NUIX PTY LTD AND CONTROLLED ENTITIES
ANNUAL REPORT
30 June 2020
ABN 80 117 140 235
PAGE 1 of 74
FINDING TRUTH IN A DIGITAL WORLD
PAGE 2 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Contents
Corporate Directory .................................................................................... 5
Chairman’s Report ..................................................................................... 6
CEO’s Message ......................................................................................... 8
Directors’ Report ...................................................................................... 10
Consolidated Statement of Comprehensive Income ................................ 15
Consolidated Statement of Financial Position .......................................... 16
Consolidated Statement of Changes In Equity ......................................... 17
Consolidated Statement of Cash Flows ................................................... 18
Notes to the Consolidated Financial Statements ...................................... 19
1.
2.
3.
4.
5.
6.
7.
8.
9.
Statement of significant accounting policies ................................................. 19
Financial risk management ........................................................................... 40
Segment information ..................................................................................... 44
Profit for the year .......................................................................................... 45
Revenue........................................................................................................ 46
Other income ................................................................................................ 46
Income tax expense ...................................................................................... 47
Cash and cash equivalents........................................................................... 48
Trade and other receivables ......................................................................... 49
10. Other current assets ..................................................................................... 50
11. Property and equipment ............................................................................... 51
12.
13.
Intangible assets ........................................................................................... 52
Leases .......................................................................................................... 53
14. Trade and other payables ............................................................................. 55
15. Deferred revenue .......................................................................................... 56
16. Provisions ..................................................................................................... 57
17. Borrowings .................................................................................................... 58
18.
Issued capital ................................................................................................ 59
19. Equity ............................................................................................................ 59
20. Earnings per share ....................................................................................... 60
21. Dividends ...................................................................................................... 61
22. Auditors’ remuneration .................................................................................. 61
23. Related party disclosures ............................................................................. 62
24. Share-based payments ................................................................................. 63
PAGE 3 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
25. Cash flow information ................................................................................... 66
26. Parent entity financial information ................................................................ 67
27. Events after the reporting date ..................................................................... 67
Director’s Declaration ............................................................................... 68
Auditor’s Independence Declaration ........................................................ 69
Independent Auditor’s Report ................................................................... 70
Shareholder Information ........................................................................... 72
PAGE 4 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Corporate Directory
Directors
Daniel Phillips – Non-Executive Director and Chairman, Non-Independent
David Standen – Non-Executive Director, Non-Independent
Roy Frank Grady – Non-Executive Director, Independent
Mark Warren de Ambrosis – Non-Executive Director, Non-Independent
Jeffrey Bleich – Non-Executive Director, Independent
Rodney Graeme Vawdrey – Executive Director, Non-Independent
Anthony Castagna – Non-Executive Director, Non-Independent
Group Chief Executive Officer
Rodney Graeme Vawdrey
Chief Financial Officer
Stephen Doyle
Registered Office and Share
Registry
Company Secretaries
Auditors
Total year
Legal Advisors
Bankers
Financiers
Nuix Pty Ltd
Level 27
1 Market Street
SYDNEY, NSW 2000
Telephone: +61 2 9280 0699
Facsimile: +61 2 9212 6902
Stephen Doyle
Brian Krupczak
Michael Gerard Egan
PricewaterhouseCoopers
One International Towers
Watermans Quay, Barangaroo
SYDNEY NSW 2000
DLA Piper Australia
140 William Street
Melbourne VIC 3000
PO Box 4301
Australia
Commonwealth Bank of Australia
Business Banking
Level 8, 201 Sussex Street
SYDNEY NSW 2000
Commonwealth Bank of Australia
Business Banking
Level 8, 201 Sussex Street
SYDNEY NSW 2000
Website Address
www.nuix.com
PAGE 5 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Chairman’s Report
Dear Shareholder,
The Board of Nuix Pty Ltd (hereafter referred to as the ‘Company’) is pleased to present the Annual Report of
the Company and its subsidiaries (hereafter referred to as ‘Nuix’ or ‘Group’) for the financial year ended 30 June
2020. This year, the Group earned total sales of $175,858,894 (2019 (Restated): $139,633,198), representing
26% year on year growth. The Group achieved a full-year profit after tax of $23,587,666 compared with
$7,441,818 (Restated) in the previous year.
OUR ASSETS AND CAPABILITIES
Nuix's key assets are:
●
●
its range of software applications that enable organisations to make fact-based decisions from
structured, semi-structured and unstructured data; and
the extensive knowledge of its global team of industry experts.
Our software, built around the Nuix Engine, enables users to search, correlate, analyse and report on data at
massive scale and in hundreds of formats.
BUSINESS AND INDUSTRY OVERVIEW
Organisations are finding themselves unprepared to investigate, manage, secure, de-risk and utilise the massive
amounts of data they hold. This poses commercial, competitive and legal risks. Nuix technology is perfectly
positioned to help organisations:
● manage the data;
● comply with legal and regulatory obligations;
●
reduce losses that result from external and insider data breaches; and
● exploit the data to create value.
OUR GROWTH STRATEGY
We plan to make our software a ubiquitously available platform for solving global risk, compliance and security
challenges. The key elements of our strategy are briefly outlined below:
Extend our technological capabilities
We intend to continue to invest heavily in our product development efforts to deliver additional features
and solutions that address existing customer needs and new end-markets. We focus on attracting and
retaining thought leaders and engineering talent who can expand the Nuix core engine into adjacent
product and technology areas that enable organisations to further investigate, secure and unlock the value
of their data.
Drive incremental revenue from existing customers
We will continue to cultivate incremental sales from our existing customers through increased use of our
software. This will be achieved by additional deployments and new use cases in processing, investigation
and analysis of data.
PAGE 6 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Chairman’s Report (continued)
Develop products that enable organisations in adjacent markets to use our software in
different ways
We believe there is a significant opportunity to leverage our core engine into new solutions that help
organisations investigate, manage, secure and unlock the value of their data in specific markets and use
cases. Training and certification services (across our range of solutions) and partner-led consulting
services (notably in GRC [Governance, Risk and Compliance], cybersecurity and insider threat
management) are growing opportunities.
Grow our user and partner ecosystem to target new use cases, drive operational
leverage and deliver additional targeted, higher value solutions
Our user community includes advisory firms, litigation support vendors, corporations, government and law
enforcement agencies. We believe this ecosystem can provide significant operating leverage to extend
our software’s functionality to new use cases. We will continue to invest in Original Equipment
Manufacturer (OEM) and strategic relationships that enable new channels to market and extend our
integration with third-party products. In addition, we expect that OEM vendors and managed service
providers will invest in and create customised application functionality based on our core engine.
Acquire and productise knowledge to deliver repeat engagements
Through our thought-leadership and partner ecosystem, we will deliver targeted solutions to early
adopters who solve the most complex unstructured data problems and create products and solutions to
be resold to industry verticals.
Deliver world-class customer service
We are determined to continue to delight our customers with our passionate can-do customer service
culture.
OUR PLANS
Looking towards 2021 and beyond, we are focused on continuing to deliver strong year-on-year revenue growth.
On behalf of the Board, I would like to thank the entire talented, passionate and committed Nuix team for their
efforts during the year, as well as acknowledge and thank our shareholders for their ongoing support during the
last financial year. We look forward to the exciting next chapter in Nuix’s history.
SIGNED: __________________________________
Daniel Phillips
Chairman
Sydney, Australia
30 October 2020
PAGE 7 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
CEO’s Message
Nuix was founded two decades ago in response to the increasing digital transformation of the way people live
and work. Specifically, how we create, use, and extract meaning from the explosion of unstructured data. Or
more simply, how we find truth in a digital world.
Since then, Nuix has evolved as a leader in investigative analytics and intelligence at scale, for businesses,
governments, and international agencies. We build forensic software that more than 1,000 customers in 79
countries use to solve many of the world’s most complex data challenges, at scale, at speed, and with precision.
AN INHERENT ABILITY TO ADAPT
Nuix has an instinctive appreciation for uncertainty that is poignantly relevant in 2020. Despite a year of
sustained global tumult, Nuix has proven to be resilient, determined, and unwavering in our mission to empower
our customers in their pursuit of data intelligence. Nuix’s revenue has increased 26% year-on-year and our Q4
results were the strongest in our history. We have continued to grow revenue without substantially increasing
our cost base, delivering a 78% increase year-on-year in EBITDA.
Our ethos of focusing on customers’ needs has delivered a powerful result. Once customers experience the
capabilities of Nuix, they often extend their use of our software or find new ways to use it. This “land and expand”
strategy has yielded significant growth in upsell revenue, demonstrating the stickiness of our product.
CONNECTING WITH OUR CUSTOMERS
In the past year, we held our first global sales conference, launched our go-to-market domain structure, and
shifted gear on enterprise selling. With these changes we have enhanced our customer focus, pooled our
industry expertise, and aligned more clearly to industry needs. We successfully expanded our customer base,
adding 102 new customer logos in FY20 and also increased our renewals year on year. In addition, we began
a strategic introduction of consumption-based pricing, converting two major advisory firm deals to consumption-
based models, as the basis for shared success as these accounts grow. Our overall revenue position is
strengthened by the diversity of our customer base both geographically and across our domains with 20% from
government, 19% from corporations, 18% of revenue from advisory firms, 11% from law firms, and 15% from
new geographic markets.
By region, the majority of our revenue comes from the United States (55%) and we initiated structural changes
and FedRAMP compliance processes to remove barriers to higher value government contracts there. We also
nurtured new markets, with our first year of fully-fledged operations in the DACH (Germany, Austria and
Switzerland) region and stronger focus on Asia with local teams coordinating new leads. We re-examined our
overall commercial approach, strengthening routes to market such as Nuix Partner Connect, a successful
revamp of our international partner program; and executed a Salesforce.com improvement project to increase
sales productivity and commercial insight.
PRODUCT AND INNOVATION LED
The Nuix Engine remains the foundation of our platform and revenue, with our vertical solution stacks enabling
us to capture further revenue from use cases in both our traditional eDiscovery and forensic investigations
markets, together with new strategic markets such as governance, risk and compliance. We have completed
the integration of Nuix Discover® (formerly Ringtail) and it is making a tangible impact on the market with 2000
active users across 70 customers and 203 TB of data under management. Nuix Discover software as a service
(SaaS) is available in six regions worldwide.
PAGE 8 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
CEO’s Message (continued)
We listened to customer feedback, and our roadmap addresses key demands for features such as mobile data
integration through our partnership with mobile forensic tool specialists MSAB; accessing password-protected
and encrypted content through integration with Passware; platform integration with the promote-to-Nuix Discover
feature; and soft licenses through our Cloud License Server. Under our new Head of Engineering, we fine-tuned
our agile software development model and renewed our focus on enterprise grade quality, scalability, availability,
and access improvements.
CURRENT AND FUTURE TRENDS
Nuix prudently monitors market trends that affect our business. We are encouraged by the growing need for our
software driven by the proliferation of unstructured data volumes; a significant focus on governance, risk,
compliance, and the consequences of data breaches; and increased levels of digitisation and automation
throughout enterprises. Organisations face a responsibility to manage their ever-growing data, which can also
be a valuable commodity and currency. Nuix provides a sustainable response to the problem and is strongly
positioned to assist clients harness the opportunities.
We have passion, commitment, and belief in what we do, whilst being alert to the shifting dynamics of our
connected customer ecosystem. We expect further consolidation in the eDiscovery services market, which we
intend to balance with new opportunities, such as helping our corporate customers bring more of the discovery
process in-house and extending their use of Nuix to solve cross-functional use cases such as compliance, or
insider threat detection. In addition, the competitive landscape remains fragmented and Nuix competes both in
specific verticals such as eDiscovery and forensic investigations and as an integral part of enterprise data
infrastructures to solve multiple use cases. It is this broader relevance of the Nuix platform that continues to help
differentiate us.
Despite unforeseen challenges, technology constitutes one of the few sectors that has turned adversity into
opportunity. Our FY2020 revenue was not significantly affected by the COVID-19 pandemic. Nuix has deftly
navigated the transition to remote working. Our people have demonstrated enormous dedication to our work,
even in the face of headcount reductions that managed our risk against the longer-term impact of COVID-19
and its economic fallout. Nuix employees brought ideas and versatility that enabled us to implement new
strategies such as the shift to virtual events and a reinvigorated training program that saw over 1,000 users
achieve Nuix certification in the 50 days from May 1st to June 19th, 2020.
I am proud of our Team Nuix achievements during this extraordinary period, which showed that our core values
prevail even under extraordinary pressure. I am certain that we have shown ourselves and our stakeholders
how much we can accomplish when challenged, and this gives me enormous excitement about the future
successes that lay ahead.
SIGNED: __________________________________
Rodney Graeme Vawdrey
Group CEO
Sydney, Australia
30 October 2020
PAGE 9 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Directors’ Report
The directors present their report on the consolidated entity (hereafter referred to as ‘Nuix’ or ‘Group’) consisting
of Nuix Pty Ltd and the entities it controlled at the end of, or during, the year ended 30 June 2020.
Directors and company secretary
The following persons were directors of Nuix Pty Ltd during the year and up to the date of this report unless
otherwise stated:
● Daniel Phillips (Non-Executive Director and Chairman)
● David Standen (Non-Executive Director)
● Roy Frank Grady (Non-Executive Director)
● Mark Warren de Ambrosis (Non-Executive Director)
● Jeffrey Bleich (Non-Executive Director)
● Rodney Graeme Vawdrey (Executive Director)
● Anthony Castagna (Non-Executive Director)
The company secretaries are Stephen Doyle and Brian Krupczak, who were appointed to the position of
company secretary in 2011 and 2015, respectively. Michael Gerard Egan was recently appointed as company
secretary last 9th of October 2020. Anthony Castagna was reappointed to the Board on 8th of August 2019.
Operating results
The profit of the Group for the financial year after providing for income tax amounted to $23,587,666
(2019: (Restated) $7,441,818), 2018 (Restated) $6,292,894.
Review of operations
A review of the operations of the Group during the financial year and the results of those operations follows:
2020
2019
Restated
2018
Restated
2019-2020
MOVEMENT
2018-2019
MOVEMENT
Revenue
EBITDA*
NPAT**
175,858,894
139,633,198
113,615,564
62,643,893
35,196,071
21,102,641
23,587,666
7,441,818
6,292,894
Operating cash flow
58,558,639
25,151,464
23,674,406
26%
78%
217%
133%
23%
67%
18%
6%
Working capital
21,348,060
*EBITDA - Earnings before Interest, Tax, Depreciation and Amortisation
** NPAT - Net Profit after Tax
(81,091)
9,752,993
(100%)
119%
A reconciliation of EBITDA against profit for the year is shown below:
Profit for the year
Income tax expense
2020
23,587,666
8,834,728
2019
Restated
7,441,818
3,981,574
Depreciation and amortization
28,399,817
22,132,585
Interest expense
Interest income
EBITDA
1,859,172
1,709,844
(37,490)
(69,750)
62,643,893
35,196,071
21,102,641
PAGE 10 of 74
2018
Restated
6,292,894
991,303
12,789,093
1,031,375
(2,024)
Nuix Pty Ltd and Controlled Entities Annual Report
Directors’ Report (continued)
The Group manages operating performance by reference to key operational metrics, a sample of which are
disclosed above.
