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ANNUAL REPORT & FINANCIAL STATEMENTS
30 JUNE 2015
COMPANY NUMBER 115584
MySale Group Plc
Contents
30 June 2015
Contents
Corporate directory
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
2
3
12
14
17
20
21
23
24
25
26
28
65
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73
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MySale Group Plc
Corporate directory
30 June 2015
Directors
Iain McDonald - Independent Non-Executive Chairman
David Mortimer AO - Independent Non-Executive Director
Jamie Jackson - Executive Director and Vice Chairman
Carl Jackson - Executive Director and Chief Executive Officer
Andrew Dingle - Executive Director and Chief Financial Officer
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
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
Zeus Capital Limited, 41 Conduit Street, London, W1S 2YQ
Company registrars
Computershare Investor Services (Jersey) Limited
Queensway House, Hilgrove Street, St Helier, Jersey, JE1 1ES
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MySale Group Plc
Strategic report
30 June 2015
This Strategic report for MySale Group Plc (‘MySale’ or the ‘company’) and its subsidiaries (collectively referred to as the
‘group’) is set out under the following main headings:
1. Financial and operating highlights
2. Chairman’s statement
3. Review of operations by the Chief Executive Officer
4. Financial review by the Chief Financial Officer
5. Principal risks and uncertainties
6. Corporate social responsibilities
7. People
1. Financial and operating highlights
Financial highlights
Revenue increased by 5% to A$235.9 million (2014: A$224.4 million).
Underlying EBITDA1 loss of A$11.2 million for the financial year in line with guidance (2014: Underlying EBITDA
profit of A$5.9 million).
Return to profitability in second half with underlying EBITDA of A$0.2 million.
Strong balance sheet with year-end cash balance of A$39.9 million and underlying cash position2 of A$63.5 million
as a result of changes in the working capital mix.
Encouraging start to current financial year.
Operational highlights
811,000 active members (2014: 796,000).
Continued increase in sales via mobile channel which now represents 55% of orders (2014: 51%).
Successful launch of new websites in United Kingdom and Hong Kong.
2. Chairman’s statement
I am pleased to be presenting to shareholders the first set of results since my appointment as Chairman on 27 July 2015.
MySale's first full year as a quoted company was a difficult one overall, but with a much improved performance through
the second half of the financial year.
Since joining the business I have worked closely with the executive management team and conducted a detailed
assessment of the business. The conclusion is that MySale group has the potential for a very exciting future. The group
has a number of fundamental strengths, namely:
an exceptional value proposition a well invested and stable proprietary technology platform
a fully developed global supply infrastructure;
a strong and experienced sourcing team;
a customer database of 15.6 million of which over 800,000 were active in the last 12 months;
a strong, cash rich balance sheet;
a low risk consignment inventory model with low net working capital requirements; and
a strong and supportive shareholder base.
The focus of the team for the next financial year is to leverage these strengths and, in terms of some simple targets,
these include:
1 Underlying EBITDA: see note 5 to the financial statements
2 Underlying cash position is defined as the aggregate of cash and receivables
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MySale Group Plc
Strategic report
30 June 2015
In the core Australia and New Zealand (‘ANZ’) market we aim to: return the active member metric to growth; increase
the average order value and frequency of existing members; and grow the profitability of each member basket.
In our South-East Asia (‘S-E Asia’) and United Kingdom (‘UK’) businesses we aim to drive customer registrations and
improve the conversion from registration to purchase.
Across the group these targets will be achieved by: our continued investment in technology to allow better use of data
analytics and non pay per click marketing channels to drive member engagement; deploying our balance sheet more
effectively by increasing the proportion of own-buy inventory and thus gross margins and improving our offer in categories
which fit naturally with our existing membership base to increase average member spend.
Driving the profitability of our core ANZ operations will allow us to build an exciting, growing business in S-E Asia.
At the same time, a key focus for myself as Chairman will be to ensure that our strategy and performance are effectively
communicated to both existing and potential shareholders. We will also add strength to the Board from a non-executive
perspective and this process is underway.
As for the new financial year, performance to date has been in line with expectations. With the peak period still ahead of
us, there is much to do, but this is an encouraging start.
_____________________________
Iain McDonald
Chairman
London
28 September 2015
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MySale Group Plc
Strategic report
30 June 2015
3. Review of operations by the Chief Executive Officer
MySale had 811,000 active members during the financial year to 30 June 2015 (2014: 796,000). During this period, the
group recorded revenue of A$235.9 million (2014: A$224.4 million, an increase of 5% on the previous year and the
seventh consecutive year of revenue growth.
Gross Profit for the year was $55.2 million (2014: A$60.4 million), a decrease on the prior year and Gross Profit margin
in the period was 23.4% compared to 26.9% in the prior year and the factors influencing Gross Profit margin are described
later in this review. Separately, it is pleasing to note positive progress as the group’s item margin increased slightly during
the year under review to 40% (2014: 39%) and both ANZ and S-E Asia achieved increases in average gross order values
which increased the group’s average order value to A$75 (2014: $61).
Year to 30 June 2015
Year to 30 June 2014
A$ million
Revenue
Total
ANZ
S-E Asia
ROW
Total
ANZ
S-E Asia
ROW
235.9
205.3
26.3
4.2
224.4
202.3
22.0
-
Revenue growth
5.1%
1.5%
19.6%
-
-
-
-
Gross Profit
55.2
50.9
3.5
0.9
60.4
57.3
3.1
Gross Profit %
23.4%
24.8%
13.2%
21.1%
26.9%
28.3%
14.0%
-
-
-
In 2014 calendar year the group embarked upon a number of significant initiatives including an Initial Public Offering
(‘IPO’) and the opening of four new retail websites in three continents and it is clear that this international expansion
stretched management resources too thinly during the first half of the financial year under review. Lessons were learned
and the group refocused on its core existing businesses and established operating model in the second half of the
financial year.
During the first half of the financial year the group’s performance was adversely affected by a number of tactical issues
with the product mix, excessive postage-led promotions and too much marketing budget spent on non-digital channels.
These issues resulted in lower than expected sales growth and reduced gross margins meaning there was a material
mismatch of income and the cost base which in turn meant a significant underlying EBITDA loss of A$ 11.2 million was
recorded.
Although disappointing the issues were of a tactical nature and therefore swift corrective action was taken and
performance improved significantly in the second half of the financial year during which gross margins began to improve
and the cost base reduced. This effective management action meant the group returned to profitability and recorded
positive underlying EBITDA of A$0.2 million for the second half of the financial year.
The group has a robust business model, is financially strong and expects to build on the positive momentum of this
second half performance in the financial year to June 2016 (‘FY2016’).
ANZ
In the ANZ region the group’s operations are relatively mature and well established flash sale business within a growing
online retail sector. Our website is recognised as one of the top ANZ online retail websites.
Revenue grew by 1.5% in the region, held back by the combined effects of postage promotions, which resulted in a
reduction in the average customer spend, a slight tightening in ANZ macroeconomic conditions and, in some product
categories, a lack of branded products within the product selection. As described above remedial action was initiated
and an improved performance was achieved in the second half of the financial year, although the full benefits of some
actions will not begin to materially accrue until the current financial year FY2016.
Following the distractions of calendar 2014 the Group has ensured this, largest, segment has management’s focus on
execution and development. Moving into FY2016 we are building on the momentum of these improvements.
While ANZ is long established, it continues to provide attractive growth possibilities due to lower levels of internet
penetration at circa 7% versus the UK and the USA at circa 11% together with this region’s relative lack of off-price
retailers.
Within the ANZ segment the group has its network of nine small-footprint, local retail stores which provide the group with
a supplementary distribution channel for off-price, clearance inventory and that can, in the future, be used to test a wider
off-price retail strategy.
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MySale Group Plc
Strategic report
30 June 2015
South-East Asia
Within the S-E Asia segment are the flash sales websites operations serving Hong Kong, Malaysia and Singapore where
we have been operating for five years. Accordingly, the websites are mostly well established as is the online retail sector
generally. We also have more recently established websites serving the Philippines and Thailand where online retail is
still in its early stages. Overall this territory delivered a 20% increase in revenue. This segment also experienced some
drag on revenue growth due to postage promotions and merchandising issues in the financial year under review and
therefore again a continued improvement in performance during FY2016 is anticipated.
This territory has different characteristics to those of ANZ and the key long term focus for the group is to grow the
membership base; transaction volumes and revenue to reach a scale which can then support further investment in the
region which in itself will then drive lower unit costs and increased profitability.
This segment is anticipated to be an increasingly significant part of the business in the medium to long term. Demand for
branded products, particularly UK and European brands, is expected to grow as the region’s consumers’ disposable
incomes rise and as these consumers also become more familiar with, and trust, online retailing. In addition, the
prevalence of smart-phones continues to grow and delivery solutions improve, thereby fuelling the demand and improving
the service available to members.
Rest of the World
ROW represents revenues generated principally in the UK which began trading in summer 2014. The foundation of this
territory is the database of Cocosa acquired in 2014 which provided the initial membership base. During the financial
year under review the group’s emphasis has been on engaging and converting this membership to active members rather
than acquiring additional new members.
Whilst currently a small part of the business, the UK operations are present in a large and well developed online
marketplace where engaged and active consumers can be acquired successfully. Given there is no online flash sale
operator of scale in the UK the group has targeted becoming a leading operator in the country.
Marketing
Following an unproductive investment into non-digital marketing initiatives in the first half of the financial year the group
refocused its marketing efforts for the acquisition of new members almost entirely to digital channels. In the first half of
the financial year the group invested, circa 11% of sales on marketing spend, a significant increase on prior periods when
6 – 8% has been invested. The group returned a marketing investment of c. 6% of sales in the second half. The entire
group’s digital marketing is carefully planned and delivered to obtain the optimum balance between lower member
acquisition costs and the acquisition of quality members with the attributes to become active, regularly spending,
members.
Sourcing
MySale has a unique ability to source inventory across the northern and southern hemispheres for the members’ sales
on our websites. During the financial year the group worked with over 3,000 brand partners to deliver high quality products
to our members and support those brand partners in their inventory management.
In the last few years, the group has invested significantly in developing the buying and logistics infrastructure required to
operate the business as one of the few truly international flash sale websites. During the financial year the group’s
products were sourced from brand partners in ANZ for 46% and ROW for 54% with the majority of the latter sourced in
the UK and USA. This mixture of sources compares to 100% of products being sourced from ANZ only three years ago.
The work of the sourcing teams meant the group’s item margin increased in the financial year to 40% (2014: 39%).
During the financial year the group ran sales campaigns with over 3,000 brands. Brands within the most consistent
performers include partners such as Calvin Klein, Guess and Desigual. Such partners repeatedly engage due to our
counter cyclical offering, our ability to deliver turn-key solutions and the flexible inventory management we offer.
