shares
A$'000
Ordinary shares £nil each - issued and fully paid
150,647,610
-
Authorised share capital
200,000,000 ordinary shares of £nil each. The share capital was converted from £1 per share to no par value at a
general meeting on 23 May 2014, effective from 28 May 2014.
Capital reconstruction - group reorganisation
MySale Group Plc ('MySale') was incorporated on 28 April 2014 and was admitted to the Alternative Investment
Market (‘AIM’) on 16 June 2014. Prior to AIM admission, the group undertook a reorganisation such that MySale
was established as APAC Sale Group Pte. Ltd.’s ('APAC') parent/holding entity. MySale determined that the
acquisition of APAC did not represent a business combination as defined by IFRS 3 'Business Combinations'. The
appropriate accounting treatment for recognising the new group structure has been determined on the basis that
the transaction was a form of capital reconstruction and group reorganisation. The capital reconstruction has been
accounted for using the principles of a reverse acquisition by APAC of MySale.
On 27 May 2014, the company issued 132,948,495 ordinary shares of £1 nominal value. On 28 May 2014 these
shares were converted into ordinary shares of £nil nominal value, on a share-for-share exchange.
66
MySale Group Plc
Notes to the parent company financial statements
30 June 2014
Note 9. Equity - called up share capital (continued)
Movements in ordinary share capital - issued and fully paid
Details
Date
Shares
A$'000
Balance
Shares issued on capital reorganisation
Conversion of ordinary shares
Share issued at AIM admission
28 April 2014
27 May 2014
28 May 2014
16 June 2014
-
132,948,495
-
17,699,115
-
239,159
(239,159)
-
Balance
30 June 2014
150,647,610
-
Movements in share premium account (note 10)
Details
Date
A$'000
Balance
Conversion of ordinary shares
Capital received on AIM admission
Transaction costs arising on AIM admission
Balance
28 April 2014
28 May 2014
16 June 2014
16 June 2014
30 June 2014
-
239,159
72,267
(5,063)
306,363
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company
in proportion to the number of and amounts paid on the shares held.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.
Note 10. Equity - share premium account
Share premium account
2014
A$'000
306,363
The share premium account is used to recognise the difference between the issued share capital at nominal value
and the capital received
Note 11. Equity - other reserves
Foreign currency reserve
Capital reorganisation reserve
2014
A$'000
13
(132,756)
(132,743)
Foreign currency reserve
The reserve is used to recognise exchange differences arising from translation of the financial statements from
the functional currency to the presentation currency.
Capital reorganisation reserve
This reserve is used to recognise the excess of purchase price of APAC (refer note 9) over the shareholding
acquired of A$132,756,000.
67
MySale Group Plc
Notes to the parent company financial statements
30 June 2014
Note 11. Equity - other reserves (continued)
Movements in reserves
Movements in each class of reserve during the current financial period are set out below:
Balance at 28 April 2014
Foreign currency translation
Capital reorganisation
Balance at 30 June 2014
Note 12. Equity - accumulated losses
Foreign
currency
A$'000
Capital
reorganisation
A$'000
Total
A$'000
-
13
-
-
-
(132,756)
-
13
(132,756)
13
(132,756)
(132,743)
Retained profits at the beginning of the financial period
Loss after income tax expense for the period
Accumulated losses at the end of the financial period
Note 13. Equity - Reconciliation of movements in shareholders’ funds
Loss for the period
Issue of capital
Movement in other reserves
Balance at 30 June 2014
Note 14. Contingent liabilities
2014
A$'000
-
(712)
(712)
2014
A$'000
(712)
306,363
(132,743)
172,908
The company had no contingent liabilities as at 30 June 2014.
Note 15. Related party transactions
Details of related party transactions are provided in note 39 to the consolidated financial statements. The
company has taken advantage of the exemption in FRS 8 'Related Party Disclosures' not to disclose details of
transactions with other wholly owned group companies.
68
MySale Group Plc
Notes to the parent company financial statements
30 June 2014
Note 16. Events after the reporting period
Subsequent to the reporting date the company entered into a lease agreement for office premises in London.
No other matter or circumstance has arisen since 30 June 2014 that has significantly affected, or may significantly
affect the company's operations, the results of those operations, or the company's state of affairs in future
financial years.