Significant changes in state of affairs
No significant changes in the Group’s state of affairs occurred during the financial year and up to date of this
report.
Principal activities
The principal continuing activities of the Group during the financial year were the development and distribution
of software. No significant change in the nature of these activities occurred during the year.
Events since the end of the financial year
On 29th September 2020, the Company held an Extraordinary General Meeting which passed the following
resolution: (1) change the type of the Company from proprietary company to public company limited by shares;
(2) change the name of the Company from Nuix Pty Ltd. to Nuix Limited; and (3) change the Company
constitution due to these changes.
These changes are expected to take effect from 6th November 2020.
On 19th October 2020 a former contractor to the Company filed a general protections claim under the Fair Work
Act 2009 in the Fair Work Commission against the Company. The claim and subsequent correspondence seeks
compensation and pecuniary penalties. Damages in the jurisdiction are uncapped and legal fees in defending
such matters can be significant. The Company rejects the foundation of the claim but continues to assess its
position given that the claim is not yet fully particularised and accordingly it is not possible to reliably estimate
the potential financial impact of the claim.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected the Group’s
operations, results or state of affairs, or may do so in future years.
Likely developments and expected results of operations
Likely developments in the operations of the Group and the expected results of those operations in future
financial years are not included in this report.
Environmental regulation
The Group’s operations are not regulated by any significant environmental regulations under a law of the
Commonwealth or of a state or any other territories of Australia or territory in which it operates.
PAGE 11 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Directors’ Report (continued)
Meetings of directors
The numbers of meetings of the company’s Board of Directors held during the fiscal year ended 30 June 2020,
and the numbers of meetings attended by each director were:
Daniel Phillips
David Standen
Roy Frank Grady
Mark Warren de Ambrosis
Jeffrey Bleich
Anthony Castagna
Rodney Graeme Vawdrey
FULL MEETINGS OF
DIRECTORS
A
7
7
7
7
7
6
7
B
7
7
7
7
7
6
7
A = Number of meetings attended
B = Number of meetings held during the time the director held office or was a member of the committee during the year
Dividends paid or recommended
There were no dividends paid or declared since the start of the financial year and up to the date of this report.
Insurance of officers
Nuix Pty Ltd insure the directors and secretaries of the company and its Australian-based controlled entities,
and the general managers of each of the divisions of the Group. The liabilities insured are legal costs that may
be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity
as officers of entities in the Group, and any other payments arising from liabilities incurred by the officers in
connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful
breach of duty by the officers or the improper use by the officers of their position or of information to gain
advantage for themselves or someone else or to cause detriment to the company. It is not possible to apportion
the premium between amounts relating to the insurance against legal costs and those relating to other liabilities.
During FY2020, the Company paid a premium under a contract insuring each of certain officers of the Group
against liability incurred in that capacity. Disclosure of the nature of the liability and the amount of the premium
is prohibited by the confidentiality clause of the contract of insurance.
Indemnifying officers or auditor
No indemnities have been given or insurance premiums paid, during or since the end of the financial year, for
any person who is or has been an auditor of the Group.
PAGE 12 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Directors’ Report (continued)
Auditor
PricewaterhouseCoopers, continues in office in accordance with section 327B of the Corporations Act 2001.
Audit and Non-audit services
Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers Australia) for audit and non-
audit services during the year are disclosed in Note 22.
The company may decide to employ the auditor on assignments additional to its statutory audit duties where the
auditor’s expertise and experience with the company and/or the Group are important.
The Board of Directors, in accordance with advice provided by the audit committee, is satisfied that the provision
of the non-audit services is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor did not
compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
● all non-audit services have been reviewed by the audit committee to ensure they do not impact the
impartiality and objectivity of the auditor, and
● none of the services undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001
is set out on page 69.
This report is signed in accordance with a resolution of the Board of Directors.
SIGNED: __________________________________
Daniel Phillips
Chairman
Sydney, Australia
30 October 2020
PAGE 13 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Financial Report Contents
Consolidated Statement of Comprehensive Income ................................ 15
Consolidated Statement of Financial Position .......................................... 16
Consolidated Statement of Changes In Equity ......................................... 17
Consolidated Statement of Cash Flows ................................................... 18
Notes to the Consolidated Financial Statements ...................................... 19
PAGE 14 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2020
Revenue
Cost of goods sold
Gross profit
Sales and distribution
Research and development
General and administration
Other income
Other gains - net
Operating profit
Finance costs
Share based payments expense
Profit before income tax
Income tax expense
Profit for the year
NOTES
2020
$
2019
(RESTATED)
$
2018
(RESTATED)
$
5
175,858,894
139,633,198
113,615,564
(20,685,738)
(15,624,068)
(12,343,798)
155,173,156
124,009,130
101,271,766
(63,622,603)
(57,822,137)
(53,930,653)
(32,805,070)
(28,816,140)
(16,940,359)
(24,540,193)
(26,071,321)
(22,087,920)
1,011,232
960,035
(249,950)
1,023,487
763,149
407,340
34,966,572
13,283,054
9,483,323
(1,859,172)
(1,709,844)
(1,031,375)
(685,006)
(149,818)
(1,167,751)
32,422,394
11,423,392
7,284,197
(8,834,728)
(3,981,574)
(991,303)
23,587,666
7,441,818
6,292,894
6
4
4
4
7
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations
19
1,808,958
1,800,108
Other comprehensive income, net of tax
1,808,958
1,800,108
375,955
375,955
Total comprehensive income for the year, net of tax
25,396,624
9,241,926
6,668,849
Earnings per share
Basic
Diluted
20
20
0.09
0.03
0.08
0.03
0.03
0.03
The financial statements should be read in conjunction with the accompanying notes.
PAGE 15 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the year ended 30 June 2020
NOTES
2020
$
2019
(RESTATED)
$
2018
(RESTATED)
$
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Property and equipment
Intangible assets
Deferred tax asset
Right of use assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Deferred revenue
Current tax liabilities
Provisions
Borrowings
Other liability
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Lease liabilities
Provisions
Borrowings
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
8
9
10
11
12
7
13
14
13
15
16
17
7
13
16
17
18
19
19
38,538,759
60,204,351
1,897,673
100,640,783
27,331,898
44,900,443
9,100,636
81,332,977
2,412,710
2,468,091
197,154,586
167,634,147
498,780
2,600,171
12,872,638
16,362,515
212,938,714
189,064,924
26,998,317
34,251,863
1,739,709
62,989,889
3,014,832
75,680,533
4,149,356
11,474,143
94,318,864
313,579,497
270,397,901
157,308,753
20,704,190
14,115,938
3,704,000
3,341,633
47,791,035
38,855,732
327,356
2,664,068
410,502
3,261,112
25,531,225
-
-
-
19,489,751
1,639,098
28,546,460
437,620
2,616,504
-
507,463
100,721,874
59,984,917
53,236,896
5,333,672
-
11,539,250
14,791,574
506,872
543,391
-
25,681,820
17,379,794
41,016,785
118,101,668
101,001,702
195,477,829
169,396,199
104,227,205
104,227,205
5,143,067
86,107,557
2,649,103
62,519,891
195,477,829
169,396,199
-
9,958,875
526,514
20,000,000
30,485,389
83,722,285
73,586,468
17,809,218
699,177
55,078,073
73,586,468
PAGE 16 of 74
The financial statements should be read in conjunction with the accompanying notes.
Nuix Pty Ltd and Controlled Entities Annual Report
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2020
ISSUED
CAPITAL
$
SHARE OPTION
RESERVE
$
FOREIGN
CURRENCY
TRANSLATION
RESERVE
$
RETAINED
EARNINGS
$
TOTAL
EQUITY
$
Balance at 1 July 2017, as
previously reported
Net impact of restatement
8,801,888
3,511,320
1,811,947
55,875,278
70,000,433
-
-
-
(7,090,099)
(7,090,099)
Balance at 1 July 2017 (restated*)
8,801,888
3,511,320
1,811,947
48,785,179
62,910,334
Profit for the year (restated)
Other comprehensive income
Total comprehensive income
Contributions of equity
Buy-back options
Foreign currency exchange
difference
Employee share options
-
-
-
9,007,330
-
-
-
-
-
-
-
(6,176,255)
8,459
1,167,751
-
6,292,894
6,292,894
375,955
-
375,955
375,955
6,292,894
6,668,849
-
-
-
-
-
-
-
-
9,007,330
(6,176,255)
8,459
1,167,751
Balance at 30 June 2018 (restated)
17,809,218
(1,488,725)
2,187,902
55,078,073
73,586,468
Profit for the year (restated)
Other comprehensive income
Total comprehensive income
Contributions of equity
Employee share options
-
-
-
86,417,987
-
-
-
-
-
149,818
-
7,441,818
7,441,818
1,800,108
-
1,800,108
1,800,108
7,441,818
9,241,926
-
-
-
-
86,417,987
149,818
Balance at 30 June 2019 (restated)
104,227,205
(1,338,907)
3,988,010
62,519,891
169,396,199
Profit for the year
Other comprehensive income
Total comprehensive income
Contributions of equity
Employee share options
-
-
-
-
-
-
-
-
-
685,006
-
23,587,666
23,587,666
1,808,958
-
1,808,958
1,808,958
23,587,666
25,396,624
-
-
-
-
-
685,006
Balance at 30 June 2020
104,227,205
(653,901)
5,796,968
86,107,557
195,477,829
The financial statements should be read in conjunction with the accompanying notes.
* See Notes 1(z) and 19 for details regarding the restatement
PAGE 17 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2020
NOTES
2020
$
(RESTATED)
$
(RESTATED)
$
2019
2018
Cash flows from operating activities
Receipts from customers (inclusive of GST and
VAT)
176,507,257
140,702,587
114,508,255
Payments to employees and suppliers
(115,744,005)
(113,620,186)
(89,551,692)
Interest received
Interest paid
Income tax paid
37,490
69,750
2,024
(1,822,882)
(1,675,894)
(1,024,675)
(419,221)
(324,793)
(259,506)
Net cash provided from operating activities
25
58,558,639
25,151,464
23,674,406
Cash flows from investing activities
Purchase of property and equipment
11
(1,355,029)
(609,154)
(2,183,972)
Payments for software development costs
(42,454,758)
(37,930,294)
(25,385,166)
Acquisition of business
-
(75,947,376)
-
Purchase of intangible assets
12
(1,021,392)
(511,492)
(1,178,974)
Net cash used in investing activities
(44,831,179)
(114,998,316)
(28,748,112)
Cash flows from financing activities
Proceeds from issuance of shares
Principal payments of lease
Proceeds from borrowings
-
86,417,987
9,007,330
(2,812,360)
(2,072,948)
(2,112,478)
17
-
5,681,820
5,000,000
Transaction costs on borrowings
(150,595)
-
-
Net cash provided by financing activities
(2,962,955)
90,026,859
11,894,852
Net change in cash and cash equivalents
10,764,505
180,007
6,821,146
Cash and cash equivalents at beginning of
financial year
Exchange differences on cash and cash
equivalents
8
27,331,898
26,998,317
20,341,298
442,356
153,574
(164,127)
Cash and cash equivalents at end of financial year
38,538,759
27,331,898
26,998,317
The financial statements should be read in conjunction with the accompanying notes.
PAGE 18 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
For the financial year ending 30 June 2020, the Group has elected to prepare general purpose financial
statements in accordance with Tier Australian 1 Accounting Standards and will no longer apply the
disclosure available under special purpose financial reporting. Therefore the consolidated financial
statements for the financial year ending 30 June 2020 are the first financial statements issued by the
Group that comply with Australian Accounting Standards and Interpretations, including AASB 1 First-time
Adoption Australian Accounting Standards (“AASB 1”), with a transition date of 1 July 2017. First time
adoption has led to incremental disclosures being included throughout the financial report for comparative
information. In addition, in order to comply with AASB 1, the Group has transitioned AASB 16 Leases on
1 July 2017 (the beginning of the comparative period presented). The Group’s adoption of AASB 1 did
not have any other impact on the financial position, financial performance and cash flows of the Group.
As such these financial statements do not include an opening balance sheet. These consolidated financial
statements also comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board.
The financial statements are for the consolidated entity consisting of Nuix Pty Ltd and its subsidiaries.
The financial report has been prepared in accordance with the accounting policies disclosed below. Such
accounting policies are consistent with the previous period unless otherwise stated.
The COVID-19 coronavirus outbreak was declared a pandemic by the World Health Organisation on 11
March 2020. The outbreak and the response of governments in dealing with the pandemic is interfering
with general activity levels within the community and the economy. The scale and duration of these
developments continue to remain uncertain as at the date of this report. However, the Group has not been
materially or adversely impacted by COVID-19.
Nuix Pty Ltd is a company limited by shares, incorporated and domiciled in Australia.
The financial statements were authorised for issue by the Board of Directors on 30 October 2020.
a. Basis of preparation
The financial report has been prepared on an accrual basis and is based on historical costs.
(i) Early adoption of standards
The Group has not elected to apply any pronouncements before their operative date in the annual
reporting period beginning 1 July 2019.
(ii) Historical cost convention
These financial statements have been prepared under the historical cost convention.
(iii) Critical accounting estimates
The preparation of 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 1(y).
b. Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Nuix Pty
Ltd (‘Nuix’ or ‘Group’ or ‘Company’) as at 30 June 2020 and the results of all subsidiaries for the year then
ended. Nuix Pty Ltd and its subsidiaries together are referred to in this financial report as the Group or
the consolidated entity.
PAGE 19 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
Subsidiaries are all entities (including structured 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
deconsolidated from the date that control ceases.
The acquisition method of accounting used to account for business combinations by the Group and is
disclosed in Note 1(e).
Intercompany balances on transactions between Group companies are eliminated. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the
Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated
statement of comprehensive income, statement of changes in equity and balance sheet respectively.
c. Segment report
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker.
The Board of the Company has appointed a strategic steering committee which assesses the financial
performance and position of the Group and makes strategic decisions. The steering committee, which
has been identified as being the chief operating decision maker, consists of the Group chief executive
officer and the chief financial officer.
d. Income tax
The income tax expense or benefit for the period is the tax payable or receivable on the current period’s
taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in
deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
(i) Current tax
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted
at the end of the reporting period in the countries where the company’s subsidiaries and associates
operate and generate taxable income.
(ii) Deferred tax
Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of
goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or
liability in a transaction other than a business combination that at the time of the transaction affects neither
accounting, nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially
enacted by the end of the reporting period and are expected to apply when the related deferred income
tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it
is probable that future taxable amounts will be available to utilise those temporary differences and losses.
