MySale Group Plc
Contents
30 June 2020
Corporate directory
Strategic report
Directors' remuneration report
Directors' report
Directors' responsibility statement
Independent auditor's report
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
2
3
21
25
28
29
34
35
37
38
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1
MySale Group Plc
Corporate directory
30 June 2020
Directors
Charles Butler - Independent Non-Executive Chairman
Carl Jackson - Executive Director and Chief Executive Officer
Mats Weiss – Executive Director and Chief Financial & Operations Officer
Dow Famulak- Independent Non-Executive Director
Wally Muhieddine - Independent Non-Executive Director
Head office
3/120 Old Pittwater Road, Brookvale, NSW 2100, Australia
Company secretary
Prism Cosec Limited, Elder House, St Georges Business Park, 207 Brooklands Road,
Weybridge, Surrey KT13 0TS
Company number
115584 (Jersey)
Registered office
Ogier House, The Esplanade, 44 Esplanade Street. Helier, JE4 9WG, Jersey
Principal place of business
Australia: 3/120 Old Pittwater Road, Brookvale, NSW 2100
Independent Auditor
BDO LLP, 55 Baker Street, London W1U 7EU.
Solicitors
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, JE4 9WG
Website
www.mysalegroup.com
Nominated advisor and brokers
N+1 Singer, 1 Bartholomew Lane, London, EC2N 2AX
Company registrars
Registrars and Transfer Agents
Neville Registrars Limited, Neville House, Steelpark Road, Halesowen B62 8HD
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MySale Group Plc
Strategic report
30 June 2020
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
8. Corporate governance
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 subsequent to the issued of this document. 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.
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MySale Group Plc
Strategic report
30 June 2020
1. Financial and operating highlights
It has been a transformational year and MYSALE of today is very different from the MYSALE of last year. We have successfully
recapitalized, restructured, and repositioned the business significantly reducing the costs base, transforming our product
margins and now operating on a profitable, cash generative and debt free basis.
Our platform is being used by many international brands, looking to take advantage of our ANZ Southern Hemisphere
customer base and associated counter seasonal inventory opportunity. The Group is now in an excellent position to accelerate
the execution of its Australia and New Zealand (ANZ) First Strategy, scaling the business with a restructured cost base which
will deliver operational gearing flowing through to the bottom line.
.
Year to 30 June (A$ million)
Revenue
Gross Profit
Gross Margin
Underlying EBITDA*
Reported loss before tax
FY20
131.0
43.9
33.5%
(2.7)
(3.4)
FY19
208.6
52.4^
25.1%
(18.8)
(58.2)
*Underlying EBITDA is calculated as EBITDA adjusted for certain items including impairment losses/reversals related to
goodwill and receivables, share-based payments and unrealised foreign exchange loss/gain. Refer to note 6 for reconciliation
to reported loss.
^Delivery costs to customers for the year ended 30 June 2019 of A$33.8 million have been reclassified from Cost of sale of
goods to Selling and distribution expenses to be in line with the online retail industry
Actions taken
• Raised A$23.3 million to repay and restructure existing bank facilities, leaving the Group bank debt free and with a
net cash balance of A$6.7m, operating a negative working capital model.
• Substantial improvement to gross margin, which increased by 8.4% points to 33.5% (FY19 25.1%)
• Completed the cost reduction programme established as part of the restructure and repositioning, with the cost base1
reduced by 48.1% to A$50.2m (FY19 A$96.7m) and rightsizing of the headcount to 123 Full Time Equivalents (‘FTEs’)
as of 30 September 2020 (FY19: 307)
• Strengthened the management and board with the appointments of Mats Weiss as Chief Financial and Operations
Officer and two new Non-Executive Directors
• Developed MYSALE Solutions the Groups proprietary end-to-end technology and operating platform.
• Continued the staged exit of aged own-buy inventory in line with management expectations.
• Closure of the UK and US warehouses and relocation of the Australian Fulfilment Centre which has delivered
significant cost reductions and improved efficiencies (started in FY19 and was completed in FY20).
• Launching MYSALE Way a new operational purpose for the Group resulting in improved customer satisfaction scores.
Post financial year end
• Raised A$9.3m from entities associated with both founders as well as the former CEO of Catch.co.au who
successfully built Catch.com.au into one of Australia’s most successful online retailers.
• Further Strengthened the management team through the appointment of a new Head of Buying, Head of Marketing
and Head of Customer.
Increased the number of new international partners. Total active partners 982.
•
1 Cost base is total expenses less depreciation & amortisation
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Strategic report
30 June 2020
2. Chairman’s statement
I am pleased to say that the last quarter of the financial year was both profitable and cash flow positive. The company is highly
focused on the high growth ANZ e-commerce market with the right size cost base and a strong management team with which
to deliver future growth.
Throughout the year we have actioned all the key strategic initiatives we set out as part of our restructure and refocus of the
business. The opportunity we face is big and the team have all pulled together to transform the business into an inventory
light e-commerce technology platform for brand and retail partners both domestic and international to access customers in
ANZ.
Like every other company we have faced challenges brought about by the COVID-19 pandemic and our number one priority
has been to adapt our working practices to ensure the welfare of our employees. The world of e-commerce has changed off
the back of the pandemic and it has caused the structural shift from physical retail to online to accelerate significantly with
many people shopping online for the first time. I believe this change is here to stay and e-commerce will continue to see strong
continued growth for a long time to come.
During the year we closed our UK operations to refocus on the ANZ market. We also strengthened our balance sheet by
raising equity and paying off our debt leaving the Group debt free and cashflow positive (Q4 FY20). We have made changes
to our business enabling us to work more efficiently with a lower cost base and in-turn these changes have led to an improved
quality of revenue and jump in gross margin to 33.5% (FY19 25.1%). This strengthening of the margin has continued to into
the current year.
Trading in the current year has started well and with the continued focus on customer experience and providing brands and
retailers with a world class platform to access that customer, we are excited about the journey ahead.
_____________________________
Charles Butler
Chairman
25 November 2020
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MySale Group Plc
Strategic report
30 June 2020
3. Review of operations by the Chief Executive Officer
A recapitalized, restructured and repositioned business with firm foundations for future growth
Last year’s strategic review concluded that the Group needed to reduce its costs, generate cash by selling down excess
inventory and execute its ANZ First Strategy. I am pleased to report that we have completed all these actions and we now
have a recapitalized, restructured, and repositioned business operating a world class platform providing unique solutions for
our retail and brand partners.
Year to 30 June (A$ million)
Revenue
Gross Profit
Underlying EBITDA(*)
Depreciation and Amortisation
Interest
Reported loss before tax
FY20
131.0
43.9
(2.7)
7.5
(0.4)
(3.4)
FY19
208.6
52.4^
(18.8)
6.9
(0.5)
(58.2)
*Underlying EBITDA is calculated as EBITDA adjusted for certain items including impairment losses/reversals related to
goodwill and receivables, share-based payments and unrealised foreign exchange loss/gain. Refer to note 6 for reconciliation
to reported loss.
^Delivery costs to customers for the year ended 30 June 2019 of A$33,831,000 have been reclassified from Cost of sale of
goods to Selling and distribution expenses to be in line with the online retail industry
Whilst we have made substantial progress over the year, it has undoubtedly been a period of unprecedented challenges, and
the environment that MySale operates in today is also very different from the environment MySale operated in last year.
COVID-19
Since the onset of the pandemic we have closely followed government guidance on safe working practices for all our
employees, which remains our top priority. To date, colleagues who are able to work from home are doing so. Where this in
not possible,we have put in place social-distancing procedures for our office an warehouse team. To date, we have not had
any major operational business disruption as a result of these measures, and I am proud of the way that MYSALE has met
this challenge head on, putting our duty to our stakeholders to act as a responsible business at the heart of our approach.Like
most businesses, we have experienced some minor operational issues during this period of uncertainty, including the supply
of inventory and reliability of international shipping, though we have carefully managed these challenges to ensure business
continuity. The flexibility of our business model has been key here, allowing us to adapt quickly. In response to the pandemic,
we sourced more product locally to ensure we remained relevant, while pivoting into complimentary categories including
homewares, activewear and leisurewear to meet customer demand from the growing work from home market. Our inventory
light platform allowed us to react quickly in line with this evolving trend ensuring we have the right merchandise mix.
Whilst the duration, severity and long-term impact of the pandemic remain unknown, we believe that there are a number of
opportunities for Mysale as a result of our unique operating model. We have already seen an accelerated shift in consumer
spending from physical retail to online; a trend which we expect will continue long after the pandemic is offer. There are also
signs that COVID-19 has further strengthened the ANZ off-price channel2, particularly online.
MySale is well positioned to take advantage of these long-term trends.
Progress against strategic initiatives
While there have been some operational benefits to the Group as a result of widespread supply chain disruption across the
global retail industry due to COVID 19, we had already made significant progress against our strategic initiatives as we entered
our final quarter. This included a great deal of work to ensure we had the right financial and organizational structures to fulfil
our ambitions.
Executing against our ANZ First strategy3 required focus, making decisions at pace in order to resolve legacy issues, while
prioritising some goals in favour of others. This meant we had to become a much smaller and nimble company with solid
foundations before we could start to grow again.
2 Off-price is a trading format based on discount pricing
3 Refer to page 16 for ANZ First Strategy
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MySale Group Plc
Strategic report
30 June 2020
We completed the cost reduction programme in the period, as outlined in the strategic review, including a significant reduction
in fixed overheads and international freight, while reducing the Groups headcount from 307 in FY19 to 170 in FY20. The
Group’s cost base4 has been significantly reduced to A$50.2 million (FY19: A$96.7 million).
The restructuring of our supply chain and decisive cost control measures put in place are now benefiting the Group, more than
offsetting the reduction in revenues for the period (see page 10 for detail). We have rightsized the business and have been
able to leverage the benefits of closing our UK and US warehouses and offices, reducing the headcount and centralising the
Group structure into ANZ.
We are confident that the decisive action taken to recapitalise, restructure and reposition the business have left us in a
stronger, more resilient position. Our underlying EBITDA loss improved from A$18.8 million to A$2.7 million, with profitable
trading during the final quarter. We exited FY20 with substantially less inventory, having increased the cadence of own-buy
promotional activity.
Although revenues have declined, the quality of revenues have improved with substantial improvements to our gross margin,
which increased to 33.5% [FY19: 25.1%]. We anticipate further improvement in gross margin during FY21.
We have also made significant progress in selling down aged owned inventory which will continue albeit at a reduced rate into
FY21. In FY19, as a result in the changes to the Australian GST legislation, we restructured the supply chain and closed the
UK and US warehouses which had an immediate negative impact on revenues. However, during the period we made good
progress in re-engaging and renegotiating the commercial contracts with our international partners which allows us to provide
them with either a direct shipment or third party freight solution ensuring they have an efficient counter seasonal solution for
their excess inventory.
Cash and Working capital
In September 2019 we raised A$23.3 million to repay and restructure existing bank facilities, leaving the Group debt free and
with a cash balance of A$6.7 million.
The business is now operating a negative working capital model where it is able to generate cash quickly by selling products
to customers before it has to pay its suppliers, reducing the cash risk on the Group’s operating results and financial condition.
Post year- end we also raised A$9.3m from entities associated with both founders as well as the former CEO of Catch.com.au
who built that business into one of Australia’s most successful online retailers. The net proceeds will be used to expand and
develop the Company’s marketplace platform, as well as take advantage of excess inventory available around the world, to
continue to improve the brand and inventory mix.
Cash generation and conservation was a key focus for us in FY20. Strict working capital management and the conversion into
cash of the aged inventory resulted in a strong cash flow performance.
Going forward the Group has the right cost base, aligned to the new simplified business, to ensure future profitability. We are
able to scale the revenue, leveraging efficiencies, with increased margins on a stable cost base.
A repositioned business
ANZ First Strategy and Partner Programme
Focusing on our ANZ First Strategy and developing our inventory light marketplace platform will further allow the Group to
leverage operational efficiencies.
In line with our Platform Strategy, we have developed and launched MYSALE Solutions which is the engine of the business,
providing Partner and Wholesale Solutions supported by three key service pillars: Technology, Operations and Data.
• Technology: Our proprietary technology platform provides a modern, flexible and highly scalable solution that is
designed to support the culture of continuous improvement, enabling us to react to partner requirements quickly. The
platform capabilities are optimized to support our unique partner solutions effectively.
• Data: Our Proprietary data platform provides in-depth analytics with real time business intelligence tools enabling
MYSALE and our partners to respond quickly to data insights.
4 Cost base is total expenses less depreciation & amortisation
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Strategic report
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• Operations: We offer our partners access to the MYSALE Fulfillment centers which provide them with flexibility,
scalability and access to international customers.
We pride ourselves on offering flexible solutions for our partners. We will continue to scale, at pace, the number of new
partners selling on the platform, focusing on delivering a daily discovery experience for discounted fashion, beauty, and
homeware products to our customers.
• 3RD Part Partner Programme
• Wholesale Programme – Own Stock
Own-stock inventory delivers significantly higher margins and an improved level of customer satisfaction. While we will
increase the amount of In-Stock inventory, we will not repeat the mistakes of the past and have adopted a “test and repeat
strategy”; buying width and not depth of product, thereby allowing us to turn the inventory very quickly.
In final quarter, over 85% of our revenue was delivered from our 3rd party platform partners compared to 2.9% from our “test
and repeat” own stock inventory.
We are already making good progress scaling the amount of own-stock product and brands which represented 7.8% of sales
in Q1 of the new financial year.
MYSALE Solutions resonates well with our UK and US partners as it provides them with a perfect counter seasonal platform
solution to what has been a very difficult trading period due to Covid-19. We have faced some challenges securing inventory,
due to key staff at retail partners being furloughed, while we have also experienced an increase in international freight costs
due to reduced global air freight capacity.
As we enter FY21 more UK and US brands are now working on the MySale platform as we provide an efficient counter
seasonal solution for their excess inventory.
The business will scale with a different cost base structure, as historically the fixed costs were too high relative to the variable
costs and revenue growth. At its peak, in FY18, our fixed annual cost base was A$39.7m of which the UK and US overhead
base was A$11.9m and did not deliver operational leverage. As part of the strategic review we closed our UK and US
warehouse, exited our UK business and relocated the management team back to ANZ which has already delivered material
benefits with our fixed cost base now reduced to A$15.8m in FY20.
The Market Opportunity
The Facts:
• Australian eCommerce April online retail spend: 17.2% 5
• New Zealand online retail spend: 9.8%6
Both markets significantly lag the UK [30%7] and US [22%8] eCommerce online retail spend.
Original industry forecasts were that by 2025 online shopping would account for 16-18%5 of total retail spend. However, since
the onset of the COVID-19 pandemic it is anticipated that this will accelerate significantly.
For our customers, our mission is to offer a daily discovery experience for discounted fashion, home and beauty brands; a
place that our customers check every day before buying for themselves, family or friends.
For our retail and brand partners we continue to provide an efficient platform solution to accelerate their sales of previous
seasons and excess current season merchandise. For our international partners it is an even more compelling solution as it
allows them to take advantage of the counter seasonal opportunity selling into ANZ while not disrupting their core market.
This presents the opportunity for Mysale to continue targeting large pool of international supplier who will be interested in the
counter seasonal opportunity as well as growing ANZ market.
5 https://auspost.com.au/content/dam/auspost_corp/media/documents/2020-ecommerce-industry-report.pdf
6 https://thefulldownload.co.nz/
7 https://www.ben-evans.com/benedictevans/2020/8/18/the-ecommerce-surge
8 https://www.ben-evans.com/benedictevans/2020/8/18/the-ecommerce-surge
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MySale Group Plc
Strategic report
30 June 2020
The MySale Way
We have developed and launched The MySale Way, a new operational purpose for the Group that is encapsulated in the
following core principles: Customer and Partners First, Entrepreneurial Thinking, Opportunities not Problems, Earn Trust, keep
it Simple and Operate at Pace.
We aim to embed The MySale Way within the organization, to build a company culture that challenges everyone to operate
at pace and think bigger putting our Customers and Partners First.
We have been very disciplined with our suppliers as we increase the focus on the customer experience and are already seeing
improvements in our customer satisfaction scores driven by improved data and management focus. While there is still work
to do, we are confident this will continue to improve.
Board and Management Changes
During the period, there have been a number of changes to the senior management team, including the appointment of Mats
Weiss as new Chief Financial & Operations Officer and two new Non-Executive Directors. Subsequent to the year end, the
management team has been strengthened through the appointment of a new Head of Buying, Head of Marketing, Head of
Customer as well a number of appointments that have enhanced the buying teams.
Current Trading and Future Outlook
I am very proud of what our team has achieved this year. As a business, we finished FY20 in a strong position and in far better
shape than when we started it, as the actions taken from the strategic review flowed into our financial results.
The Group is now operating on a cash generative and debt free basis following the post year end capital raise with cash
balances of A$15.9 million as 31st October 2020 and further improvements to our gross margin during the first quarter of the
new financial year.
While the Board is conscious of the ongoing uncertainty and operational risk caused by COVID-19 pandemic, for both our
business and the global retail industry as a whole, it is pleasing to see the Group's strong trading momentum and increased
interest from international partners in our unique offering has continued into the new financial year.
We have built a highly scalable low-cost business model and are now in a position where we can grow our business and
execute our strategy as an off-price specialist, with a clear customer offering built around MySale Solutions. Our talented team
is now re-focused on delivering growth through scaling our Partner Program and increasing the amount of high margin own
inventory stock to deliver operational leverage as we further accelerate the ANZ First Strategy.
_____________________________
Carl Jackson
Chief Executive Officer
25 November 2020
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MySale Group Plc
Strategic report
30 June 2020
Financial review by the Chief Financial Officer
FY20 has truly been a transformational year where we have exited non-core businesses, delivered a step-change in working
capital and materially improved profitability. We have a continued focus on reducing our overall cost base, and during the
financial year 2020 we have decreased operating expenses by 48.1%, to A$52.2m (FY19: A$96.7m).