69
MySale Group Plc
Notice of General Annual Meeting
30 June 2014
MYSALE GROUP PLC
REGISTERED IN JERSEY WITH REGISTERED NUMBER: 115584
REGISTERED OFFICE: 44 ESPLANADE, ST HELIER, JERSEY JE4 9WG
Notice of Annual General Meeting
Notice is hereby given that the first Annual General Meeting (AGM) of MySale Group plc (MySale or the
Company) will be held at the offices of Crescent Capital Partners, Level 29, Governor Phillip Tower, 1 Farrer
Place, Sydney NSW 2000, Australia on 16 December 2014 commencing at 19.30 Australian Eastern Daylight Time
(AEDT)/08.30 GMT to consider and, if thought fit, to pass resolutions 1 to 7 as ordinary resolutions and resolution 8
as a special resolution.
RESOLUTIONS
ORDINARY RESOLUTIONS
1.
2.
3.
4.
5.
6.
7.
Financial statements for the year ended 30 June 2014
To receive the Company’s Annual Report and Accounts for the financial year ended 30 June 2014
together with the Reports of the Directors and Auditor thereon.
Appointment of the auditor
To appoint PricewaterhouseCoopers LLP as auditor of the Company, to hold office until the
conclusion of the next general meeting at which accounts are laid before the Company, and to
authorise the Directors to fix the remuneration of the auditor.
Election of Directors
To elect David Mortimer AO as a Director in accordance with Articles 7.2 and 7.9 - 7.12 of the
Company’s Articles of Association (the Articles).
To elect Andrew Dingle as a Director in accordance with Articles 7.2 and 7.9 - 7.12 of the Articles.
To elect Carl Jackson as a Director in accordance with Articles 7.2 and 7.9 - 7.12 of the Articles.
To elect James Jackson as a Director in accordance with Articles 7.2 and 7.9 - 7.12 of the Articles.
To elect Adrian MacKenzie as a Director in accordance with Articles 7.2 and 7.9 - 7.12 of the
Articles.
SPECIAL RESOLUTION
8.
Disapplication of pre-emption rights
THAT, in substitution for all existing authorities to the extent unused, the Directors of the Company
be generally and unconditionally empowered, pursuant to and in accordance with Article 2.15 of
the Articles, to exercise all powers of the Company to allot Shares (as that term is defined in the
Articles) for cash as if Article 2.8 of the Articles did not apply to any such allotment, provided that
this power shall be limited to:
(A) the allotment of Shares for cash in connection with or pursuant to a rights issue (as defined
below) or any other issue in favour of holders of Shares in proportion (as nearly as may be
practicable) to the respective holdings of Shares then held by them;
(B) the allotment of Shares in connection with any scrip dividend scheme or similar arrangement
implemented in accordance with the Articles from time to time in force; and
70
MySale Group Plc
Notice of General Annual Meeting
30 June 2014
(C) otherwise than pursuant to paragraphs 8(A) and (B) above, the allotment of Shares for cash
up to an aggregate amount of 15,064,700 Shares, being approximately ten per cent. of the
Company's issued Shares as at 10 November 2014, being the latest practicable date before
publication of this notice;
provided further that such power shall expire at the conclusion of the Company’s Annual General
Meeting in 2015 or fifteen months following the passing of this resolution, whichever is the sooner,
unless previously revoked, varied or renewed by the Company in general meeting (save that the
Company may before such expiry make an offer or agreement which would or might require
Shares to be allotted after such expiry and notwithstanding such expiry the Directors of the
Company may allot Shares in pursuance of such offer or agreement).
For the purposes of the authority in paragraph (A) above, “rights issue” means an offer to: (i)
holders (other than the Company) on the register on a record date fixed by the Directors of Shares
in proportion (as nearly as may be practicable) to their existing holdings; and (ii) other persons so
entitled by virtue of the rights attaching to any other equity securities held by them, but subject in
both cases to such exclusions, restrictions or other arrangements as the Directors may deem
necessary or expedient in relation to treasury shares, fractional entitlements, record dates or legal,
regulatory or practical problems in, or under the laws of, any territory.
By order of the Board
Prism Cosec Limited
Company Secretary
14 November 2014
71
MySale Group Plc
Notice of General Annual Meeting
30 June 2014
Notes to the Notice of Annual General Meeting
1. Record Date
Shareholders registered in the Register of Members of the Company as at 18:00 GMT on 14 December
2014 (or, in the event of any adjournment, on the date which is two days before the time of the adjourned
meeting) shall be entitled to attend or vote at the AGM in respect of the shares registered in their name at
that time. Changes to entries on the Register of Members after 18:00 GMT on 14 December 2014 will be
disregarded in determining the rights of any person to attend or vote at the AGM.