Where opportunities present themselves, we have been selectively increasing the mix of own-buy off-price products,
primarily sourced from Europe and the UK, from below 10% of online sales volumes and in the medium term anticipate
20-30% of online sales activity to be on an own-buy basis. Own-buy inventory delivers increased gross margins, improved
product selection for members and deeper relationships with brand partners. Whilst this increase in own-buy activity shall
increase the investment into working capital assets the overall business model shall continue to have a relatively low net
working capital requirement and the majority of sourcing activity shall be undertaken on a risk free, consignment basis.
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MySale Group Plc
Strategic report
30 June 2015
Logistics
The group has three principle distribution centres in Australia, USA and the UK which allows efficient servicing of our
international membership base. These centres comprise over 300,000 square feet of warehouse space and an
infrastructure capable of shipping over 2.5 million deliveries in the peak months.
The group has implemented a continual process improvement system for its logistics operations and as a result has seen
global average dispatch days reduce by circa 7 days to 12 days and improved supplier delivery lead times. During the
financial year the group dispatched approximately 9.3 million units to members. Within the core ANZ and S-E Asia
segments the group’s level of product returns remains consistent and, at around 5-7%, is low compared to the wider
industry, whilst the UK is a little higher but also relatively low against the wider UK industry.
Technology
The group has made significant investment over the past few years to continue the development of systems that provide
responsiveness, reliability and international scalability. During the financial year the group committed capital expenditure
to improving its data, mobile and user experience capabilities and will continue the investment in these areas. In 2015
this programme of continual development included, for example, changes to our checkouts which allowed buying multiple
sales in a single basket which assisted the growth in average order value to A$75 (2014: A$61).
We have executed our mobile strategy as planned on IOS, Android and Windows across all our websites and have
continued strong adoption in mobile shopping with approximately 55% of orders coming from mobile devices in the period
under review. To date our shopping apps have been downloaded more than 4.5 million times.
Board changes
After the year end we were delighted welcome Iain McDonald as our Non-Executive Chairman whilst at the same time
expressing our gratitude to Non-Executive Director Adrian MacKenzie who left after, alongside David Mortimer, guiding
the company through international expansion and a London IPO. Iain has brought new sector insights to the Board and
will help us refine and grow our business in the future.
Outlook
Following a year of some challenges in FY2015 we look forward with optimism to FY2016. The group undertook a number
of actions at the time of our half year that refocussed all our resources on our core business. Since then we have
implemented initiatives that have: improved the product selection on our websites; reduced our reliance on postage
promotions; strengthened the senior team; invested our marketing budget in proven digital channels; and significantly
reduced our cost base. This delivered a return to modest profitability in the second half of FY2015 and we continue to
focus on these initiatives in FY2016.
We are maintaining the planned investment into our technology solutions in areas which will support business
improvement: data analysis, mobile and user experience to drive revenue and operational efficiency to reduce costs.
MySale has a number of unique strengths with our international inventory sourcing capability, robust logistics and
technology platform; substantial member base and experienced senior team and the group is focused on leveraging
these strengths to develop the business for all stakeholders.
Our aim for FY2016 is to continue on our path of improving underlying EBITDA. The group established a profitable path
in the second half of FY2015 and it is anticipated this momentum will continue into the first half of FY2016. Whilst sales
growth is clearly central to this, we are also focused on driving our gross margin higher and carefully controlling our
operating costs.
Whilst still early in the new financial year and with the peak period still ahead of us, there is much to do, but the early
signs are encouraging.
_____________________________
Carl Jackson
Chief Executive Officer
London
28 September 2015
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MySale Group Plc
Strategic report
30 June 2015
4. Financial review by the Chief Financial Officer
Revenue and Gross Profit
For the year ended 30 June 2015 group revenue increased by 5% to A$235.9 million (2014: A$224.4 million). The Gross
Profit deceased to A$55.2 million (2014: A$60.4 million) as a result of a lower Gross Profit percentage for reasons noted
in the Operational Review.
Operating expenses
Underlying Operating Expenses increased to A$66.4 million (2014: A$54.4 million) for the year under review. Underlying
Operating Expenses were A$39.8 million in the first half of the year but reduced significantly in the second half of the
year, to $A26.6 million, following a cost reduction programme initiated at the turn of the calendar year which primarily
focused on reducing marketing and headcount costs..
Loss after tax
The loss after tax reported in the financial statements is $A17.8 million (2014: A$58.5 million). This loss includes the
costs of a number of exceptional and non-cash items which are shown in note 5 to the financial statements.
Taxation
Due to the reported loss tax is a benefit of A$3.7 million which represents an effective rate of 17.1% for the financial year
(2014: 5.8%). The group has total tax losses of A$29.7 million with the majority located in Australia. The entire tax loss
has been recognised with the provision of a deferred tax asset of A$8.9 million.
Cash and working capital
The group’s cash on hand at the balance sheet date was A$39.9 million (2014: A$77.3 million) and working capital assets
of A$41.5 million (2014: A$16.6 million). During the second half of the year the group made a planned, additional
investment into inventory and trade receivables as more own-buy inventory was secured. . Own-buy inventory represents
a small though increasing element of the sales mix and improves the group’s product selection, delivery times and gross
profit margin. Over 80% of the group’s sales activities are undertaken on a zero inventory, consignment basis and
therefore, even as own-buy activity increases, the group has a relatively low net working capital requirement. The phasing
of activity in the second half of this year meant the year end balances were at the higher end of the normal range and it
is anticipated these working capital balances should unwind across the next financial year.
Capital expenditure
Capital expenditure of A$4.1 million (2014: A$3.6 million) in total was incurred supporting the group’s growth strategy.
The main components of this expenditure were the purchase of equipment for the group’s logistics operations and further
investment into the group’s technology platform and capabilities.
Banking facilities
The group holds significant cash balances, held principally with HSBC with whom the group also has trade finance multi
option debt facilities of A$6.2 million. In addition the group has trade finance facilities of A$7.2 million with ANZ Bank. All
facilities are renewed on an annual basis.
Key performance indicators
The group manages it operations through the use of a number of key performance indicators (KPI’s) such as revenue,
revenue growth, gross margin percentage, average revenue per active member, and underlying EBITDA
Website closures
During the financial year the group opened and subsequently closed, for the time being, the sales websites in USA and
South Korea together with a secondary Singapore site. As a result the group’s second distribution centre in USA was
also closed. The net results of these three website operations are disclosed separately, on a net basis, in note 5 to the
financial statements and have been adjusted in the underlying results.
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MySale Group Plc
Strategic report
30 June 2015
Underlying basis
The group manages its operations looking at the underlying EBITDA which excludes the impact of a number of one off
and non-cash items as this, in the Board’s opinion, provides a more representative measure of the group’s performance.
A reconciliation between reported Loss before Tax to Underlying EBITDA is included at note 5 to the financial statements.
_____________________________
Andrew Dingle
Chief Financial Officer
London
28 September 2015
5. 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 Australia and New Zealand (‘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 sale’ model operated by the group
needs to continue to be successful. The group’s strategies require existing members to make repeat purchases 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.
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 appropriate prices, on
appropriate 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.
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MySale Group Plc
Strategic report
30 June 2015
Growth in e-commerce and flash sales
The business of selling products over the internet, particularly on the flash sale model, is dynamic and relatively new.
The market segment for the flash sale model has grown significantly, and this growth may not be sustainable. If members
cease to find the flash sale 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 and could negatively affect net sales
and have an adverse effect on the group’s operating results and financial condition.
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 and financial condition.
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 third-party data centre hosting facilities. 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 or mobile application 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 member interest and by maintaining strong relationships with its members.
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 some 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 third-party logistics providers to manage, process and ship product between group locations and 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 sourcing 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, receives negative publicity or unfavourable member reviews and complaints on social media
platforms, these could damage the brand and reduce consumer use of the group’s websites and mobile applications. 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.
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MySale Group Plc
Strategic report
30 June 2015
Changes in indirect tax rules
Changes in local indirect tax, such as sales and value-added taxes, and duty treatment in any of the markets in which
the group operates could have an impact on the sales of products in those markets. Such changes could reduce the
attractiveness of the group’s sales offering and have a material and adverse effect on the group’s financial condition and
financial results.
Cash
The management of the group’s cash is of fundamental importance. The group maintains all cash balances with large,
appropriately capitalised, international financial institutions and seeks any necessary credit facilities from these
institutions. The group relies on access to its cash and credit facilities in order to trade successfully and restrictions to
such access could have a material and adverse effect on the group’s financial condition and financial results.
6. Corporate social responsibilities
The group’s approach is to make a positive difference to the people, environment and communities in which it works.
Examples include engaging not-for-profit employment agencies, to motivate and upskill the local unemployed community
to sustain employment with the group and investing in warehousing training programs such as a Certificate 3 in
Warehousing and Logistics for the group’s Australian staff. To reduce waste and the impact on the environment the group
does not put copies of customer invoices in its parcels, but rather provide them online.
7. 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 receives 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.
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 re-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.
11
MySale Group Plc
Corporate governance
30 June 2015
As the company is listed on the Alternative Investment Market, a market regulated by London Stock Exchange Plc, it 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 therefore applies the principles of the QCA Code where they consider it appropriate for a
company of MySale’s size and nature.
The Board of Directors
During the financial year ended 30 June 2015 and as at the date of approval of these financial statements, the Board
consisted of five directors as shown below. 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:
Iain McDonald
David Mortimer AO
Jamie Jackson
Carl Jackson
Andrew Dingle
Independent Non-Executive Chairman (appointed 27 July 2015)
Independent Non-Executive Director
Executive Director and Vice Chairman
Executive Director and Chief Executive Officer
Executive Director and Chief Financial Officer
Adrian Mackenzie
Former Independent Non-Executive Director (resigned on 27 July 2015)
Biographies for each of the current directors are set out in the Directors’ report under ‘Directors and their interests’.
Schedule of matters reserved specifically for the Board 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 company, and in line with the recommendations of the QCA Code, the Board has
delegated certain of its responsibilities to the Audit Committee or Remuneration Committee, as appropriate.
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 group is properly
measured and reported on, reviewing and challenging reports from management and the external auditor relating to the
company’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
Iain McDonald
Member
Chair
12
MySale Group Plc
Corporate governance
30 June 2015
The Audit Committee met eight times during the financial year.
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 are 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:
Iain McDonald
David Mortimer AO
Chair
Member
The Remuneration Committee did not meet during the financial year.
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 are 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 in place an organisational structure with formally defined lines of
responsibility and delegation of authority. There are established procedures for planning, for 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. 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 review 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.
13
MySale Group Plc
Directors' remuneration report
30 June 2015
As the company is listed on the Alternative Investment Market (‘AIM’), it 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 number of times the Remuneration Committee met is also detailed in the Corporate governance.
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
amounts 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, committee meetings of the directors, 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 that may include 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 are reviewed annually in line with the remuneration reviews for all other group employees.