PAGE 20 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying
amount and tax bases of investments in foreign operations where the Group is able to control the timing
of the reversal of the temporary differences and it is probable that the differences will not reverse in the
foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset
and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively.
(iii) Uncertainty over income tax treatments
The application of the tax law to a particular transaction or circumstance may be unclear and the
acceptance of the treatment may not be known until the relevant taxation authority undertakes an
examination of the tax treatment adopted or, in the event of a dispute, when a court makes a decision at
a future time.
Where there is uncertainty over income tax treatments the recognition and measurement of current or
deferred tax assets or liabilities is determined applying Interpretation 23 - Uncertainty Over Income Tax
Treatments.
Each uncertain tax treatment is considered separately unless consideration together with one or more
other uncertain tax treatments gives rise to a better prediction of the resolution of the uncertain treatments
on examination by the relevant taxation authority.
Where it is considered probable (more likely than not) that the relevant taxation authority will accept the
tax treatment used or planned to be used in its income tax filings the tax treatment adopted is consistent
with that used or planned treatment in the income tax filings.
In assessing such probability and the recognition and measurement of uncertain tax treatments it is
assumed that the relevant taxation authority will examine amounts it has a right to examine and have full
knowledge of all related information when making those examinations and determining whether or not to
accept the tax treatment in the relevant income tax filings.
In the event that the relevant taxation authority will not accept the tax treatment, the uncertainty of each
uncertain tax treatment is measured using either of the following methods:
(a) the most likely amount – the single most likely amount in a range of possible outcomes, particularly
where the outcome is binary or concentrated on one value; or
(b) the expected value – the sum of the probability weighted amounts in a range of possible outcomes.
In the event that an uncertain tax treatment affects both current and deferred tax the judgments made in
relation to the uncertain tax treatment are made consistently for current and deferred tax.
PAGE 21 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
e. Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of
whether equity instruments or other assets are acquired. The consideration transferred for the acquisition
of a subsidiary comprises the:
fair values of the assets transferred
liabilities incurred to the former owners of the acquired business
●
●
● equity interests issued by the Group
●
●
fair value of any asset or liability resulting from a contingent consideration arrangement, and
fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities assumed in a business combination are, with limited exceptions,
measured initially at their fair values at the acquisition date. The Group recognises any non-controlling
interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-
controlling interest’s proportionate share of the acquired entity’s net identifiable assets. Acquisition-related
costs are expensed as incurred.
The excess of the:
● consideration transferred,
● amount of any non-controlling interest in the acquired entity, and
● acquisition-date fair value of any previous equity interest in the acquired entity
over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are
less than the fair value of the net identifiable assets of the business acquired, the difference is recognised
directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity’s
incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
f. Property and equipment
Each class of property and equipment is carried at historical cost less accumulated depreciation and
impairment losses.
The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives
commencing from the time the asset is held ready for use. Leased assets are depreciated over the shorter
of either the unexpired period of the lease or the estimated useful lives of the assets.
The depreciation rates used for each class of depreciable assets are:
CLASS OF FIXED ASSET
Property and computer equipment
Furniture and fixture
Leasehold improvement
DEPRECIATION RATE
33%
20%
20% or lease term whichever is shorter
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting
period date. An asset’s carrying amount is written down immediately to its recoverable amount if the
asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals
are determined by comparing proceeds with the carrying amount. These gains or losses are included in
the statement of comprehensive income.
PAGE 22 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
g. Leases
See Note 1(z) and Note 13 for the Group’s accounting policy for leases.
h. Investments and other financial assets
Classification
The Group classifies its financial assets in the following measurement categories:
●
those to be measured subsequently at fair value (either through other comprehensive income
(OCI) or through profit or loss), and
●
those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the
contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For
investments in equity instruments that are not held for trading, this will depend on whether the Group has
made an irrevocable election at the time of initial recognition to account for the equity investment at fair
value through other comprehensive income (FVOCI).
The Group reclassifies debt investments when and only when its business model for managing those
assets changes.
Recognition and derecognition
Regular purchases and sales of financial assets are recognised on trade date, being the date on which
the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to
receive cash flows from the financial assets have expired or have been transferred and the Group has
transferred substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in
profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether
their cash flows are solely payment of principal and interest.
Impairment
The Group assesses on a forward-looking basis, the expected credit losses associated with its debt
instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by AASB 9, which requires
expected lifetime losses to be recognised from initial recognition of the receivables (see Note 9(a) for
further details).
i.
Impairment of non-financial assets
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication
exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell
and value in use, is compared to the asset’s carrying value.
PAGE 23 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
In assessing value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not been adjusted.
Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of
comprehensive income.
Impairment testing is performed at each reporting date for intangible assets with indefinite lives and
intangible assets not yet available for use. Where it is not possible to estimate the recoverable amount
of an individual asset, the Group estimates the recoverable amount of the cash-generating unit (CGU) to
which the asset belongs.
Goodwill and 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 assets are tested 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. The
recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of
assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are
reviewed for possible reversal of the impairment at the end of each reporting period.
j.
Intangible assets
(i) Goodwill
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortized but is
tested for impairment annually or more frequently if events or changes in circumstances indicate that it
might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the
disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units (CGUs) for the purpose of impairment testing. The
allocation is made to those CGUs or groups of cash-generating units that are expected to benefit from the
business combination in which the goodwill arose, identified according to operating segments.
(ii) Customer contracts
Customer contracts acquired as part of a business combination are recognised separately from goodwill.
The customer contracts are carried at their fair value at the date of acquisition less accumulated
amortisation and impairment losses. Amortisation is calculated based on the timing of projected cash
flows of the contracts over their estimated useful lives. At present, there are no customer contracts
recorded within the financial statements.
(iii) Software
Software comprises computer software purchased from third parties which is capitalised on the basis of
the costs incurred to acquire and bring into use the specific software. Costs associated with maintaining
computer software programs are recognised as an expense when incurred.
(iv) Intellectual property
Development Costs
Development costs are capitalised where future economic benefits from development of a chosen
alternative for new or improved software products, processes, systems or services are considered
probable, and expenditure in relation to such activities is capable of reliable measurement. Future
economic benefits are considered probable where commercial benefit and technical feasibility have been
PAGE 24 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
established. The expenditure capitalised comprises all directly attributable costs, including external direct
costs of materials, services, direct labour and overheads.
Other development expenditure that does not meet these criteria, which includes research activities and
the expenditure on maintenance of computer software, is expensed as incurred.
Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in
the specific asset to which it relates. All other expenditure, including expenditure on internally generated
goodwill, is recognised in profit or loss as incurred.
Amortisation
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values
using the straight-line method over their estimated useful lives and is recognised in profit or loss. Goodwill
and brand is not amortised. Intangible assets, other than goodwill and brand, have finite useful lives.
Goodwill has an indefinite useful life.
The estimated useful lives are as follows:
CLASS OF FIXED ASSET
Software
Intellectual Property
AMORTISATION RATE
33%
10% - 33%
k. Foreign currency transactions and balances
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency
of the primary economic environment in which the entity operates (‘the functional currency’). The
consolidated financial statements are presented in Australian dollars, which is Nuix Pty Ltd’s functional
and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in profit or loss, except when they are
deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are attributable
to part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the income statement,
within finance costs. All other foreign exchange gains and losses are presented in the income statement
on a net basis within other income or other expenses.
Non-monetary items that are measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined. Translation differences on assets and
liabilities carried at fair value are reported as part of the fair value gain or loss.
(iii) Group companies
The results and financial position of foreign operations (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
PAGE 25 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
▪ Assets and liabilities for each balance sheet presented are translated at the closing rate at the
date of that balance sheet,
▪
Income and expenses for each income statement and statement of comprehensive income are
translated at average exchange rates (unless this is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which case income and
expenses are translated at the dates of the transactions), and
▪
all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign
entities, and of borrowings and other financial instruments designated as hedges of such investments,
are recognised in other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets
and liabilities of the foreign operation and translated at the closing rate.
l. Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of
financial year, which are unpaid. The amounts are unsecured and are usually paid within 45 days of
recognition. Trade and other payables are presented as current liabilities unless payment is not due within
12 months from the reporting date. They are recognised initially at their fair value and subsequently
measured at amortised cost using the effective interest method.
m. Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs)
and the redemption amount is recognised in consolidated statement of comprehensive income over the
period of the borrowings using the effective interest method. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of
the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent
there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is
capitalised and amortised over the period of the facility to which it relates.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting period.
n. Provision
Make good obligations are recognised when the Group has a present legal or constructive obligation as
a result of past events, it is probable that an outflow of resources will be required to settle the obligation
and the amount has been reliably estimated. Provisions are measured using the best estimate of amounts
required to settle the obligation at the end of each reporting period.
The fair value of financial guarantees is determined as the present value of the difference in net cash
flows between the contractual payments under the debt instrument and the payments that would be
required without the guarantee, or the estimated amount that would be payable to a third party for
assuming the obligations.
The discount rate used to determine the present value is a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The increase in the provision
due to the passage of time is recognised as interest expense.
PAGE 26 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
o. Employee benefits
(i) Short term obligations
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be
settled within 12 months after the end of the period in which the employees render the related service are
recognised in respect of employees’ services up to the end of the reporting period and are measured at
the amounts expected to be paid when the liabilities are settled.
The liability for annual leave is recognised in the provision for employee benefits. All other short-term
employee benefit obligations are presented as payables.
(ii) Other long-term employee benefits obligations
The liability for long service leave and annual leave which is not expected to be settled within 12 months
after the end of the period in which the employees render the related service is recognised in the provision
for employee benefits and measured as the present value of expected future payments to be made in
respect of services provided by employees up to the end of the reporting period using the projected unit
credit method. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at the
end of the reporting period on high-quality corporate bond rates with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows.
(iii) Retirement benefit obligations
Employees of the Group are entitled to benefits from the Group’s superannuation plan on retirement,
health insurance plan and 401K. The Group’s superannuation plan has a defined contribution section.
The defined contribution section receives fixed contributions from Group companies and the Group’s legal
or constructive obligation is limited to these contributions.
(iv) Share-based payments
Share-based compensation benefits are provided to employees via the Nuix Employee Share Option
Plans. The fair values of options granted under the Employee Share Option Plans are recognised as a
share-based payments expense with a corresponding increase in equity reserves. The total amount to
be expensed is determined by reference to the fair value of the options granted, which includes the impact
of any non-vesting conditions.
Non-market vesting conditions are included in assumptions about the number of options that are expected
to vest. The total expense is recognised over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. At the end of each reporting period, the Company revises
its estimates of the number of options that are expected to vest based on the non-market vesting
conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a
corresponding adjustment to equity.
The Nuix Employee Option Plans are administered by the Nuix Compensation Committee. When the
options are exercised, the Committee transfers the appropriate number of shares to the Option Holder.
The proceeds received, net of any directly attributable transaction costs, are credited directly to equity.
(v) Bonus plans
The Group recognises a liability and an expense for bonuses by way of a provision where contractually
obliged or where there is a past practice that has created a constructive obligation.
(vi) Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or
when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises
termination benefits as an expense.
PAGE 27 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
p. Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid
investments that are readily convertible to known amounts of cash and which are subject to insignificant
risk of changes in value.
q. Trade receivables
Trade receivables are recognised initially at the amount of consideration that is unconditional, unless they
contain significant financing components when they are recognised at fair value. They are subsequently
measured at amortised cost using the effective interest method, less loss allowance. They are generally
due for settlement within 30 days and are therefore all classified as current. See Note 9 for further
information about the Group’s accounting for trade receivables and for a description of the Group’s
impairment policies.
r. Revenue recognition
AASB 15 Revenue from Contracts with Customers
The Group discloses revenue within two categories, namely sale of goods and services. During 2018,
2019 and 2020 there has been no change to the nature of the revenue transactions.
AASB 15 aligns revenue recognition with the pattern for transfer of control of the output from satisfying a
performance obligation to a customer. In order to achieve this, the standard requires the application of a
five-step model in recognising revenue from contracts with customers:
1. Identify the contract with the customer;
2. Identify the performance obligations in the contract;
3. Determine the transaction price;
4. Allocate the transaction price to performance obligations based on their relative standalone selling price;
and
5. Recognise revenue when, or as, performance obligations are satisfied.
Revenue is recognised upon transfer of control of promised products and services to customers in the
amount that reflects the consideration expected to be received in exchange.
The Group’s revenue primarily consists of license fees from customers’ right to use the software.
Revenue recognition approach
Revenue is recognised for the major business activities and delivery platforms as follows:
(i) Software license fee and software usage revenue
Revenue is recognised when a performance obligation is satisfied and when control of the promised goods
or services is transferred to the customer. When considering the performance obligation in relation to the
provision of software, it can be either a right to access (revenue recognised over time) or a right to use
(revenue recognised when software transferred). Software will be recognised as a right to access when it
meets the below three criteria:
1) There is an expectation (contracted or otherwise) that significant activities will be undertaken to affect
the IP of the software;
2) The license holder is exposed to the positive or negative effects of the changes made under point 1;
3) The activities do not result in the transfer of a good or service to the license holder as the activities
occur.
PAGE 28 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
In Nuix’s case, the software is generally provided on-premise and is updated through updates and
releases. However, these updates and releases are not critical to the continued utility of the software as
is. The software could be held stable and still provide the same benefit to the customers who have
purchased licenses. There is also no contractual obligation under the End User License Agreement
(EULA) to update customers with the new substantial functionality of the software. As a result, it is
appropriate that annual license revenue is considered a right to use license (upfront recognition).
(ii) Maintenance and support revenue
Maintenance and support services are either bundled into licensing arrangements or sold separately to
customers. Where these services are bundled the Group allocates the transaction price to maintenance
and support performance obligations based on their relative standalone selling price. We determine
standalone selling price by considering multiple factors including but not limited to prices we charge for
similar offerings, market conditions, competitive landscape and pricing practices. Priority is placed on
market observable pricing where available. Maintenance and support services are provided over the
contractual period and accordingly are recognised over time. Amounts that are billed and yet to be
recognised as revenue are recognised as deferred revenue/contract liabilities.
(iii) Professional services revenue
Professional services revenue mainly consists of fees charged for consultancy and training service.
Revenue from a contract to provide consulting and training services is recognised at the time the
consulting and training are completed.
(iv) Sale of goods
The Group on occasion will provide 3rd Party Software and Hardware to a customer. Revenue from the
sale of these goods is recognised at the point of delivery as this corresponds to the transfer of control of
the goods to the customer.
(v) Interest income
Interest income is recognised using the effective interest method. When a receivable is impaired, the
Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow
discounted at the original effective interest rate of the instrument and continues unwinding the discount
as interest income. Interest income on impaired loans is recognised using the original effective interest
rate.