The Inventory position on June 30, 2020 was A$2.8m, down A$13.2m vs. prior year (FY19: A$16.0m) due to transitioning the
business to an inventory-light platform by selling down the aged ownbuy stock.
The business is now debt free and with a net cash balance of A$6.7m, operating a negative working capital model.
Revenue and gross profit^
For the year ended 30 June 2020 Group revenue decreased by 37.2% to A$131.0 million (FY19: A$208.6 million) and gross
profit decreased, by 16.2%, to A$43.9 million (FY19: A$52.4 million). Gross margin has increased in FY20 by 8.4ppt, to 33.5%.
Executing against our ANZ First strategy required focus, making decisions at pace in order to resolve legacy issues, while
prioritising some goals in favour of others. This meant we had to become a much smaller and nimble company with solid
foundations before we could start to grow again. We have also made significant progress in selling down aged owned inventory
which will continue albeit at a reduced rate into FY21. In FY19, as a result of the changes to the Australian GST legislation,
we restructured the supply chain and closed the UK and US warehouses which had an immediate negative impact on
revenues.
The gross margin has continuously improved throughout the financial year ending the overall gross margin at 33.5% (FY19:
25.1%), this is a trend that has continued into the first quarter in FY21. This is a result of focusing on core revenue with
stronger margins and holding our suppliers responsible for key KPI’s.
Further to that, we have managed to decrease our freight costs as a share of revenue from 12.8% in the first quarter to 9.8%
in Q4.
Operating expenses
The operating expenses reduced by 48.1% to A$50.2 million (FY19: A$96.7 million). In the FY20, the group received a
government COVID-19 grant of A$0.9m.
The significant reduction of operating expenses has been achieved through automation and simplification of processes,
closing of UK & US warehouses and relocation of the Australian Fulfilment Centre.
Variable costs have decreased in line with revenue, whilst we have successfully reduced the fixed costs share of revenue
from 13.6% in FY19 to 12.1% in FY20. The reduction of fixed costs is a result of aligning the structure to fit the ANZ First
Strategy, operating on an inventory light model. Headcounts have been reduced from 307 in FY19 to 170 in FY20.
Profit/loss before tax
The reported loss before tax for the year is A$3.4 million (FY19: A$58.2 million loss). This reported loss is after the inclusion
of a number of one-off and non-cash items such as debt forgiveness and net foreign currency gain.
Profit/loss after tax and earnings per share
The reported loss after tax for the year is A$3.6 million (FY19: A$69.3 million loss). This reported loss for the prior year 2019
is after the inclusion of a number of one-off and non-cash items which are shown in more detail in note 6 to the financial
statements in order to provide greater insight as to the underlying profitability of the Group.
Note 38 to the financial statements shows the detailed calculations of basic loss per share for the financial year which after
tax was 0.53 cents per share loss (FY19: 44.92 cents loss) and was 0.41 cents loss (FY19: 12.21 cents loss) on underlying
EBITDA.
Taxation
The group has recorded a tax expense of A$0.2 million for the year (FY19:A$11.1 million expense). Further detail of the tax
expense is provided in note 9 to the financial statements. The Group has A$103.6 million (FY19: A$83.9 million) of carried
forward tax losses that may be available to use for further offset. A deferred tax asset is only recorded where it is probable
that these losses will be recoverable.
Balance sheet, cash and working capital
The Group’s closing cash balance was A$6.7 million (FY19: A$0.8 million) and a borrowing of A$nil (FY19: A$18.4 million).
The Group finalised a share placement of 640.4 million shares for A$23.3 million in September 2019. As part of the share
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MySale Group Plc
Strategic report
30 June 2020
placement, the Group agreed with its financier Hong Kong and Shanghai Banking Corporation Plc (‘HSBC’) to extinguish all
borrowing facilities, Corporate Guarantees and Indemnities with a repayment of A$10.9 million. As part of this repayment
HSBC agreed to provide the Group with a debt forgiveness amount of A$7.7 million. After these actions the business is debt
free.
Capital investment was reduced on prior year investment levels as we focused on conserving cash and prioritizing the
development projects in line with the business priorities. Whilst the majority of the capex is allocated to technology the business
did relocate its warehouse which accounted for 37.5% of capital expenditure. Total capital expenditure was A$2.6m (FY19
A$5.0m). No impairment was considered necessary.
Trade & Other Receivables has been reduced to A$4.1m (FY19: A$10.0m) as a result of exiting the wholesale business and
scaling down the share of business on Ourpay, the Groups owned BNPL solution.
Inventory value was recognised at the year-end as A$2.8 million (FY19: A$16.0 million). The significant decrease is a result
of the continued focus on the ANZ First Strategy and developing our inventory light platform and successfully reducing the
aged own-buy inventory.
Trade and other payables have also been significantly reduced, from A$33.0m in FY19 to A$19.0m in FY20. Trade payables
has reduced as a natural consequence of revenue declining and the company being in a stronger cash position.
Post the FY20 year-end closing, the group raised A$9.1 million from entities associated with both founders as well as the
former CEO of Catch.com.au who successfully built that business into one of Australia’s most successful online retailers.
Banking facilities
Subsequent to the refinancing the Group are no longer relying on trade and overdraft financing to support the business
operations. The sell down of ‘ownbuy’ inventory and the transition to an inventory light business model has reduced the overall
reliance on external financing to support inventories and other working capital requirements.
Underlying basis
As noted above the Group manages its operations by looking at the underlying EBITDA which excludes the impact of a number
of one-off and non-cash items of a non-trading nature as this, in the Board’s opinion, provides a more representative measure
of the Group’s performance.
Year to 30 June (A$ million)
FY20
FY19
Reported loss before tax
(3.4)
(58.2)
Interest
Depreciation
Impairment of goodwill
(Recovery) / Impairment of receivables
Net gain on Cocosa websites
Debt forgiveness
Share based payments
Reorganisation
Non-trading one-off costs
Unrealised foreign exchange (gain)/loss
Inventory write down
0.4
7.5
-
(1.5)
-
(7.7)
0.3
1.8
(0.3)
(0.7)
0.9
0.5
6.9
2.8
6.8
(2.7)
-
(1.0)
2.5
3.1
1.6
18.9
Underlying EBITDA*
(2.7)
(18.8)
*Underlying EBITDA is calculated as EBITDA adjusted for certain items including impairment losses/reversals related to
goodwill and receivables, share-based payments and unrealised foreign exchange loss/gain.
^Delivery costs to customers for the year ended 30 June 2019 of A$33.8 million have been reclassified from Cost of sale of
goods to Selling and distribution expenses to be in line with the online retail industry
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Key performance indicators
The Group manages its operations through the use of a number of key performance indicators (‘KPI’s’) including revenue
growth, gross margin %, Underlying EBITDA.
_____________________________
Mats Weiss
Chief Financial Officer
25 November 2020
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4. Principal risks and uncertainties
The management of the business and the execution of the Group’s 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:
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 operating results and financial condition could be
adversely affected.
Membership base
The Group needs to attract new ‘active’ members, in sufficient numbers. 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 (the flash sale model is a discount or promotion
that is offered for a short period of time for a limited selection of stock at heavily discounted prices) 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 operating results and financial condition.
Coronavirus (COVID-19) pandemic
The World Health Organisation declared COVID-19 as a pandemic in March 2020. The pandemic has and continues to
cause significant disruption to businesses and world economics with Governments placing restrictions on movement of
individuals and trade.
The Group’s performance is subject to global economic conditions, which included the impact of COVID-19 pandemic.
Deterioration in these conditions may reduce consumer spending. Adverse economic changes in any of the regions in which
the Group sells its products could reduce consumer confidence and could negatively affect sales and have an adverse effect
on the Group's operating results and financial condition. To date the COVID-19 pandemic has not materially impacted the
Group’s business.
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 operating results and financial condition.
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. The Group relies on access to its cash 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. The move to an inventory light strategy means the business now operates on a negative working capital
model where the business is able to generate cash quicky by selling products to customers before it has to pay its suppliers,
reducing the cash risk on the Group’s operating results and financial condition.
Financial risks
The Group's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Group's overall risk
management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on
the financial performance of the Group. The key financial risks are detailed in note 31 to the consolidated financial
statements. Failure to manage financial risks could have an adverse effect on the Group.
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Competition and sales model
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.
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.
The Group does not take delivery of products from a large number of suppliers 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.
Changes in indirect tax rules
Changes in local indirect tax, such as sales taxes, good and services tax 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.
Technology
The Group’s Information Technology (‘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, operating results and financial condition.
Data security and data privacy
The Group’s business is highly dependent on engaging with members via daily emails and app notifications. 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 messages to members and also that members actually open and read the
messages. Webmail prioritisation, ‘spam’ and blocking filters and local laws on sending emails could affect the Group’s
business, prospects, operating results and financial condition.
The Group is subject to data and privacy regulations, particularly General Data Protection Regulation (‘GDPR’). Failure to
comply with legal or regulatory requirements relating to data security or data privacy in the course of the Group business
activities, results in reputational damage, fines or other adverse consequences, including criminal penalties and consequential
litigation, adverse impact on the Group’s financial results or unfavourable effects on the Group’s ability to do business.
Unauthorised access to customer database, either from external attack or internal control weaknesses, could lead to
reputational damage, compliance issues, substantial regulatory fines and loss of customer confidence. The company has
implemented a disaster recovery plan and cyber insurance to support the business in the event of an incident occurring.
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, operating results and financial condition.
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
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Group fails to maintain the brand or if excessive expenses are incurred in this effort, the Group’s business, operating results
and financial condition may be materially and adversely affected.
Sustainability and climate change
The Group’s long-term success and viability will depend on the social and environmental sustainability of its business model,
the resilience of its supply chain and the Group’s ability to manage the impact of climate change across its operations. The
Group is committed to sustainability in its processes and supply chain. The Group works closely with strategic partners to
provide off-price Northern hemisphere apparel to Southern hemisphere customers, thus preventing such inventory being
destroyed or dumped in landfills. The risk of climate change is one for the entire world who must act collectively.
Brexit
Brexit is the withdrawal of the UK from the European Union (EU). The withdrawal agreement was ratified by the UK on 23
January 2020 and by the EU on 30 January 2020; it came into force on 31 January 2020. Failure to prepare for the UK’s
departure from the EU causes disruption to and creates uncertainty around the Group’s business including: the ability to
recruit; as well as impacting the Group’s relationships with existing and future customers, suppliers and colleagues. These
disruptions and uncertainties could have an adverse effect on the Group’s business, financial results and operations.
5. 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 provides them online.
6. 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.
7. Corporate governance
Introduction
High standards of corporate governance are a key priority for the Board of MySale Group Plc and, in line with the London
Stock Exchange’s requirement that AIM-listed companies adopt and comply with a recognised corporate governance code,
the Board applies the principles of the 2018 Quoted Companies Alliance Corporate Governance Code (the “QCA Code”),
where they consider it appropriate, as the basis of the Group’s governance framework. It is the responsibility of the Board to
ensure that the Group is managed for the long-term benefit of all shareholders and stakeholders, with effective and efficient
decision-making. Corporate governance is an important aspect of this, reducing risk and adding value to the business.
The Board acknowledge the importance of the QCA Code’s aims that: “Companies need to deliver growth in long-term
shareholder value. This requires an efficient, effective and dynamic management framework and should be accompanied by
good communication which helps to promote confidence and trust” and the ten principles of corporate governance set out in
that Code. The Group’s current approach to complying, as appropriate, with those principles is set out below.
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Quoted company Alliance Corporate Governance Code Principles
Deliver growth
1. Establish a strategy and business model which promote long-term value for shareholders
MySale Group Plc has an established strategy to deploy its international ecommerce platform to connect brand partners with
consumers.
Leverage market leading position in ANZ
The Board has identified the tactics that it believes will support the strategic aims and improve the Group’s performance:
•
• Utilise technology to improve customer experience and business efficiency
•
•
Build international brand partnerships to provide a wide product selection
Selective M&A where and when appropriate to expand the business model
Source international brands to sell in ANZ
Source local ANZ brands to sell in ANZ
Key pillars of the Australia New Zealand “ANZ” First Strategy are;
•
•
• Marketing spend prioritised to ANZ region
•
•
Key personnel located in ANZ
Pivot the business toward an inventory light Marketplace Platform
The group ANZ first strategy is focused on the opportunities in Australia and New Zealand has accelerated the shift onto its
unique proprietary Marketplace platform, which transforms cost efficiency & scalability, and facilitates the move to a negative
working capital model. A key focus in scaling the international supply base, to take advantage of the unique counter
seasonal opportunity in the market.
We continue to be a leading off-price apparel and home online retail platform in ANZ offering unique solutions for our brand
partners. We are absolutely focussed on the fashion and home categories, leveraging the counter seasonal opportunity. There
is a significant market opportunity and we are ideally placed to provide Northern hemisphere brands access to the Southern
hemisphere markets.
The retail landscape is continually evolving and brands are increasingly recognising the benefits of a more integrated inventory
partnership that allows them to accelerate the sell through of their discounted inventory outside of their core business.
Our focus is for MySale to be the leading off-price apparel and home online retail platform in ANZ offering unique solutions for
our brand partners. These solutions clearly differentiate us from most major retailers, which we see as a significant advantage
and extremely difficult for others to replicate. Our new set-up allows us to operate an Inventory Light Marketplace Platform
offering a large selection and delivering great value to our customers every day, through a combination of brand, fashion,
price and quality.
2. Seek to understand and meet shareholder needs and expectations
The company recognises the importance of engaging with its shareholders and reports formally to them when its full-year and
half-year results are published. At the same time, Executive directors present the results to institutional investors, analysts
and the media. The Non-executive directors are available to discuss any matter stakeholders might wish to raise, and the
Chairman and independent Non-executive directors attend meetings with investors and analysts as required.
The Chief Executive Officer provides the Board with a summary of the content of any engagement the Executive directors
have had with investors to ensure that major shareholders’ views are communicated to the Board as a whole. The Board is
also provided with brokers’ and analysts’ reports when published. This process enables the Chairman and the other Non-
Executive director to be kept informed of major shareholders’ opinions on strategy and governance, and for them to understand
any issues or concerns.
Shareholders are encouraged to attend the annual general meeting at which the Group’s activities and results are considered,
and questions answered by the directors. General information about the Group is also available on the company’s website.
This includes an overview of activities of the Group and details of all recent regulatory announcements.
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The Group maintains a dedicated email address at shareholder.notifications@mysale.com which investors may use to contact
the company which, together with the Group’s address, are prominently displayed on the Group’s website. Investors may also
make contact requests through the company’s Nominated Advisor and Broker, N+1 Singer.
3. Take into account wider stakeholder and social responsibilities and their implications for long-term success
In addition to its shareholders, the company believes its main stakeholder groups are its employees, customers, brand
partners, suppliers and relevant statutory authorities in its areas of operation.
The Group recognises the increasing importance of corporate social responsibility and endeavours to take it into account
when operating its business in the interests of its stakeholders, including its investors, employees, customers, suppliers,
business partners and the communities where it conducts its activities.
The Group believes that having empowered and responsible employees who display sound judgment and awareness of the
consequences of their decisions or actions, and who act in an ethical and responsible way, is key to the success of the
business.
The operation of a profitable business is a priority which in turn means investing for growth and operating in a sustainable
manner. The Group has therefore adopted core principles which provide a framework to operating with integrity and respect
for all stakeholders.
The Group aims to conduct its business with integrity, respecting the different cultures and the dignity and rights of individuals
in the countries where it operates. The Group recognises the obligation to promote universal respect for and observance of
human rights and fundamental freedoms for all, without distinction as to race, religion, gender, language or disability and these
are codified within the operational documents and procedures of the Group.
The Group has the aim that communities in which it operates should benefit directly from its presence through the wealth and
jobs created, and the investment of its time and money in the community.
Health and safety
The directors are committed to ensuring the highest standards of health and safety, both for employees and for the
communities within which the Group operates. The Group’s Chief Executive Officer is the person with overall responsibility for
health and safety matters.
The Group seeks to meet legal requirements aimed at providing a healthy and secure working environment to all employees
and understands that successful health and safety management involves integrating sound principles and practice into its
day-to-day management arrangements and requires the collaborative effort of all employees. All employees are positively
encouraged to be involved in consultation and communication on health and safety matters that affect their work.
Environment
The directors are committed to minimising the impact of the Group’s operations on the environment. The Group recognises
that its business activities have an influence on the local, regional and global environment and accepts that it has a duty to
carry these out in an environmentally responsible manner. It is the Group’s policy to endeavour to meet relevant legal
requirements and codes of practice on environmental issues so as to ensure that any adverse effects on the environment are
minimised.
Consumer
The Group has deployed policies and procedures to ensure its compliance with consumer laws and regulations within each
jurisdiction of operation. These policies and procedures and reviewed by external experts on a regular basis.
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation
The Board has overall responsibility for the Group’s internal control systems and for monitoring their effectiveness. The Board,
with the assistance of the Audit Committee, maintains a system of internal controls to safeguard shareholders’ investment and
the Group’s assets, and has established principles and a continuous process for identifying, evaluating and managing the
risks the Group faces.
Further details of the principal risks faced by the Group and how they are mitigated are contained on pages 14 and 15 of this
report.
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The Board considers risk to the business on an ongoing basis and the Group formally reviews and documents the principal
risks at least annually. Both the Board and senior management are responsible for reviewing and evaluating risk and the
Executive directors meet on a regular basis to review ongoing trading performance, discuss budgets and forecasts and any
new risks associated with ongoing trading, the outcome of which is reported 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 the
Group’s 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.
Maintain a dynamic management framework
5. Maintain the Board as a well-functioning, balanced team led by the chair
The Chairman is responsible for leadership of the Board, ensuring its effectiveness on all aspects of its role, setting its agenda
and ensuring that the directors receive accurate, timely and clear information. The Chairman also ensures effective
communication with shareholders and facilitates the effective contribution of the other Non-executive director. The Group is
satisfied that the current Board is sufficiently resourced to discharge its governance obligations on behalf of all stakeholders
and will consider the requirement for additional Non- executive directors as the company fulfils its growth objectives.