14
MySale Group Plc
Directors' remuneration report
30 June 2015
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 for that period. 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 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 Iain McDonald entered into letters of appointment on 3 June 2014 and 27 July 2015, respectively.
David Mortimer’s letter was updated on 12 August 2015. 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.
The annual fees for non-executive directors, effective at the date of this report, are as follows:
Non-executive director
Base fee
Group entity with which the
appointment is with
Iain McDonald
David Mortimer AO
£75,000
£40,000
MySale Group Plc
MySale Group Plc
The appointment of any non-executive director is terminable on 3 months’ written notice.
Iain McDonald has been granted 3,000,000 options over the ordinary share capital of the company each with an exercise
price of 53p. 1,000,000 options will vest when the company’s share price reaches £1.50, a further 1,500,000 shall vest
when the company’s share price reaches £2.26 and a further 500,000 shall vest when the company’s share price reaches
£2.75.
The following information is subject to audit.
Directors’ remuneration for the year ended 30 June 2015 was as follows and this information is subject to audit:
Basic salary/
fees
Bonus
Taxable
benefits
Pension
contributions
Total
2015
Total
2014
Non-executive
directors:
David Mortimer AO
Adrian MacKenzie
£100,000
£40,000
Executive directors:
Jamie Jackson
Carl Jackson
Andrew Dingle
A$210,787
A$275,000
A$263,750
-
-
-
-
-
-
-
-
-
£100,000
£40,000
-
-
A$25,295
A$14,814
A$24,633
-
A$26,125
A$25,056
A$236,082
A$315,939
A$313,439
A$727,555
A$415,949
A$294,659
15
MySale Group Plc
Directors' remuneration report
30 June 2015
The company had two employee share plans prior to its AIM admission on 16 June 2014: (i) the Executive Incentive
Plan (‘EIP’) and (ii) the Loan Share Plan (‘LSP’).
(i) The Executive Incentive Plan
On 16 June 2015, Andrew Dingle became entitled to 201,115 ordinary shares which vested but have not been exercised
in accordance with the EIP. Andrew Dingle had a previous entitlement to a cash bonus payable on AIM admission but
had agreed to defer the payment and take it in the form of a conditional award under the EIP, which was subject to a
continued employment with the group.
(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 directors and employees selected to participate to buy
or subscribe for ordinary shares of the company, using a loan from the company. The ordinary shares are bought on-
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 AIM admission (16 June 2016) and the remaining 50% three years after
(16 June 2017), 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.
The current equity award pursuant to the LSP is not deemed to be achieving its intended objective, and as such the
Board and some of its participants, including Andrew Dingle, have mutually agreed to the cancellation of the share awards
granted on 16 June 2014. The Board is currently reviewing its long term incentive plans and if grants are made, Andrew
Dingle and previous participants may be eligible for future grants.
Shares granted under the LSP are as follows:
Balance
1 July
2014
-
-
-
111,499
70,182
David Mortimer AO
Adrian MacKenzie
Jamie Jackson
Carl Jackson
Andrew Dingle
Granted
Exercised
Cancelled
Balance
30 June
2015
Exercise
price
(£)
Date of
exercise
Market price
on exercise (£)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
70,182
-
-
-
111,499
-
-
-
-
£2.26
£2.26
-
-
-
-
-
-
-
-
-
-
Share price information
The market price of MySale Group Plc ordinary shares at 30 June 2015 was £0.52 (2014: £2.13) and the range during
the financial year was between £0.47 and £2.35 (2014: £1.87 and £2.27).
16
MySale Group Plc
Directors' report
30 June 2015
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', ‘group’ or ‘MySale’) consisting of MySale Group Plc
and the subsidiaries it controlled at the end of, or during, the year ended 30 June 2015.
Directors
The directors who have served on the Board of MySale Group Plc during the whole of the financial year and up to the
date of this report are set out below:
Iain McDonald (appointed 27 July 2015)
David Mortimer AO
Jamie Jackson
Carl Jackson
Andrew Dingle
Adrian Mackenzie (resigned 27 July 2015)
Information on directors and their interests
Biographies for the directors and their interests in the ordinary shares of the company, are shown below:
Name:
Title:
Age:
Experience and
expertise:
Name:
Title:
Age:
Experience and
expertise:
Name:
Title:
Age:
Experience and
expertise:
Name:
Title:
Age:
Experience and
expertise:
Iain McDonald
Independent Non-Executive Chairman
44
Iain was appointed to the Board in July 2015. Based in London, Iain has a wealth of experience
of high growth, online businesses and capital markets which the Board believes will be of great
benefit to the group. Iain is a partner with the William Currie Group of Companies (‘WCG’), a
family business founded by financier Bill Currie to invest primarily in technology and e-commerce
companies. Iain has worked with WCG for seven years now during which time WCG has built
upon its already strong track record in the sector, having invested in the early stages of
development of companies including ASOS, The Hut Group, Metapack, Eagle Eye Solutions and
Anatwine. As well as working on the investment side of the business, Iain is a non-executive
director at The Hut Group, Anatwine, Atterley Road and Houseology.com.
David Mortimer AO
Independent Non-Executive Director
70
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.
Jamie Jackson
Executive Director and Vice Chairman
49
Jamie founded MySale in 2007 having identified the gap in the Asia-Pacific region for an online
flash sales marketplace. He 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 for companies such as TK Maxx,
Costco and Tesco. Building on this experience. He is currently focused on the group’s
international buying, product development and strategic partnerships.
Carl Jackson
Executive Director and Chief Executive Officer
51
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. Carl has led MySale’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.
17
MySale Group Plc
Directors' report
30 June 2015
Name:
Title:
Age:
Experience
and expertise:
Andrew Dingle
Executive Director and Chief Financial Officer
45
Andrew joined MySale in 2013 having previously served as ANZ CFO for Henry Schein, a US
Fortune 500 company. He 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.
Directors’ beneficial interests in the shares of the company:
Name
Iain McDonald
David Mortimer AO3
Jamie Jackson
Carl Jackson
Andrew Dingle
Adrian Mackenzie4
Ordinary
shares
Percentage
holding
148,482
165,000
47,469,189
3,745,000
-
665,882
0.1%
0.1%
31.5%
2.5%
-
0.4%
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 financial 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 2015.
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 Strategic review and this 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 member 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 financial statements.
3 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
18
MySale Group Plc
Directors' report
30 June 2015
Substantial shareholdings
At the reporting date, 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
Insight Venture Partners VI5
Schroders plc
Sports Direct International
FMR LLC
Janus Capital Management LLC
Number of shares
held
Percentage
holding
33,237,124
7,871,137
7,851,161
7,251,065
4,908,969
4,565,674
22.06%
5.2%
5.2%
4.8%
3.2%
3.0%
Charitable and political donations
The group made charitable donations of A$25,250 (2014: A$112,827) 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 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.
_____________________________
Iain McDonald
Chairman
London
28 September 2015
5 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)
19
MySale Group Plc
Directors' responsibility statement
30 June 2015
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 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 the 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 group and the parent company and enable them to ensure that the financial statements
comply with the Companies (Jersey) Law 1991. They have a general responsibility for taking such steps as are
reasonable open to them to safeguard the assets of the group and the parent company 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 group and parent company auditors
are unaware, and each director has taken all steps that he ought to have taken as a director in order to make himself
aware of any relevant audit information and to establish that the group and parent company’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 financial statements, taken as a whole, is fair, balanced and
understandable and provides the information necessary for shareholders to assess the group’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 European
Union, give a true and fair view of the assets, liabilities, financial position and profit or 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.
Cautionary statement regarding forward looking statements
This document contains certain forward-looking statements. These forward-looking statements include matters that are
not historical facts or are statements regarding the company’s intentions, beliefs or current expectations concerning,
among other things, the group’s results of operations, financial condition, liquidity, prospects, growth, strategies, and the
industries in which the group operates. Forward-looking statements are based on the information available to the
directors at the time of preparation of this document, and will not be updated during the year. The directors can give no
assurance that these expectations will prove to be correct. Due to inherent uncertainties, including both economic and
business risk factors underlying such forward-looking information, actual results may differ materially from those
expressed or implied by these forward-looking statements.
20
MySale Group Plc
Independent auditors' report to the members of MySale Group Plc
30 June 2015
Report on the financial statements
Our opinion
In our opinion:
MySale Group Plc’s group financial statements and parent company financial statements (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 2015 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.
What we have audited
The financial statements comprise the:
Balance sheet as at 30 June 2015;
Parent company balance sheet as at 30 June 2015;
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 comprises
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.
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
the 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.
21
MySale Group Plc
Independent auditors' report to the members of MySale Group Plc
30 June 2015
Responsibilities for the financial statements and the audit
Our responsibilities and those of the directors
As explained more fully in the Directors’ responsibilities statement set out on page 20, 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
International Standards on Auditing (UK and Ireland) (“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.
What an audit of financial statements involves
We conducted our audit in accordance with 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.
We primarily focus our work in these areas by assessing the directors’ judgements against available evidence, forming
our own judgements, and evaluating the disclosures in the financial statements.
We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to
provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of
controls, substantive procedures or a combination of both.
In addition, we read all the financial and non-financial information in the Annual report and the financial statements 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.