(vi) Recognition of government grant approach for the R&D incentive scheme
The Group applies the Government Grant Approach to recognise incentives from R&D spending in excess
of the income tax benefit received. This approach recognises the benefit relating to R&D costs capitalised
into intangibles as Deferred Income in the balance sheet with this amount then unwound to Government
Grant Income in line with the amortisation period of the intangible.
(vii) Delivery Platforms – on Premise or Saas
The Group provides customers with a choice of licensing and delivery platform. Delivery platforms can
be either Saas or On premise. SaaS refers to cloud-based software which can be hosted on Nuix’s SaaS
environment or hosted in Partners’ SaaS environments.
For On-Demand licensing contracts, there are a series of distinct goods and services including access to
software maintenance and support provided to customers that are treated as a single performance
obligation because they are delivered in the same pattern over a period of time.
(viii) Costs of obtaining a customer contract
AASB 15 requires that incremental costs associated with acquiring a customer contract, such as sales
commissions, be recognised as an asset and amortised over a period that corresponds with the period of
benefit. An assessment of commissions paid by the Group was performed in connection with the sale of
software products. As a practical expedient, Nuix generally recognises the commissions as an expense
PAGE 29 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
when incurred given the amortisation period of any capitalised amount would be recognised in one year
or less. This is a result of license revenue being recognised at a point in time and commensurate
commission being paid upon renewal of a contract. Consequently, under current arrangements costs of
obtaining a contract are expensed in the period incurred.
(ix) Principal versus agent
Where the Group uses resellers, the Group must assess whether its customer is the reseller or the end
user. Where the end user is the customer, revenue is recognised for the consideration paid by the end
user with any commission retained by the reseller recognised as commission expense within costs of
goods sold. Where the reseller is the customer, revenue is recognised at the net amount received.
Where Nuix considers that the end user is its customer it is on the basis that resellers are an extension of
the salesforce. Under these Reseller Agreements, Nuix is primarily responsible to the end user for delivery
and acceptability of the product and issues licences directly to the end user. Nuix bears significant risk in
end user delivery.
s. Government grants
Grants from the government are recognised in Other Income 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.
Deferral and presentation of government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary
to match them with the costs that they are intended to compensate.
Government grants relating to the intangible assets are included in noncurrent liabilities as deferred
income and they are credited to profit or loss on a straight-line basis over the expected lives of the related
assets.
Allowances under the Research and Development Tax Incentive regime are accounted for as a tax credit,
except for the incremental benefit above the statutory income tax rate which is accounted for as a
government grant.
t.
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares
are shown in equity as a deduction, net of tax, from the proceeds.
u. Goods and services tax
Revenues, expenses and assets are recognised net of the associated goods and services tax (GST),
unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as
part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated
inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or
payable to, the taxation authority is included with other receivables or payables in the balance sheet.
Cash flows are presented on a gross basis.
The GST components of cash flows arising from investing or financing activities which are recoverable
from, or payable to the taxation authority, are presented as operating cash flows.
PAGE 30 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
v. Classification of expenses
When required by Australian Accounting Standards, comparative figures have been adjusted to conform
to changes in presentation for the current financial year. See Note 1(z) for changes to comparative
figures.
Presentation of results
The Group has presented the expense categories within the Consolidated statement of profit or loss on a
functional basis. The categories used are cost of revenues, research and development, sales and
distribution and general and administration. This presentation style provides insight into the Company’s
business model and enables users to consider the results of the Group compared to other major software
companies. The methodology and the nature of costs within each category are further described below.
Cost of goods sold
Cost of goods sold consists of expenses directly associated with securely hosting the Group’s services
and providing support to customers. Costs include data centre costs, personnel and related costs directly
associated with cloud infrastructure and customer consulting, implementation and customer support,
contracted third party costs, reseller channel costs and allocated overheads.
Research and development expenses
Research and development expenses consist primarily of personnel and related costs directly associated
with the Company’s research and development employees, as well as direct costs of research and
development (including subscriptions) and allocated overheads. When future economic benefits from
development of an intangible asset are determined probable and the development activities are capable
of being reliably measured, the costs are capitalised as an intangible asset and then amortised to profit or
loss over the estimated life of the asset created. The development activities comprise the interface design,
coding, documentation and testing of a chosen alternative for new or improved software products,
processes, systems and services. The amortisation of those costs capitalised is included as a research
and development expense.
Sales and distribution expenses
Sales and distribution expenses consist of personnel costs directly associated with the sales and
marketing team’s activities to acquire new customers and grow revenue from existing customers. Other
costs included are external advertising, digital platforms, rent, marketing and promotional events as well
as allocated overheads.
General and administration expenses
General and administration expenses consist of personnel and related costs for the Company’s executive,
Board of Directors, finance, legal, human resources, corporate strategy, CISO, and IT employees. They
also include legal, accounting and other professional services fees, insurance premiums, acquisition and
integration costs associated with the Company’s ongoing acquisition strategy, other corporate expenses
and allocated expenses.
Overhead allocation
The presentation of the Consolidated statement of profit or loss and other comprehensive income by
function requires certain overhead costs to be allocated to functions. These allocations require
management to apply judgement. The costs associated with the Group’s facilities, internal information
technology and non-product related depreciation and amortisation are allocated to each function based
on respective headcount.
w. New accounting standards and interpretation
In accordance with AASB 1, the Group has adopted new and revised Standards and Interpretations
issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations
and effective for the current annual reporting period. These same accounting policies have been
applied throughout all periods presented.
PAGE 31 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
The adoption of the new and revised standards includes AASB 16 – Leases, as described in Note 1(z)
and Note 13, and Interpretation 23 – Uncertainty over Income Tax Treatments as described below.
(a) Interpretation 23 – Uncertainty over Income Tax Treatments
The interpretation explains how to recognise and measure deferred and current income tax assets and
liabilities where there is uncertainty over a tax treatment. In particular, it discusses:
●
●
● how to determine the appropriate unit of account, and that each uncertain tax treatment should be
considered separately or together as a group, depending on which approach better predicts the
resolution of the uncertainty
that the entity should assume a tax authority will examine the uncertain tax treatments and have
full knowledge of all related information, ie that detection risk should be ignored
that the entity should reflect the effect of the uncertainty in its income tax accounting when it is not
probable that the tax authorities will accept the treatment
that the impact of the uncertainty should be measured using either the most likely amount or the
expected value method, depending on which method best predicts the resolution of the uncertainty,
and
that the judgements and estimates made must be reassessed whenever circumstances have
changed or there is new information that affects the judgements.
●
●
While there are no new disclosure requirements, the Group’s judgements and estimates made in
preparing the financial statements are disclosed in Note 1(y).
x. Parent entity financial information
The financial information for the parent entity, Nuix Pty Ltd, disclosed in Note 26 has been prepared on
the same basis as the consolidated financial statements, except as set out below.
(i) Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial
statements of Nuix Pty Ltd.
(ii) Financial guarantees
Where the parent entity has provided financial guarantees in relation to loans and payables of subsidiaries
for no compensation, the fair values of these guarantees are accounted for as contributions and
recognised as part of the cost of the investment. There were no financial guarantees during the year
(2019: Nil).
(iii) Share-based payment expense
The grant by the Company of options over its equity instruments to the employees of subsidiary
undertakings in the Group is treated as an inter-Group charge to that subsidiary undertaking. The fair
value of employee services received, measured by reference to the grant date fair value, is recognised
over the vesting period as an expense in the subsidiary undertakings, with a corresponding credit to
equity.
y. Critical accounting estimates and assumptions
The Directors evaluate estimates and judgments incorporated into the financial statements based on
historical knowledge and best available current information. Estimates assume a reasonable expectation
of future events and are based on current trends and economic data, obtained both externally and within
the Group. Actual results may differ from these estimates. The estimates and underlying assumptions are
reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which
PAGE 32 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
the estimate is revised if the revision affects only that period or in the period of the revision and future
periods if the revision affects both current and future periods.
(i) Revenue recognition
(a) Contracts with multiple performance obligations
The Group enters into contracts with its customers that can include promises to transfer multiple
performance obligations. A promised good or service must be distinct to be accounted for as a
separate performance obligation. For software license contracts, there is a combination of goods and
services that include software licensing, software maintenance and software support services which
are generally treated as three (3) separate performance obligations on the basis that the customers
benefit from the goods or services on their own and are separately identifiable in the contract.
Customers substantially benefit from the software licencing immediately and have a right to use the
software at the point software licence keys are provided. Consequently, revenue from software
licencing is recognised at this point in time when control is transferred to customers. Software support
and maintenance on the other hand are recognised over time given the customers derive benefits as
provided and consequently revenue is recognised over the period of the agreement.
Judgement has been exercised in estimating the standalone selling price for software licences with
bundled support and maintenance. In order to estimate the stand-alone selling prices for the software
licenses and bundled support and maintenance, Nuix considers available observable inputs, such as
the support and maintenance charges where there is no bundling.
(b) Recognition of revenue distributed by resellers
Where the Group uses resellers, the Group must assess whether its customer is the reseller or the
end user. Where the end user is the customer, revenue is recognised for the consideration paid by
the end user with any commission retained by the reseller recognised as commission expense.
Where the reseller is the customer, revenue is recognised at a net amount received.
Nuix has exercised judgement in determining that in some cases the end user is its customer on the
basis that under the Reseller Agreement, Nuix is primarily responsible to the end user for delivery
and acceptability of the product and issues licences directly to the end user. Nuix bears significant
risk in end user counter party delivery and brand equity.
(ii) Share based payment expense
Nuix accounts for share-based payments to employees, including grants of employee options, which
requires that share-based payments be recognised in the consolidated statements of financial position
based on their fair values. Nuix recognises share based compensation expense, net of an estimated
forfeiture rate, on a straight-line basis over the service period of the award, which generally extends to a
Corporate Transaction event. Nuix uses the Black-Scholes option pricing model to determine the grant
date fair value of stock options.
The determination of the grant date fair value of stock option awards using the Black-Scholes model is
affected by assumptions regarding a number of complex and subjective variables. These variables
include the estimated number of years that we expect employees to hold their options, risk-free interest
rates and dividends to be paid on our stock over that term.
If Nuix changes the terms of its employee share-based compensation programs, refines future
assumptions or changes to other acceptable valuation models, the stock-based compensation expense
recorded in future periods for future grants may differ significantly from historical trends and could
materially affect the results of operations.
Management judgment is applied in determining the fair value of options issued under the employee option
plan. There are inherent difficulties in determining market volatility for an unlisted entity.
PAGE 33 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
Furthermore, the expected price volatility is based on the historic volatility (based on the remaining life of
the options), adjusted for any expected changes to future volatility due to publicly available
information. Being a private company with constant and consistent growth finding a comparable cohort
of companies to which we can benchmark is difficult. Nuix has assumed a constant volatility rate over the
past 3 years in accordance with our own judgement and estimates.
(iii) Capitalisation and useful life of intangible assets
Management has made judgements in respect of intangible assets when assessing whether an internal
project in the development phase meets the criteria to be capitalised, and on measuring the costs and
economic life attributed to such projects. On acquisition, specific intangible assets are identified and
recognised separately from goodwill and then amortised over their estimated useful lives. The
capitalisation of these assets and the related amortisation charges are based on judgements about the
value and economic life of such items.
Management has also made judgements and assumptions when assessing the economic life of intangible
assets and the pattern of consumption of the economic benefits embodied in the assets. The economic
lives for intangible assets are estimated at between three and ten years for internal projects, which
includes internal use software and internally generated software, and between three and ten years for
acquired intangible assets. Amortisation methods, useful lives and residual values are reviewed at each
reporting date and adjusted, if appropriate.
As at 30 June 2020, the carrying amount of intangible assets was $197,154,586 (2019: $167,634,147;
2018: $75,680,533).
(iv) Uncertain tax position
The Group is subject to tax in numerous jurisdictions. Significant judgement is required in recognising and
measuring current and deferred tax assets and liabilities as there are transactions in the ordinary course
of business and calculations for which the ultimate tax treatment on examination by a relevant taxation
authority or, in the event of dispute, decision by a court is uncertain.
The Group recognises liabilities based on estimates of whether additional tax will be due. Where the final
tax outcome of these matters is different from the amount that was initially recognised, such differences
will impact on the results for the year and the respective income tax and deferred tax assets or provisions
in the year in which such determination is made. The Group recognises tax assets based on forecasts of
future profits against which those assets may be utilised.
The Group recognises and measures uncertain tax treatments in accordance with the policy stated at
Note 1 (d) (iii) above.
In the current and prior years, the Group has exercised judgment in recognising and measuring the tax
benefit of Research and Development tax offsets available under Australian tax legislation relating to
eligible Research and Development expenditure incurred on eligible overseas development activities in
excess of related eligible Australian activities. In respect of the Group's Endpoint project, the relevant
overseas and Australian activities was the subject of an advance overseas finding for the years ended 30
June 2016 to 30 June 2018. These activities continued to be undertaken for the years ended 30 June
2019 and 2020. The relevant advance overseas finding continues to be in force.
The advance overseas finding was made on the basis that the overseas expenditure on the eligible
overseas development activities would not exceed the Australian portion of the total development
expenditure on the eligible R&D activities as required by section 28C IR&D Act 1986. The finding was
made on the basis of estimates of actual and anticipated expenditure on the activities provided by the
Group in the course of the application for advance and overseas finding in September 2016.
The Group has exercised judgment in assessing that it is probable that relevant taxation authority (the
Australian Taxation Office) will accept the tax treatment for the Endpoint project.
PAGE 34 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
As at 30 June 2020 there was a deferred tax asset of $7,276,037 (30 June 2019: $7,141,380; 30 June
2018: $6,818,657) recognised in respect of overseas expenditure in this project of which approximately
$1,606,398 (2019: $1,576,668, 2018: $1,505,418) representing the excess overseas development
expenditure would be de-recognised if the tax treatment for R&D tax offset purposes would not be
accepted by the Australian Taxation Office (ATO) and the ATO was accepting the revenue
characterisation of the excess overseas development expenditure as assessed to be probable in relation
to the years ended 30 June 2019 and 2020.
In relation to the years ended 30 June 2019 and 30 June 2020, despite the excess overseas development
expenditure on the continuing activities being activities subject to the advance overseas finding continuing
to be in force, the Group has exercised judgment in assessing that the tax treatment of the excess
overseas development expenditure on the relevant activities in the filed tax position for the year ended 30
June 2019 and planned filed tax position for the year ended 30 June 2020 is an uncertain tax treatment.
In the years ended 30 June 2019 and 30 June 2020, the Group adopted the most likely amount method
in recognising and measuring this uncertain tax treatment which in the case of the R&D tax offset
calculations has been to treat the excess overseas R&D expenditure as not subject to notional
deductibility in determining the available R&D tax offsets available under section 355-210 of the Income
Tax Assessment Act 1997 (ITAA) in the years ended 30 June 2019 and 2020.