2. Attendance at the AGM
The Company’s first AGM will be held at the offices of Crescent Capital Partners, Level 29, Governor
Phillip Tower, 1 Farrer Place, Sydney NSW 2000, Australia at 19.30 AEDT/08.30 GMT on 16 December
2014. To enable shareholders based outside Australia to listen to the proceedings at the AGM, the
Company will provide a conference facility for the AGM. Details of the conference facility will be set out on
the Company’s website (www.mysalegroup.com) and notified to the market in due course. However,
shareholders should note that they cannot vote at the AGM by means of the conference facility and that
votes may only be cast in person, by corporate representative or by proxy at the venue of the AGM.
3. Proxies
A member is entitled to appoint another person as his proxy (who need not be a member of the Company)
to exercise all or any of their rights to attend and vote on their behalf at the AGM.
A member may appoint more than one proxy in relation to the AGM. When two or more valid but differing
appointments of proxy are delivered or received for the same share, the one which is last validly delivered
or received (regardless of its date or the date of its execution) shall be treated as replacing and revoking
the other or others as regards that share. If the Company is unable to determine which appointment was
last validly delivered or received, none of them shall be treated as valid in respect of that share.
Members who wish to appoint more than one proxy in respect of their holding may obtain additional Forms
of Proxy by contacting the Company’s Registrars, Computershare Investor Services at 0870 707 4040.
Lines are open Monday to Friday 9.00am to 5.30pm. Alternatively, members may photocopy the Form of
Proxy provided with this document indicating on each copy the name of the proxy appointed and the
number of ordinary shares in the Company in respect of which that proxy is appointed. All Forms of Proxy
should be returned together in the same envelope.
A Form of Proxy is enclosed with this Notice. Completion of the Form of Proxy will not prevent a member
from subsequently attending and voting at the AGM in person if they so wish. The Form of Proxy, and any
power of attorney or other authority under which it is executed (or a duly certified copy of any such power
or authority), must be either (i) received by post or (during normal business hours only) by hand at the
offices of the Company’s Registrars, Computershare, Queensway House, Hilgrove Street, St Helier,
Jersey,
4. Corporate Representatives
A corporate shareholder may authorise a person to act as its representative at the AGM. Each
representative may exercise (on behalf of the corporate shareholder) the same powers as the corporate
shareholder could exercise if they were an individual shareholder in the Company.
5. CREST Proxy Instructions
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment
service may do so for the AGM and any adjournment thereof by following the procedures described in the
CREST Manual. CREST Personal Members or other CREST Sponsored Members, and those CREST
members who have appointed a voting service provider, should refer to their CREST sponsor or voting
service provider who will be able to take the appropriate action on their behalf.
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In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate
CREST message (a CREST Proxy Instruction) must be properly authenticated in accordance with
Euroclear’s specifications and must contain the information required for such instruction, as described in
the CREST Manual (available at www.euroclear.com/CREST). The message, regardless of whether it
relates to the appointment of a proxy or to an amendment to the instruction given to a previously appointed
proxy, must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID number
3RA50) by no later than 19.30 AEDT/08.30 GMT on 14 December 2014. No message received through
the CREST network after this time will be accepted. For this purpose, the time of receipt will be taken to
be the time (as determined by the timestamp applied to the message by the CREST Applications Host)
from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner
prescribed by CREST. The CREST Manual is available at www.euroclear.com/CREST.
CREST members and, where applicable, their CREST sponsors or voting service provider should note that
Euroclear does not make available special procedures in CREST for any particular messages. Normal
system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is
the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST
Personal Member or Sponsored Member, or has appointed a voting service provider, to procure that his
CREST sponsor or voting service provider takes) such action as shall be necessary to ensure that a
message is transmitted by means of the CREST system by any particular time. In this connection, CREST
members and, where applicable, their CREST sponsors or voting service provider are referred, in
particular, to those sections of the CREST Manual concerning practical limitations of the CREST system
and timings.
The Company will treat as invalid a CREST Proxy Instruction in the circumstances set out in Article 34 of
the Companies (Uncertificated Securities) (Jersey) Order 1999, as amended.