To enable the Board to discharge its duties, all directors receive appropriate and timely information. Briefing papers are
distributed to all directors in advance of Board and Committee meetings. All directors have access to the advice and services
of the Chief Financial Officer (or the Chief Executive Officer in the absence of a CFO), who is responsible for ensuring that
the Board procedures are followed, and that applicable rules and regulations are complied with. In addition, procedures are
in place to enable the directors to obtain independent professional advice, at the Group’s expense, if necessary.
The Board is responsible to the shareholders and sets the Group’s strategy for achieving long-term success. It is ultimately
responsible for the management, governance, controls, risk management, direction and performance of the Group. Further
details of the composition of the Board and Committee are set out on page 20 of this report.
Plc
Board Meetings
Eligible
to
attend
Attended
3
6
6
9
1
9
4
3
6
6
9
1
9
4
David Mortimer AO
Dow Famulak
Wally Muhieddine
Charles Butler
Jamie Jackson
Carl Jackson
Mats Weiss
Audit
Remuneration
Eligible
to
attend
Attended
Eligible
to
attend
Attended
1
1
1
1
1
1
2
1
1
2
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
At the time of this report the Board comprises of two executives and three non-executive directors. The skills and experience
of the Board are set out in their biographies on pages 26 and 27 of this report. The experience and knowledge of each of the
directors gives them the ability to constructively challenge the strategy and to scrutinise performance. The Board also has
access to external advisors where necessary.
Throughout their period in office the directors are continually updated on the Group’s business, the industry and competitive
environment in which it operates, corporate social responsibility matters and other changes affecting the Group by written
briefings and meetings with senior executives. Advisors provide updates on changes to the legal and governance requirements
of the Group, and directors, on an ongoing and timely basis.
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7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
The performance of the Board, its Committees and that of the individual directors is monitored by the Chairman on an ongoing
basis. The Chairman considers the operation of the Board and performance of the Directors on an ongoing basis as part of
his duties and will bring any areas of improvement he considers are needed to the attention of the Board. However, the Board
recognises the need to put in place an annual formal evaluation process for the Board, its Committees and individual Directors.
The effectiveness of the Board, its Committees and Directors will be reviewed on an annual basis.
8. Promote a corporate culture that is based on ethical values and behaviours
The Group adopts a policy of equal opportunities in the recruitment and engagement of staff as well as during the course of
their employment. It endeavours to promote the best use of its human resources on the basis of individual skills and experience
matched against those required for the work to be performed.
The Group recognises the importance of investing in its employees and, as such, the Group provides opportunities for training
and personal development and encourages the involvement of employees in the planning and direction of their work. These
values are applied regardless of age, race, religion, gender, sexual orientation or disability.
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.
The Group recognises that commercial success depends on the full commitment of all its employees and commits to
respecting their human rights, to provide them with favourable working conditions that are free from unnecessary risk and to
maintain fair and competitive terms and conditions of service at all times.
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.
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the
Board
The Chairman, is responsible for leadership of the Board, ensuring its effectiveness on all aspects of its role, setting its agenda
and ensuring that the directors receive accurate, timely and clear information. The Chairman also ensures effective
communication with shareholders and facilitates the effective contribution of the other Non-executive directors. The Chief
Executive Officer, Carl Jackson, is responsible for the operational management of the Group and the implementation of Board
strategy and policy. By dividing responsibilities in this way, no one individual has unfettered powers of decision-making.
There is a schedule of matters reserved for decision by the Board which enables the Board to provide leadership and ensure
effectiveness. Such matters include business strategy and management, financial reporting (including the approval of the
annual budget), Group policies, corporate governance matters, major capital expenditure projects, materials acquisitions and
divestments and the establishment and monitoring of internal controls.
The appropriateness of the Board’s composition and corporate governance structures are reviewed through the ongoing Board
evaluation process and on an ad hoc basis by the Chairman together with the other directors, and these will evolve in parallel
with the Group’s objectives, strategy and business model as the Group develops.
Board Committees
The Board has established Audit and Remuneration Committees.
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:
Charles Butler
Dow Famulak
Chair
Member
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The executive directors, other members of the senior management team or the company advisors or the independent Auditors
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.
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 on pages 21 to 24 of this report.
The members of the Remuneration Committee are:
Dow Famulak
Wally Muhieddine
Chair
Member
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.
Build Trust
10. Communicate how the company is governed and is performing
The Group formally reports its performance to all stakeholders with the publication of full year and half-year results. These
publications are supplemented by three regular trading updates each year together with any ad hoc announcement required
in order to ensure appropriate market sensitive information is available to all interested parties.
The company holds and Annual General Meeting each year at which a trading update is provided and shareholders and
encouraged to participate. The results of the resolutions voted upon at the Annual General Meeting are formally published.
The Board maintains a healthy dialogue with all its stakeholders. Throughout the course of the financial year the Board
communicates with shareholders directly and uses external advisors to canvass shareholders on any views, concerns and
expectations they may wish to express indirectly.
By Order of the Board.
_____________________________
Charles Butler
Chairman
25 November 2020
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High standards of corporate governance are a key priority for the Board of MySale Group Plc and, in line with the London
Stock Exchange’s requirement that AIM-listed companies adopt and comply with a recognised corporate governance code,
the Board applies the principles of the 2018 Quoted Companies Alliance Corporate Governance Code (the “QCA Code”),
where they consider it appropriate, as the basis of the Group’s governance framework. It is the responsibility of the Board to
ensure that the Group is managed for the long-term benefit of all shareholders and stakeholders, with effective and efficient
decision-making. Corporate governance is an important aspect of this, reducing risk and adding value to the business.
The Board of Directors
As at the date of signing of these financial statements, the Board consisted of five directors as shown below. Dow Famulak
and Wally Muhieddine were appointed as Independent Non-Executive Directors on 3 December 2019. Mats Weiss was
appointed as the CFO on 9 March 2020. All 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:
Charles Butler
Carl Jackson
Mats Weiss
Dow Famulak
Wally Muhieddine
Chairman
Executive Director and Chief Executive Officer
Chief Financial & Operations Officer (appointed 9 March 2020)
Independent Non-Executive Director (appointed 3 December 2019)
Independent Non-Executive Director (appointed 3 December 2019)
During the financial year ended 30 June 2020 the following individual served for part of the year and have stepped down
subsequent to the year end and before the signing of this report.
Jamie Jackson
Executive Director and Vice Chairman resigned from the Board on 6 September 2019
Biographies for each of the directors who served during the 2020 year or who are currently on the Board are set out in the
Directors’ report under ‘Information on 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.
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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:
Charles Butler
Dow Famulak
Chair
Member
The Audit Committee met two times during the financial year.
The executive directors, other members of the senior management team or the company advisors or the independent Auditors
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:
Charles Butler
Wally Muhieddine
Chair
Member
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, capital expenditure, 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 the
Group’s 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.
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.
22
MySale Group Plc
Directors' remuneration report
30 June 2020
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: is competitive and is acceptable to shareholders; aligns executive compensation with company
performance and shareholder return; and 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 detailed in the Corporate Governance section of this report.
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’s shareholders 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. Executive directors’ salaries are reviewed annually in line with
the remuneration reviews for all other Group employees. The basic annual salaries and key benefits as of 30 June 2020 are
as follows:
Executive director
Carl Jackson
Mats Weiss
Base salary
A$371,250
A$300,000
Pension
Contributions
A$35,269
A$28,500
Taxable
Benefits
A$30,000
Group entity with which the
contract is with
Ozsale Pty Limited
Ozsale Pty Limited
Executive directors’ 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 have 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 they are a member, subject to and in accordance with the terms and/or rules of those arrangements from
time to time.
23
MySale Group Plc
Directors' remuneration report
30 June 2020
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. Charles Butler, Dow Famulak and Wally Muhieddine entered
into letters of appointment on 23 October 2017, 3 December 2019 and 3 December 2019 respectively. Each receives a fee
for their services which takes into account the role undertaken. They do not receive any pension or other benefits from the
Group.
The annual fees for non-executive directors, effective at the date of this report, are as follows:
Non-executive director
Charles Butler
Dow Famulak
Wally Muhieddine
Group entity with which the
Base fee
appointment is with
£75,000 MySale Group Plc
£45,000 MySale Group Plc
£45,000 MySale Group Plc
The appointment of any non-executive director is terminable on 3 months’ written notice.
The following information is subject to audit.
Directors’ remuneration for the year ended 30 June 2020 was as follows:
Name
Non,executive directors:
Iain McDonald
David Mortimer AO
Dow Famulak
Wally Muhieddine
Charles Butler
Executive directors:
Jamie Jackson
Andrew Dingle
Carl Jackson
Mats Weiss
Basic salary
/ fees
Bonus
Taxable
benefits
Pension
contributions
Total 2020
Total 2019
-
-
£25,154
A$50,750
£73,750
£192,000
-
A$344,265
A$80,769
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
£170
-
£1,316
-
-
£25,324
A$50,750
£75,066
£43,750
£46,667
-
-
£63,391
-
-
A$27,692
-
£1,316
-
A$35,193
A$7,673
£193,316
-
A$407,150
A$88,442
A$497,270
A$138,065
A$439,369
-
Employee Share Plan
Details of the operation of the company’s employee share plan can be found in note 39 to the financial statements.
Shares granted under the Loan Share Plan (‘LSP’) are as follows:
Balance
1 July,
2019
-
-
-
-
Granted
11.250.000
3.835.227
3.835.227
12.938.061
Exercised
-
-
-
-
Cancelled
-
-
-
-
Balance
30 June
2020
11.250.000
3.835.227
3.835.227
12.938.061
Exercise
price (£)
£0.02000
£0.03520
£0.03520
£0.02428
Date of
exercise
-
-
-
-
Market
price on
exercise
(£)
-
-
-
-
Charles Butler
Dow Famulak
Wally Muhieddine
Mats Weiss
Share price information
The market price of Mysale Group Plc ordinary shares at 30 June 2020 was £0.056 (2019: £0.026) and the range during the
financial year was between £0.018 and £0.063 (2019: £0.022 and £0.596).
24
MySale Group Plc
Directors' report
30 June 2020
The directors present their report, together with the audited financial statements and independent auditors’ report, on the
consolidated group (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 2020.
Directors
The directors who have served on the Board of MySale Group Plc during any part of the financial year and up to the date of
this report are set out below:
Charles Butler
Carl Jackson
Mats Weiss
Dow Famulak
Wally Muhieddine
Jamie Jackson
David Mortimer AO
joined the Board on 9 March 2020
joined the Board on 3 December 2019
joined the Board on 3 December 2019
left the Board on 6 September 2019
left the Board on 3 December 2019
Information on directors and their interests
Biographies for the directors in office at the 30 June 2020 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:
Charles Butler
Independent Non-Executive Director
48
Charles was appointed to the Board in October 2017 and took over the role of Chairman in
November 2018. He has over two decades experience in senior and board level positions in growth
and digital technology businesses. Amongst Charles’ broad executive experience, notable roles
include Chief Executive Officer of Market Tech Holdings, a property and digital technology group
which he led from successful IPO through to its subsequent takeover, and Group CEO at NetPlay
TV, the interactive gaming company. Charles is a member of the Institute of Chartered Accountants
in England and Wales.
Carl Jackson
Executive Director and Chief Executive Officer
57
Carl joined MySale in 2009 and has over 28 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.
Mats Weiss
Chief Financial & Operations Officer
48
Mats Weiss was appointed to the Board in March 2020. He has more than 20 years’ experience
from senior finance roles across FMCG and Entertainment industries. Amongst Mats’ experience,
his most recent role was as Regional Vice President for Twentieth Century Fox, leading the finance
function for APAC and Emerging Markets.
Dow Famulak
Independent Non-Executive Director
59
Dow has significant global experience in building, transforming and commercialising businesses,
having worked with a range of high-profile consumer fashion brands over a 30-year career. He is
currently based in London in his role as Advisor to the CEO for Global Brands Group, one of the
world’s leading branded fashion accessories, footwear, and apparel companies. He was previously
President of Global Brands Group from 2014 to September 2019, and before then held roles with
Li & Fung and Colby International Ltd.
25
MySale Group Plc
Directors' report
30 June 2020
Name:
Title:
Age:
Experience and
expertise:
Wally Muhieddine
Independent Non-Executive Director
50
Wally is an expert in media and marketing and has been at the forefront of the evolution of TV
advertising in Australia. For the last 16 years he has been at the helm of one of Australia’s most
successful advertising agencies working closely with leading brands to grow their awareness and
sales. Advertising Advantage has offices and services clients in Australia, Europe and the United
States. He is a valued adviser to local and international CEO’s in sectors including fashion, finance,
FMCG, online and retail.
Directors’ beneficial interests in the shares of the company at the 30 June 2020 are:
Name
Charles Butler
Carl Jackson9
Dow Famulak
Jamie Jackson
Ordinary
shares
Percentage
holding
17,000
103,745,000
1,100,000
57,469,189
0.0%
12.69%
0.13%
7.03%
Information on company secretary
Name:
Title:
Experience and
expertise:
Almond + Company Limited
Company Secretary
Almond + Company Limited is a 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 2020 (June 2019: A$nil).
The directors are responsible for the maintenance and integrity of the company’s website.
Going concern
COVID-19 has impacted all aspects of the Group’s business. The Group has considered the additional costs and revenue
incurred as a result of the pandemic and has determined that COVID-19 impacts should not be treated as an exceptional item.
The Group will continue to monitor closely the impact of the COVID-19 outbreak, and apply guidance issued by the World
Health Organisation and local governments appropriately. As always, the safety of our customers and colleagues remains
paramount.
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. The going concern basis of
accounting has therefore been adopted in preparing the financial statements. The directors have also assessed the prospects
of the Company and the Group over two-year period to 30 June 2022, and have a reasonable expectation that the Company
and the Group will be able to continue in operation and meet its liabilities as they fall due over the two-year period under
review.
The Group has conducted extensive stress-testing given the impacts of COVID-19 on customer demand and behaviours,
none of which have resulted in a change to the assessment of the Group as a going concern. The Directors have therefore
continued to adopt the going concern basis in preparing the Group’s financial statements. Further details of the steps taken
by the Group are included in the going concern accounting policy in note 2 of the financial statements.
Substantial shareholdings
99 Held by Jackson Capital Pty Ltd as trustee for the Jackson Family Trust.
26
MySale Group Plc
Directors' report
30 June 2020
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
Number of
shares held
Percentage
holding
Shelton Capital Limited
Lombard Odier Asset Management Europe Ltd
Schroders Plc
InterTrader Limited
143,237,124
134,878,825
130,788,136
57,811,818
17.53%
16.50%
16.00%
7.07%
Charitable and political donations
The Group made no charitable donations (2019: A$0) during the financial year. The Group made no political donations.
Indemnity and insurance of officers
The company maintains directors’ and officers’ liability insurance which gives appropriate cover for any legal action brought
against its directors. The company has also provided an indemnity for its directors, which is a qualifying third-party indemnity
provision. This was in place throughout the year and up to the date and approval of the financial statements.
Independent Auditor
PwC resigned and BDO LLP were appointed as auditors during the year. BDO LLP have expressed their willingness to
continue as auditors. A resolution for the appointment of BDO LLP as auditor of the Company is to be proposed at the
forthcoming AGM.
Audit information
Each of the Directors at the date of the Directors’ report confirms that, so far as he is aware, there is no relevant audit
information of which the Company’s auditor is unaware and he has taken all the reasonable 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 the information.
By Order of the Board.
_____________________________
Charles Butler
Chairman
London
25 November 2020
27
MySale Group Plc
Directors' responsibility statement
30 June 2020
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.
Company law requires the Directors to prepare Group financial statements for each financial year. As required by the AIM
Rules of the London Stock Exchange they are required to prepare the Group financial statements in accordance with
International Financial Reporting Standards as adopted by the EU (“IFRSs as adopted by the EU”) and applicable law.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Group and of its profit or loss for that period. In preparing the Group financial statements,
the Directors are required to:
select suitable accounting policies and then apply them consistently;
state whether they have been prepared in accordance with IFRSs as adopted by the EU; and
•
• make judgements and estimates that are reasonable, relevant and reliable;
•
• assess the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and use the going concern basis of accounting unless they either intend to liquidate the Group or to cease operations,
or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time
the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies
(Jersey) Law 1991. They are responsible for such internal control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility
for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud
and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company’s website. Legislation in Jersey 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.
•
•
By Order of the Board
_____________________________
Charles Butler
Chairman
London
25 November 2020
28
MySale Group Plc
Independent auditor’s report
30 June 2020
Opinion
We have audited the financial statements of Mysale Group plc (“the Parent Company”) and its subsidiaries (the “Group”) for
the year ended 30 June 2020 which comprise the Statement of Profit or Loss and Other Comprehensive Income, the Balance
Sheet, the Statement of Changes in Equity, the Statement of Cash Flows and notes to the financial statements, including a
summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion, the financial statements:
• give a true and fair view of the state of the Group’s affairs as at 30 June 2020 and of its loss for the year then ended;
• have been properly prepared in accordance with IFRSs as adopted by the European Union; and
• have been prepared in accordance with the requirements of Companies (Jersey) Law 1991.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the Group and Parent Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as
applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you
where:
•
•
the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is not
appropriate; or
the Directors have not disclosed in the financial statements any identified material uncertainties that may cast
significant doubt about the Group’s ability to continue to adopt the going concern basis of accounting for a period of
at least twelve months from the date when the financial statements are authorised for issue.
Overview
Group materiality was A$1,310,000, which represents 1% of total revenue. Component materiality and other materiality
considerations are detailed in the materiality section below.
Other than the Parent company we identified one component of the Group that contributed greater than 15% of Group revenue,
which, in our view, required an audit of their complete financial information.
We have identified and reported on two key audit matters, including revenue recognition, and going concern.
Key audit matter
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
This matter was addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on this matter.