In having adopted that position in regard to the uncertain tax treatment of notional deductibility of the
excess overseas R&D expenditure for years ended 30 June 2019 and 2020 the Group was required to
exercise judgment in assessing the tax treatment of the excess overseas R&D expenditure on the relevant
activities having a revenue characterisation and being tax deductible under section 8-1 of the ITAA in the
year ended 30 June 2019 and 2020 as being probable of being accepted by the Australian Taxation Office
on future examination with full knowledge of related information, allowing that such expenditure has been
capitalised and amortised for accounting purposes.
The Group proposes to proactively engage with the Australian Taxation Office to address the uncertain
tax treatment and to resolve the uncertainty in advance of finalisation of the audited financial statements
for the year ending 30 June 2021.
As at 30 June 2020 the amount of R&D tax offset not recognised as a deferred tax asset was $2,835,152
(30 June 2019: $1,476,847; 30 June 2018: nil).
z. Representation of comparative information
(1) Change in accounting policy – lease accounting
As indicated in note 1(w) above, the Group has adopted AASB 16 Leases retrospectively using the
simplified transitional approach permitted under AASB 16. In accordance with AASB 1, AASB 16 has
been reflected in the financial statements from 1 July 2017.
On adoption of AASB 16, the Group recognised lease liabilities in relation to leases which had previously
been classified as ‘operating leases’ under the principles of AASB 117 Leases. These liabilities were
measured at the present value of the remaining lease payments, discounted using the lessee’s
incremental borrowing rate as of 1 July 2017. The weighted average lessee’s incremental borrowing rate
applied to the lease liabilities on 1 July 2017 was 4.74%.
(i) Practical expedients applied
In applying AASB 16 for the first time, the Group has used the following practical expedients permitted
by the standard:
● applying a single discount rate to a portfolio of leases with reasonably similar characteristics
● accounting for operating leases with a remaining lease term of less than 12 months as at 1 July
2017 as short-term leases
PAGE 35 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
● excluding initial direct costs for the measurement of the right-of-use asset at the date of initial
application, and
● using hindsight in determining the lease term where the contract contains options to extend or
terminate the lease.
(ii) Measurement of right-of-use assets
The associated right-of-use assets were measured at the amount equal to the lease liability, adjusted
by the amount of any accrued lease payments relating to that lease recognised in the balance sheet as
at 1 July 2017.
(2) Corrections to comparative period information
In addition to the adoption of AASB 16, in preparation of the financial statements for the year ended 30
June 2020, the Company identified certain areas which required correction to prior period balances.
These areas relate to:
●
In the prior year, the Company used a cost-plus expected margin approach to determine the stand-
alone selling price of support and maintenance services. In the current year, management considered
it more appropriate that the stand-alone selling price be made with reference to adjusted market
observable pricing for similar services. This has resulted in a higher allocation of consideration to
support and maintenance services that is recognised over time as compared to the software license
which is recognised at a point in time of inception of the contract. Deferred revenue has increased by
$11,758,231, $12,838,001 and $20,809,164 at 1 July 2017, 30 June 2018 and 30 June 2019,
respectively.
● The Company has re-assessed its accounting treatment involving resellers. Prior year revenue and
commission expenses were decreased by $1,934,805 (year ended 30 June 2018: reduced by $126,255)
to reflect changes where Nuix determined certain resellers as being its end customers, and for certain
discounts provided by resellers to the end user.
● The Group has also re-assessed the timing of revenue recognition for a customer renewal which has
resulted in an increase in deferred revenue and reduction in retained earnings of $6,073,200 as at 1
July 2018 and 30 June 2019.
● The deferred revenue assumed in the acquisition of Ringtail was adjusted to its fair value - resulting in
a decrease in deferred revenue and goodwill of $581,733 at 30 June 2019.
● The tax impacts of the above matters have also been recognised. In addition, the Group also corrected
the deferred tax recognised in respect of a number of temporary differences.
● Certain expense related profit and loss classifications and balance sheet accounts were adjusted for
consistency to the presentation in the current year including reflecting amortisation of intellectual
property as a research and development expense rather than as a general and administration expense,
allocation of overheads to research and development expenses and sales and distribution expenses
rather than general and administration expenses, integrated solution department expenses being
reflected in research and development expenses rather than sales and distribution and technical
operations department expenses being reflected in cost of goods sold rather than sales and distribution
expense. The result of these adjustments is reflected in the presentation adjustment column below.
● The statement of cash flows has been restated to reflect amounts paid for software development costs,
payments for business combinations and indirect taxes collected. The result of these adjustments is
reflected in the presentation adjustment column below.
The impact of the above on the Statement of Comprehensive Income, Statement of Financial Position,
and Statement of Cash Flows - net of associated tax impacts - is as follows:
PAGE 36 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
Statement of Financial Position:
1 JULY 2017
AS REPORTED
LEASE
ADJUSTMENTS
CORRECTION
ADJUSTMENT
1 JULY 2017
ADJUSTED
Right of use assets
Deferred tax assets
Total assets
-
13,298,363
-
13,298,363
2,457,646
242,885
232,846
2,933,377
115,629,831
13,541,248
232,846
129,403,925
Trade and other payables
9,237,235
Lease liabilities – current
-
(123,830)
1,581,110
-
-
9,113,405
1,581,110
Deferred revenue
13,206,694
-
12,534,383
25,741,077
Deferred tax liabilities
5,284,303
(170,943)
(4,797,611)
315,749
Lease liabilities – non-current
-
11,841,083
-
11,841,083
Total liabilities
Retained earnings
Total equity
45,629,398
13,127,420
7,736,772
66,493,590
55,875,278
70,000,433
413,828
(7,503,926)
48,785,180
413,828
(7,503,926)
62,910,335
30 JUNE 2018
AS REPORTED
LEASE
ADJUSTMENTS
PRESENTATION
ADJUSTMENT
CORRECTION
ADJUSTMENT
30 JUNE 2018
ADJUSTED
Other current assets
1,769,109
-
(29,400)
-
1,739,709
Deferred tax assets
2,157,393
242,885
Right of use assets
-
11,474,143
-
-
1,749,078
4,149,356
-
11,474,143
Total assets
143,872,047
11,717,028
(29,400)
1,749,078
157,308,753
Trade and other
payables
Lease liabilities –
current
19,642,982
(123,831)
(29,400)
-
19,489,751
-
1,639,098
Deferred revenue
9,635,257
-
Deferred tax liabilities
5,132,522
(170,943)
Lease liabilities – non-
current
-
9,958,875
-
-
-
-
1,639,098
18,911,203
28,546,460
(4,961,579)
-
-
9,958,875
Total liabilities
58,498,862
11,303,199
(29,400)
13,949,624
83,722,285
Retained earnings
66,864,790
Total equity
85,373,185
413,828
413,828
-
-
(12,200,545)
55,078,073
(12,200,545)
73,586,468
PAGE 37 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
30 JUNE 2019
AS REPORTED
LEASE
ADJUSTMENTS
PRESENTATION
ADJUSTMENT
CORRECTION
ADJUSTMENT
30 JUNE 2019
ADJUSTED
Other current assets
9,316,380
Property and equipment
3,117,793
Intangible assets
167,566,178
-
-
-
(215,744)
(649,702)
-
-
9,100,636
2,468,091
649,702
(581,733)
167,634,147
Deferred tax assets
665,732
242,885
Right of use assets
-
16,362,515
-
-
1,691,554
2,600,171
-
16,362,515
Total assets
252,898,424
16,605,400
(215,744)
1,109,821
270,397,901
Trade and other
payables
Lease liabilities –
current
14,639,295
(479,202)
(215,744)
171,589
14,115,938
-
3,341,633
Deferred revenue
11,973,369
Current tax liabilities
965,505
-
-
Deferred tax liabilities
7,430,965
(170,943)
Lease liabilities – non-
current
-
14,791,574
-
-
-
-
-
-
3,341,633
26,882,363
38,855,732
(555,003)
410,502
(7,260,022)
-
-
14,791,574
Total liabilities
64,495,457
17,483,062
(215,744)
19,238,927
101,001,702
Foreign currency
translation reserve
3,963,949
24,061
Retained earnings
81,550,720
(901,726)
Total equity
188,402,967
(877,665)
-
-
-
-
3,988,010
(18,129,103)
62,519,891
(18,129,103)
169,396,199
Statement of Comprehensive Income:
30 JUNE 2018
AS REPORTED
LEASE
ADJUSTMENTS
PRESENTATION
ADJUSTMENT
CORRECTION
ADJUSTMENT
30 JUNE 2018
ADJUSTED
Revenue
120,118,636
-
-
(6,503,072)
113,615,564
Cost of goods sold
(10,354,915)
(2,115,138)
126,255
(12,343,798)
Gross profit
109,763,721
- (2,115,138)
(6,376,817)
101,271,766
Sales and distribution
(53,575,892)
244,530
(599,291)
-
(53,930,653)
Research and
development
General and
administration
(4,015,335)
41,912
(12,966,936)
-
(16,940,359)
(37,771,103)
1,818
15,681,365
-
(22,087,920)
Operating profit
15,571,880
288,260
Finance costs
(743,115)
(288,260)
Income tax expense
(2,671,502)
-
Profit for the year
10,989,512
-
-
-
-
(6,376,817)
9,483,323
-
(1,031,375)
1,680,199
(991,303)
(4,696,618)
6,292,894
PAGE 38 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
30 JUNE 2019
AS REPORTED
LEASE
ADJUSTMENTS
PRESENTATION
ADJUSTMENT
CORRECTION
ADJUSTMENT
30 JUNE 2019
ADJUSTED
Revenue
150,120,898
Cost of goods sold
(13,607,584)
Gross profit
136,513,314
-
-
-
-
(10,487,700)
139,633,198
(3,951,291)
1,934,807
(15,624,068)
(3,951,291)
(8,552,893)
124,009,130
Sales and distribution
(57,801,522)
(258,308)
237,693
Research and
development
General and
administration
Operating profit
Finance costs
Income tax expense
(6,607,097)
(243,784)
(21,965,259)
(51,751,642)
1,464
25,678,857
22,336,575
(894,918)
(6,605,909)
(500,628)
(814,926)
-
Profit for the year
14,685,930
(1,315,554)
Statement of Cash Flows:
-
-
-
(57,822,137)
(28,816,140)
(26,071,321)
-
-
-
-
(8,552,893)
13,283,054
-
(1,709,844)
2,624,335
(3,981,574)
(5,928,558)
7,441,818
30 JUNE 2018
AS REPORTED
LEASE
ADJUSTMENTS
PRESENTATION
ADJUSTMENT
30 JUNE 2018
ADJUSTED
Receipts from customers
111,138,416
-
3,369,839
114,508,255
Payment to employees and suppliers
(88,582,591)
2,400,738
(3,369,839)
(89,551,692)
Interest paid
(736,415)
(288,260)
Net cash provided by operating activities
21,561,928
2,112,478
Software development costs
-
Purchase of intangibles
(26,564,140)
Net cash used in investing activities
(28,748,112)
-
-
-
Lease payments
-
(2,112,478)
Net cash provided by financing activities
14,007,330
(2,112,478)
-
(1,024,675)
-
23,674,406
(25,385,166)
(25,385,166)
25,385,166
(1,178,974)
-
-
(28,748,112)
(2,112,478)
-
11,894,852
PAGE 39 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
30 JUNE 2019
AS REPORTED
LEASE
ADJUSTMENTS
PRESENTATION
ADJUSTMENT
30 JUNE 2019
ADJUSTED
Receipts from customers
135,920,234
-
4,782,353
140,702,587
Payment to employees and suppliers
(116,329,933)
2,887,874
(178,127)
(113,620,186)
Interest paid
(860,968)
(814,926)
-
(1,675,894)
Net cash provided by operating activities
18,474,290
2,072,948
4,604,226
25,151,464
Purchase of property and equipment
(1,258,856)
Software development costs
Acquisition of assets
Purchase of Intangibles
-
-
(109,135,234)
Net cash used in investing activities
(110,394,090)
-
-
-
-
-
649,702
(609,154)
(37,930,294)
(37,930,294)
(75,947,376)
(75,947,376)
108,623,742
(511,492)
(4,604,226)
(114,998,316)
Lease payments
-
(2,072,948)
Net cash provided by financing activities
92,099,807
(2,072,948)
-
-
(2,072,948)
90,026,859
2. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks including:
▪ market risk (including currency risk and price 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 Group uses
different methods to measure different types of risk to which it is exposed. These methods include
sensitivity analysis in the case of interest rate, foreign exchange and other price risks and ageing analysis
for credit risk to determine market risk. Risk management is carried out by the corporate finance
department under policies approved by the Board of Directors.
The Company has principles for overall risk management covering areas such as foreign exchange risk,
credit risk and derivative financial instruments.
a. Market risk
(i) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency
exposures, primarily with respect to the United States dollar, British Pound and European Euro. Foreign
exchange risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the entity’s functional currency. The risk is measured using
sensitivity analysis and cash flow forecasting. Management has set up a policy requiring Group
companies to manage their foreign exchange risk against their functional currency.
PAGE 40 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
The Group’s exposure to foreign currency risk at the end of the reporting period, expressed in Australian
dollars, was as follows:
2020
2019
2018
USD
EURO
GBP
USD
EURO
GBP
USD
EURO
GBP
Cash and cash
equivalents
Trade
receivables
16,774,320 6,869,341 5,061,790 20,900,580 2,706,372 1,981,443
5,414,586 3,193,126 5,061,790
-
-
4,265,924
614,415
404,601 2,562,412
872,134 2,169,769
2,530,800
604,371
Trade payables
148,325
210,117
7,708
156,849
146,971
41,745
309,510
198,962
The Group’s exposure to other foreign exchange movements is not considered material.
Sensitivity
As shown in the table above, the Group is primarily exposed to changes in USD exchange rates. The
sensitivity of profit or loss to changes in the exchange rates arises mainly from US-dollar. Impact on profit
after tax of +/- 10% change of USD against AUD will result to an increase / (decrease) of $2,089,192/
($2,089,192) for the fiscal year ended 30 June 2020 (2019: $2,330,614 / ($2,330,614); 2018: $763,588 /
($763,588)).
b. Credit risk
Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents, deposits
with banks and financial institutions and outstanding receivables, contract assets and committed
transactions.
For all customers in all instances the Group retains title over the software. A permanent licence key to
use the software is not issued until full payment is received, thus reducing risk of impairment to accounts
receivable. Compliance with credit limits for wholesale customers are regularly monitored by Corporate
Finance. Sales to retail customers are required to be settled by using major credit cards, mitigating credit
risk. There are no significant concentrations of credit risk, whether through exposure to individual
customers, specific industry sectors and/or regions.
Trade receivables and contract assets
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a
lifetime expected loss allowance for all trade receivables and contract assets.