Craig Skelton (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
28 September 2015
22
MySale Group Plc
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2015
Revenue
Sale of goods
Postage revenue
Cost of sale of goods
Gross profit
Other operating gains/(loss), net
Finance income
Finance costs
Finance income, 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
Loss before income tax benefit
Note
2015
A$'000
2014
A$'000
4
5
7
34
216,516
19,337
235,853
(180,621)
199,624
24,738
224,362
(163,942)
55,232
60,420
204
195
(58)
137
535
337
(128)
209
(47,952)
(28,969)
-
-
-
(116)
(36,497)
(26,034)
(9,818)
(51,263)
304
-
(21,464)
(62,144)
Income tax benefit
9
3,675
3,602
Loss after income tax expense for the year attributable to the owners of
MySale Group Plc
(17,789)
(58,542)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Net change in the fair value of cash flow hedges taken to equity, net of tax
Foreign currency translation
23
23
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners of
MySale Group Plc
740
6,219
6,959
(719)
612
(107)
(10,830)
(58,649)
Basic earnings per share
Diluted earnings per share
Cents
Cents
35
35
(11.81)
(11.81)
(58.28)
(58.28)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
23
MySale Group Plc
Balance sheet
As at 30 June 2015
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments
Income tax receivable
Other
Total current assets
Non-current assets
Investments in joint venture
Property, plant and equipment
Intangibles
Deferred tax
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Derivative financial instruments
Income tax payable
Provisions
Deferred revenue
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share premium account
Other reserves
Accumulated losses
Total equity
Note
2015
A$'000
2014
A$'000
10
11
12
26
13
34
14
15
16
17
18
26
19
20
21
23
39,853
23,630
17,880
22
1,643
4,736
87,764
134
3,023
23,517
10,320
36,994
77,344
3,817
12,803
-
1,962
16,044
111,970
-
3,219
22,439
5,396
31,054
124,758
143,024
29,240
1,189
-
1,234
2,115
11,147
44,925
64
328
392
30,118
1,613
705
295
4,883
15,616
53,230
262
2,966
3,228
45,317
56,458
79,441
86,566
306,363
(122,931)
(103,991)
306,363
(133,595)
(86,202)
79,441
86,566
The financial statements of MySale Group Plc (company number 115584) were approved by the Board of Directors and
authorised for issue on 28 September 2015. They were signed on its behalf by:
__________________________ ___________________________
Carl Jackson Andrew Dingle
Director Director
The above balance sheet should be read in conjunction with the accompanying notes
24
MySale Group Plc
Statement of changes in equity
For the year ended 30 June 2015
Share
capital
A$'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 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 22)
Business combination – contingent
consideration with shares to be issued
-
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
Share
capital
A$'000
Share
premium
account
A$'000
Other
reserves
A$'000
Accumulated
losses
A$'000
Total
equity
A$'000
Balance at 1 July 2014
Loss after income tax benefit for the year
Other comprehensive income for the year, net
of tax
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Share-based payments (note 23)
Balance at 30 June 2015
-
-
-
-
-
-
306,363
(133,595)
(86,202)
86,566
-
-
-
-
-
(17,789)
(17,789)
6,959
-
6,959
6,959
(17,789)
(10,830)
3,705
-
3,705
306,363
(122,931)
(103,991)
79,441
The above statement of changes in equity should be read in conjunction with the accompanying notes
25
MySale Group Plc
Statement of cash flows
For the year ended 30 June 2015
Cash flows from operating activities
Loss before income tax expense for the year
Adjustments for:
Depreciation and amortisation
Net loss on disposal of property, plant and equipment
Share of loss - joint ventures
Fair value on share-based payments reserve
Fair value loss on redeemable preference shares
Fair value loss/(gain) on contingent consideration
Loss on revaluation of long-term incentive plan
Gain on business combination - bargain purchase
Interest income
Interest expense
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in inventories
Decrease/(increase) in other operating assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in other provisions
Increase in deferred revenue
Interest received
Interest paid
Income taxes paid
Note
2015
A$'000
2014
A$'000
(21,464)
(62,144)
3,434
71
116
3,705
-
-
-
-
(195)
58
1,865
182
-
-
51,263
(304)
4,888
(932)
(337)
128
(14,275)
(5,391)
(19,508)
(5,077)
11,760
(1,728)
(5,407)
(4,469)
(38,704)
195
(58)
(49)
(517)
(4,335)
(8,575)
14,046
841
4,118
187
337
(128)
(2,046)
Net cash used in operating activities
(38,616)
(1,650)
Cash flows from investing activities
Payment for purchase of business, net of cash acquired
Payments for new joint venture capital invested
Payments for property, plant and equipment
Payments for intangibles
Proceeds from disposal of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from borrowings
Repayment of borrowings
Repayments of leases
Share issue transaction costs
Net cash from/(used in) financing activities
32
14
15
22
22
-
(104)
(1,033)
(3,026)
51
487
-
(1,789)
(1,813)
-
(4,112)
(3,115)
-
2,467
(2,759)
(330)
-
72,267
317
(532)
-
(5,063)
(622)
66,989
The above statement of cash flows should be read in conjunction with the accompanying notes
26
MySale Group Plc
Statement of cash flows
For the year ended 30 June 2015
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash
Note
2015
A$'000
(43,350)
77,344
5,859
2014
A$'000
62,224
15,072
48
Cash and cash equivalents at the end of the financial year
10
39,853
77,344
The above statement of cash flows should be read in conjunction with the accompanying notes
27
MySale Group Plc
Notes to the financial statements
30 June 2015
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 of the group, 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.
MySale Group Plc is a public limited company incorporated and registered in Jersey 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 the company 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, that occurred on 16 June 2014. 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 was on the basis that the transaction is a form of capital
reconstruction and group reorganisation. Therefore, these financial statements had been prepared using the principles
of a reverse acquisition by APAC and the consolidated financial statements had been prepared as a continuation of the
financial statements of the existing APAC Group.
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 and contingent consideration.
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.
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. The adoption of these
Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of
the group.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of MySale Group Plc as at
30 June 2015 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.
28
MySale Group Plc
Notes to the financial statements
30 June 2015
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 rates at the dates of the transactions, for the period. All resulting foreign exchange
differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
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 group; 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 and wholesale 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. 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.
Postage revenue
Postage revenue is recognised when the associated goods have been successfully delivered to the customer.
29
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 2. Significant accounting policies (continued)
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 the changes in deferred tax assets and liabilities attributable
to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when
the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted,
except for:
● When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in
a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting
nor taxable profits; or
● When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and
the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the
foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available
for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that
it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Current and non-current classification
Assets and liabilities are presented in the balance sheet based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in normal
operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is 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.
Other receivables are recognised at amortised cost, less any provision for impairment.
30
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 2. Significant accounting policies (continued)
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.
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery 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.
Cash flow hedges
Cash flow hedges are used to cover the group's exposure to variability in cash flows that is attributable to particular risks
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, the 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, the 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. Income/(losses) earned from joint ventures 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.
31
MySale Group Plc
Notes to the financial statements
30 June 2015
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 the 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.
32
MySale Group Plc
Notes to the financial statements
30 June 2015
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 in profit or loss when incurred.
Impairment of non-financial assets
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.
Deferred revenue
Deferred revenue relates to cash received in advance from customers where the goods have not been delivered as at
the reporting date.
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.
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 and other employee benefits 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.
33
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 2. Significant accounting policies (continued)
Other long-term employee benefits
Employee benefits 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 corporate 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 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 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.
34
MySale Group Plc
Notes to the financial statements
30 June 2015
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 interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the
fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either
not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge
and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an
analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison,
where applicable, with external sources of data.
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 the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within
equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling
interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment
in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the
fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised
as a gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification
and measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration
transferred and the acquirer's previously held equity interest in the acquirer.
35
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 2. Significant accounting policies (continued)
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') (comparative period)
When MySale (the legal parent and legal acquirer) acquired APAC and its subsidiaries (the legal subsidiary) in the
previous year, the acquisition did not meet the definition of a business combination in accordance with IFRS 3 'Business
Combinations'. Instead, the combination had 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 were reflected at their carrying amounts. No adjustments were 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 were the existing retained earnings and other equity
balances of APAC;
• The amount recognised as issued equity instruments were 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 was recognised as a result of the combination. The only goodwill that was recognised was the existing
goodwill of APAC. The difference between the consideration paid and the equity 'acquired' was 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.
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 2015.
The group's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant
and material to the group, are set out below:
36
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 2. Significant accounting policies (continued)
IFRS 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all
previous versions of AASB 9 and completes the project to replace IAS 39 ‘Financial Instruments: Recognition and
Measurement’. AASB 9 introduces new classification and measurement models for financial assets. New simpler hedge
accounting requirements are intended to more closely align the accounting treatment with the risk management activities
of the entity. New impairment requirements will use an ‘expected credit loss’ (‘ECL’) model to recognise an allowance.
The group will adopt this standard from 1 July 2018 but the impact of its adoption is yet to be assessed.
IFRS 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. 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 from 1 July 2018
but the impact of its adoption is yet to be assessed.
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.
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 2015 (2014: A$nil).
37
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 3. Critical accounting judgements, estimates and assumptions (continued)
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.
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.
The group's operations are unaffected by seasonality.
Intersegment transactions
Intersegment transactions were made at market rates and are eliminated on consolidation.
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 balance sheet for group
assets and liabilities.
Major customers
During the year ended 30 June 2015 there were no major customers (2014: none). A customer is considered major if its
revenues are 10% or more of the group's revenue.
38
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 4. Operating segments (continued)
Operating segment information
2015
Revenue
Sales to external customers
Total revenue
Gross Profit
Other operating gains, net
Selling and distribution expenses
Administration expenses
Finance income
Finance costs
Share of loss of joint venture
Loss before income tax benefit
Income tax benefit
Loss after income tax benefit
2014
Revenue
Sales to external customers
Total revenue
Gross Profit
Other operating gains, net
Selling and distribution expenses
Administration expenses
Finance income
Finance costs
Preference shares fair value loss
Listing costs
Contingent consideration fair value gain
Loss before income tax benefit
Income tax benefit
Loss after income tax benefit
Australia and
New
Zealand
A$'000
Asia
A$'000
Rest of the
world
A$'000
Total
A$'000
205,340
205,340
26,333
26,333
4,180
4,180
235,853
235,853
50,879
3,472
881
55,232
204
(47,952)
(28,969)
195
(58)
(116)
(21,464)
3,675
(17,789)
Australia and
New
Zealand
A$'000
Asia
A$'000
Total
A$'000
202,343
202,343
22,019
22,019
224,362
224,362
57,336
3,084
60,420
535
(36,497)
(26,034)
337
(128)
(51,263)
(9,818)
304
(62,144)
3,602
(58,542)
39
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 5. Other operating gains/(loss), net
Net foreign exchange loss
Gain on business combination - bargain purchase
Other income
Other operating gains/(loss), net
2015
A$'000
2014
A$'000
(205)
-
409
204
(479)
932
82
535
Refer to note 32 for further details on the gain on business combination - bargain purchase.
Note 6. EBITDA reconciliation (earnings before interest, taxation, depreciation and amortisation)
EBITDA reconciliation
Loss before income tax
Add: Non-controlling interest
Less: Interest income
Add: Interest expense
Add: Depreciation and amortisation
EBITDA
2015
A$'000
2014
A$'000
(21,464)
116
(195)
58
3,434
(62,144)
-
(337)
128
1,865
(18,051)
(60,488)
Underlying EBITDA represents EBITDA adjusted for significant, unusual and other one-off items.
Underlying EBITDA reconciliation
EBITDA
Loss on revaluation of preference shares
Reorganisation and discontinued operations
Advertising one off (TV and Print)
Listing costs
Loss on revaluation of long term incentive plan
Acquisition and corporate reorganisation costs
Gain on revaluation of contingent consideration
Underlying EBITDA
2015
2014
(18,051)
-
3,493
3,216
(356)
519
-
-
(60,488)
51,263
-
-
9,818
4,888
809
(304)
(11,179)
5,986
40
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 7. Expenses
Loss before income tax includes the following specific expenses:
Sales, distribution and administration expenses:
Staff costs (note 8)
Marketing expenses
Occupancy costs
Merchant and other professional fees
Depreciation and amortisation
Other administration costs
Total sales, distribution and administration expenses
Finance costs
Interest and finance charges paid/payable
Occupancy costs include:
Minimum operating lease payments
2015
A$'000
2014
A$'000
30,423
27,001
5,327
5,534
3,434
5,202
32,541
15,019
4,218
5,251
1,865
3,637
76,921
62,531
58
128
3,420
2,541
Cost of inventories recognised as an expense in 'cost of sales' in profit or loss
139,676
125,692
Note 8. Staff costs
Aggregate remuneration:
Wages and salaries
Social security costs
Long term employee incentive plan
Other staff costs and benefits
Total staff costs
The average monthly number of employees (including executive directors and those on a
part-time basis) was:
Sales and distribution
Administration
2015
A$'000
2014
A$'000
24,399
1,803
335
3,886
22,822
1,488
4,888
3,343
30,423
32,541
2015
2014
387
172
559
360
122
482
Details of directors’ remuneration and interests are provided in the audited section of the Directors’ remuneration report
and should be regarded as part of these financial statements.