29
MySale Group Plc
Independent auditor’s report
30 June 2020
Key Audit Matter
Revenue recognition
reported
The Group has
revenues of
A$131.0m (2019: A$208.6m) with deferred
revenue at 30 June 2020 of A$6.2m (2019:
A$10.4m). The revenue recognition policy is
detailed within note 2 of these financial
statements and the revenue disclosures are
outlined in note 4.
The key audit matter is the existence of
revenue recognised during the year, revenue
recognised around the year end, including the
recognition of the correct apportionment of
revenue in the year based on performance
obligations completed as defined per IFRS
15, and the related amounts deferred at year
end for all deliveries in transit. Because of the
this balance, we have
significance of
considered it to be a key audit matter.
How we addressed the key audit matter in the audit
Our audit work included, but was not restricted to, the
following:
• Reviewed the revenue recognition policy for the material
sources of revenue and check revenue is recognised in
accordance with IFRS 15;
• On a sample basis, tested revenue transactions
throughout the year by tracing to supporting
documentation, including proof of delivery and cash
receipts;
• Use data analytics technique to generate expected
revenue from EPOS data to compare with revenue
recognised and cash collected;
•
•
Performed cut-off procedures to ensure revenue is
recorded in the correct period. This consisted of checking
that revenue is recognised in the correct period for a
sample of items sold before and after the year end;
Tested the existence of deferred revenue for a sample of
deliveries in transit at year end; and
• Reviewed the financial statement disclosures relating to
revenue to check that they comply with the IFRS 15
accounting standard requirements.
Key Observations
Based on procedures performed, consider that revenue has
been recognised in the correct period and in accordance with
accounting standards.
30
MySale Group Plc
Independent auditor’s report
30 June 2020
Key Audit Matter
Going concern
In the second half of the financial year, the
outbreak of COVID-19 became a global
pandemic. Governments internationally have
enforced various restrictions on society which
has had a negative impact on the global
economy resulting in ongoing uncertainty in
the external economic environment.
The financial statements explain in note 2
how the Directors have formed a judgement
that it is appropriate to adopt the going
concern basis of preparation for the Group.
That judgement is based on the Directors’
evaluation of the inherent risks to the Group’s
business model, including the impact of
COVID-19, and how those risks might affect
the Group’s financial resources or ability to
continue operations over a period of at least
a year from the date of approval of the
financial statements.
As a consequence, going concern is
considered a key audit matter.
How we addressed the key audit matter in the audit
Our audit work included, but was not restricted to, the
following:
• Obtained an understanding of the business model,
objectives, strategies and related business risk, the
measurement and review of the Group’s financial
performance including forecasting and budgeting
processes and the Group’s risk assessment process;
• We evaluated the Directors’ model including the
relevance and reliability of underlying data used to
make the assessment by agreeing to supporting
documentation, including management accounts,
whether assumptions and changes to assumptions
from prior years are appropriate and consistent with
each other;
• We performed analyses of changes in key assumptions
including a reasonably possible (but not unrealistic)
reduction in forecast revenue to understand the
sensitivity in the cash flow forecasts for a period of
twelve months from the date of approval of the financial
statements.
• We reviewed the stress test analysis prepared by
management to see when the Group will run out of
cash. We confirmed through subsequent actual
numbers that this scenario is improbable due to the
Group being in strong cash position.
• we evaluated the Directors’ plans for future actions in
relation to the going concern assessment including
whether such plans are feasible in the circumstances,
with reference to management accounts and other
supporting documentation.
• We evaluated the adequacy and appropriateness of
disclosures in the financial statements regarding the
going concern assessment and any material
uncertainties that may exist.
Key Observations
Our key observations are set out in the Conclusions relating to
going concern section above.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements
on the audit and in forming our audit opinion. We consider materiality to be the magnitude by which misstatements, including
omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial
statements.
31
MySale Group Plc
Independent auditor’s report
30 June 2020
Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the
nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the
financial statements as a whole.
Materiality for the Group financial statement as a whole was calculated at A$1,310,000 based on 1% of total revenue. In
arriving at this judgement, we considered the financial measures which we believed to be most relevant to the users of the
financial statements in assessing the performance of the Group. Profit before tax is a generally accepted benchmark for a
profit-orientated business. However, due to the loss making nature of the Group, we consider that there is still significant
volatility in this measure. We concluded that, in isolation, this metric did not appropriately reflect the scale of the Group’s
ongoing operations or its underlying performance. As a result, revenue was considered the most appropriate benchmark.
Materialities for significant components comprising the Parent Company and the Australian component were both calculated
as A$972,750.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels
will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Performance materiality was calculated at A$972,750, which was deemed appropriate with reference to our risk assessment,
together with our assessment of the Group’s internal controls.
Performance materiality levels used for the two significant components identified within the Group were based upon the same
benchmarks and percentages detailed for the Group, due to each component being consistent in both nature, audit risks
identified and control environment to the Group as a whole. In the current year, performance materiality applied to the audits
of the two significant components was A$729,500 each.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above A$39,200,
as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
An overview of the scope of our audit
Our audit of the Group was scoped by obtaining an understanding of the Group and its environment, including the Group’s
system of internal control, and assessing the risks of material misstatement in the financial statements at a Group level. We
also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias
by the directors that may have represented a risk of material misstatement due to fraud.
In determining the scope of our audit we considered the level of work to be performed at each component in order to ensure
sufficient assurance was gained to allow us to express an opinion on the financial statements of the Group as a whole. The
group operates through a number of components in Jersey, Australia, New Zealand and South-East Asia. Ozsale Pty Limited,
the component in Australia, was considered by us to be significant as it is the principal trading component in the Group. We
completed full scope audits on Mysale Group plc and Ozsale Pty Limited. The audit of Mysale Group plc was completed by
the group engagement team. Ozsale Pty Limited was audited by our network firm in Australia. The Group engagement team
was significantly involved in the planning and direction of the audit of Ozsale Pty Limited. As part of our audit strategy, we
issued group audit engagement instructions and discussed the instructions with the component auditor. A senior member of
the group audit team held discussions with the component auditor and local management. The group audit team performed a
review of the component audit files and we discussed the audit findings with the component auditor. A senior member of the
group audit team also attended the closing meeting with the client.
The non-significant components, which contributed 1.2% of total revenue of the Group, were subject to desktop reviews or
specific procedures in relation to specific areas of the financial statements carried out by the Group engagement team.
Other information
The Directors are responsible for the other information. The other information comprises the information included in the
Annual Report and Financial Statements, other than the financial statements and our auditor’s report thereon. Our opinion
on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
32
MySale Group Plc
Independent auditor’s report
30 June 2020
misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies (Jersey) Law 1991 requires us to report
to you if, in our opinion:
• proper accounting records have not been kept by Parent Company, or proper 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; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s or Parent Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Article 113A of the Companies (Jersey)
Law 1991. Our audit work has been undertaken so that we might state to the Parent Company’s members those matters we
are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Parent Company and the Parent Company’s members as a body,
for our audit work, for this report, or for the opinions we have formed.
David Butcher
For and on behalf of BDO LLP
Chartered Accountants
London, United Kingdom
25 November 2020
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
33
MySale Group Plc
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
Revenue from contracts with customers
Cost of sale of goods*
Gross profit
Other operating gain, net
Interest income
Expenses
Selling and distribution expenses
Administration expenses
Impairment/(recovery) of receivables
Impairment of assets
Finance costs
Loss before income tax benefit/(expense)
Note
Consolidated
2020
A$'000
2019
A$'000
4
4
5
11
16
7
131,032
(87,152)
208,596
(156,178)
43,880
52,418
8,626
4
1,591
-
(37,015)
(20,746)
2,262
-
(400)
(71,795)
(31,814)
(5,261)
(2,832)
(547)
(3,389)
(58,240)
Income tax benefit/(expense)
9
(171)
(11,090)
Loss after income tax benefit/(expense) for the year attributable to the owners
of MySale Group Plc
(3,560)
(69,330)
Other comprehensive (loss)/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
Exchange differences on translation of foreign operations
28
28
Other comprehensive (loss)/income for the year, net of tax
Total comprehensive loss for the year attributable to the owners of MySale
Group Plc
-
(2,125)
(2,125)
(38)
932
894
(5,685)
(68,436)
Cents
Cents
Basic and diluted earnings per share
38
(0.53)
(44.92)
* Delivery costs to customers for the year ended 30 June 2019 of A$33,831,000 have been reclassified from Cost of sale
of goods to Selling and distribution expenses to be in line with the online retail industry.
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
34
MySale Group Plc
Balance sheet
As at 30 June 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax receivable
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangibles
Other non-current assets
Deferred tax
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Lease liabilities
Income tax payable
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium account
Other reserves
Accumulated losses
Equity attributable to the owners of MySale Group Plc
Non-controlling interests
Total equity
Note
Consolidated
2020
A$'000
2019
A$'000
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
6,660
4,107
2,761
15
634
14,177
1,216
5,362
30,168
1,629
3,407
41,782
814
9,985
15,963
-
4,766
31,528
1,186
-
34,480
-
3,369
39,035
55,959
70,563
18,985
6,186
-
1,581
-
2,428
29,180
5,048
450
5,498
32,968
10,408
18,357
-
96
4,415
66,244
-
231
231
34,678
66,475
21,281
4,088
-
328,971
(124,979)
(182,691)
21,301
(20)
-
306,363
(123,125)
(179,130)
4,108
(20)
21,281
4,088
The above balance sheet should be read in conjunction with the accompanying notes
35
MySale Group Plc
Balance sheet
As at 30 June 2020
The financial statements of MySale Group Plc (company number 115584) (Jersey) were approved by the Board of Directors
and authorised for issue on 25 November 2020. They were signed on its behalf by:
___________________________
Carl Jackson
Director
25 November 2020
___________________________
Charles Butler
Chairman
The above balance sheet should be read in conjunction with the accompanying notes
36
MySale Group Plc
Statement of changes in equity
For the year ended 30 June 2020
Consolidated
Share
premium
account
A$'000
Other
reserves
A$'000
Accumulated
losses
A$'000
Non-
controlling
interest
A$'000
Total equity
A$'000
Balance at 1 July 2018
306,363
(122,983)
(109,800)
(20)
73,560
Loss after income tax expense for the year
Other comprehensive income for the year, net
of tax
Total comprehensive (loss)/income for the year
Transactions with owners in their capacity as
owners:
Share-based payments (note 39)
-
-
-
-
(69,330)
894
-
894
(69,330)
-
-
-
(69,330)
894
(68,436)
-
(1,036)
-
-
(1,036)
Balance at 30 June 2019
306,363
(123,125)
(179,130)
(20)
4,088
Consolidated
Share
premium
account
A$'000
Other
reserves
A$'000
Accumulated
losses
A$'000
Non-
controlling
interest
A$'000
Total equity
A$'000
Balance at 1 July 2019
306,363
(123,125)
(179,130)
(20)
4,088
Loss after income tax expense for the year
Other comprehensive loss for the year, net of
tax
Total comprehensive (loss)/income for the year
-
-
-
-
(3,561)
(2,125)
-
(2,125)
(3.561)
Transactions with owners in their capacity as
owners:
Issue of ordinary shares, net of transaction
costs (note 27)
Share-based payments (note 39)
22,608
-
-
271
-
-
-
-
-
-
-
(3,561)
(2,125)
(5,686)
22,608
271
Balance at 30 June 2020
328,971
(124,979)
(182,691)
(20)
21,281
The above statement of changes in equity should be read in conjunction with the accompanying notes
37
MySale Group Plc
Statement of cash flows
For the year ended 30 June 2020
Cash flows from operating activities
Loss before income tax benefit/(expense) for the year
Adjustments for:
Depreciation and amortisation
Impairment of goodwill
Net loss on disposal of property, plant and equipment
Net loss/(gain) on disposal of intangibles
Interest income
Interest expense
Change in operating assets and liabilities:
Decrease in trade and other receivables
Decrease in inventories
Decrease/(increase) in other operating assets
(Decrease)/increase in trade and other payables
(Decrease)/increase in contract liabilities
(Decrease)/increase in other provisions
Interest received
Interest paid
Income taxes paid
Note
Consolidated
2020
A$'000
2019
A$'000
(3,389)
(58,240)
7,520
-
390
128
(4)
400
6,937
2,832
487
(2,655)
-
547
5,045
(50,092)
7,320
13,202
2,502
(17,307)
(4,222)
(578)
5,962
4
(51)
(321)
20,153
17,687
(399)
986
1,787
1,558
(8,320)
-
(547)
(136)
Net cash from/(used in) operating activities
5,594
(9,003)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of intangibles
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Repayment of borrowings
Repayment of leases
Net cash (used in)/from financing activities
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 and cash equivalents
26
(980)
(1,633)
-
-
(94)
(4,865)
177
2,655
(2,613)
(2,127)
22,608
(5,200)
(1,163)
16,245
-
-
(124)
(124)
19,226
(12,323)
(243)
(11,254)
(938)
(131)
Cash and cash equivalents at the end of the financial year
10
6,660
(12,323)
The above statement of cash flows should be read in conjunction with the accompanying notes
38
MySale Group Plc
Notes to the financial statements
30 June 2020
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 dollars.
The principal business of the Group is the operating of online shopping outlets for consumer goods like ladies, men's and
children’s fashion clothing, accessories, beauty and homeware items.
MySale Group Plc is a public company, limited by shares, listed on the AIM (Alternate Investment Market), a sub-market of
the London Stock Exchange. The company is incorporated and registered under the Companies (Jersey) Law 1991. The
company is domiciled in Australia.
The registered office of the company is Ogier House, The Esplanade, 44 Esplanade Street. Helier, JE4 9WG, Jersey and
principal place of business is at 3/120 Old Pittwater Road, Brookvale, NSW 2100, Australia.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 25 November 2020.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and interpretations issued by the international
Accounting Standard Board (“IASB’) which have been endorsed by the European Union that are mandatory for the current
reporting period.
The following Accounting Standards and Interpretations are most relevant to the Group:
IFRS 16 Leases
The Group has adopted IFRS 16 from 1 July 2019. The standard replaces IAS 17 'Leases' and for lessees eliminates the
classifications of operating leases and finance leases. Except for short-term leases and leases of low-value assets, right-of-
use assets and corresponding lease liabilities are recognised in the statement of financial position. Straight-line operating
lease expense recognition is replaced with a depreciation charge for the right-of-use assets (included in administrative
expenses) and an interest expense on the recognised lease liabilities (included in finance costs). In the earlier periods of the
lease, the expenses associated with the lease under IFRS 16 will be higher when compared to lease expenses under IAS
17. However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results improve as the operating
expense is now replaced by interest expense and depreciation in profit or loss. For classification within the statement of cash
flows, the interest portion is disclosed in operating activities and the principal portion of the lease payments are separately
disclosed in financing activities. For lessor accounting, the standard does not substantially change how a lessor accounts for
leases.
The Group lease portfolio is principally comprised of property leases of buildings in relations to fulfilment centres and office
space. The term of the lease’s ranges between 2 to 5 years.
Impact of adoption
IFRS 16 was adopted using the modified retrospective approach which does not require the comparatives to be restated and
the cumulative effect of initially applying the standard is recognised in the opening balance of accumulated losses at the
transition date. The impact of adoption on opening accumulated losses as at 1 July 2019 was as follows:
39
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Operating lease commitments as at 1 July 2019 (IAS 17)
Finance lease commitments as at 1 July 2019 (IAS 17)
Operating lease commitments discount based on the weighted average incremental borrowing rate of 5%
(IFRS 16)
Short-term leases not recognised as a right-of-use asset (IFRS 16)
Low-value assets leases not recognised as a right-of-use asset (IFRS 16)
Right-of-use assets (IFRS 16)
Lease liabilities - current (IFRS 16)
Lease liabilities - non-current (IFRS 16)
Net change in opening accumulated losses as at 1 July 2019
1 July
2019
A$'000
5,835
20
(181)
(3,945)
(5)
1,724
(541)
(1,183)
(1,724)
-
Practical expedients applied:
In adopting IFRS 16, the Group has used the following practical expedients permitted by the standard:
applied a single discount rate to a portfolio of leases with reasonably similar characteristics;
●
accounted for operating leases with a remaining lease term of less than 12 months as at 1 July 2019 as short-term
●
leases;
excluded initial direct costs for the measurement of the right-of-use asset at the date of initial application;
used hindsight in determining the lease term where the contract contains options to extend or terminate the lease; and
not apply IFRS 16 to contracts that were not previously identified as containing a lease.
●
●
●
IFRIC 23 – Uncertainty over Income Tax Treatments
The Group has adopted Interpretation 23 from 1 July 2019. The interpretation clarifies how to apply the recognition and
measurement requirements of IAS 12 ‘Income Taxes’ in circumstances where uncertain tax treatments exists. The
interpretation requires: the Group to determine whether each uncertain tax treatment should be treated separately or
together, based on which approach better predicts the resolution of the uncertainty; the Group to consider whether it is
probable that a taxation authority will accept an uncertain tax treatment; and if the Group concludes that it is not probable
that the taxation authority will accept an uncertain tax treatment, it shall reflect the effect of uncertainty in determining the
related taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates, measuring the tax uncertainty
based on either the most likely amount or the expected value. In making the assessment it is assumed that a taxation
authority will examine amounts it has a right to examine and have full knowledge of all related information when making
those examinations. IFRIC 23 was adopted using the modified retrospective approach and as such comparatives have not
been restated. There was no impact of adoption on opening retained profits as at 1 July 2019.
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 2020. 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:
IASB new Conceptual Framework for Financial Reporting
The new framework is applicable for annual reporting periods beginning on or after 1 January 2020 and the application of
the new definition and recognition criteria may result in future amendments to several accounting standards. Furthermore,
entities who rely on the conceptual framework in determining their accounting policies for transactions, events or conditions
that are not otherwise dealt with under IFRS may need to revisit such policies. The Group will apply the revised conceptual
framework from 1 July 2020 and at this time, the application of the Conceptual Framework is not expected to have a material
impact on the Group’s financial statements.