To measure the expected credit losses, trade receivables and contract assets have been grouped based
on shared credit risk characteristics and the days past due. The contract assets relate to unbilled
receivables and have substantially the same risk characteristics as the trade receivables for the same
types of contracts. The Group has therefore concluded that the expected loss rates for trade receivables
are a reasonable approximation of the loss rates for the contract assets.
PAGE 41 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
The expected loss rates are based on the payment profiles of sales over a period of 24 months before 30
June 2019 or 30 July 2020 respectively and the corresponding historical credit losses experienced within
this period. The historical loss rates are adjusted to reflect current and forward- looking information on
macroeconomic factors affecting the ability of the customers to settle the receivables. The Group has
identified the consumer price index rate of the countries in which it sells its goods and services to be the
most relevant factors, and accordingly adjusts the historical loss rates based on expected changes in
these factors.
On that basis, the loss allowance as at 30 June 2020, 30 June 2019 and 30 June 2018 was determined
as follows for both trade receivables and contract assets:
2020
Balance
Expected
Loss Rate
Loss
Allowance
Balance
2019
Expected
Loss Rate
2018
Loss
Allowance Balance
Expected
Loss Rate
Loss
Allowance
Current
30 days
60 days
90 days
Over 90
days
Total
26,196,474
0.1%
30,962
27,275,145
1.0%
376,085
24,102,834
0.0%
3,237,575
1.5%
49,977
2,110,693
1.0%
26,327
1,161,984
0.0%
3,129,071
3.9%
122,719
603,024
2.0%
9,828
710,557
0.0%
988,985
6.9%
68,648
246,307
3.0%
6,256
230,762
0.0%
1,639,175
10.6%
173,596
1,484,593
3.0%
37,706
764,084
0.0%
35,191,280
445,902
31,719,762
456,202
26,970,220
Unbilled
receivables 25,124,317
Total
25,124,317
Total loss
allowance
0.1%
23,834
13,636,883
0.0%
23,834
13,636,883
-
-
7,281,643
0.0%
34,251,863
469,736
456,202
-
-
-
-
-
-
-
The loss allowances for trade receivables and contract assets as at 30 June reconcile to the opening loss
allowances as follows:
2020
$
2019
$
2018
$
As at 1 July
456,202
-
71,643
Increase in loan loss allowance recognised
in profit or loss during the year
Receivables written off during the year as
uncollectible
Unused amount reversed
Foreign exchange difference
As at 30 June
1,081,746
1,168,022
493,061
(1,075,700)
(711,820)
(564,704)
7,277
211
-
-
469,736
456,202
-
-
-
Trade receivables and contract assets are written off where there is no reasonable expectation of
recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the
failure of a debtor to engage in a repayment plan with the Group, and a failure to make contractual
payments for a period of greater than 120 days past due.
PAGE 42 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
Impairment losses on trade receivables and contract assets are presented as net impairment losses within
operating profit. Subsequent recoveries of amounts previously written off are credited against the same
line item.
c. Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the
availability of funding through adequate committed credit facilities to meet financial obligations as and
when they fall due. At the end of the reporting period the Group held deposits at call of $38,538,759
(2019: $27,331,898; 2018: $26,998,317) that are expected to expeditiously generate cash inflows for
managing liquidity risk.
Management monitors rolling forecasts of the Group’s liquidity reserve as discussed above and cash and
cash equivalents (Note 8) on the basis of forecasted cash flows. This is generally carried out at a Group
level by Corporate Finance. In addition, the Group’s liquidity management policy involves projecting cash
flows in major currencies and considering the level of liquid assets necessary to meet these and
monitoring balance sheet liquidity ratios against internal requirements.
The below page analyses the Group’s financial liabilities into relevant maturity groupings based on their
contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the
contractual undiscounted cash flows.
Balances due within 12 months equal their carrying balances as the impact of discounting is not
considered material.
CONTRACTUAL MATURITIES
OF FINANCIAL LIABILITIES
At 30 June 2018
LESS THAN
6 MONTHS
$
6-12
MONTHS
$
BETWEEN
1-3 YEARS
$
MORE THAN
3 YEARS
$
TOTAL
$
CARRYING
AMOUNT
LIABILITIES
Trade payables
Lease liabilities
Borrowings
At 30 June 2019
Trade payables
Lease liabilities
Borrowings
At 30 June 2020
Trade payables
Lease liabilities
3,800,099
-
-
-
3,800,099
3,800,099
996,914
1,039,554
6,240,726
4,796,185 13,073,379 11,597,973
21,031,375
- 21,031,375 20,000,000
4,797,013
1,039,554 27,272,101
4,796,185 37,904,853 35,398,072
5,519,328
-
-
-
5,519,328
5,519,328
2,181,101 1,809,741
9,610,608
7,016,274 20,617,724 18,133,207
-
-
26,576,738
- 26,576,738
25,681,820
7,700,429 1,809,741 36,187,346
7,016,274 52,713,790
49,334,355
6,769,750
-
-
-
6,769,750
6,769,750
2,351,406 1,947,181
7,971,005
4,965,943 17,235,535 15,243,250
Borrowings (Note 17)
26,555,011
-
-
- 26,555,011 25,531,225
35,676,167
1,947,181
7,971,005
4,965,943 50,560,296 47,544,225
d. Fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and
measurement or for disclosure purposes in accordance with AASB 9 Financial Instruments. The carrying
amounts of trade receivables and payables are assumed to approximate their fair values due to their
short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting
the future contractual cash flows at the current market interest rate that is available to the Group for similar
financial instruments. The fair value of current borrowings approximates the carrying amount, as the
impact of discounting is not significant.
PAGE 43 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
3. SEGMENT INFORMATION
The Group manages its operations as a single business operation and there are no parts of the Group
that qualify as operating segments under AASB 8 Operating Segments. The CEO (Chief Operating
Decision Maker or “CODM”) assesses the financial performance of the Group on an integrated basis only
and accordingly, the Group is managed on the basis of a single segment. Information presented to the
CODM on a monthly basis is categorised by type of revenue as provided below. Further, earnings before
interest, tax and depreciation and amortisation (EBITDA) is used to assess the performance of the
business.
Segment performance:
Continuing operations
Software
Services
Hardware
Total revenue
2019
2018
2020
$
(RESTATED)
$
(RESTATED)
$
168,969,376
130,875,803
106,268,505
5,890,893
8,274,963
6,391,613
998,625
482,432
955,446
175,858,894
139,633,198
113,615,564
In general, a large amount of revenue is generated by customers that are global, from transactions that
cross multiple countries and where the source of revenue can be unrelated to the location of the users
accessing the software. Accordingly, the Group is managed as a single segment.
Reconciliation of segment EBITDA to the net profit after tax is as follows:
EBITDA
Interest income
Interest expense
2019
2018
2020
$
(RESTATED)
$
(RESTATED)
$
62,643,893
35,196,071
21,102,641
37,490
69,750
2,024
(1,859,172)
(1,709,844)
(1,031,375)
Depreciation and amortisation
(28,399,817)
(22,132,585)
(12,789,093)
Income tax expense
Net profit after tax
Geographic Information
(8,834,728)
(3,981,574)
(991,303)
23,587,666
7,441,818
6,292,894
The amounts for revenue by region in the following table are based on the invoicing location of the
customer.
PAGE 44 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
Revenue generated by location of customer:
Asia Pacific
Americas
2019
2018
2020
$
(RESTATED)
$
(RESTATED)
$
28,749,158
22,749,131
19,212,218
97,556,066
78,419,587
59,212,138
Europe, Middle East and Africa (EMEA)
49,553,670
38,464,480
35,191,208
175,858,894
139,633,198
113,615,564
Non-current assets by geographic location:
Asia Pacific
Americas
2020
$
2019
(RESTATED)
$
2018
(RESTATED)
$
111,458,736
101,995,420
84,842,917
100,870,261
85,737,361
7,450,720
Europe, Middle East and Africa (EMEA)
609,717
1,332,143
2,025,227
212,938,714
189,064,924
94,318,864
4. PROFIT FOR THE YEAR
The profit for the year has been arrived at after charging the following items:
Employee benefits
Wages and salaries
Sales and distribution
Research and development
General and administration
Employee option expense
Finance costs
Interest expense
Other losses / (gains) – net
2020
$
2019
(RESTATED)
$
2018
(RESTATED)
$
48,961,052
41,974,275
40,878,806
4,270,922
6,740,827
3,551,293
12,456,450
12,203,436
10,038,241
685,006
149,818
1,167,751
1,859,172
1,709,844
1,031,375
Realised and unrealised foreign exchange (gain)
(249,950)
(1,023,487)
(407,340)
Expenses (included in general and administration)
Bad debts expense
1,708,639
1,168,022
493,061
Rental expense on operating leases
371,546
660,918
707,731
Depreciation and amortization
Sales and distribution
Research and development
General and administration
2,887,030
2,879,077
1,103,887
24,626,131
18,970,699
11,274,704
886,656
282,809
410,502
PAGE 45 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
5. REVENUE
Software
Services
Hardware
2020
$
2019
(RESTATED)
$
2018
(RESTATED)
$
168,969,376 130,875,803
106,268,505
5,890,893
8,274,963
6,391,613
998,625
482,432
955,446
175,858,894
139,633,198
113,615,564
Disaggregation of revenue
AASB 15 requires disclosure of revenue disaggregation that best depicts how the nature, amount, timing
and uncertainty of the Group’s revenue and cash flows are affected by economic factors.
The Group disaggregates revenue by categories shown in the table below.
Timing of revenue recognition
Point in time
Overtime
6. OTHER INCOME
Government grant income
Bank interest
a. Government grants
2020
$
2019
(RESTATED)
$
2019
(RESTATED)
$
127,276,391
108,216,453
90,597,557
48,582,503
31,416,745
23,018,007
175,858,894
139,633,198
113,615,564
NOTES
(a)
2020
$
973,742
37,490
2019
(RESTATED)
$
2019
(RESTATED)
$
890,285
69,750
761,125
2,024
1,011,232
960,035
763,149
Government grants recognised as other income for the current financial year relates to benefits
received under the Research and Development Tax Incentive regime in excess of the statutory income
tax rate.
PAGE 46 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
7. INCOME TAX EXPENSE
(a) Income tax expense
Current tax
Current tax on profits for the year
Total current tax expense
Deferred income tax
2020
$
2019
(RESTATED)
$
2018
(RESTATED)
$
4,724,292
4,724,292
2,432,389
2,523,030
2,432,389
2,523,030
(Increase) / decrease in deferred tax assets
(1,223,235)
1,549,185
(1,531,727)
Increase / (decrease) in deferred tax liabilities
Total deferred tax expense
Income tax expense
5,333,671
4,110,436
-
-
1,549,185
(1,531,727)
8,834,728
3,981,574
991,303
(b) The numerical reconciliation of income tax expense to prima facie tax payable:
Profit before income tax expense
Tax at the Australian tax rate of 30% (2019:
30%; 2018: 30%)
Tax effect of amounts which are not deductible
(taxable) in calculating taxable income:
Entertainment
Share-based payments
Interest expense
Difference in overseas tax rates
Write-off carried forward loss
Research and development tax credit
Others
Income tax expense
2020
$
2019
(RESTATED)
$
2018
(RESTATED)
$
32,422,394
11,423,392
7,284,197
9,726,718
3,427,018
2,185,259
48,132
149,902
-
80,839
40,671
15,331
80,143
350,325
184,264
(658,888)
(765,955)
(1,167,477)
-
1,530,848
(41,898)
(303,370)
(127,766)
(267,491)
(79,687)
(169,525)
(429,788)
8,834,728
3,981,574
991,303
PAGE 47 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
Deferred tax balances
(i) Deferred tax assets
The balance comprises temporary differences attributable to:
Research and development tax credit to
carry forward
Employee benefits
Deferred revenue
Lease liabilities
Tax losses
Property and equipment
Others
Total deferred tax assets
Set-off deferred tax liabilities pursuant to set-
off provisions
Net deferred tax assets
(ii) Deferred tax liabilities
2020
$
2019
(RESTATED)
$
2018
(RESTATED)
$
19,038,462
22,363,088
18,653,906
1,316,975
9,822,557
3,697,079
21,875
243,965
83,027
688,044
8,534,486
4,290,309
25,870
9,922
1,172,389
640,197
7,014,967
4,290,309
70,137
(219,333)
230,280
34,223,940
37,084,108
30,680,463
(33,725,160)
(34,483,937)
(26,531,107)
498,780
2,600,171
4,149,356
The balance comprises temporary differences attributable to:
Intellectual property
Right of use assets
Others
2020
$
35,373,921
3,127,293
557,618
2019
(RESTATED)
$
2018
(RESTATED)
$
29,534,998
22,640,833
3,876,591
1,072,348
3,876,591
13,683
Total deferred tax liabilities
39,058,832
34,483,937
26,531,107
Set-off deferred tax assets pursuant to set-off
provisions
(33,725,160)
(34,483,937)
(26,531,107)
Net deferred tax liabilities
5,333,672
-
-
All movements in the deferred tax assets and deferred tax liabilities were recognised in profit and loss.
8. CASH AND CASH EQUIVALENTS
This account consists of cash in bank amounting to $38,538,759 (2019: $27,331,898; 2018: $26,998,317).
The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each
class of cash and cash equivalents aforementioned.
PAGE 48 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
9. TRADE AND OTHER RECEIVABLES
NOTE
2020
$
2019
(RESTATED)
$
2018
(RESTATED)
$
Trade receivables
35,191,280
31,719,762
26,970,220
Provision for impairment of trade
receivables and unbilled revenue
Unbilled revenue
Other debtors
(a)
(469,736)
(456,202)
-
25,124,317
13,636,883
7,281,643
358,490
-
-
Total trade and other receivables
60,204,351
44,900,443
34,251,863
The carrying value of trade receivables is considered a reasonable approximation of fair value due to the
short-term nature of the balances.
(a) Provision for impairment of receivables and unbilled receivables
AASB 9 introduced a new impairment model which is the new expected credit loss (ECL) model which
involves a three-stage approach whereby financial assets move through the three stages as their credit
quality changes. The stage dictates how an entity measures impairment loss and applies the effective
interest rate method. A simplified approach is permitted for financial assets that do not have a significant
financing component (eg trade receivables). On initial recognition, entities will record a day-1 loss equal
to the 12-month ECL (or lifetime ECL for trade receivables), unless the assets are considered credit
impaired.
The Group applied the simplified approach to measuring ECL which uses a lifetime expected loss
allowance for all trade receivables as the assets do not contain significant financing component. A
provision for impairment is recognised before the credit loss is incurred based on the relevant loss rates
applied to outstanding balances of trade receivables. There was no material impact from the adoption of
AASB 9.
These amounts have been included in the general and administration expenses. The amount of the
provision was $469,736 (2019: $456,202; 2018: nil). The individually impaired receivables mainly relate
to smaller clients who experienced financial distress. During 30 June 2020, $1,075,700 (2019: $711,820;
2018: $564,704) was written off as bad debts. As a percentage of total Group revenue, the provision for
impairment recognised during the year is negligible.