6. Total Voting Rights
Holders of the Company’s ordinary shares are entitled to attend and vote at general meetings of the
Company. Each ordinary share entitles the holder to one vote on a poll. As at 10 November 2014, being
the latest practicable date prior to the publication of this Notice, the Company had 150,647,610 shares in
issue. The Company does not hold any shares in treasury. Therefore, the total voting rights in the
Company as at 10 November 2014 are 150,647,610.
7. Voting at the AGM
In order for the voting preferences of all shareholders to be taken into account, and not only those who can
physically attend, the Company will conduct a poll vote on all resolutions put to the AGM. As soon as
practicable following the meeting, the results of voting at the meeting and the numbers of proxy votes cast
for and against each resolution, together with the number of votes actively withheld will be announced to
the market via a Primary
the Company’s website
(www.mysalegroup.com).
Information Provider and also placed on
In the case of joint holders of shares, the vote of the senior member who is entitled to receive notice of
general meetings in accordance with the Articles whether in person or by proxy shall be accepted to the
exclusion of any votes of the other joint holders, and seniority shall be determined by the order in which the
names of the holders stand in the register of members of the Company.
8. Display Documents
Copies of the service contracts for all Executive Directors and the letters of appointment for the Non-
executive Directors are available for inspection at the registered office of the Company during normal
business hours on any weekday (excluding Saturdays, Sundays and public holidays) from the date of this
Notice until the conclusion of the AGM and also at the place of the AGM from 19.00 AEDT on the day of
the AGM until the conclusion thereof.
9. Electronic address
Please note that shareholders may not use any electronic address provided in this Notice or any related
documents (including the Form of Proxy) to communicate with the Company for any purpose other than
those expressly stated.
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Notice of Annual General Meeting
30 June 2014
Explanatory Notes to the Resolutions
Ordinary Resolutions
Resolutions 1 to 7 are being proposed as ordinary resolutions and for each of these resolutions to be passed, more
than 50% of the votes cast must be in favour of the resolution.
1
2
Report and Accounts
The Companies (Jersey) Law 1991 as amended requires the Directors of a public company to lay its
Annual Report and Accounts, together with a copy of any auditor’s report on them, before a general
meeting of the shareholders. An ordinary resolution to receive the Annual Report and Accounts will be
proposed.
Appointment of the Auditor and Auditor’s Remuneration
Shareholders are required to appoint the external auditor at the AGM to hold office until the conclusion of
the next annual general meeting. Following a review of the effectiveness, independence and objectivity of
the external auditor, PricewaterhouseCoopers LLP, the Board is proposing their re-appointment as
external auditor. PricewaterhouseCoopers LLP have expressed their willingness to continue in office for a
further year.
The resolution also authorises the Directors, in accordance with standard practice, to negotiate and agree
the remuneration of the auditors. In practice, the Audit Committee will consider the audit fees for
recommendation to the Board.
3-7 Election of Directors
The Company’s Articles of Association require the Directors to retire by rotation. Directors retiring by
rotation may, if they wish, stand for re-election. Since all the Directors were appointed on 28 May 2014,
they have agreed that they will each retire at the forthcoming AGM and offer themselves for election by
shareholders. Biographical details of each of the Directors can be found on pages 13-14 of the Annual
Report and Accounts.
Subject to the Articles, at each subsequent annual general meeting, one third of the continuing Directors
will be subject to retirement by rotation.
Special Resolution
Resolution 8 is being proposed as a special resolution. In order for a special resolution to be passed, at least
two-thirds of the votes cast must be in favour of the resolution.
8
Disapplication of Pre-Emption Rights
If the Directors wish to allot new Shares for cash (other than bonus shares or in connection with an
employee share scheme) they are required to first offer these Shares to existing shareholders in
proportion to their holdings in accordance with Article 2.8 of the Articles (the 'Pre-emption Procedure').
The purpose of paragraphs (A) and (B) of resolution 8 is to authorise the Directors to allot new Shares for
cash in connection with or pursuant to a rights issue or any other issue in favour of holders of Shares in
proportion (as nearly as may be practicable) to the respective holdings of Shares then held by them, or in
connection with a scrip dividend scheme or similar arrangement, in each case without following the Pre-
emption Procedure.
The purpose of paragraph (C) of resolution 8 is to allow the Directors, in addition to the authority granted
to the Directors pursuant to paragraphs (A) and (B), to allot Shares for cash up to an aggregate amount
equal to ten per cent of the issued Shares, again without following the Pre-emption Procedure.
This authority would remain in force until the conclusion of the Company’s annual general meeting in 2015
or fifteen months following the passing of this resolution, whichever is the earlier.
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