40
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Basis of preparation
These financial statements have been prepared in accordance with applicable Jersey Law and International Financial
Reporting Standards ('IFRS' or 'IFRSs') as adopted for use in the European Union (the 'EU') and IFRS Interpretations
Committee interpretations (together 'EUIFRS').
Under Article 105(11) of the Companies (Jersey) Law 1991, a parent company preparing consolidated financial statements
need not present solus (parent company only) financial information, unless required to do so by an ordinary resolution of
the Company’s members. The Company’s members did not pass an ordinary resolution on this matter and hence Parent
Company financial information has not been presented for the year.
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Going concern
The consolidated financial statements have been prepared on a going concern basis. In reaching their assessment, the
Directors have considered a period extending at least 12 months from the date of approval of these financial statements.
The Group’s business activities and financial position, together with the factors likely to affect its future development,
performance and position, are set out in section 4 of the Strategic Report. In addition, note 31 to the financial statements
includes the Company’s objectives, policies and processes for managing its capital; its financial risk management objectives;
details of its financial instruments; and its exposures to credit risk and liquidity risk. The Group prepare budgets and cashflow
forecasts to ensure that the Group can meet its liabilities as they fall due.
As at 30 June 2020, the Group’s current liabilities exceeds current assets by A$15,003,000 (2019: A$34,716,000) and the
Group has incurred a loss before tax of A$3,389,000 (2019: A$58,240,000) and generated operating cash inflows of
A$5,594,000 (2019: cash outflows of A$9,003,000).
During the year, the Group finalised a share placement for A$23,329,000. The Group also agreed with its financier Hong
Kong and Shanghai Banking Corporation Plc (‘HSBC’) to extinguish all borrowing facilities, Corporate Guarantees and
Indemnities with a repayment of A$10,914,000 in September 2019. As part of this repayment HSBC agreed to provide the
Group with debt forgiveness amount of A$7,753,000.
The uncertainty as to the future impact on the Group of the COVID-19 pandemic has been considered as part of the Group’s
adoption of the going concern basis. Subsequent to the end of the financial year, the Directors continue to monitor
developments and the potential impact of Covid-19 on the operational and financial risks of the Group.
Immediate action has been taken to protect the cash resources of the business until further certainty is gained. These
measures include, but are not limited to:
· strengthening the cash position by raising an additional A$9,300,000 as of 8 October 2020
· obtaining government support as part of various economic stimulus initiatives
The Directors have prepared cash flow forecasts covering a period to 30 June 2022. This assessment has included
consideration of the forecast performance of the business for the foreseeable future and the cash available to the Group. In
preparing these forecasts, the Directors have considered a number of detailed sensitivities, including a worst case scenario
considering the potential impact of Covid-19.
If revenue were to fall in line with the worst case model, the Group would take further remedial action to counter the reduction
in profit and cash through a cost cutting exercise that would include staff redundancies and general cost control measures.
Based on current trading, the worst case scenario is considered unlikely. However, it is difficult to predict the overall impact
and outcome of COVID-19 at this stage, particularly if the second wave continues in to 2021. Nevertheless, after making
enquiries, and considering the uncertainties described above, the directors have a reasonable expectation that the company
has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to
adopt the going concern basis in preparing the annual report and accounts.
41
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of MySale Group Plc as at 30
June 2020 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.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
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.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and
other comprehensive income, balance sheet and statement of changes in equity of the Group. Losses incurred by the Group
are attributed to the non-controlling interest in full, even if that results in a deficit balance.
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 the Company’s functional currency in 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 reporting date 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 the Group's presentational currency using the exchange
rates at the reporting date. The revenues and expenses of foreign operations included in each of the Statement of Profit or
Loss and Statement of Comprehensive income 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.
42
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange
for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a
customer; identifies the performance obligations in the contract; determines the transaction price; allocates the transaction
price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or
service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts
the transfer to the customer of the goods or services promised.
Sale of goods
The Group's revenue mainly comprises the sale of goods online, in-store, and by wholesale to businesses. Revenue is
recognised when control of the goods has transferred to the customer at an amount that reflects the consideration to which
the Group expects to be entitled.
The Group operates mostly an online retail business selling men's, ladies and children's apparel, accessories, beauty and
homeware items. Revenue from sale of goods is recognised at the point in time when the customer obtains control of the
goods, which is generally at the time of delivery. Sales represent product delivered 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 30 days. Accruals for sales returns are
estimated on the basis of historical returns and are recorded so as to allocate them to the same period in which the original
revenue is recorded. The accrual for return totalled A$387k at 30 June 2020 (FY19:A$407k)
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be
received and the Group will comply with all attached conditions. Government grants are recognised in profit or loss over the
period necessary to match with the costs that they are intended to compensate. The Group received government grants
relating to COVID-19 wage subsidies in Australia, New Zealand and Singapore during the year. The grants are netted off
against employee costs in the statement of profit or loss and are detailed in note 8.
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 tax losses.
43
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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.
MySale Group Plc (the 'head entity') and its wholly-owned Australian subsidiaries plus Apac Sale Group Pte. Ltd. have
formed an income tax consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax
consolidated group continue to account for their own current and deferred tax amounts. The tax consolidated group has
applied the 'separate taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members
of the tax consolidated group.
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 the Group's
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is current when: it is expected to be settled in the Group's normal operating cycle; it is held primarily for the purpose
of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the
settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash
and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on the balance
sheet.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables consist of wholesale debtor and online
customer. Wholesale debtor are generally due for settlement within 30 days of recognition and online customer are generally
due for settlement within 3-43 days
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Right of return assets
Right of return assets represents the right to recover inventory sold to customers and is based on an estimate of customers
who may exercise their right to return the goods and claim a refund. Such rights are measured at the value at which the
inventory was previously carried prior to sale, less expected recovery costs and any impairment.
Inventories
Goods for resale are stated at the lower of cost and net realisable value on a 'weighted average cost' basis. Cost comprises
purchase, delivery and direct labour costs, net of rebates and discounts received or receivable.
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.
44
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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 obsolete or slow-moving inventory to net realisable value, based on management's
assessment of the expected future sales of that inventory, the condition of the inventory and the seasonality of the inventory.
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
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 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.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the
lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for
any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms
of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as
incurred.
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.
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.
45
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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.
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
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-
financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the 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.
Contract liabilities
Contract liabilities represent the Group's obligation to transfer goods or services to a customer and are recognised when a
customer pays consideration, or when the Group recognises a receivable to reflect its unconditional right to consideration
(whichever is earlier) before the Group has transferred the goods or services to the customer.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected
to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably
certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or
a rate are expensed in the period in which they are incurred.
46
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset
is fully written down.
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.
Refund liabilities
Refund liabilities are recognised where the Group receives consideration from a customer and expects to refund some, or
all, of that consideration to the customer. A refund liability is measured at the amount of consideration received or receivable
for which the Group does not expect to be entitled and is updated at the end of each reporting period for changes in
circumstances. Historical data is used across product lines to estimate such returns at the time of sale based on an expected
value methodology.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries and other employee benefits expected to be settled wholly within 12 months of the reporting
date are measured at the amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
Employee benefits not expected to be settled within 12 months of the reporting date are measured as the present value of
expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration
is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected
future payments are discounted using market yields at the reporting date on high quality 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 share-based compensation benefits are provided to employees. There are no cash-settled share-based
compensation benefits.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
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.
47
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value
of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting period,
any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award
is treated as if they were a modification.
Share capital
Financial instruments issued by the Group are classified as equity only to the extent that they do not meet the definition of a
financial liability or financial asset. The Group's ordinary shares are classified as equity instruments.
Share capital represents the nominal value of shares that have been issued. Share premium includes any premiums received
on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net
of any related income tax.
Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or
loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Any
difference between the carrying amount and the consideration, if reissued, is recognised in the share premium.
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.
Diluted earnings per share is not calculated if anti-dilutive.
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.
48
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Commitments and contingencies are disclosed net of the amount of VAT/GST recoverable from, or payable to, the tax
authority.
Rounding of amounts
Amounts in this report have been rounded off to the nearest thousand dollars, or in certain cases, the nearest dollar.
Change in accounting policy – delivery costs
Certain comparatives in the statement of profit or loss and other comprehensive income have been reclassified, where
necessary, to be consistent with current period presentation. In particular, delivery costs to customers for the year ended 30
June 2019 of A$33,831,000 have been reclassified from Cost of sale of goods to Selling and distribution expenses. This
change in accounting policy is to ensure that the presentation of costs within the statement of profit or loss and other
comprehensive income is in line with the online retail industry.
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.
Judgements:
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. The Group has adopted Interpretation IFRIC 23 (note 2) from 1 July 2019 which clarifies how to apply
the recognition and measurement requirements of IAS 12 ‘Income Taxes’ in circumstances where uncertain tax treatments
exists and there was no impact of adoption on opening accumulated losses as at 1 July 2019.”
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying
asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be included
in the lease term. In determining the lease term, all facts and circumstances that create an economical incentive to exercise
an extension option, or not to exercise a termination option, are considered at the lease commencement date. Factors
considered may include the importance of the asset to the Group's operations; comparison of terms and conditions to
prevailing market rates; incurrence of significant penalties; existence of significant leasehold improvements; and the costs
and disruption to replace the asset. The Group reassesses whether it is reasonably certain to exercise an extension option,
or not exercise a termination option, if there is a significant event or significant change in circumstances.
Estimates:
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to discount
future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is
based on what the Group estimates it would have to pay a third party to borrow the funds necessary to obtain an asset of a
similar value to the right-of-use asset, with similar terms, security and economic environment.
49
MySale Group Plc
Notes to the financial statements
30 June 2020
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.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit
loss rate for each group. These assumptions include recent sales experience and historical collection rates.
Provision for impairment of 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.
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 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. An impairment charge was required during the financial year ended 30 June 2020 for A$nil (2019: A$2,832,000).
Refer to note 16 for further details.
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. Significant judgement is required to
determine the amount of deferred tax assets that can be recognised based on the estimates and assumptions made in
relation to the timing and level of future taxable amounts that will be available.
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 revenue and gross profit by reportable segments, being geographical regions. The accounting policies
adopted for internal reporting to the CODM are consistent with those adopted in these financial statements.
The Group 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 country's 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.
50
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 4. Operating segments (continued)
Major customers
During the year ended 30 June 2020 there were no major customers (2019: none). A customer is considered major if its
revenues are 10% or more of the Group's revenue.
Operating segment information
Consolidated - 2020
Revenue
Sales to external customers transferred at a point in time
Total revenue
Gross profit
Other operating gain, net
Selling and distribution expenses
Administration expenses
Finance income
Finance costs
Recovery of receivables
Loss before income tax expense
Income tax expense
Loss after income tax expense
Consolidated - 2019
Australia and South-East
New Zealand
A$'000
Asia
A$'000
Total
A$'000
118,107
118,107
12,925
12,925
131,032
131,032
38,943
4,937
43,880
8,626
(37,015)
(20,746)
4
(400)
2,262
(3,389)
(171)
(3,560)
Australia and South-East
New Zealand
A$'000
Asia
A$'000
Rest of the
world
A$'000
Total
A$'000
Revenue
Sales to external customers transferred at a point in time
Total revenue
166,082
166,082
28,386
28,386
14,128
14,128
208,596
208,596
Gross profit - restated*
Other operating gain, net
Selling and distribution expenses
Administration expenses
Finance costs
Impairment of receivables
Impairment of assets
Loss before income tax expense
Income tax expense
Loss after income tax expense
44,786
4,865
2,767
52,418
1,591
(71,795)
(31,814)
(547)
(5,261)
(2,832)
(58,240)
(11,090)
(69,330)
No customers are located outside Australia, New Zealand, and South-East Asia in 2020, hence revenue for the Rest of the
World is A$nill, with operations now closed. In 2019 revenue in the Rest of the World segment was A$14,128,000. In May
2019, the Group sold its Cocosa website, which served the Group’s customers in the UK market. The closure of the US and
UK warehouses, which sourced the rest of the world operating segment, commenced in 2019 and was completed in 2020.
Following the reorganisation,and given the location of the Group’s customers in 2020, there is no longer a Rest of the World
segment to be reported.
*Delivery costs to customer for the year ended 30 June 2019 of A$33,831,000 have been reclassified from Cost of Goods to
Selling and Distribution expenses to be in line with the online retail industry.
51
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 5. Other operating gain, net
Net foreign exchange gain/(loss)
Net loss on disposal of property, plant and equipment
Net gain on disposal of asset *
Debt forgiveness **
Other income
Other operating gain, net
Consolidated
2020
A$'000
2019
A$'000
893
(23)
-
7,723
33
(692)
(487)
2,655
-
115
8,626
1,591
* In May 2019, the Group sold its Cocosa websites through an asset sale for a net gain on sale of A$2,655,000.
**In September 2019, the Group finalised a share placement for A$23,329,000. Net proceeds after considering the share
issue costs of A$721,000 was A$22,608,000. The total number of new shares issued under the placement was 640,376,083
bringing the total shares on issue to 794,707,735. At the same time as the share placement, the Group agreed with its
financier Hong Kong and Shanghai Banking Corporation Plc (‘HSBC’) to extinguish all borrowing facilities, Corporate
Guarantees and Indemnities with a repayment of A$10,914,000 in September 2019. As part of this repayment HSBC agreed
to provide the Group with a debt forgiveness amount of A$7,723,000.
Note 6. EBITDA reconciliation (earnings before interest, taxation, depreciation and amortisation) and exceptional
items
EBITDA reconciliation
Loss before income tax
Less: Interest income
Add: Interest expense
Add: Depreciation and amortisation
EBITDA
Underlying EBITDA represents EBITDA adjusted for certain items, as outlined below.
Underlying EBITDA reconciliation
EBITDA
Impairment of goodwill
(Recovery)/impairment of receivables
Net gain on disposal of Cocosa websites and trademarks (note 5)
Debt forgiveness (note 5)
Share-based payments
Reorganisation costs*
One-off costs of non-trading, non-recurring nature including acquisition expenses
Inventory write down
Unrealised foreign exchange loss
Underlying EBITDA
*
Costs in relation to the closure of overseas operations.
52
Consolidated
2020
A$'000
2019
A$'000
(3,389)
(4)
400
7,526
(58,240)
-
547
6,937
4,533
(50,756)
Consolidated
2020
A$'000
2019
A$'000
4,533
-
(1,505)
-
(7,723)
271
1,796
(288)
948
(763)
(50,756)
2,832
6,760
(2,655)
-
(1,036)
2,502
3,096
18,941
1,468
(2,731)
(18,848)
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 6. EBITDA reconciliation (earnings before interest, taxation, depreciation and
amortisation) and exceptional items (continued)
Management has presented the EBITDA and underlying EBITDA because these are performance measures used to monitor
and understand the Group’s financial performance. EBITDA is calculated by adjusting loss before income tax from continuing
operations to exclude the impact of taxation, interest income, interest expense, depreciation and amortisation. Underlying
EBITDA is calculated as EBITDA adjusted for certain items including impairment losses/reversals related to goodwill and
receivables, share-based payments and unrealised foreign exchange loss/gain. Underlying EBITDA and EBITDA are not
defined performance measures in IFRS Standards.
In 2019, the group disclosed certain costs as exceptional items in the Statement of profit or loss and comprehensive
income. There were no such costs that occurred in 2020. A breakdown of the exceptional costs are shown below:
Exceptional items
Cost of sale of goods
Other operating (gain)/loss, net
Sales, distribution and administration expenses:
Staff costs
Merchant and other professional fees
Other administration cost
Impairment of receivable
Impairment of assets
Total
Consolidated
2019
A$'000
19,611
(848)
(384)
307
3,630
6,760
2,832
31,908
The group considers items of income and expenses as exceptional where the nature of the item, or its magnitude, is material
and likely to be non-recurring in nature so as to assist the user of the financial statements to better understand the results of
the core operations of the Group. These costs have not been disclosed separately on the face of the statement of profit or
loss and other comprehensive income within these financial statements. An explanation of the exceptional costs incurred in
2019 are set out below.
Staff costs
During the 2019 financial year, staff related exceptional costs related to the integrating previously acquired businesses
onto the Group's online platform.
Cost of sale of goods
Cost of sale of goods adjustment relates to the write down of the Group's ownbuy and outlet stock at year end.
Merchant and other professional fees
This relates to the professional fees paid for potential acquisitions and business restructure initiatives.
Other administration cost
Other administration cost relates to non-recurring restructuring costs and provisions recognised by the business.
Impairment of receivables
An impairment of $6,760,000 has been recognised against the Group's wholesale business receivables.
Impairment of assets - goodwill
An impairment of $2,832,000 has been recognised against goodwill relating to the Online Retail CGU.
53
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 7. Expenses
Loss before income tax includes the following specific expenses:
Sales, distribution and administration expenses:
Staff costs (note 8)
Marketing expenses
Delivery costs *
Short term leases
Low value leases
Merchant and other professional fees
Depreciation and amortisation
Other administration costs
Consolidated
2020
A$'000
2019
A$'000
17,823
8,297
14,776
1,577
26
4,638
7,526
3,098
24,897
18,725
33,831
6,442
-
7,985
6,937
4,792
Total sales, distribution and administration expenses
57,761
103,609
Finance costs
Interest and finance charges paid/payable on borrowings
Interest and finance charges paid/payable on lease liabilities
Finance costs expensed
Leases
Minimum lease payments
159
241
400
547
-
547
-
4,907
* Delivery costs to customer for the year ended 30 June 2019 of A$33,831,000 have been reclassified from Cost of Goods
to Selling and Distribution expenses to be in line with the online retail industry.
Note 8. Staff costs
Aggregate remuneration:
Wages and salaries *
Social security costs
Long term employee incentive plan (note 39)
Other staff costs and benefits
Total staff costs
Consolidated
2020
A$'000
2019
A$'000
14,922
1,344
271
1,286
21,473
1,876
(1,036)
2,584
17,823
24,897
* During the financial year and related to the COVID-19 pandemic, certain entities within the Group received JobKeeper
support payments from the Australian government and wage subsidies from the New Zealand and Singapore governments.