PAGE 49 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
The ageing of overdue receivables is as follows:
1 – 3 months
4 – 6 months
Over 6 months
2020
$
2019
$
2018
$
7,339,720
2,269,879
2,103,302
737,989
630,180
917,097
1,544,558
521,004
243,080
8,994,806
4,444,617
2,867,386
The movements in receivables provision is disclosed in Note 2(b). Amounts charged to the allowance
account are generally written off when there is no expectation of recovering additional cash.
a. Foreign exchange and interest rate risk
Information about the Group’s exposure to foreign currency risk and interest rate risk in relation to trade
and other receivables is provided in Note 2(a)(i).
b. Fair value and credit risk
Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their
fair value. The maximum exposure to credit risk at the end of the reporting period is the carrying amount
of each class of receivables outlined above. Refer to Note 2 for more information on the risk management
policy of the Group and the credit quality of the entity’s trade and other receivables.
10. OTHER CURRENT ASSETS
Prepayments
Other receivables
(a)
1,698,529
9,064,528
1,583,882
199,144
36,108
155,827
Total other current assets
1,897,673
9,100,636
1,739,709
2020
$
2019
$
2018
$
(a) FY2019 balance is inclusive of Ringtail data centre.
PAGE 50 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
11. PROPERTY AND EQUIPMENT
At 1 July 2017
At cost
Accumulated depreciation
Net book amount
Year ended 30 June 2018
Opening net book amount
Forex difference – cost
Forex difference – accumulated depreciation
Additions
Disposals
Depreciation
Closing net book amount
At 30 June 2018
At cost
Accumulated depreciation
Net book amount
Year ended 30 June 2019
Opening net book amount
Forex difference – cost
Forex difference – accumulated depreciation
Additions
Disposals
Depreciation
Closing net book amount
At 30 June 2019
At cost
Accumulated depreciation
Net book amount
Year ended 30 June 2020
Opening net book amount
Forex difference – cost
Forex difference – accumulated depreciation
Additions
Disposals
Depreciation
Closing net book amount
At 30 June 2020
At cost
Accumulated depreciation
Net book amount
OFFICE &
COMPUTER
EQUIPMENT
FURNITURE
LEASEHOLD
& FIXTURE
IMPROVEMENT
TOTAL
7,798,158
(5,595,689)
2,202,469
462,548
(233,059)
229,489
2,107,254
(1,498,933)
10,367,960
(7,327,681)
608,321
3,040,279
2,202,469
259,608
(250,106)
1,018,232
(1,626,990)
1,603,213
229,489
14,804
(12,392)
558,555
(4,746)
(130,423)
655,287
608,321
46,466
(41,774)
607,185
-
(463,866)
3,040,279
320,878
(304,272)
2,183,972
(4,746)
(2,221,279)
756,332
3,014,832
9,075,998
(7,472,785)
1,603,213
1,020,088
(364,801)
655,287
2,757,374
(2,001,042)
756,332
12,853,460
(9,838,628)
3,014,832
1,603,213
355,715
(318,901)
373,437
-
(1,123,730)
889,734
655,287
51,538
(19,175)
9,976
(2,579)
(205,905)
489,142
756,332
75,261
(52,729)
518,410
-
(208,059)
3,014,832
482,514
(390,805)
901,823
(2,579)
(1,537,694)
1,089,215
2,468,091
9,805,150
(8,915,416)
889,734
1,079,023
(589,881)
489,142
3,351,045
(2,261,830)
14,235,218
(11,767,127)
1,089,215
2,468,091
889,734
161,975
(136,583)
895,056
(2,896)
(760,069)
1,047,217
489,142
23,272
(7,708)
12,402
-
(188,436)
1,089,215
46,594
(15,878)
447,571
-
(530,681)
2,468,091
231,841
(160,169)
1,355,029
(2,896)
(1,479,186)
328,672
1,036,821
2,412,710
10,859,285
(9,812,068)
1,047,217
1,114,697
(786,025)
3,845,210
(2,808,389)
15,819,192
(13,406,482)
328,672
1,036,821
2,412,710
PAGE 51 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
12. INTANGIBLE ASSETS
At 1 July 2017
At cost
Accumulated amortisation & impairment
Net book amount
Year ended 30 June 2018
Opening net book amount
Forex difference – cost
Forex difference – accumulated
amortisation & impairment
Additions
Amortisation
Closing net book amount
At 30 June 2018
At cost
Accumulated amortisation & impairment
Net book amount
Year ended 30 June 2019
Opening net book amount
Forex difference – cost
Forex difference – accumulated
amortisation & impairment
Additions
Amortisation
GOODWILL
(RESTATED)
SOFTWARE
BRAND
INTELLECTUAL
PROPERTY
TOTAL
(RESTATED)
-
1,703,207
-
(1,092,122)
-
611,085
-
-
-
69,083,944
70,787,151
(11,837,702)
(12,929,824)
57,246,242
57,857,327
-
-
-
-
-
-
-
-
-
-
-
-
611,085
32,759
(31,349)
12,662
(449,875)
175,282
1,748,628
(1,573,346)
175,282
175,282
61,008
(59,248)
-
-
-
-
-
-
-
-
-
-
-
-
57,246,242
57,857,327
1,963
34,722
(711)
(32,060)
26,551,478
26,564,140
(8,293,721)
(8,743,596)
75,505,251
75,680,533
95,637,385
97,386,013
(20,132,134)
(21,705,480)
75,505,251
75,680,533
75,505,251
75,680,533
2,880
63,888
(113,511)
(172,759)
4,422,365
301,067
712,276
103,767,495
109,203,203
-
(251,160)
-
(16,889,558)
(17,140,718)
Closing net book amount
4,422,365
226,949
712,276
162,272,557
167,634,147
At 30 June 2019
At cost
4,422,365
2,110,703
712,276
199,407,760
206,653,104
Accumulated amortisation & impairment
-
(1,883,754)
-
(37,135,203)
(39,018,957)
Net book amount
Year ended 30 June 2020
Opening net book amount
Forex difference – cost
Forex difference – accumulated
amortisation & impairment
Additions
Disposals
Amortisation
4,422,365
226,949
712,276
162,272,557
167,634,147
4,422,365
226,949
712,276
162,272,557
167,634,147
121,014
35,612
17,225
1,791,566
1,965,417
-
-
-
(27,975)
24,349
(18,029)
(113,284)
-
-
-
-
66,077
38,102
51,038,451
51,062,800
(176,355)
(194,384)
(23,238,212)
(23,351,496)
Closing net book amount
4,543,379
127,622
729,501
191,754,084
197,154,586
At 30 June 2020
At cost
4,543,379
2,152,635
729,501
252,061,422
259,486,937
Accumulated amortisation & impairment
-
(2,025,013)
-
(60,307,338)
(62,332,351)
Net book amount
4,543,379
127,622
729,501
191,754,084
197,154,586
Impairment test for Goodwill and Brand (intangible assets with indefinite useful life)
The Group acquired goodwill as part of the acquisition of Ringtail in September 2018. The Group tests
whether goodwill has suffered any impairment this fiscal year ended June 30, 2020. The recoverable
amount of the CGU (the Group only has one CGU and that is Nuix operations as a whole) was determined
based on value-in-use calculations which require the use of assumptions.
PAGE 52 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
The calculations use cash flow projections based on financial budget approved by the Board and
extrapolated using the estimated growth rates stated below covering a five-year period. These growth
rates are a combination of historical data and forecast of the CGU.
The key assumptions used in the estimation of the recoverable amount are set out below. The values
assigned to the key assumptions represent management’s assessment of future trends in the relevant
industries and have been based on historical data from both external and internal sources.
Post-tax discount rate per annum
Pre-tax discount rate per annum
Long-term perpetuity growth rate
2020
9.2%
13.1%
2.5%
2019
9.2%
13.1%
2.5%
2018
-
-
-
Assumption
Approach used in determining values
Revenue growth rate
Operating expenditures rate
EBITDA margin
Net profit before tax
Depreciation and amortisation
Average annual growth rate over the five-year forecast period; based on past
performance and management’s expectations of market development.
Average percentage based on revenue over the five-year forecast period;
based on past performance and management’s expectation of market
development.
Working capital
Average historical rates based on revenue and operating expenses
Capital expenditures
Expected cash costs in the CGU. This is based on the historical experience
of management, and the planned refurbishment expenditure. No incremental
cost savings are assumed in the value-in-use model as a result of this
expenditure.
The cash flow projections included specific estimates for five years and a terminal growth rate thereafter.
Management has performed sensitivity analysis and assessed reasonable changes for key assumptions
and has not identified any instances that could cause the carrying amount of the group of CGUs, over
which goodwill is monitored, to exceed its recoverable amount.
13. LEASES
a. Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:
Right of use assets, net of depreciation
2020
$
12,872,638
2019
$
16,362,515
2018
$
11,474,143
Lease liabilities
Current
Non-current
3,704,000
11,539,250
15,243,250
3,341,633
14,791,574
18,133,207
1,639,098
9,958,875
11,597,973
PAGE 53 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
Additions to the right-of-use assets during FY2020 were Nil (FY2019: $2,336,281). There are no lease
commitments.
b. Amounts recognised in profit or loss
The profit or loss shows the following amounts relating to leases:
Depreciation charge of right-of-use assets
Interest expense (included in finance cost)
Expenses relating to short-term leases
Expenses relating to leases of low-value
assets that are not shown above as short-
term leases
2020
$
3,569,135
726,705
349,609
2019
$
3,454,174
814,926
186,453
2018
$
1,824,218
288,260
238,146
14,608
4,660,057
5,776
4,461,329
11,252
2,361,876
c. The Group’s leasing activities and how these are accounted for
The Group leases various offices and equipment. Rental contracts are typically made for fixed periods of
3 months to 5 years but may have extension options as described in (d) below.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and
conditions. The lease agreements do not impose any covenants other than the security interests in the
leased assets that are held by the lessor. Leased assets may not be used as security for borrowing
purposes.
From 1 July 2017, leases are recognised as a right-of-use asset with a corresponding liability recognised
at the date at which the leased asset is available for use by the Group.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the following lease payments:
●
fixed payments (including in-substance fixed payments), less any lease incentives receivable
● amounts expected to be payable by the Group under residual value guarantees
●
the exercise price of a purchase option if the Group is reasonably certain to exercise that option,
and
● payments of penalties for terminating the lease, if the lease term reflects the Group exercising
that option.
Lease payments to be made under reasonably certain extension options are also included in the
measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be
readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing
rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to
obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar
terms, security and conditions.
To determine the incremental borrowing rate, the Group:
● where possible, uses recent third-party financing received by the individual lessee as a starting
point, adjusted to reflect changes in financing conditions since third party financing was received;
and
● makes adjustments specific to the lease, e.g., term, country, currency and security.
PAGE 54 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit
or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance
of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
●
the amount of the initial measurement of lease liability
● any lease payments made at or before the commencement date less any lease incentives
received
● any initial direct costs, and
●
restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term
on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use
asset is depreciated over the underlying asset’s useful life.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets
are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with
a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office
furniture.
d. Extension and termination options
Extension and termination options are included in a number of property and equipment leases across the
Group. These are used to maximise operational flexibility in terms of managing the assets used in the
Group’s operations. The majority of extension and termination options held are exercisable only by the
Group and not by the respective lessor.
14. TRADE AND OTHER PAYABLES
2020
$
2019
$
2018
$
Sundry payables and accrued expenses
9,498,410
5,232,797
4,833,190
Trade payables
Customer deposits
6,769,750
5,519,328
3,800,099
452,559
146,939
103,790
Payroll tax and other statutory liabilities
1,822,353
1,813,862
9,805,798
Indirect taxes payable
2,161,118
1,403,012
946,874
Total trade and other payables
20,704,190
14,115,938
19,489,751
All amounts are short term and the carrying values are considered to be a reasonable approximation of
fair value. Information about the Group’s exposure to foreign exchange risk is provided in Note 2(a)(i).
PAGE 55 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
15. DEFERRED REVENUE
Deferred revenue is recognised over the period during which the service is provided.
Customer-related
Annual license and maintenance
24,396,365
19,252,758
15,838,665
2020
$
2019
$
2018
$
Maintenance income
Perpetual licence
Processing income
Professional service income
Tax incentive related
Reseach and development
Total deferred revenue
14,911,704
13,286,796
6,565,930
6,296
16,143
-
1,442,793
1,194,691
460,849
419,206
-
-
41,951,849
33,016,546
22,823,800
5,839,186
5,839,186
5,722,660
47,791,035
38,855,732
28,546,460
Deferred revenue reflects the value of advance payments made by customers who have been invoiced
for services that will be provided in the future.
Movements during the year of customer-related deferred revenue are as under:
2020
$
2019
$
2018
$
Opening balance
33,016,546
22,823,800
20,157,357
Revenue recognised in the current year
(61,252,620)
(56,384,080)
(61,154,860)
Invoiced during the period
Exchange differences
Closing balance
70,181,826
66,506,171
63,760,353
6,095
70,655
60,950
41,951,849
33,016,546
22,823,800
Movements during the year of tax incentive - related deferred revenue are as under:
Opening balance
Other income recognised in the current year
Additional research and development
incentive
Closing balance
2020
$
2019
$
2018
$
5,839,186
(973,742)
5,722,660
(890,285)
4,807,568
(761,125)
973,742
1,006,811
5,839,186
5,839,186
1,676,217
5,722,660
Applying the practical expedient of AASB 15, paragraph 121, the Group does not disclose further
qualitative information related to remaining performance obligations, as they are part of a contract that
has an original expected duration of one year or less.
PAGE 56 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
16. PROVISIONS
Current
Annual leave
Long service leave
Non-current
Long service leave
Make good obligation
Movements during the year:
Annual leave
Opening balance
Charged to profit or loss
Closing balance
Long service leave - current
Opening balance
Charged to profit or loss
Closing balance
Total - current
Long service leave – non-current
Opening balance
Charged to profit or loss
Closing balance
Make good obligation
Opening balance
Charged to profit or loss
Closing balance
Total – non-current
2020
$
2019
$
2018
$
2,329,961
3,093,508
2,476,241
334,107
167,604
140,263
2,664,068
3,261,112
2,616,504
203,866
303,006
506,872
241,525
230,255
301,866
296,259
543,391
526,514
2020
$
2019
$
2018
$
3,093,508
2,476,241
1,893,687
(763,547)
617,267
582,554
2,329,961
3,093,508
2,476,241
167,604
166,503
334,107
140,263
27,341
90,213
50,050
167,604
140,263
2,664,068
3,261,112
2,616,504
241,525
(37,659)
230,255
11,270
203,866
241,525
301,866
1,140
303,006
506,872
296,259
5,607
301,866
296,259
543,391
526,514
160,670
69,585
230,255
292,955
3,304
The current portion of these liabilities represents the Group’s obligations to which the employee has a
current legal entitlement. These liabilities arise mainly from accrued annual leave entitlements at the
reporting date. A provision has been recognised for employee benefits relating to long service leave for
employees. In calculating the present value of future cash outflows in respect of long service leave, the
probability of long service leave being taken is based upon historical data. The measurement and
recognition criteria for employee benefits have been included in Note 1(o).