41
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 9. Income tax benefit
Income tax benefit
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustment recognised for prior periods
Other adjustment
Aggregate income tax benefit
Deferred tax included in income tax benefit comprises:
Increase in deferred tax assets (note 16)
Numerical reconciliation of income tax benefit and tax at the statutory rate
Loss before income tax benefit
Tax at the statutory tax rate of 31.5% (2014: 19.6%)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Non-deductible expenses
Tax incentive
Revaluation of contingent consideration
Preference share fair value
Tax revaluation upon group restructure
Adjustment recognised for prior periods
Current year tax losses not recognised
Difference in overseas tax rates
Income tax benefit
2015
A$'000
2014
A$'000
1,194
(5,013)
144
-
379
(3,978)
(153)
150
(3,675)
(3,602)
(5,013)
(3,978)
(21,464)
(62,144)
(6,761)
(12,180)
704
-
-
-
2,280
(3,777)
144
48
(90)
142
(73)
(53)
8,715
-
(3,449)
(153)
-
-
(3,675)
(3,602)
Tax at the statutory tax rate represents the effective rate of income tax across the jurisdictions in which each of the group
entities are domiciled.
The tax rates of the main jurisdictions are Australia 30% (2014: 30%), Singapore 17% (2014: 17%), New Zealand 28%
(2014: 28%), United Kingdom 20% (2014: 20%) and United States 42.8% (2014: 23.84%).
Note 10. Current assets - cash and cash equivalents
Cash at bank
Bank deposits at call
Bank deposits - pledged
Short term deposits - pledged
These deposits are pledged in relation to merchant facilities for the group. Refer to note 20.
2015
A$'000
2014
A$'000
39,853
-
-
69,144
8,000
200
39,853
77,344
42
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 11. Current assets - trade and other receivables
Trade receivables
Less: Provision for impairment of receivables
Other receivables
Sales tax receivable
2015
A$'000
2014
A$'000
23,667
(37)
23,630
-
-
2,051
-
2,051
1,343
423
23,630
3,817
Trade receivables include uncleared cash receipts due from on-line customers which amounted to A$1,529,000 (2014:
A$958,000).
Impairment of receivables
The group has recognised a loss of A$37,000 (2014: A$nil) in profit or loss in respect of impairment of receivables for
the year ended 30 June 2015.
The ageing of the impaired receivables provided for above are as follows:
3 to 6 months overdue
Movements in the provision for impairment of receivables are as follows:
Additional provisions recognised
2015
A$'000
2014
A$'000
37
-
2015
A$'000
2014
A$'000
37
-
Past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to A$203,000 as at 30
June 2015 (A$nil as at 30 June 2014).
The ageing of the past due but not impaired receivables are as follows:
2015
A$'000
2014
A$'000
-
3 to 6 months overdue
The group did not consider a credit risk on the aggregate balances after reviewing credit terms of customers based on
recent collection practices.
203
43
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 12. Current assets - inventories
Goods for resale
Obsolete and slow moving inventory provision
Stock in transit
2015
A$'000
2014
A$'000
16,252
(343)
15,909
1,971
13,668
(865)
12,803
-
17,880
12,803
Write-downs of inventories to net realisable value recognised as an expense during the year ended 30 June 2015
amounted to A$904,000 (2014: A$341,000). This expense has been included in 'cost of sales' in profit or loss.
Note 13. Current assets - other
Prepayments
Prepaid inventory
Other deposits
Other current assets
2015
A$'000
2014
A$'000
432
3,948
316
40
340
15,090
547
67
4,736
16,044
Prepaid inventory relates to the costs of goods for resale that have been paid for by the group but not delivered to its
distribution centres for further dispatch to the customers who placed the orders as at the reporting date. The
corresponding cash received in advance from customers are accounted for within deferred revenue category in the
balance sheet which includes the total amount of cash received for the goods not delivered to customers at the reporting
date.
Note 14. Non-current assets - property, plant and equipment
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Fixtures and fittings - at cost
Less: Accumulated depreciation
Motor vehicles - at cost
Less: Accumulated depreciation
44
2015
A$'000
2014
A$'000
942
(563)
379
4,640
(2,582)
2,058
836
(456)
380
538
(332)
206
794
(341)
453
3,781
(1,701)
2,080
813
(307)
506
445
(265)
180
3,023
3,219
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 14. Non-current assets - property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Leasehold Plant and
improvements equipment and fittings
A$'000
Fixtures
A$'000
A$'000
Motor
vehicles
A$'000
Total
A$'000
Balance at 1 July 2013
Additions
Disposals
Exchange differences
Depreciation expense
Balance at 30 June 2014
Additions
Disposals
Exchange differences
Depreciation expense
491
163
(30)
(1)
(170)
453
119
-
20
(213)
1,514
1,335
(54)
(2)
(713)
2,080
788
(100)
144
(854)
Balance at 30 June 2015
379
2,058
Assets pledged as security
Refer to note 20 for property, plant and equipment pledged as security.
463
254
(94)
(1)
(116)
506
32
(11)
(13)
(134)
380
211
37
(4)
2
(66)
180
94
-
(1)
(67)
206
2,679
1,789
(182)
(2)
(1,065)
3,219
1,033
(111)
150
(1,268)
3,023
Property, plant and equipment secured under finance leases
Refer to note 30 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 15. Non-current assets - intangibles
2015
A$'000
2014
A$'000
16,849
16,849
2,294
(765)
1,529
4,595
(1,683)
2,912
3,084
(857)
2,227
2,019
-
2,019
2,819
(709)
2,110
1,948
(487)
1,461
23,517
22,439
Goodwill - at cost
Customer relationships - at cost
Less: Accumulated amortisation
Software - at cost
Less: Accumulated amortisation
ERP system
Less: Accumulated amortisation
45
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 15. 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:
Goodwill
A$'000
Customer
relationships Software
A$'000
A$'000
ERP
system
A$'000
Total
A$'000
Balance at 1 July 2013
Additions
Additions through business combinations
(note 32)
Amortisation expense
Balance at 30 June 2014
Additions
Disposals
Exchange differences
Amortisation expense
16,849
-
-
-
16,849
-
-
-
-
-
-
2,019
-
2,019
-
-
217
(707)
1,047
1,512
-
(449)
2,110
1,761
-
11
(970)
1,511
301
-
(351)
1,461
1,265
(10)
-
(489)
19,407
1,813
2,019
(800)
22,439
3,026
(10)
228
(2,166)
Balance at 30 June 2015
16,849
1,529
2,912
2,227
23,517
Goodwill is allocated to the group’s cash-generating units ('CGUs') identified according to countries of operation as
follows:
Australia
2015
A$'000
2014
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:
46
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 15. Non-current assets - intangibles (continued)
Key assumptions used for value-in-use calculations:
Budgeted gross margin
Five year compound growth rate
Long term growth rate
Pre-tax discount rate
2015
%
2014
%
28.0%
7.0%
2.0%
9.0%
28.0%
12.0%
2.0%
9.0%
These assumptions were used for the analysis of the country based CGU. Management determined budgeted gross
margin based on expectations of market developments. The 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$126,000,000.
Amortisation expense is included in 'administration expenses' in profit or loss.
Note 16. Non-current assets - deferred tax
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses
Accrued expenses
Provisions
Sundry
Property, plant and equipment
Intangibles
Deferred tax asset
Movements:
Opening balance
Credited to profit or loss (note 9)
Additions through business combinations (note 32)
Exchange gain/(loss)
Closing balance
2015
A$'000
2014
A$'000
8,863
310
807
1,592
(946)
(306)
2,306
1,107
631
2,117
(361)
(404)
10,320
5,396
5,396
5,013
-
(89)
1,822
3,978
(404)
-
10,320
5,396
Deferred income tax assets are recognised for tax losses, non-deductible accruals and provisions and capital allowances
carried forward to the extent that realisation of the related tax benefits through future taxable profits is probable.
47
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 17. Current liabilities - trade and other payables
Trade payables
Other payables and accruals
Contingent consideration
Sales tax payable
Refer to note 25 for further information on financial instruments.
Note 18. Current liabilities - borrowings
Bank loans
Finance lease liability
2015
A$'000
2014
A$'000
23,838
4,730
-
672
19,626
10,277
215
-
29,240
30,118
2015
A$'000
2014
A$'000
1,098
91
1,390
223
1,189
1,613
Refer to note 20 for further information on assets pledged as security and financing arrangements.
Refer to note 25 for further information on financial instruments.
Note 19. Current liabilities - provisions
Employee benefits provision
Lease make good provision
Gift voucher provision
Sales returns provision
2015
A$'000
2014
A$'000
823
185
710
397
3,593
178
517
595
2,115
4,883
Lease make good provision
The provision represents the present value of the estimated costs to make good the premises leased by the group at the
end of the respective lease terms.
Gift voucher provision
The provision represents the estimated costs to honour gift vouchers that are in circulation and not expired.
Sales return provision
The provision represents the costs for goods expected to be returned by customers.
48
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 19. Current liabilities - provisions (continued)
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out below:
2015
Carrying amount at the start of the year
Additional provisions recognised
Amounts used
Foreign exchange differences
Carrying amount at the end of the year
Note 20. Non-current liabilities - borrowings
Finance lease liability
Refer to note 25 for further information on financial instruments.
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Bank loans
Finance lease liability
Lease make
good
provision
A$'000
Gift vouchers
provision
A$'000
Sales returns
provision
A$'000
178
-
-
7
185
517
710
(517)
-
710
595
397
(595)
-
397
2015
A$'000
2014
A$'000
64
262
2015
A$'000
2014
A$'000
1,098
155
1,390
485
1,253
1,875
The group has a A$7,174,000 (2014: A$5,274,000) borrowing facility with Australia and New Zealand Banking Group
Limited ('ANZ') which is secured by a Corporate Guarantee and Indemnity. It is required to comply with three main
covenants in relation to this facility:
Borrowings base ratio, being the ratio of aggregate facilities to current assets (stock, debtors and cash), must not
exceed 65%. The group is in compliance with the covenant as of the reporting date and its strategy is to maintain
borrowing base ratios well below the 65% requirement;
Interest cover ratio, being the ratio of earnings before interest and tax (before abnormal and non-recurring items)
over the interest expense, must exceed 3:1 on a quarterly basis. The group is in compliance with the covenant as of
the reporting date and its strategy is to maintain interest cover ratios well above the 3:1 requirement; and
Distributions to shareholders must not be made without the written consent of ANZ. The group is in compliance with
the covenant as of the reporting date and at the date these financial statements were authorised for issue.