The relevant entities are eligible for JobKeeper support from the Australian government on the condition that employee
benefits continue to be paid. The New Zealand wage subsidy, recognised during the financial year, commenced in March
2020 and covered a 12 week period. These subsidies were passed on to the eligible employees and have been recognised
in the financial statements net of employment costs over the relevant periods. The net impact (gross amount less top up
payments to casual employees) recognised in the statement of profit or loss during the financial year was A$947,000 (FY19:
A$Nil) in respect of JobKeeper and A$91,000 (FY19: A$Nil) in respect of New Zealand and Singapore wage subsidies.
54
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 8. Staff costs (continued)
The average monthly number of employees (including executive directors and those on a
part-time basis) was:
Sales and distribution
Administration
Consolidated
2020
2019
81
89
170
131
176
307
Details of Directors’ remuneration and interests are provided in the audited section of the Directors’ remuneration report and
should be regarded as part of these financial statements.
Note 9. Income tax (benefit)/expense
Income tax (benefit)/expense
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustment recognised for prior years
Aggregate income tax (benefit)/expense
Deferred tax included in income tax (benefit)/expense comprises:
Decrease/(increase) in deferred tax assets (note 18)
Numerical reconciliation of income tax (benefit)/expense and tax at the statutory rate
Loss before income tax benefit/(expense)
Tax at the statutory tax rate of 30% (2019 – 30%)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Effect of overseas tax rates
(Non-taxable income/Non-deductible expenses
Tax-exempt income
Prior year tax losses not recognised now recognised
Change in recognised deductible temporary differences
Adjustment recognised for prior periods
Income tax expense
Consolidated
2020
A$'000
2019
A$'000
160
-
11
247
10,594
249
171
11,090
-
10,594
(3,389)
(58,240)
(1,017)
(17,472)
65
(2,456)
(18)
(3,426)
34
3,552
11
(860)
865
(34)
(17,501)
(1,612)
29,954
249
171
11,090
The tax rates of the main jurisdictions are Australia 30% (2019: 30%), Singapore 17% (2019: 17%), New Zealand 28% (2019:
28%), United Kingdom 19% (2019: 19%) and United States 21% (2019: 21%).
55
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 10. Current assets - cash and cash equivalents
Cash at bank
Bank deposits at call
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial
year as shown in the statement of cash flows as follows:
Balances as above
Bank overdraft (note 21)
Balance as per statement of cash flows
Note 11. Current assets - trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
Other receivables
Sales tax receivable
Consolidated
2020
A$'000
2019
A$'000
6,550
110
6,660
703
111
814
6,660
-
814
(13,137)
6,660
(12,323)
Consolidated
2020
A$'000
2019
A$'000
2,479
(183)
2,296
369
1,442
11,307
(5,389)
5,918
1,107
2,960
4,107
9,985
Trade receivables include uncleared cash receipts due from online customers which amounted to A$2,261,000(2019:
A$5,303,000).
Allowance for expected credit losses
The Group has recognised a recovery of A$2,262,000 (2019: loss of A$5,261,000) in profit or loss in respect of impairment
of receivables for the year ended 30 June 2020.
56
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 11. Current assets - trade and other receivables (continued)
The ageing of the trade receivables and the merchant receivables (uncleared cash receipts due from online customers) and
allowance for expected credit losses provided for above are as follows:
Consolidated
Wholesale and other trade
receivable:
Not overdue
1-30 days overdue
Over 61 days
Merchant receivables:
1-30 days overdue
31-60 days overdue
Over 61 days
Expected credit loss rate
2020
%
2019
%
Carrying amount
2019
A$'000
2020
A$'000
Allowance for expected
credit losses
2020
A$'000
2019
A$'000
-
-
100.00%
11.00%
-
93.00%
0.10%
56.44%
100.00%
4.90%
11.50%
90.50%
96
109
13
218
2,061
74
126
2,261
1,913
-
4,115
6,028
3,561
477
1,241
5,279
2,479
11,307
-
-
13
13
2
42
126
170
183
210
-
3,827
4,037
174
55
1,123
1,352
5,389
The Group has increased its monitoring of debt recovery as there is an increased probability of customers delaying payment
or being unable to pay, due to the Coronavirus (COVID-19) pandemic. As a result, the calculation of expected credit losses
has been revised as at 30 June 2020 and rates have increased in the category over 61 days overdue for wholesale and over
31 days overdue for merchant.
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Unused amounts reversed
Receivables written off during the year as uncollectable
Closing balance
Consolidated
2020
A$'000
2019
A$'000
5,389
-
(2,262)
(2,944)
311
5,078
-
-
183
5,389
57
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 12. Current assets - inventories
Goods for resale
Obsolete and slow-moving inventory provision
Stock in transit
Consolidated
2020
A$'000
2019
A$'000
8,968
(6,207)
2,761
21,556
(7,249)
14,307
-
1,656
2,761
15,963
Write-downs of inventories to net realisable value recognised as an expense during the year ended 30 June 2020 amounted
to A$947,592 (2019: A$18,941,000). This expense has been included in 'cost of sales' in profit or loss.
Note 13. Current assets - Other current assets
Prepayments
Prepaid inventory *
Other deposits
Right of return assets
Other current assets
Consolidated
2020
A$'000
2019
A$'000
284
90
-
260
-
634
738
3,406
266
292
64
4,766
*
Prepaid inventory relates to the costs of goods for resale that have been paid for by the Group but not delivered to its
distribution centres for further dispatch to the customers who placed the orders as at the reporting date. The
corresponding cash received in advance from customers are accounted for within the contract liabilities category in the
balance sheet which includes the total amount of cash received for the goods not delivered to customers at the reporting
date. This amount has reduced through a faster dispatch process and most product being shipped from the Australian
warehouse.
58
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 14. Non-current assets - property, plant and equipment
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Fixtures and fittings - at cost
Less: Accumulated depreciation
Motor vehicles - at cost
Less: Accumulated depreciation
Consolidated
2020
A$'000
2019
A$'000
1,949
(1,185)
764
5,027
(4,670)
357
940
(845)
95
209
(209)
-
1,367
(1,058)
309
4,996
(4,381)
615
1,169
(926)
243
239
(220)
19
1,216
1,186
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Opening net book amount at 1 July 2018
Additions
Disposals
Exchange differences
Depreciation expense
Closing net book amount at 30 June 2019
Additions
Disposals
Depreciation expense
Closing net book amount at 30 June 2020
Leasehold
Plant and
improvements equipment
A$'000
A$'000
Fixtures
and fittings
A$'000
Motor
vehicles
A$'000
Total
A$'000
612
36
(174)
1
(166)
309
622
0
(167)
764
1,310
57
(273)
(10)
(469)
615
48
0
(306)
357
437
1
(31)
9
(173)
243
1
(65)
(84)
95
212
-
(177)
4
(20)
19
-
(16)
(3)
2,571
94
(655)
4
(828)
1,186
671
(81)
(560)
-
1,216
Assets pledged as security
Refer to note 21 for property, plant and equipment pledged as security.
Depreciation expense is included in the 'administration expenses' in profit or loss.
59
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 15. Non-current assets - right-of-use assets
Opening cost on adoption of IFRS 16
Additions
Less: Accumulated depreciation
Consolidated
Opening cost on adoption of IFRS 16
Additions
Cost at 30 June 2020
Depreciation on adoption of IFRS 16
Depreciation charge for year
Accumulated depreciation at 30 June 2020
NBV at 01 July 2020
NBV at 30 June 2020
Consolidated
2020
A$'000
2019
A$'000
1,724
4,781
(1,143)
5,362
-
-
Property
A$'000
Equipment
A$'000
Total
A$'000
1,673
4,781
6,454
-
(1,130)
(1,130)
1,673
5,324
51
-
51
-
(13)
(13)
51
38
1,724
4,781
6,505
-
(1,143)
(1,143)
1,724
5,362
The Group leases buildings for its offices, warehouses and retail outlets under agreements of between 1 to 5 years with, in
some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are
renegotiated.
The Group leases office equipment under agreements of less than 1 year. These leases are either short-term or low value,
so have been expensed as incurred and not capitalised as right-of-use assets. Details of the amounts recognised in the
income statement are included in Note 7. The total cash outflow for leases for the year amounted to A$1,163,000.
60
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 16. Non-current assets - intangibles
Goodwill - at cost
Customer relationships - at cost
Less: Accumulated amortisation
Software - at cost *
Less: Accumulated amortisation
ERP system
Less: Accumulated amortisation
Consolidated
2020
A$'000
2019
A$'000
21,214
21,221
3,850
(3,718)
132
28,001
(19,608)
8,393
4,905
(4,476)
429
1,846
(1,702)
144
26,492
(14,296)
12,196
3,300
(2,381)
919
30,168
34,480
*2019 cost base and accumulated amortisation was understated by A$3,032,000, however the net book value is correct.
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Opening net book amount at 1 July 2018
Additions
Exchange differences
Impairment of assets
Amortisation expense
Closing net book amount at 30 June 2019
Additions
Disposals
Exchange differences
Amortisation expense
Closing net book amount at 30 June 2020
Goodwill
A$'000
Customer
relationships Software
A$'000
A$'000
ERP
system
A$'000
Total
A$'000
24,043
-
10
(2,832)
-
21,221
-
-
(7)
-
21,214
605
-
-
-
(461)
144
-
-
-
(12)
132
12,048
4,852
2
-
(4,706)
12,196
1,621
(112)
-
(5,312)
1,846
13
2
-
(942)
919
12
(3)
-
(499)
38,542
4,865
14
(2,832)
(6,109)
34,480
1,633
(115)
(7)
(5,823)
8,393
429
30,168
Amortisation expense is included in 'administration expenses' in profit or loss.
Goodwill is allocated to the Group’s cash-generating units ('CGUs') identified according to business model as follows:
Online flash
Online retail
61
Consolidated
2020
A$'000
2019
A$'000
19,458
1,756
19,683
1,538
21,214
21,221
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 16. Non-current assets - intangibles (continued)
The Group's retail websites are "OO.com", Deals Direct, and Top Buy. All other websites owned by the Group are online
flash websites.
The recoverable amounts of the CGUs were 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.
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 risks relating to
the CGUs.
Online flash
Key assumptions used for value-in-use calculations:
Budgeted gross margin
Five year compound growth rate
Long term growth rate
Pre-tax discount rate
Consolidated
2020
%
2019
%
29.5%
3.0%
2.0%
9.0%
22.0%
(8.0%)
2.0%
9.0%
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 are no impairment indicators arising from this analysis. The recoverable amount exceeded
the carrying amount by A$79,700,000.Recoverable amount in FY2019 is the remaining balance after impairment of
A$2,832,000.
Online retail
Key assumptions used in value-in-use calculation
Budgeted gross margin
Five year compound growth rate
Long-term growth rate
Pre-tax discount rate
2020
%
2019
%
28.3%
0.8%
2.0%
9.0%
23.0%
(8.0%)
2.0%
9.0%
Based on the assessment, an impairment charge of A$nil (2019: A$2,832,000) is required. The recoverable amount
exceeded the carrying amount by A$3,010,000 (2019: A$2,832,000).
Sensitivity
As disclosed in note 3, the Directors have made judgements and estimates in respect of impairment testing of goodwill.
Should these judgements and estimates not occur the resulting goodwill carrying amount may decrease. Sensitivity analysis
has been performed on the value-in-use calculations, holding all other variables constant, to:
(i) apply a 1% increase in discount rate from 9% to 10%. No impairment would occur in the Online Flash CGU. The
recoverable amount exceeded the carrying amount by A$68,529,000.
(ii) apply a 100 bps decrease in margin from 29.5% to 28.5%. No impairment would occur in the Online Flash CGU. The
recoverable amount exceeded the carrying amount by A$60,678,000.
62
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 16. Non-current assets - intangibles (continued)
(iii) apply a 1% increase in discount rate from 9% to 10%. No impairment would occur in the Online Retail CGU. The
recoverable amount exceeded the carrying amount by A$2,485,000.
(iv) apply a 100 bps decrease in margin from 28.3% to 27.3%. No impairment would occur in the Online Retail CGU. The
recoverable amount exceeded the carrying amount by A$1,799,000.
Note 17. Non-current assets – Other non-current assets
Other deposits*
*Deposit given for lease agreements
Note 18. Non-current assets - deferred tax
Deferred tax asset comprises temporary differences attributable to:
Tax losses*
Accrued expenses
Provisions
Sundry
Property, plant and equipment
Leases
Intangibles
Deferred tax asset
Movements:
Opening balance
Credited/(charged) to profit or loss (note 9)
Exchange loss
Closing balance
Consolidated
2020
A$'000
2019
A$'000
1,629
-
Consolidated
2020
A$'000
2019
A$'000
299
258
2,553
(285)
242
380
(40)
-
735
2,105
424
148
-
(43)
-
3,407
3,369
3,369
-
38
14,112
(10,594)
(149)
3,407
3,369
*the breakdown of the prior year deferred tax asset has been amended to reflect the appropriate breakdown of the deferred
tax asset.
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. Deferred tax
assets have not been recognized for trading losses totaling A$103,548,000 (2019 – A$83,900,000), given the lack of visibility
over the level of future profitability of the Group.
63
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 19. Current liabilities - trade and other payables
Trade payables
Other payables and accruals
Sales tax payable
Refer to note 31 for further information on financial instruments.
Note 20. Current liabilities - contract liabilities
Contract liabilities
Consolidated
2020
A$'000
2019
A$'000
13,053
3,163
2,769
28,359
4,609
-
18,985
32,968
Consolidated
2020
A$'000
2019
A$'000
6,186
10,408
Unsatisfied performance obligations
The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied at the end of the
reporting period was A$6,186,000 as at 30 June 2020 (A$10,408,000 as at 30 June 2019) and is expected to be recognised
as revenue in future periods as follows:
Within 1 month
Consolidated
2020
A$'000
2019
A$'000
6,186
10,408
Contract liabilities represent the Group's obligation to transfer goods or services to a customer and are recognised when a
customer pays consideration, or when the Group recognises a receivable to reflect its unconditional right to consideration
(whichever is earlier) before the Group has transferred the goods or services to the customer.
Note 21. Current liabilities - borrowings
Bank overdraft
Bank loans
Finance lease liability
Consolidated
2020
A$'000
2019
A$'000
-
-
-
-
13,137
5,200
20
18,357
Refer to note 31 for further information on financial instruments.
Assets pledged as security
The Group has no borrowing facilities as at 30 June 2020 (30 June 2019: A$21,685,000 with Hong Kong and Shanghai
Banking Corporation Plc ‘HSBC’). The borrowing facilities were secured by a Corporate Guarantee and Indemnity. There
were no financial covenants in relation to these borrowing facilities. The average interest rate incurred on these bank
borrowings is nil (30 June 2019: 2.96%).
64
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 21. Current liabilities - borrowings (continued)
The movement in borrowings for the year were as follows:
Consolidated
Balance at 1 July 2019
Additions
Repayment
Debt forgiveness (refer to note 5)
Balance at 30 June 2020
Bank
overdraft
A$'000
Bank loans
A$'000
Finance lease
liability
A$'000
Total
A$'000
13,137
280
(5,694)
(7,723)
5,200
-
(5,200)
-
-
-
20
-
(20)
-
-
18,357
280
(10,914)
(7,723)
-
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Consolidated
2020
A$'000
2019
A$'000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,413
5,886
1,541
845
21,685
13,137
5,200
1,506
116
19,959
276
686
35
729
1,726
Consolidated
2020
A$'000
2019
A$'000
1,581
-
Total facilities
Bank overdraft
Bank loans
Bank guarantees
Bank loans under interchangeable facilities
Used at the reporting date
Bank overdraft
Bank loans
Bank guarantees
Bank loans under interchangeable facilities
Unused at the reporting date
Bank overdraft
Bank loans
Bank guarantees
Bank loans under interchangeable facilities
Note 22. Current liabilities - lease liabilities
Lease liability
Refer to note 31 for information on the maturity analysis of lease liabilities.
65
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 23. Current liabilities - provisions
Employee benefits provision
Lease make good provision
Gift voucher provision
Sales returns provision
Consolidated
2020
A$'000
2019
A$'000
1,148
458
309
513
1,093
564
444
2,314
2,428
4,415
Employee benefits provision
The provision represents employee annual leave along with employee parental leave.
Lease make good provision
The provision represents the present value of the estimated costs to make good the premises leased by the Group at the
end of the respective lease terms.
Gift voucher provision
The provision represents the estimated costs to honour gift vouchers that are in circulation and not expired.
Sales return provision
The provision represents the costs for goods expected to be returned by customers.
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out below:
Consolidated - 2020
Carrying amount at the start of the year
Additional provisions recognised
Reversal of recall provision
Amounts used
Employee
provision
A$'000
Lease make
good
provision
A$'000
Gift
vouchers
provision
A$'000
Sales
returns
provision
A$'000
Total
A$'000
1,093
452
-
(397)
564
-
-
(106)
444
309
-
(444)
2,314
513
(1,717)
(597)
4,415
1,274
(1,717)
(1,544)
Carrying amount at the end of the year
1,148
458
309
513
2,428
Note 24. Non-current liabilities - lease liabilities
Lease liability
Refer to note 31 for information on the maturity analysis of lease liabilities.
Consolidated
2020
A$'000
2019
A$'000
5,048
-
66
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 25. Non-current liabilities - provisions
Employee benefits provision
Note 26. Equity - share capital
Ordinary shares £nil each - fully paid
Less: Treasury shares
Consolidated
2020
A$'000
2019
A$'000
450
231
Consolidated
2020
Shares
2019
Shares
2020
A$'000
2019
A$'000
817,240,853 154,331,652
(3,000,000)
(25,533,118)
791,707,735 151,331,652
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Authorised share capital
874,178,509 (2019: 200,000,000) ordinary shares of £nil each.