The group has a GBP £3,000,000 (2014: £Nil) borrowing facility with Hong Kong and Shanghai Banking Corporation Plc
('HSBC') which is secured by a Corporate Guarantee.
49
(cid:13)
(cid:13)
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 20. Non-current liabilities - borrowings (continued)
Assets pledged as security
All bank borrowings of the group are secured by a Corporate Guarantee and Indemnity. Average interest rate incurred
on these bank borrowings was 2.1% (2014: 2.9%). The borrowings are expected to be repaid within 90 days.
The lease liabilities are effectively secured as the rights to the leased assets, recognised in the balance sheet, revert to
the lessor in the event of default.
The carrying amounts of assets pledged as security for current and non-current borrowings are:
2015
A$'000
2014
A$'000
-
-
-
200
485
685
2015
A$'000
2014
A$'000
5,914
63
2,053
5,930
13,960
1,098
31
-
3,705
4,834
4,816
32
2,053
2,225
9,126
1,909
930
-
5,194
8,033
1,390
874
-
2,283
4,547
519
56
-
2,911
3,486
2015
A$'000
2014
A$'000
328
2,966
Cash and cash equivalents
Plant and equipment
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities
Bank loans and overdrafts
Bank guarantees
Letters of credit
Interchangable facilities
Used at the reporting date
Bank loans and overdrafts
Bank guarantees
Letters of credit
Interchangable facilities
Unused at the reporting date
Bank loans and overdrafts
Bank guarantees
Letters of credit
Interchangable facilities
Note 21. Non-current liabilities - provisions
Employee benefits provision
Long term incentive plan
Refer to note 36 for details on the long term incentive plan.
50
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 22. Equity - share capital
2015
Shares
2014
Shares
2015
A$'000
2014
A$'000
Ordinary shares £nil each - issued and fully paid
150,647,610 150,647,610
-
-
Authorised share capital
200,000,000 (2014: 200,000,000) ordinary shares of £nil each. The share capital was converted from £1 per share to
£nil per share at a general meeting on 23 May 2014, effective from 28 May 2014.no par value at a general meeting on
23 May 2014, effective from 28 May 2014.
Capital reconstruction - group reorganisation (comparative period)
MySale Group Plc ('MySale') was incorporated on 28 April 2014 and was admitted to the Alternative Investment Market
(‘AIM’) on 16 June 2014. Prior to AIM admission, the group undertook a reorganisation such that MySale was established
as APAC Sale Group Pte. Ltd.’s ('APAC') parent/holding entity. MySale determined that the acquisition of APAC did not
represent a business combination as defined by IFRS 3 'Business Combinations'. The appropriate accounting treatment
for recognising the new group structure had been determined on the basis that the transaction was a form of capital
reconstruction and group reorganisation. The capital reconstruction had been accounted for using the principles of a
reverse acquisition by APAC of MySale.
As a result, the financial statements of MySale Group Plc have been prepared as a continuation of the financial
statements of the accounting acquirer, APAC. Refer to basis of preparation in note 2. The number of shares on issue
shown reflects those of MySale after the reconstruction.
On 27 May 2014, the company issued 132,948,495 ordinary shares of £1 nominal value. On 28 May 2014 these shares
were converted into ordinary shares of £nil nominal value, on a share-for-share exchange.
Movements in ordinary share capital - issued and fully paid
Details
Date
Shares
A$'000
Balance
Shares issued on capital reorganisation
Conversion of ordinary shares
Share issued at AIM admission
1 July 2013
27 May 2014
28 May 2014
16 June 2014
-
132,948,495
-
17,699,115
11,205
227,954
(239,159)
-
Balance
Balance
30 June 2014
150,647,610
30 June 2015
150,647,610
-
-
Movements in share premium account:
Details
Date
A$'000
Balance
Conversion of ordinary shares
Capital received on AIM admission
Transaction costs arising on AIM admission
Balance
Balance
1 July 2013
28 May 2014
16 June 2014
16 June 2014
30 June 2014
30 June 2015
-
239,159
72,267
(5,063)
306,363
306,363
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in
proportion to the number of and amounts paid on the shares held.
51
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 22. Equity - share capital (continued)
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Capital risk management
The group’s objectives when managing capital is to safeguard the group’s ability to continue as a going concern, so that
it can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital. It is the group’s strategy to maintain borrowing base ratio well below 65%
requirement in order to comply with the borrowing facility covenants. Refer to note 20.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
Note 23. Equity - other reserves
Foreign currency reserve
Hedging reserve - cash flow hedges
Share-based payments reserve
Capital reorganisation reserve
2015
A$'000
2014
A$'000
6,099
21
3,705
(132,756)
(120)
(719)
-
(132,756)
(122,931)
(133,595)
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.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
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$132,756,000 has
not been capitalised but deducted from equity.
52
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 23. Equity - other reserves (continued)
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Foreign
currency
A$'000
Hedging
A$'000
Share-based
payments
A$'000
Capital
reorganisation
A$'000
Balance at 1 July 2013
Foreign currency translation
Cash flow hedge
Capital reorganisation
Balance at 30 June 2014
Foreign currency translation
Cash flow hedge
Share-based payments
Balance at 30 June 2015
Note 24. Equity - dividends
(732)
612
-
-
(120)
6,219
-
-
6,099
-
-
(719)
-
(719)
-
740
-
-
-
-
-
-
-
-
3,705
-
-
-
(132,756)
(132,756)
-
-
-
Total
A$'000
(732)
612
(719)
(132,756)
(133,595)
6,219
740
3,705
21
3,705
(132,756)
(122,931)
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 25. 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.
53
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 25. Financial instruments (continued)
The carrying amount of the group's foreign currency denominated financial assets and financial liabilities at the reporting
date were as follows:
US dollars
Euros
Pound sterling
New Zealand dollars
Singapore dollars
Malaysian ringgit
Thai baht
Others
Assets
Liabilities
2015
A$'000
2014
A$'000
2015
A$'000
2014
A$'000
2,556
6,111
34,903
3,849
2,343
1,280
417
-
494
776
65,518
369
765
96
575
-
3,691
2,499
3,791
605
103
23
2
7
4,062
2,791
4,857
814
300
108
-
-
51,459
68,593
10,721
12,932
The group had net assets denominated in foreign currencies of A$40,738,000 as at 30 June 2015 (2014: A$55,661,000).
Based on this exposure, had the Australian dollar weakened by 10% / strengthened by 10% (2014: weakened by 10% /
strengthened by 10%) against these foreign currencies with all other variables held constant, the group's loss before tax
for the year would have been A$4,073,000 lower / higher (2014: A$5,566,000 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 2015 was A$205,000 (2014: A$479,000).
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 is not exposed to any significant cash flow interest rate risks arising mainly from interest bearing deposits.
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.
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.
54
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 25. Financial instruments (continued)
Unused borrowing facilities at the reporting date:
Bank loans and overdrafts
Bank guarantees
Letters of credit
Interchangable facilities
2015
A$'000
2014
A$'000
4,816
32
2,053
2,225
9,126
519
56
-
2,911
3,486
Remaining contractual maturities
Trade payables and other financial liabilities mainly arise from the financing of assets used in the group's ongoing
operations such as plant and equipment and investments in working capital. These assets are considered in the group's
overall liquidity risk.
The following tables detail the group's remaining contractual maturity for its financial instrument liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the balance sheet.
2015
Non-derivatives
Non-interest bearing
Trade and other payables
Sales tax payable
Interest-bearing - variable
Bank loans
Lease liability
Total non-derivatives
2014
Non-derivatives
Non-interest bearing
Trade and other payables
Contingent consideration
Interest-bearing - variable
Bank loans
Lease liability
Total non-derivatives
Derivatives
Forward foreign exchange contracts inflow
Forward foreign exchange contracts outflow
Total derivatives
Weighted
average
interest rate
%
1 year or less
A$'000
Between 1
and 5 years
A$'000
Remaining
contractual
maturities
A$'000
Over 5 years
A$'000
-%
-%
29,173
672
2.11%
8.00%
1,189
94
31,128
-
-
-
72
72
-
-
-
-
-
29,173
672
1,189
166
31,200
Weighted
average
interest rate
%
1 year or less
A$'000
Between 1
and 5 years
A$'000
Remaining
contractual
maturities
A$'000
Over 5 years
A$'000
-%
-%
29,903
215
2.90%
8.00%
-%
-%
1,408
243
31,769
5
(710)
(705)
-
-
-
264
264
-
-
-
-
-
-
-
-
-
-
-
29,903
215
1,408
507
32,033
5
(710)
(705)
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
55
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 26. Fair value measurement
Fair value hierarchy
The following tables detail the group's assets and liabilities, measured or disclosed at fair value, using a three level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices)
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
2015
Assets
Derivative financial instruments
Total assets
2014
Liabilities
Contingent consideration
Derivative financial instruments
Total liabilities
Level 1
A$'000
Level 2
A$'000
Level 3
A$'000
Total
A$'000
Level 1
A$'000
-
-
-
-
-
22
22
-
-
22
22
Level 2
A$'000
Level 3
A$'000
Total
A$'000
-
705
705
215
-
215
215
705
920
There were no transfers between levels during the financial year.
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying amounts of
trade receivables and trade payables are assumed to approximate their fair values due to their short-term nature. The
fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market
interest rate that is available for similar financial instruments. Also, there is no material difference between the fair value
of cash and cash equivalents and the carrying amounts.
Valuation techniques for fair value measurements categorised within level 2 and level 3
The fair value of the derivative financial instruments, being forward exchange contracts, are determined using quoted
forward exchange rates at the reporting date. These instruments are included in Level 2.
The fair value of financial instruments classified as level 3 is determined by the use of valuation models. These include
discounted cash flow analysis or the use of observable inputs that require significant adjustments based on unobservable
inputs.
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current and previous financial year are set out below:
Balance at 1 July 2013
Additions
Settled
Balance at 30 June 2014
Settled
Balance at 30 June 2015
Contingent
consideration
A$'000
Total
A$'000
304
215
(304)
215
(215)
-
304
215
(304)
215
(215)
-
Changing one or more inputs would not significantly change the fair value of level 3 financial instruments.
56
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 27. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the group is set
out below:
Short-term employee benefits
Post-employment benefits
2015
A$
2014
A$
1,574
121
2,019
107
1,695
2,126
Key management includes directors (executives and non-executives) and key heads of departments.
During the financial year ended 30 June 2015 22,636 (2014: 1,078,584) performance rights were granted to members
of key management personnel under share-based payments plans operated by the group as disclosed in note 36.
Note 28. 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:
2015
A$'000
2014
A$'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)
392
310
1,038
423
273
159
54
234
245
147
965
2,310
Note 29. 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 (2014: 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 (2014: USD$2,100,000).
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$100,000 (2014: NZ$60,000) and lease obligations to NZ$34,000.
57
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 30. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Lease commitments - finance
Committed at the reporting date and recognised as liabilities, payable:
Within one year
One to five years
Total commitment
Less: Future finance charges
Net commitment recognised as liabilities
Representing:
Finance lease liability - current (note 18)
Finance lease liability - non-current (note 20)
Sub-lease receivable - operating
Committed at the reporting date but not recognised as assets, receivables:
Within one year
One to five years
2015
A$'000
2014
A$'000
3,972
3,094
2,677
3,283
7,066
5,960
94
72
166
(11)
155
91
64
155
742
1,048
1,790
243
264
507
(22)
485
223
262
485
-
-
-
The group leases office space, land and buildings and warehouses from non-related parties under non-cancellable
operating lease agreements. The leases have varying terms, escalation clauses and renewal rights.
The group leases certain plant and equipment, and motor vehicles from non-related parties under finance leases. The
lease agreements do not have renewal clauses but provide the group with options to purchase the leased assets at
nominal values at the end of the lease term.
Included in additions are plant and equipment and motor vehicles acquired under finance leases amounting to A$nil
(2014: A$nil) and A$nil (2014: A$40,000) respectively.
The carrying amounts of plant and equipment and motor vehicles held under finance leases are A$102,000 (2014:
A$344,000) and A$74,000 (2014: A$141,000) respectively at the reporting date.
The company also subleases some of its office and warehouse space to related and non-related parties. The subleases
have varying terms and expiry dates.
Note 31. Related party transactions
Parent entity
MySale Group Plc is the parent company of the group.
Subsidiaries
Interests in subsidiaries are set out in note 33.
58
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 31. Related party transactions (continued)
Joint ventures
Interests in joint ventures are set out in note 34.
Key management personnel
Disclosures relating to key management personnel are set out in note 27.
Transactions with related parties
The following transactions occurred with related parties:
Sale of goods and services:
Sale of goods to other related party (Arcadia and Sports Direct)
Sale of freight services to other related party
Payment for goods and services:
Purchase of goods from other related party
2015
A$
2014
A$
5,236,496
1,299,867
2,032,419
-
-
-
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current receivables:
Trade receivables from joint venture
Trade receivables from other related party
Current payables:
Trade payables to other related party
2015
A$
2014
A$
-
6,674,062
462,000
-
1,739,631
-
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 32. Business combinations
Summary of business combinations (comparative period)
The group acquired the following subsidiaries and businesses during the financial year ended 30 June 2014:
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, from a related party. This acquisition added
another website to the group, targeted at the UK market. 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 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
- Cocosa was acquired for a nominal amount of A$1.
59
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 32. Business combinations (continued)
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.
Non-controlling interest of 50% was recognised using the proportional consolidation value.
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$5,000 to the group for the
period from 14 May 2014 to 30 June 2014. Non-controlling interest of 49% was recognised using the proportional
consolidation value.
Details of the acquisitions, in aggregate, is as follows:
Cash and cash equivalents
Trade and other receivables
Inventories
Customer relationships
Trade payables
Other payables
Deferred tax liability
Other loans
Net assets acquired
Discount on acquisition
Acquisition-date fair value of the total consideration transferred
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: cash and cash equivalents
Net cash received
Fair value
A$'000
488
16
76
2,019
(632)
(88)
(404)
(542)
933
(932)
1
2015
A$'000
2014
A$'000
-
-
-
1
(488)
(487)
Invite to Buy
On 12 September 2014, the group acquired 60% of the ordinary share capital of Handelsselskabet af 1. September 2008
Aps, a company located in Denmark. The Company operates a Danish members-only online Flash Sale site called
Invitetobuy.dk. Handelsselskabet af 1. September 2008 Aps is deemed to be a jointly controlled operation of the group.
Although the group has a larger share of the ownership and voting rights, there is equal control over the operational and
strategic direction of the business. Total investment of A$250,000 has been accounted for using the equity method.
60
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 33. 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:
Principal place of
business /
Country of
incorporation
Principal
activities
Name
Parent
Ownership
interest
2015
%
Ownership
interest
2014
%
Non-controlling interest
Ownership
interest
2014
%
Ownership
interest
2015
%
Italy
Australia
Singapore
New Zealand
United Kingdom
United States of
America
United Kingdom
APAC Sale Group
Pte. Ltd.
APAC Sale Italy
s.r.l
APAC Sales
Group, Inc.
APAC UK
Procurement Co
Limited
APACSale Limited United Kingdom
BuyInvite Pty
Limited
Cocosa Lifestyle
Limited
NZ Sale Limited
Ozsale Pty Limited Australia
Malaysia
Ozsale Sdn. Bhd.
Singapore
Private Sale Asia
Pacific Pte Ltd
Simply Sent It Pty
Limited
Singsale Pte. Ltd.
APAC France
SARL
Brand Search Pty
Limited
Chic Global Limited United Kingdom
BuyInvite NZ Pty
Limited
Click Frenzy
Australia Pty Ltd
NZ Wine Limited
My Trade Ltd
MySale Group
Limited
Handelsselskabet
New Zealand
United Kingdom
Hong Kong
Singapore
France
Denmark
Australia
Australia
Australia
Australia
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
Trading company
Trading company
Dormant
Dormant
Dormant
Dormant
Dormant
Trading company
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%
100.00%
100.00%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
51.00%
100.00%
51.00%
100.00%
49.00%
-%
49.00%
-%
100.00%
100.00%
-%
-%
100.00%
50.00%
100.00%
50.00%
-%
50.00%
-%
50.00%
100.00%
100.00%
100.00%
100.00%
-%
100.00%
100.00%
100.00%
100.00%
60.00%
-%
-%
-%
40.00%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
Summarised financial information for subsidiaries that have non-controlling interests, has not been provided as they are
not material to the group.
Note 34. Interests in joint ventures
Name
Thaisale.co.th Limited
Invite to Buy
Principal place of business /
Country of incorporation
Thailand
Denmark
61
Ownership interest
2014
2015
%
%
49.00%
60.00%
49.00%
-%
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 34. Interests in joint ventures (continued)
Thaisale.co.th Limited
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.
Invite to Buy
Invite to Buy is deemed to be a jointly controlled operation of the company 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.
Summarised financial information
Summarised balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-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
Invite to Buy Thaisale
Thaisale
2015
A$'000
2015
A$'000
2014
A$'000
61
91
152
198
51
249
121
23
144
1,182
-
1,182
175
42
217
935
-
935
(97)
(1,038)
(718)
352
(546)
(194)
-
1,360
(1,551)
1,855
(2,530)
(191)
(675)
-
-
(194)
(191)
(675)
The group has not recognised the entire share of its losses of its Thaisale co.th Limited joint venture interest amounting
to A$94,000 (2014: A$331,000) 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$492,000 (2014: A$398,000) at the reporting date.
The group has recognised the entire share of its losses of its Invite to Buy.dk joint venture interest amounting to
A$116,000 (2014: A$nil) using the equity method.
Note 35. Earnings per share
Loss after income tax attributable to the owners of MySale Group Plc
(17,789)
(58,542)
2015
A$'000
2014
A$'000
62
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 35. Earnings per share (continued)
Weighted average number of ordinary shares used in calculating basic earnings per
share
150,647,610
100,448,603
Weighted average number of ordinary shares used in calculating diluted earnings per
share
150,647,610
100,448,603
Number
Number
Basic earnings per share
Diluted earnings per share
Cents
Cents
(11.81)
(11.81)
(58.28)
(58.28)
795,541 (2014: 1,247,262) employee long term incentives have been excluded from the 2015 (2014) diluted earnings
calculation as they are anti-dilutive for the period.
Note 36. Share-based payments
During the year the Long Term Incentive Plan (the ‘LTIP’) previously approved by APAC shareholders in 2012 and which
expired at the date of AIM admission on 16 June 2014, was settled in July 2015.
A number of employees were offered the opportunity to defer the payment of their cash bonus owing under the LTIP and
to take it in the form of a conditional ‘right’ to free ordinary shares under the Executive Incentive Plan (EIP). The award
converted the cash due to them into ordinary shares at the Placing Price of GBP2.26 with a maximum A$75,000
enhancement if they defer 100% of the entitlement. Total ordinary shares applicable to the conditional award was
684,042 with a vest date of 16 June 2015 and no performance conditions but was subject to continued employment. As
at 16 June 2015, all of the employees who agreed to deferral of their entitlement met the continued employment condition
and the share right awards vested.
The company also established two new employee share plans prior to the AIM admission; (1) the Executive Incentive
Plan (‘EIP’) and (2) the Loan Share Plan (‘LSP’). In accordance with the terms of each plan, 50% of the award to eligible
employees will vest two years and the balance three years after grant date. 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.
The current equity award pursuant to the EIP and LSP is not deemed to be achieving its intended objective, and as such
The Board and all of its participants, excluding Carl Jackson, have mutually agreed to the cancellation of share awards
granted on 28 May 2014. At 30 June 2015 there are 795,541 shares granted under the LSP. The Board is currently
reviewing its long term incentive plans and if grants are made previous participants may be eligible for future grants.
Set out below are summaries of share and options granted under the plans for directors and employees:
2015
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Expired/
forfeited/
other
Balance at
the end of
the year
Exercised
28/05/2014
28/05/2014
28/05/2014
22/09/2014
22/09/2014
16/06/2015 *
16/06/2019 **
16/06/2019 ***
16/06/2019 **
16/06/2019 ***
£2.26
£2.26
£2.26
£0.00
£0.00
684,042
102,210
461,010
-
-
1,247,262
-
-
-
18,386
45,642
64,028
-
-
-
-
-
-
-
(102,210)
(349,511)
(18,386)
(45,642)
(515,749)
684,042
-
111,499
-
-
795,541
63
MySale Group Plc
Notes to the financial statements
30 June 2015
Note 36. Share-based payments (continued)
EIP - Share rights
*
** EIP - Options
*** LSP
2014
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Expired/
forfeited/
other
Balance at
the end of
the year
Exercised
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
The weighted average remaining contractual life of the share plan outstanding at the end of the financial year was 4
years (2014: 2 years).
The share-based payment expense for the year was A$335,000 (2014: A$4,888,000).
Note 37. Events after the reporting period
No matter or circumstance has arisen since 30 June 2015 that has significantly affected, or may significantly affect the
group's operations, the results of those operations, or the group's state of affairs in future financial years.