Movements in ordinary share capital - fully paid
Details
Balance
Balance
Issue of shares
Issue of shares
Balance
Movements in treasury shares
Details
Balance
Date
Shares
A$'000
1 July 2018
154,331,652
30 June 2019
20 September 2019
11 December 2019
154,331,652
640,376,083
22,533,118
30 June 2020
817,240,853
Date
Shares
A$'000
1 July 2018
3,000,000
Balance
Issue of shares under the management incentive scheme
30 June 2019
5 December 2019
3,000,000
22,533,118
Balance
30 June 2020
25,533,118
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.
Treasury shares
The company has two employee share plans; (1) the Executive Incentive Plan (‘EIP’) and (2) the Loan Share Plan (‘LSP’).
In accordance with the terms of each plan 100% of the ordinary shares will vest three years from grant date subject either to
the achievement of the Underlying Earnings Before Interest, Tax, Depreciation and Amortisation (‘EBITDA’) included in the
company’s internal forecasts set by the Board in the year of the grant or certain share price hurdles. Share options and loan
shares have been granted over the ordinary share capital of the company and are accounted for as share-based payments.
That is, the fair value of the accounting expense in relation to these options and loan shares are recognised over the vesting
period.
67
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 26. Equity - share capital (continued)
Vested and unvested shares under the plans are recorded as treasury shares representing a deduction against issued
capital. When the loans are settled or the options are exercised, the treasury shares are reclassified as ordinary shares and
the equity will increase accordingly. Treasury shares have no dividend, or voting, rights.
Note 27. Equity - share premium account
Share premium account
Consolidated
2020
A$'000
2019
A$'000
328,971
306,363
The share premium account is used to recognise the difference between the issued share capital at nominal value and the
capital received.
In September 2019, the Company finalised a share placement for A$23,329,000. Net proceeds after considering the share
issue costs of A$721,000 was A$22,608,000. The total number of new shares issued under the placement was 640,376,083
bringing the total shares on issue to 794,707,735.
In December 2019, the Company issued 22,533,118 ordinary shares, 4,542,614 to MySale Group Trustee Limited, in its
capacity as the trustee of the MySale Group Plc Employee Benefit Trust ('EBT'), and 17,990,504 directly to those Directors
and management taking part in the Loan Share Plan as part of the Company’s management incentive scheme for its
Directors, Non-executive Directors, and senior management. These shares, in addition to the existing 3,000,000 ordinary
shares already held in the EBT, will be used to satisfy the Share Awards, subject to the performance criteria being met.
Following admission of these shares, the Company's total issued share capital was 817,240,853 Ordinary Shares. The total
number of voting rights in the Company is 791,707,735 (25,533,118 with no voting rights)
Note 28. Equity - other reserves
Foreign currency reserve
Share-based payments reserve
Capital reorganisation reserve
Consolidated
2020
A$'000
2019
A$'000
2,265
5,512
(132,756)
4,390
5,241
(132,756)
(124,979)
(123,125)
Foreign currency reserve
The reserve is used to recognise exchange differences arising from translation of the financial statements of foreign
operations to Australian dollars.
Hedging reserve - cash flow hedges
The reserve is used to recognise the effective portion of the gain or loss of cash flow hedge instruments that is determined
to be an effective hedge.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their
remuneration, and other parties as part of their compensation for services.
68
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 28. Equity - other reserves (continued)
Capital reorganisation reserve
The reserve is used to recognise the difference between the purchase price of APAC Sale Group Pte. Ltd. and the net assets
acquired following a Group reorganisation in 2014.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2018
Loss after income tax expense for the year
Other comprehensive income for the year, net
of tax
Total comprehensive (loss)/income for the year
Transactions with owners in their capacity as
owners:
Share-based payments (note 39)
Balance at 30 June 2019
Foreign
currency
A$'000
Hedging
A$'000
Share-based
payments
A$'000
Capital
reorganisation
A$'000
Total
A$'000
3,458
-
932
932
-
4,390
38
-
(38)
(38)
-
-
6,277
(132,756)
(122,983)
-
-
-
-
-
-
-
894
894
(1,036)
-
(1,036)
5,241
(132,756)
(123,125)
Consolidated
Balance at 1 July 2019
Loss after income tax benefit for the year
Other comprehensive loss for the year, net of
tax
Foreign
currency
A$'000
Hedging
A$'000
4,390
-
(2,125)
Total comprehensive (loss)/income for the year
(2,125)
Transactions with owners in their capacity as
owners:
Share-based payments (note 39)
Balance at 30 June 2020
-
2,265
Note 29. Equity - non-controlling interests
Share-based
payments
A$'000
Capital
reorganisation
A$'000
Total
A$'000
-
-
-
-
-
-
5,241
(132,756)
(123,125)
-
-
-
271
-
-
-
-
-
(2,125)
(2,125)
271
5,512
(132,756)
(124,979)
Accumulated losses
The non-controlling interest has 49% equity holding in Simply Send It Pty Limited.
Refer to note 37 for details.
69
Consolidated
2020
A$'000
2019
A$'000
(20)
(20)
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 30. Equity - dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 31. 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, Asia
(including Malaysia, Thailand and Singapore) and UK. 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. Refer to note 5 for the foreign exchange gain / loss recognised in the year.
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.
The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities at the reporting
date were as follows:
Consolidated
US dollars
Euros
Pound sterling
New Zealand dollars
Singapore dollars
Malaysian ringgit
Swiss Franc
Russian Ruble
Assets
2020
A$'000
2019
A$'000
Liabilities
2020
A$'000
2019
A$'000
121
-
996
3,479
1,331
174
-
47
929
5,339
345
167
168
39
227
26
49
-
1,261
330
132
89
-
37
1,443
-
10,443
33
-
43
-
69
6,148
7,240
1,898
12,031
70
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 31. Financial instruments (continued)
The Group had net assets denominated in foreign currencies of A$4,250,000 as at 30 June 2020 (2019: net liabilities of
A$4,791,000). Based on this exposure, had the Australian dollar weakened by 10% / strengthened by 10% (2019: weakened
by 10% / strengthened by 10%) against these foreign currencies with all other variables held constant, the Group's foreign
exchange loss before tax for the year would have been A$425,000 lower / higher (2019: A$479,100 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 2020 was A$893,000
(2019: A$692,000).
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.
Capital is regarded as total equity, as recognised in the balance sheet, plus net debt which totals A$21,250,000 (2019 –
A$21,631,000). Net debt is calculated as total debt (including borrowings and lease liabilities) less cash and cash equivalents.
Refer to note 32.
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.
The capital risk management policy remains unchanged from the 30 June 2019 Annual Report.
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 and cash held by merchant provider. For bank deposits
and merchant, the Group adopts the policy of dealing only with high credit quality financial institutions and major banks.
The principal business of the Group is online cash sales.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through
the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative
across all customers of the Group based on recent sales experience, historical collection rates and forward-looking
information that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year. See note 11 for details of the provisions made against trade receivables.
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.
71
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 31. Financial instruments (continued)
Unused borrowing facilities at the reporting date:
Bank overdraft
Bank loans
Bank guarantees
Bank loans under interchangeable facilities
Consolidated
2020
A$'000
2019
A$'000
-
-
-
-
-
276
686
35
729
1,726
Remaining contractual maturities
Trade payables and other financial liabilities mainly arise from the financing of assets used in the Group's ongoing operations
such as plant and equipment and investments in working capital. These assets are considered in the Group's overall liquidity
risk.
72
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 31. Financial instruments (continued)
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial
liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual
maturities and therefore these totals may differ from their carrying amount in the balance sheet.
Weighted
average
interest
rate
%
<1 month
1-3 months
A$'000
A$'000
Total
undiscounted
liability
A$'000
Carrying
amount as
included on
the Balance
Sheet
A$'000
3-12 months
A$'000
1-5 years
A$'000
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade and other payables -
Interest-bearing - variable
Lease liability
Total non-derivatives
5.00%
12,877
5,733
510
(135)
18,985
18,985
158
13,035
475
6,208
1,250
1,760
5,673
5,538
7,556
26,541
6,629
25,614
Weighted
average
interest
rate
%
<1 month
1-3 months
A$'000
A$'000
Total
undiscounted
liability
A$'000
Carrying
amount as
included on
the Balance
Sheet
A$'000
3-12 months
A$'000
1-5 years
A$'000
Consolidated - 2019
Non-derivatives
Non-interest bearing
Trade and other payables
-
18,243
11,878
2,521
326
32,968
32,968
Interest-bearing - variable
Bank overdraft
Bank loans
Lease liability
Total non-derivatives
2.75%
2.92%
6.48%
13,137
5,200
20
36,600
-
-
-
11,878
-
-
-
2,521
-
-
-
326
13,137
5,200
20
51,325
13,137
5,200
20
51,325
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying amounts of trade
receivables and trade payables are assumed to approximate their fair values due to their short-term nature. The fair value of
financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate that is
available for similar financial instruments. Also, there is no material difference between the fair value of cash and cash
equivalents and the carrying amounts.
73
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 32. Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2018
Net cash used in financing activities
Balance at 30 June 2019
Lease liability opening balance at 1/07/19 on adoption of IFRS 16
Net cash used in financing activities
Other changes – cash incentive
Interest and finance charges paid / payable on lease liabilities (note 7)
Acquisition of buildings and equipment - right-of-use
Balance at 30 June 2020
Net debt
Cash and cash equivalents
Borrowings (including overdraft)
Lease liabilities
Net debt
Bank
loans
A$'000
Lease
liability
A$'000
Total Debt
A$'000
5,200
-
5,200
(5,200)
-
-
144
(124)
20
1,724
(1,163)
1,026
241
4,781
5,344
(124)
5,220
1,724
(6,363)
1,026
241
4,781
6,629
6,629
2020
A$'000
2019
A$'000
6,660
-
(6,629)
814
(18,357)
-
31
(17,543)
Note 33. 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
Consolidated
2020
A$'000
2019
A$'000
2,108
194
2,056
110
2,302
2,166
Key management includes Directors (executives and non-executives) and key heads of departments.
During the financial year ended 30 June 2020 A$6,322,777 (2019: A$nil) performance rights were granted to members of
key management personnel under share-based payments plans operated by the Group as disclosed in note 39.
74
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 34. 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:
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
- taxation services
- other non-audit services
Consolidated
2020
A$'000
2019
A$'000
201
49
39
29
318
258
102
142
44
546
Note 35. Contingent liabilities
The Group issued bank guarantees through its banker, Hong Kong and Shanghai Bank Corporation and Macquarie Bank, in
respect of lease obligations amounting to A$777,000 (2019: A$1,503,000).
The Group has issued a bank guarantee through its banker ANZ Bank New Zealand Limited, in respect of customs and
duties obligations amounting to NZ$NIL (2019: NZ$150,000).
Note 36. Related party transactions
Parent entity
MySale Group Plc is both the parent company of the Group and also the ultimate parent entity of the group
Subsidiaries
Interests in subsidiaries are set out in note 37.
The Group has utilised exemptions available to it to not report transactions with its 100% or majority owned subsidiaries that
are listed in note 37.
Key management personnel
Disclosures relating to key management personnel are set out in note 33.
Transactions with related parties
The following transactions occurred with related parties:
Sale of goods and services:
Sale of goods to other related party (Sports Direct) *
Payment for goods and services:
Purchase of goods from other related party (Sports Direct) *
*
Sports Direct.Com Retail Ltd is owned by a majority shareholder of MySale Group Plc.
Consolidated
2020
A$'000
2019
A$'000
-
-
381
6,483
75
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 36. Related party transactions (continued)
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Consolidated
2020
A$'000
2019
A$'000
-
488
Current payables:
Trade payables to other related party
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.
Ultimate Controlling party
The directors consider that the Group has no ultimate controlling party.
Note 37. 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
Ownership
interest
2020
%
Principal activities
Ownership
interest
2019
%
Parent
Non-controlling interest
Ownership
interest
2019
%
Ownership
interest
2020
%
Name
APAC Sale Group
Pte. Ltd.
3 Fusionopolis Link
#02-08
Nexus@one-north,
Singapore
APAC Sale Italy s.r.l Impruneta
APAC Sales Group,
Inc.
(Florence), via Di
Colle Ramole 11,
50023, Bottai, Italy
1107 S Boyle
Street, Los Angeles,
CA 90023, U.S.A
The Old Mill, 9 Soar
APAC UK
Lane, Leicester,
Procurement Co
Limited
England, LE3 5DE.
APACSale Limited The Old Mill, 9 Soar
BuyInvite Pty
Limited
Lane, Leicester,
England, LE3 5DE.
3/120 Old Pittwater
Road, Brookvale,
2100, Australia
Company 07640503
Limited (formerly
called Cocosa
Lifestyle Limited)
NZ Sale Limited
The Old Mill, 9 Soar
Lane, Leicester,
England, LE3 5DE.
25 Barrys Point
Road, Takapuna
Auckland 0632, NZ
Trading company
100%
100%
Deregistered
100%
100%
Trading company
100%
100%
Trading company
100%
100%
Trading company
100%
100%
Trading company
100%
100%
Dormant
100%
100%
Trading company
100%
100%
76
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 37. Interests in subsidiaries (continued)
Principal place of
business /
Country of
incorporation
Ownership
interest
2020
%
Principal activities
Ownership
interest
2019
%
Parent
Non-controlling interest
Ownership
interest
2019
%
Ownership
interest
2020
%
Name
Ozsale Pty Limited 3/120 Old Pittwater
Ozsale Sdn. Bhd.
Private Sale Asia
Pacific Pte Ltd
Simply Sent It Pty
Limited *
Singsale Pte. Ltd.
Brand Search Pty
Limited
Road, Brookvale,
2100, Australia
29-3, Block F2,
Jalan PJU1/42A,
Dataran Prima,
47301 Petaling
Jaya, Selangor,
Malaysia
3 Anson Road, #27-
01 Springleaf
Tower, Singapore
3/120 Old Pittwater
Road, Brookvale,
2100, Australia
3 Fusionopolis Link
#02-08
Nexus@one-north,
Singapore
3/120 Old Pittwater
Road, Brookvale,
2100, Australia
Chic Global Limited The Old Mill, 9 Soar
BuyInvite NZ Pty
Limited
Click Frenzy
Australia Pty Ltd
NZ Wine Limited
My Trade Ltd
MySale Group
Limited
Branch of Click
Frenzy Australia Pty
Ltd
Lane, Leicester,
England, LE3 5DE.
3/120 Old Pittwater
Road, Brookvale,
2100, Australia
3/120 Old Pittwater
Road, Brookvale,
2100, Australia
25 Barrys Point
Road, Takapuna
Auckland 0632, NZ
The Old Mill, 9 Soar
Lane, Leicester,
England, LE3 5DE.
Hong Kong
3/120 Old Pittwater
Road, Brookvale,
2100, Australia
Russia
3/120 Old Pittwater
Road, Brookvale,
2100, Australia
Trading company
100%
100%
Trading company
100%
100%
Dormant
100%
100%
-
-
-
-
-
-
Dormant
51%
51%
49%
49%
Trading company
100%
100%
Dormant
100%
100%
Dormant
100%
100%
Dormant
100%
100%
Dormant
100%
100%
Dormant
100%
100%
Dormant
100%
100%
Dormant
100%
100%
Trading company
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
*
This subsidiary has been consolidated as the Group has control over the partly owned.
Summarised financial information for subsidiaries that have non-controlling interests has not been provided as they are not
material to the Group.
77
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 38. (Loss)/earnings per share
Loss after income tax attributable to the owners of MySale Group Plc
(3,560)
(69,330)
Weighted average number of ordinary shares used in calculating basic earnings per share
665,483,037 154,331,652
Weighted average number of ordinary shares used in calculating diluted earnings per share 665,483,037 154,331,652
Number
Number
Consolidated
2020
A$'000
2019
A$'000
Basic earnings per share
Diluted earnings per share
Underlying EBITDA basic per share
Cents
Cents
(0.53)
(0.53)
(44.92)
(44.92)
(0.41)
(12.21)
65,985,501 (2019: 2,580,543) employee long term incentives have been excluded from the 2020 diluted earnings calculation
as they are anti-dilutive for the year.
Note 39. Share-based payments
The company has two employee share plans; (1) the Executive Incentive Plan (‘EIP’) and (2) the Loan Share Plan (‘LSP’).
In accordance with the terms of each plan 100% of the ordinary shares will vest three years from grant date subject to the
achievement of the Underlying Earnings Before Interest, Tax, Depreciation and Amortisation (‘EBITDA’) included in the
company’s internal forecasts set by the Board in the year of the grant.
Set out below are summaries of share and options granted under the plans for Directors and employees:
2020
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
18/08/2015
18/08/2015
19/08/2016
19/08/2016
05/12/2019
05/12/2019
05/12/2019
05/12/2019
21/04/2020
21/04/2020
18/08/2020 **
18/08/2020 *
19/08/2021 **
19/08/2021 *
05/12/2024 **
05/12/2024 **
05/12/2024 *
05/12/2024 *
21/04/2025 **
21/04/2025 **
*
**
EIP - Options
LSP
£0.51
£0.51
£0.65
£0.65
£0.05
£0.10
£0.05
£0.10
£0.05
£0.10
-
1,040,198
-
162,207
-
1,019,445
-
358,693
7,077,638
-
7,077,638
-
9,460,227
-
9,460,227
-
- 15,298,686
- 15,298,686
2,580,543 63,673,102
-
-
-
-
-
-
-
-
-
-
-
941,961
(98,237)
162,207
-
849,538
(169,907)
358,693
-
7,077,638
-
7,077,638
-
9,460,227
-
9,460,227
-
- 15,298,686
- 15,298,686
(268,144) 65,985,501
78
MySale Group Plc
Notes to the financial statements
30 June 2020
Note 39. Share-based payments (continued)
2019
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
28/05/2014
18/08/2015
18/08/2015
27/07/2015
19/08/2016
19/08/2016
19/08/2017
19/08/2017
16/06/2019 **
18/08/2020 **
18/08/2020 *
27/07/2020 **
19/08/2021 **
19/08/2021 *
19/08/2022 **
19/08/2022 **
*
**
EIP - Options
LSP
£2.26
£0.51
£0.51
£0.53
£0.65
£0.65
£1.15
£1.15
111,499
1,697,815
290,533
3,000,000
1,868,982
358,693
449,314
271,014
8,047,850
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(111,499)
(657,617)
(128,326)
(3,000,000)
(849,537)
-
(449,314)
(271,014)
(5,467,307)
-
1,040,198
162,207
-
1,019,445
358,693
-
-
2,580,543
The weighted average remaining contractual life of the share plan outstanding at the end of the financial year was 4 years
(2019: 2 years).