64
MySale Group Plc
Parent company balance sheet
As at 30 June 2015
Assets
Cash at bank and in hand
Debtors - amounts falling within one year
Investment in subsidiary
Property, plant and equipment
Total assets
Liabilities
Creditors - amounts falling due within one year
Creditors - amounts falling due after more than one year
Total liabilities
Net assets
Equity
Share premium account
Other reserves
Accumulated losses
Total equity
Note
2015
A$'000
2014
A$'000
4
5
6
7
8
9
16,084
4,304
161,077
189
65,246
1,280
106,403
-
181,654
172,929
755
-
755
7
14
21
180,899
172,908
11
12
306,363
(123,734)
(1,730)
306,363
(132,743)
(712)
180,899
172,908
Refer to note 10 for share capital details.
The financial statements of MySale Group Plc (company number 115584) were approved by the Board of Directors and
authorised for issue on 28 September 2015. They were signed on its behalf by:
__________________________ ___________________________
Carl Jackson Andrew Dingle
Director Director
The above balance sheet should be read in conjunction with the accompanying notes
65
MySale Group Plc
Notes to the parent company financial statements
30 June 2015
Note 1. General information
The company was incorporated on 28 April 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. These policies
have been consistently applied to all the years presented, unless otherwise stated.
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.
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.
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
5-7 years
3-7 years
5-10 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
66
MySale Group Plc
Notes to the parent company financial statements
30 June 2015
Note 2. Significant accounting policies (continued)
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.
Investments in subsidiaries
Investments in subsidiaries are shown at cost less provision for impairment.
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.
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.
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 reporting date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the reporting 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 reporting 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 reporting 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.
67
MySale Group Plc
Notes to the parent company financial statements
30 June 2015
Note 3. Profit for the year/period
The company has elected not to present its own profit and loss account for the financial year ended 30 June 2015.
MySale Group Plc reported a loss for the financial year ended 30 June 2015 of A$1,018,000 (2014: Period from
incorporation on 28 April 2014 to 30 June 2014 of A$712,000).
The auditor's remuneration for audit and other services is disclosed within note 28 to the consolidated financial
statements. The only employees of the company are the directors whose emoluments are disclosed in the Directors'
remuneration report.
Note 4. Cash at bank and in hand
Cash on bank
Note 5. Debtors - amounts falling within one year
Other receivables
Amounts owed by other group undertakings
Note 6. Investment in subsidiary
Investment in APAC Sale Group Pte. Ltd. - at cost
Investment in Ozsale Pty. Ltd. - at cost
2015
A$'000
2014
A$'000
16,084
65,246
2015
A$'000
2014
A$'000
20
4,284
1,280
-
4,304
1,280
2015
A$'000
2014
A$'000
106,403
54,674
106,403
-
161,077
106,403
A detailed list of subsidiaries is detailed within note 33 to the consolidated financial statements.
During the year Ozsale Pty Ltd issued 418,140,316 shares to Mysale Group plc in consideration for the capitalisation of
a loan of $50,969,000. A further A$3,705,000 is due to Mysale Group plc shares which have vested in accordance with
the Executive Investment Plan for employees of Ozsale Pty Ltd.
68
MySale Group Plc
Notes to the parent company financial statements
30 June 2015
Note 7. Property, plant and equipment
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Fixtures and fittings - at cost
Less: Accumulated depreciation
2015
A$'000
2014
A$'000
86
(14)
72
20
(2)
18
120
(21)
99
189
-
-
-
-
-
-
-
-
-
-
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Leasehold Plant and Fixtures and
improvements equipment
A$'000
A$'000
fittings
A$'000
Balance at 28 April 2014
Balance at 30 June 2014
Additions
Depreciation expense
Balance at 30 June 2015
-
-
86
(14)
72
-
-
20
(2)
18
-
-
120
(21)
99
Note 8. Creditors - amounts falling due within one year
Total
A$'000
-
-
226
(37)
189
Trade payables
Accruals
Note 9. Creditors - amounts falling due after more than one year
Employee benefits - long term incentive plan
2015
A$'000
2014
A$'000
118
637
755
-
7
7
2015
A$'000
2014
A$'000
-
14
Long term incentive plan
Information on the company's long term incentive plan and employee share plans (the Executive Incentive Plan and
the Loan Share Plan) are detailed within note 36 to the consolidated financial statements.
69
MySale Group Plc
Notes to the parent company financial statements
30 June 2015
Note 10. Equity - called up share capital
2015
Shares
2014
Shares
2015
A$'000
2014
A$'000
Ordinary shares £nil each - issued and fully paid
150,647,610 150,647,610
-
-
Authorised share capital
200,000,000 (2014: 200,000,000) ordinary shares of £nil each. The share capital was converted from £1 per share to
no par value at a general meeting on 23 May 2014, effective from 28 May 2014.
Capital reconstruction - group reorganisation (comparative period)
MySale Group Plc ('MySale') was incorporated on 28 April 2014 and was admitted to the Alternative Investment Market
(‘AIM’) on 16 June 2014. Prior to AIM admission, the group undertook a reorganisation such that MySale was
established as APAC Sale Group Pte. Ltd.’s ('APAC') parent/holding entity. MySale determined that the acquisition of
APAC did not represent a business combination as defined by IFRS 3 'Business Combinations'. The appropriate
accounting treatment for recognising the new group structure had been determined on the basis that the transaction
was a form of capital reconstruction and group reorganisation. The capital reconstruction had been accounted for using
the principles of a reverse acquisition by APAC of MySale.
On 27 May 2014, the company issued 132,948,495 ordinary shares of £1 nominal value. On 28 May 2014 these shares
were converted into ordinary shares of £nil nominal value, on a share-for-share exchange.
Movements in ordinary share capital - issued and fully paid
Details
Date
Shares
A$'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
Balance
30 June 2014
150,647,610
30 June 2015
150,647,610
-
-
Movements in share premium account:
Details
Date
A$'000
Balance
Conversion of ordinary shares
Capital received on AIM admission
Transaction costs arising on AIM admission
Balance
Balance
28 April 2014
28 May 2014
16 June 2014
16 June 2014
30 June 2014
30 June 2015
-
239,159
72,267
(5,063)
306,363
306,363
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in
proportion to the number of and amounts paid on the shares held.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll
each share shall have one vote.
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MySale Group Plc
Notes to the parent company financial statements
30 June 2015
Note 11. Equity - other reserves
Foreign currency reserve
Share-based payments reserve
Capital reorganisation reserve
2015
A$'000
2014
A$'000
5,317
3,705
(132,756)
13
-
(132,756)
(123,734)
(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.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
Capital reorganisation reserve
This reserve is used to recognise the excess of purchase price of APAC (refer note 10) over the shareholding acquired
of A$132,756,000.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Balance at 28 April 2014
Foreign currency translation
Capital reorganisation
Balance at 30 June 2014
Foreign currency translation
Share-based payments
Balance at 30 June 2015
Note 12. Equity - accumulated losses
Foreign
currency
A$'000
Share-based
payments reorganisation
Capital
A$'000
A$'000
Total
A$'000
-
13
-
13
5,304
-
-
-
-
-
-
(132,756)
-
13
(132,756)
-
-
3,705
(132,756)
-
-
(132,743)
5,304
3,705
5,317
3,705
(132,756)
(123,734)
Accumulated losses at the beginning of the financial year
Loss after income tax expense for the year
Accumulated losses at the end of the financial year
2015
A$'000
2014
A$'000
(712)
(1,018)
(1,730)
-
(712)
(712)
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MySale Group Plc
Notes to the parent company financial statements
30 June 2015
Note 13. Equity - Reconciliation of movements in shareholders' funds
Balance at 1 July 2014
Loss for the year/period
Issue of capital
Movement in other reserves
Balance at 30 June 2015
Note 14. Contingent liabilities
The company had no contingent liabilities as at 30 June 2015 and 30 June 2014.
Note 15. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Sub-lease receivable - operating
Committed at the reporting date but not recognised as assets, receivable:
Within one year
One to five years
2015
A$'000
2014
A$'000
172,908
(1,018)
-
9,009
-
(712)
306,363
(132,743)
180,899
172,908
2015
A$'000
2014
A$'000
656
1,650
2,306
456
804
1,260
-
-
-
-
-
-
The company leases office space from non-related parties under a non-cancellable operating lease agreement. The
lease expires within four year.
The company also subleases some of its office and warehouse space to related and non-related parties. The subleases
have varying terms and expiry dates.
Note 16. Related party transactions
Details of related party transactions are provided in note 31 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.
Note 17. Events after the reporting period
No matter or circumstance has arisen since 30 June 2015 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.
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MySale Group Plc
MYSALE GROUP PLC
REGISTERED NUMBER: 115584
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the second Annual General Meeting (AGM) of MySale Group plc (MySale
or the Company) will be held at Unit 5, 111 Old Pittwater Road, Brookvale, NSW 2100, Australia on
Wednesday 25 November 2015 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 2015
To receive the Company’s Annual Report and Accounts for the financial year ended 30 June
2015 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 Iain McDonald as a Director in accordance with Articles 7.2 and 7.9 - 7.12 of the
Company’s Articles of Association (the Articles).
To re-elect Andrew Dingle as a Director in accordance with Articles 7.2 and 7.9 - 7.12 of the
Articles.
To re-elect Carl Jackson as a Director in accordance with Articles 7.2 and 7.9 - 7.12 of the
Articles.
To re-elect James Jackson as a Director in accordance with Articles 7.2 and 7.9 - 7.12 of the
Articles.
To re-elect David Mortimer 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
(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 16 October 2015, 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 2016 or fifteen months following the passing of this resolution, whichever is
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MySale Group Plc
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
19 October 2015
74
MySale Group Plc
Notes to the Notice of Annual General Meeting
1
2
3
4
5
Record Date
Shareholders registered in the Register of Members of the Company as at 18:00 GMT on 23
November 2015 (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 23 November 2015 will be disregarded in determining the rights of any person to attend or
vote at the AGM.
Attendance at the AGM
The Company’s second AGM will be held at the Company’s Head Office at Unit 5, 111 Old Pittwater
Road, Brookvale, NSW 2100, Australia at 19.30 AEDT/08.30 GMT on 25 November 2015. 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 by proxy prior to the date of the AGM or in person, by proxy or by
corporate representative at the venue of the AGM.
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 Investor Services
PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY UK or (ii) members may submit their proxies
electronically at www.investorcentre.co.uk/je using the designation set out in the Form of Proxy, in
each case by no later than 19.30 AEDT/08.30 GMT on 23 November 2015, being 48 hours before
the time appointed for the holding of the AGM.
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.
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.
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
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MySale Group Plc
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 23
November 2015. 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.
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 16 October 2015,
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 16 October 2015 are 150,647,610.
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 Information Provider and also placed on the
Company’s website (www.mysalegroup.com).
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.
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.
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.
6
7
8
9
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MySale Group Plc
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 16 December 2015, they have agreed that they will each retire at the forthcoming
AGM and offer themselves for re-election by shareholders. Biographical details of each of the
Directors can be found on pages 17 and 18 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 2016 or fifteen months following the passing of this resolution, whichever is the
earlier.
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