The share-based payment expense for the year was an expense of A$271,000 (2019: a benefit of A$1,036,000). There was
a benefit in the prior year mainly due to vesting conditions for the FY 18 grant not being met so all the related options were
forfeited. The benefit was also a result of the leavers in the restructure and the resignation of the previous Chairman resulting
in their respective options being forfeited.
For the options granted during the current financial year, the valuation model inputs used to determine the fair value at the
grant date, are as follows:
Grant date
Expiry date
05/12/2019
05/12/2019
05/12/2019
05/12/2019
21/04/2020
21/04/2020
05/12/2024
05/12/2024
05/12/2024
05/12/2024
21/04/2025
21/04/2025
Share price Exercise
at grant date
price
Expected
volatility
Dividend
Risk-free
Fair value
yield
interest rate at grant date
£0.03
£0.03
£0.03
£0.03
£0.02
£0.02
£0.05
£0.10
£0.05
£0.10
£0.05
£0.10
75.0%
75.0%
75.0%
75.0%
75.0%
75.0%
-
-
-
-
-
-
0.5%
0.5%
0.5%
0.5%
0.5%
0.5%
£0.020
£0.017
£0.020
£0.017
£0.023
£0.019
Note 40. Events after the reporting period
The existence of the infectious disease COVID-19 ('Coronavirus')since around the beginning of the calendar year 2020, has
become widely known, and subsequent to the reporting date, continued to rapidly spread throughout the world, including
Australia. The Directors have considered the impact of this on the ability of the Group to continue as a going concern, as set
out in note 2.
The Group has raised approximately £5,100,000 (approximately A$9,300,000) on 15 Oct 2020, before expenses, through a
subscription for 85,225,129 new ordinary shares ("Subscription Shares") in the Company at a subscription price of 6.0 pence
per ordinary share (the "Subscription Price") by entities associated with Gabby Leibovich, Hezi Leibovich and Nati Harpaz
(together, the "Subscription").
No other matter or circumstance has arisen since 30 June 2020 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.
79
MYSALE GROUP PLC
Registered Number 115584
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting (AGM) of MySale Group plc (MySale or the
Company) will be held at the Company’s head office at 120 Old Pittwater Road, Brookvale, NSW
2100, Australia on Friday 18 December 2020 commencing at 21.00 Australian Eastern Daylight Time
(AEDT) (10.00 GMT) to consider and, if thought fit, to pass resolutions 1 to 5 (inclusive) as
ordinary resolutions and resolutions 6 to 8 (inclusive) as special resolutions.
Due to the COVID-19 pandemic and the related restrictions on gatherings imposed by local laws in
Australia and the public health guidance measures that have been put in place to protect the
community, shareholders will not be permitted to attend the AGM in person. The Company is
therefore offering shareholders the option to participate in the AGM remotely via a Zoom webinar and
conference call facility that can be accessed from any computer with internet access or through a
telephone (mobile or landline). This facility will be used to respond to questions and for the formal
business as set out in this Notice. Questions should be submitted in advance of the AGM via
shareholder.notifications@mysale.com.
Shareholders will not be able to vote at the AGM if they attend via the Zoom conference call. The
Board of Directors therefore strongly encourages shareholders to vote by proxy in lieu of attending the
AGM in person. Given the current restrictions on attendance, shareholders are encouraged to appoint
the chairperson of the meeting as their proxy (rather than a named person as such person will not be
permitted to attend the meeting).
The final arrangements, including details of how to register for the conference call facility, are
available on the Company’s website at https://www.mysalegroup.com/investor.html#/reports.
Shareholders are required to register their attendance via the Zoom facility on the website. After
verification of their identity, details of how to join the Zoom webinar will be provided to each
shareholder who has registered.
Resolutions
Ordinary Resolutions
1. Financial statements for the year ended 30 June 2020
To receive the Company’s Annual Report and Accounts for the financial year ended 30 June
2020 together with the Reports of the Directors and Auditor thereon.
2. Re-appointment of the auditor
To re-appoint BDO LLP as auditor of the Company, to hold office until the conclusion of the next
annual general meeting of the Company, and to authorise the Directors to fix the remuneration of
the auditor.
Election of Director
3.
To elect Mats Weiss as a Director in accordance with Articles 7.2 of the Company’s Articles of
Association (the Articles).
Re-election of Directors
4.
5.
To re-elect Wally Muhieddine as a Director in accordance with Articles 7.2 and 7.9 - 7.12 of the
Articles.
To re-elect Dow Famulak as a Director in accordance with Articles 7.2 and 7.9 - 7.12 of the
Articles.
Special Resolutions
6.
Dis-application of pre-emption rights - general
THAT, in substitution for all existing authorities to the extent unused, the Directors 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 6(a) and (b) above, the allotment of Shares for cash
up to an aggregate amount of 47,483,505 Shares, being approximately 5% of the
Company's issued Shares as at close of business on 25 November 2020, being the latest
practicable date before publication of this notice,
provided further that such power shall expire at the conclusion of the Company’s next Annual
General Meeting or fifteen months following the passing of this resolution, whichever is the
sooner, unless previously revoked, varied or renewed by the Company in general meeting (save
that the Company may before such expiry make an offer or agreement which would or might
require Shares to be allotted after such expiry and notwithstanding such expiry the Directors may
allot Shares in pursuance of such offer or agreement).
For the purposes of the authority in paragraph 6(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.
7. Dis-application of pre-emption rights – financing
THAT, in addition to any authority granted under Resolution 6 above, the Directors 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 for cash as if Article 2.8 of the Articles did not
apply to any such allotment, provided that this power shall be:
a)
limited to the allotment of Shares for cash up to an aggregate amount of 94,967,011
Shares, being approximately 10% of the Company's issued Shares as at close of business
on 25 November 2020, being the latest practicable date before publication of this notice;
and
b) used only for the purposes of financing (or refinancing, if the authority is to be used within
six months after the original transaction) a transaction which the Directors determine to be
an acquisition or other capital investment of a kind contemplated by the Statement of
Principles on Disapplying Pre-emption Rights most recently published by the Pre-Emption
Group prior to the date of this notice,
provided further that such power shall expire at the conclusion of the Company’s next Annual
General Meeting or fifteen months following the passing of this resolution, whichever is the
sooner, unless previously revoked, varied or renewed by the Company in general meeting (save
that the Company may before such expiry make an offer or agreement which would or might
require Shares to be allotted after such expiry and notwithstanding such expiry the Directors may
allot Shares in pursuance of such offer or agreement).
8. Authority to buy back shares
THAT the Company be and is hereby generally and unconditionally authorised for the purposes
of Article 57 of the Companies (Jersey) Law 1991 (as amended) (the Law) to make one or more
purchases on the AIM market operated by the London Stock Exchange plc of its own Shares on
such terms and in such manner as the Directors may from time to time determine, provided that:
a)
the maximum aggregate number of Shares hereby authorised to be purchased is
94,967,011, (representing approximately 10% of the total number of Shares in issue as at
close of business on 25 November 2020, being the latest practicable date before
publication of this notice);
b)
the minimum price which may be paid for a Share is £0.01 each;
c)
the maximum price which may be paid for a Share is an amount equal to the higher of:
i) 5% above the average of the middle market quotations for such shares taken from
the AIM Appendix of The London Stock Exchange Daily Official List for the five
business days immediately preceding the day on which the purchase is made; and
ii)
the higher of the price of the last independent trade of a Share and the highest
current independent bid for a Share as derived from the London Stock Exchange
Trading System;
d) such authority shall expire at the conclusion of the Company’s next Annual General
Meeting or fifteen months following the passing of this resolution, whichever is the sooner,
unless previously revoked, varied or renewed by the Company in general meeting;
e)
the Company may make a contract to purchase its own Shares under the authority
conferred by this resolution prior to the expiry of such authority, which will or may be
executed wholly or partly after the expiry of such authority, and the Company may make a
purchase of its own Shares in pursuance of any such contract as if the authority had not
expired; and
f)
subject to the provisions of the Articles, the Company be and is hereby generally and
unconditionally authorised for the purposes of Article 58A of the Law, to hold any Shares
repurchased under the authority conferred by this Resolution 8 as treasury shares.
By order of the Board
Almond + Co
Company Secretary, MySale Group plc
26 November 2020
1
2
3
4
5
Notes to the Notice of Annual General Meeting
Record Date
Shareholders registered in the Register of Members of the Company as at 10:00 GMT on 16 December 2020 (or, in the event
of any adjournment, on the date which is 48 working hours 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 this time (as applicable) will be disregarded in determining the rights of any person to attend or vote at the
AGM.
Attendance at the AGM
The Company’s AGM will be held at 21.00 Australian Eastern Daylight Time (10.00 GMT) on 18 December 2020. However,
shareholders should note that votes may only be cast by proxy prior to the AGM.
Proxies
A member is ordinarily 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. However, due to the COVID-19 restrictions on
personal attendance at the AGM, such individuals will not be permitted to attend the AGM in person. The board of directors
therefore strongly encourages members to appoint the chairperson as their proxy in order to ensure that their votes may be
cast at the AGM. Failure to do so may result in the votes not being capable of being validly cast.
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. As noted above, members are encouraged to submit only a single proxy which appoints the
chairperson as their proxy.
Members who nonetheless wish to appoint more than one proxy in respect of their holding may obtain additional Forms of
Proxy by contacting the Company’s Transfer Agent, Neville Registrars Limited at 0121 585 1131. Lines are open Monday to
Friday 9.00am to 5.00pm. 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. 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 Transfer Agent, Neville Registrars Limited, Neville House,
Steelpark Road, Halesowen B62 8HD or (ii) members may submit their proxies electronically at www.sharegateway.co.uk
using their personal proxy registration code (Activity Code) as shown on the Form of Proxy, in each case by no later than
21.00 AEDT/10.00 GMT on 16 December 2020, being 48 working hours before the time appointed for the holding of the AGM.
Where the AGM is adjourned for not more than 48 hours, the Form of Proxy shall be delivered at the adjourned meeting to the
chairperson or the secretary or to a director of the Company.
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 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
7RA11) by no later than 21.00 AEDT/10.00 GMT on 16 December 2020 (or in the case of an adjourned meeting, received not
less than 48 hours before the time for holding the adjourned meeting). No message received through the CREST network
after this time will be accepted. For this purpose, the time of receipt will be taken to be the time (as determined by the
timestamp applied to the message by the CREST Applications Host) from which the issuer’s agent is able to retrieve the
message by enquiry to CREST in the manner prescribed by CREST. The CREST Manual is available at
www.euroclear.com/CREST.
CREST members and, where applicable, their CREST sponsors or voting service provider should note that Euroclear does
not make available special procedures in CREST for any particular messages. Normal system timings and limitations will
therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned
to take (or, if the CREST member is a CREST Personal Member or Sponsored Member, or has appointed a voting service
provider, to procure that his CREST sponsor or voting service provider takes) such action as shall be necessary to ensure
that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members
and, where applicable, their CREST sponsors or voting service provider are referred, in particular, to those sections of the
CREST Manual concerning practical limitations of the CREST system and timings.
The Company will treat as invalid a CREST Proxy Instruction in the circumstances set out in Article 34 of the Companies
(Uncertificated Securities) (Jersey) Order 1999, as amended.
6
Total Voting Rights
Holders of the Company’s ordinary shares are entitled to attend and vote at general meetings of the Company. Each ordinary
share entitles the holder to one vote on a poll. As at 25 November 2020, being the latest practicable date prior to the
publication of this Notice, the Company had 949,670,110 shares in issue. The Company does not hold any shares in treasury.
Therefore, the total voting rights in the Company as at 25 November 2020 are 949,670,110.
7
8
9
Voting at the AGM
In order for the voting preferences of all shareholders to be taken into account, particularly given the COVID-19 restrictions on
personal attendance, 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 22.00 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.
10
Arrangements for the Meeting – COVID-19 outbreak
The continuing COVID-19 pandemic has led to the imposition of severe restrictions on public gatherings which remain in
place at the date of publication of this document. The AGM will therefore be held remotely via a Zoom conference call. If you
wish to use this facility, please register by emailing the Company at shareholder.notifications@mysale.com and you will be
provided with further information. Please note that shareholders will not be able to use this facility to actively participate in the
Meeting by voting on the Resolutions or asking questions. Pending further developments, the Board:
•
•
•
•
•
encourages shareholders to submit their votes via proxy as early as possible, and shareholders should appoint the
chairperson of the AGM as their proxy. All proxy appointments should be received by no later than 21.00 AEDT/10.00
GMT on 16 December 2020;
strongly recommends CREST members to vote electronically through the CREST electronic proxy appointment service
as your vote will automatically be counted;
proposes that voting at the AGM will be conducted by means of a poll on all Resolutions, with each shareholder having
one vote for each share held, thereby allowing all those proxy votes submitted and received prior to the AGM to be
counted;
encourages you to submit any question that you would like to be answered at the AGM by emailing such questions to
the Company at shareholder.notifications@mysale.com, so that it is received by no later than 21.00 AEDT/10.00 GMT
on 16 December 2020. The Company will endeavour to respond to all questions received from shareholders at the
AGM or within seven days following the AGM; and
will continue to closely monitor the COVID-19 situation in the lead up to the AGM and make further updates about the
AGM on the Company’s website at shareholder.notifications@mysale.com. Please ensure that you regularly check this
page for updates.
Explanatory Notes to the Resolutions
Ordinary Resolutions
Resolutions 1 to 5 (inclusive) 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 each 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 detailed review, the Board is proposing to re-appoint BDO LLP as external
auditor. BDO 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, 4 and
5
Election and re-election of Directors
The Chief Financial Officer of the Company, Mats Weiss was appointed by the board of directors as a director of
the Company and commenced his role on 9 March 2020. Pursuant to the Company's Articles of Association, as Mr
Weiss was appointed by the board, he holds office as a director only until the dissolution of the next annual general
meeting, unless he is re-appointed during such meeting. Accordingly, Mr Weiss is standing for election as a
Director at this AGM.
Further, the Company’s Articles of Association require one-third of the Directors to retire by rotation at the AGM
(excluding appointments made by the board since the last AGM). Directors retiring by rotation may, if they wish,
stand for re-election. Accordingly, this year, Wally Muhieddine and Dow Famulak will retire by rotation at the AGM
and will each offer himself for re-election as Director. Biographical details of each of the Directors can be found in
the Annual Report and Accounts.
Special Resolutions
Resolutions 6 to 8 (inclusive) are being proposed as special resolutions. In order for a special resolution to be passed, at least
two-thirds of the votes cast must be in favour of the resolution.
6
Disapplication of Pre-Emption Rights – general
In relation to Resolution 6, 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 6 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 6 is to allow the Directors, in addition to the authority granted to the
Directors pursuant to paragraphs (a) and (b), generally to allot Shares for cash up to an aggregate amount equal
to 5% of the issued Shares, again without following the Pre-emption Procedure.
This authority would remain in force until the conclusion of the Company’s next annual general meeting or fifteen
months following the passing of this resolution, whichever is the earlier.
7
Disapplication of Pre-Emption Rights – financing
Resolution 7 seeks a separate and additional authority to dis-apply pre-emption rights in respect of 10% of
issued ordinary share capital for certain purposes pursuant to certain elements of the guidance from the Pre-
Emption Group (PEG).
On 5 May 2016, the PEG published a recommended template resolution for dis-applying pre-emption rights. The
template recommends companies request separate authority to dis-apply pre-emption rights in respect of
amounts in addition to a base 5% to be used when the Board considers the use to be for an acquisition or
specified capital investment in accordance with the 2015 Statement of Principles as a separate resolution to the
disapplication to issue share on an unrestricted basis.
The Directors confirm, partly in accordance with the 2015 Statement of Principles, that they will only allot Shares
representing more than 5% of the issued ordinary share capital of the Company for cash pursuant to the
authority referred to in Resolution 6, where the allotment is in connection with an acquisition or specified capital
investment, which is announced contemporaneously with the allotment.
The Directors consider that the authorities sought are appropriate as they provide the Company with the
necessary flexibility to take advantage of business opportunities as they arise.
8
Authority to buy back Shares
Resolution 8 seeks authority for the Company to make market purchases of its own Shares, such authority
being limited to the purchase of 10% of the Shares in issue as at 25 November 2020, being the last practicable
date prior to publication of this Notice.
The maximum price payable for the purchase by the Company of its own Shares will be limited to an amount
equal to the higher of (i) 5% above the average of the middle market quotations of the Shares, as derived from
the AIM Appendix of The London Stock Exchange Daily Official List for the five business days prior to the
purchase; and (ii) the higher of the price of the last independent trade of an ordinary share and the highest
current independent bid for a Share as derived from the London Stock Exchange Trading System. The minimum
price payable by the Company for the purchase of its own Shares will be £0.01 per Share.
The Directors have no present intention of exercising the authority to purchase the Company’s Shares but will
keep the matter under review, taking into account other investment opportunities. The authority would only be
exercised if and when, in the light of market conditions prevailing at the time, they believe that the effect of such
purchases will be in the best interests of shareholders generally.
The Law allows the Company to hold in treasury any Shares purchased by it. Such Shares will remain in issue
and will be capable of being re-sold by the Company or used in connection with certain of its share schemes.
At the date of this Notice the Company does not hold any treasury shares, but Resolution 8 seeks authority for
any Shares which are repurchased to be held in treasury.
The authority set out in this resolution will expire at the end of the next annual general meeting or fifteen months
after the resolution is passed, whichever is sooner.
Printed by
Perivan 260033