PAGE 57 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
Nuix is required to restore the leased office at 1 Market Street in Sydney and Unit 17C in Cork Airport
Business Park in Cork to the original condition at the end of the respective leases. A provision has been
recognised for the present value of the estimated expenditure required to remove any leasehold
improvements. These costs have been capitalised as part of the cost of leasehold improvements and are
amortised over the shorter of the term of the lease or the useful life of the assets.
The discount rate used to determine the present value is a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The increase in the provision
due to the passage of time is recognised as an interest expense.
17. BORROWINGS
Current
Bank Loans
Non-current
Bank Loans
(a) Secured liabilities
NOTE
(b)
(a)
2020
$
2019
$
2018
$
25,531,225
-
-
-
25,681,820 20,000,000
Nuix Pty Ltd utilised the cash facility of $25,531,225 out of $50,942,515 ($40M AUD and $7.5M USD).
The financing is provided by Commonwealth Bank of Australia (CBA) with interest repayable on a
quarterly basis over the term of the loan. The facility is secured over the Group’s assets. Drawdown
made during 2020 was nil (2019: $4,000,000 USD; 2018: $5,000,000 AUD).
(b) Loan covenants
Under the terms of the loan facilities with the bank, the Group is required to comply with the following
financial covenants every testing date:
• Gross leverage ratio (GLR) does not exceed 1.75:1;
•
Interest cover ratio (ICR) is equal to or greater than 3.00:1;
• Obligors own at least 95% of total assets of the Group and are responsible for at least 95%
of EBITDA of the Group during the relevant period; and
• Minimum cash balance of $10M over the period.
The Group has complied with these covenants throughout the reporting periods.
For the year ended FY2019 the Company did not furnish audited financial statements to CBA within the
120 day borrowing requirements stipulated within the borrowing agreement. In September 2020,
notification was received from CBA formalising their position regarding the late submission of audited
financial statements for FY2019 outlining that CBA would not be asserting its rights, including its right to
terminate borrowing facilities in this scenario. Given notification was received post 30 June 2020 balance
date then as at 30 June 2020 CBA still possessed the right to terminate borrowing facilities. Accordingly,
the Company has classified borrowings for the year ended 30 June 2020 as a current liability.
PAGE 58 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
18. ISSUED CAPITAL
265,400,633 (2019: 265,400,633;
2018: 217,390,649) fully paid ordinary
shares
The issued shares do not carry a par value.
NOTE
2020
$
2019
$
2018
$
(a)
104,227,205
104,227,205
17,809,218
Movements in issued capital
Balance as at 30 June 2017
Shares issued during 2018
Balance as at 30 June 2018
Shares issued during 2019
Balance as at 30 June 2019
Shares issued during 2020
Balance as at 30 June 2020
*weighted average price
NUMBER
#
ISSUE PRICE*
$
AMOUNT
$
212,389,650
5,000,999
217,390,649
48,009,984
265,400,633
-
265,400,633
1.80
1.80
-
8,801,888
9,007,330
17,809,218
86,417,987
104,227,205
-
104,227,205
Ordinary shares participate in dividends and the proceeds upon winding up of the Company,
proportionately to the shareholding. At the shareholders’ meetings each ordinary share is entitled to one
vote when a poll is called, otherwise each shareholder has one vote on a show of hands.
a. Capital risk management
Management controls the capital of the Group in order to maintain an appropriate debt to equity ratio,
provide the shareholders with returns and ensure that the Group can fund its operations and continue as
a going concern. The Group’s debt and capital includes ordinary share capital and financial liabilities,
supported by financial assets. There are no externally imposed capital requirements aside from debt
covenants. Management effectively manages the Group’s capital by assessing the Group’s financial risks
and adjusting its capital structure in response to changes in these risks and in the market. These
responses include the management of debt levels, distributions to shareholders and share issues.
19. EQUITY
a. Share-based payments
The share-based payments reserve is used to recognise:
•
•
•
the grant date fair value of options issued to employees but not exercised,
the grant date fair value of shares issued to employees, and
the grant date fair value of shares issued to shareholders.
PAGE 59 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
b. Movement in reserves
Share option reserve (net of buy-back)
As at 1 July
Share based payment costs
Buy-back options
As at 30 June
Foreign currency translation reserve
As at 1 July
Foreign currency translation reserve
As at 30 June
Total Reserves
c. Retained earnings
Retained earnings
Prior period adjustment
Retained earnings, restated
Net profit for the year
Total retained earnings
20. EARNINGS PER SHARE
Profit for the year
Basic weighted average number of
ordinary shares
Basic earnings per share
2020
$
2019
$
2018
$
(1,338,907)
685,006
-
(653,901)
(1,488,725)
149,818
-
(1,338,907)
3,511,320
1,176,210
(6,176,255)
(1,488,725)
3,988,010
1,808,958
5,796,968
5,143,067
2,187,902
1,800,108
3,988,010
2,649,103
1,811,947
375,955
2,187,902
699,177
2020
$
2019
(RESTATED)
$
2018
(RESTATED)
$
62,519,891
55,078,073
55,875,278
-
-
(7,090,099)
62,519,891
55,078,073
48,785,179
23,587,666
7,441,818
6,292,894
86,107,557
62,519,891
55,078,073
2020
$
2019
(RESTATED)
$
2018
(RESTATED)
$
23,587,666
7,441,818
6,292,894
265,400,633
265,400,633
217,390,649
0.09
0.03
0.03
Profit for the year
23,587,666
7,441,818
6,292,894
Basic weighted average number of
ordinary shares
Shares issuable in relation to equity-
based compensation scheme
Diluted weighted average number of
ordinary shares
265,400,633
265,400,633
217,390,649
36,499,547
15,368,900
15,368,900
301,900,180
280,769,533
232,759,549
Diluted earnings per share
0.08
0.03
0.03
PAGE 60 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
21. DIVIDENDS
During the year the Directors did not declare an interim dividend (2019: Nil) and have not recommended
a final dividend be paid after 30 June 2020 (2019: Nil). Franking credits arising from the payment of
income tax, by the parent entity, Nuix Pty Ltd, during the years ended 30 June 2020 and 30 June 2019
are represented below.
Franking credits
Parent Entity
Franking Credits Attributable To Parent Entity
Franking credits available for subsequent
financial years based on a tax rate of 30%
(2019: 30%; 2018: 30%)
2020
$
2019
$
2018
$
668,772
668,772
668,772
The amounts represent the balance of the franking account as at the end of the reporting period, adjusted
for:
•
•
•
franking credits that will arise from the payment of the amount of the provision for income tax,
franking debits that will arise from the payment of dividends recognised as a liability at the
reporting date (2019: Nil), and,
franking credits that will arise from the receipt of dividends recognised as receivables at the
reporting date (2019: Nil).
Franking credits attributable to the parent entity only are represented above. If the distributable profits of
the subsidiaries were paid as dividends the consolidated amounts would include franking credits.
The jurisdictional income tax paid by the subsidiaries is set out below:
Nuix North America Inc.
Nuix Technology UK Ltd
Nuix Philippines Regional Operating Headquarters
Nuix Ireland Ltd
22. AUDITORS’ REMUNERATION
PricewaterhouseCoopers Australia
Audit and other assurance
Other assurance
Total for audit and other assurance
Taxation services
Total for taxation services
2020
$
2019
$
188,036
15,902
12,920
202,364
228,584
87,363
8,846
-
419,222
324,793
2018
$
245,032
-
3,790
10,684
259,506
2020
$
2019
$
2018
$
300,000
42,785
342,785
28,281
28,281
279,800
405,200
685,000
14,000
14,000
225,000
27,000
252,000
14,000
14,000
266,000
PAGE 61 of 74
Total for PricewaterhouseCoopers Australia
371,066
699,000
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
It is the Group’s policy to engage PricewaterhouseCoopers Australia on assignments in addition to their
statutory audit duties where their expertise and experience with the Group are important. These
assignments are principally tax advice. It is the Group’s policy to seek competitive tenders for all major
consulting projects.
23. RELATED PARTY DISCLOSURES
a. Parent entity
The ultimate and parent entity within the Group is Nuix Pty Ltd.
b. Interests in other entities
Name of entity
Place of
business/
country of
incorporation
Ownership interest held
by the Group
Ownership interest held
by non-controlling
interests
Principal activities
2020
2019
2018
2020
2019
2018
Nuix North America, Inc
USA
100%
100%
100%
0%
Nuix Ireland Ltd
Ireland
100%
100%
100%
0%
Nuix Pte Ltd
Singapore
100%
100%
100%
0%
Nuix Holding Pty Ltd
Australia
100%
100%
100%
0%
Nuix USG Inc.
Nuix Technology UK Ltd
USA
UK
100%
100%
100%
0%
100%
100%
100%
0%
Nuix Philippines ROHQ
Philippines
100%
100%
100%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Sale of Software
Sale of Software
Sale of Software
Holding Company
Sale of Software
Sale of Software
Business Support
c. Key Management Personnel compensation
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payment expense
Total
Short-term employee benefits
2020
$
2019
$
2018
$
1,883,202
1,504,329
1,691,115
76,505
84,699
238,803
45,531
72,532
45,049
72,532
307,722
482,896
2,283,209
1,930,114
2,291,592
These amounts include salaries, fees, cash bonuses and fringe benefits paid to Key Management
Personnel including executive and non-executive Directors.
Post-employment benefits
These amounts include the cost of superannuation contributions made during the year.
PAGE 62 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
Other long-term benefits
These amounts represent long service leave and long-term annual leave benefits accruing during the
year.
d. Transactions with other related parties
The parent entity enters into commercial arm’s length distribution and reseller agreements between the
Group subsidiaries and other Macquarie Group Limited related parties. These agreements are entered
into on normal and commercial terms.
2020
$
2019
$
2018
$
TRANSACTION
OUTSTANDING
BALANCE
TRANSACTION
OUTSTANDING
BALANCE
TRANSACTION
OUTSTANDING
BALANCE
Sale and purchases of
goods and services
Sale of goods to other
related parties
Purchase of service from
other related party
46,296
3,225
2,150,744
-
760,006
404,670
697
-
-
-
-
-
24. SHARE-BASED PAYMENTS
a. Employee Share Option Plan (ESOP)
The establishment of the Nuix Pty Limited ESOP was approved by the Board of Directors on or around
fiscal year 2012. The ESOP is designed to align the interests of eligible employees more closely with
shareholders and provide greater motivation and incentive for them to focus on the Company's longer-
term goals. Under the plan, participants are granted Options which may only be exercised if the Relevant
Requirement has been met.
Participation in the plan is at the Board’s discretion and no individual has a contractual right to participate
in the plan or to receive any guaranteed benefits. To be eligible to receive an Option Invitation, an
Employee must have at least six months continuous employment with the Company at the time
invitations are issued, not be on a Performance Improvement Plan and not be employed as an Intern.
Options are granted under the plan for no consideration and carry no dividend or voting rights and are
Non-statutory Stock Options. Option holders cannot assign, transfer, sell or otherwise deal with the
Options granted under the Plan without Board of Directors’ approval.
The amount of Options that vest depends upon the vesting rules of the respective Plan rules (generally
three to five years). The Options vest in a series of successive equal monthly instalments beginning on
the first anniversary of the Vesting Commencement Date, subject to the Option holder’s continued
employment with the Company through a Corporate Transaction event.
Once vested, the Options become exercisable following the consummation of a Corporate Transaction
/ Liquidity Event (as defined in the Plan rules) or a date determined by the Board. However, under some
earlier Plan rules, Options are exercisable for a period of three years once they become fully vested.
Following the exercise of the Options, a vested Option is converted into one ordinary share within a
certain number of business days as determined by the Plan rules (generally ten to fifteen business
days). The exercise price of options is determined by a combination of internal and external valuation
methodologies and presided over by the Board of Directors.
PAGE 63 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
Set out below are summaries of options granted under the plan:
2020
2019
(RESTATED)*
2018
(RESTATED)
Average Exercise Price Per
Number of Share Options
As at 1 July
Granted during the year
Exercised during the year
Sold
Forfeited during the year
As at 30 June
$
0.84
2.40
-
-
1.40
0.71
#
$
#
$
#
41,154,823
0.83
43,050,373
0.72
53,044,523
349,800
2.40
20,886,900
2.30
1,530,000
-
-
-
-
-
-
0.12
(3,959,150)
-
-
(1,850,000)
2.24
(22,782,450)
0.80
(7,565,000)
39,654,623
0.84
41,154,823
0.83 43,050,373
Exercisable at 30 June
36,046,274
*Prior year amounts restated to include forfeitures
0.70
0.71
36,383,278
0.01 15,368,900
Share Options outstanding at the end of the year have the following expiry date and exercise prices
Last Exercise
Date
Weighted
Average
Exercise Price
Share Options
Share Options
Share Options
(Post Split)
(Post Split)
(Post Split)
30 June 2020
30 June 2019
30 June 2018
$0.0002
15,000,000
15,000,000
15,000,000
Grant Date
FYE 2006
FYE 2009
FYE 2010
FYE 2011
FYE 2012
FYE 2012
FYE 2013
FYE 2014
FYE 2015
FYE 2016
FYE 2017
FYE 2018
FYE 2019
FYE 2020
Total
CE
OT
CT
CT
CT
CE
CT
CT
CT
CT
CT
CT
CT
CT
$2.00
$0.06
$0.10
$0.31
$0.26
$0.61
$0.86
$1.42
$1.77
$2.02
$2.27
$2.40
$2.40
$0.71
453,273**
-
-
1,854,000
1,854,000
1,935,850
1,259,450
1,259,450
1,709,700
869,550
1,091,000
1,372,800
147,450
147,450
-
1,007,500
1,337,500
1,677,500
2,967,500
3,173,750
3,682,500
6,755,000
7,210,000
7,867,500
1,681,250
1,926,250
2,623,750
5,172,500
5,345,000
5,625,000
1,242,150
1,344,650
1,555,773
1,182,500
1,465,773
62,500
-
-
-
39,654,623
41,154,823
43,050,373
2.0 years
2.0 years
2.0 years
Weighted average remaining contractual life of
options outstanding at end of period
CT – Corporate Transaction and/or Liquidity Event (LE)
OT – Other Trigger than a CT or LE or CE
CE – Currently Exercisable
**In 2019, Nuix settled a claim and formal proceedings brought by a former member of key management personnel on terms
requested by him, in relation to options issued during the financial year ended 30 June 2009. Pursuant to that settlement, the
Supreme Court of NSW made a declaration that 453,273 options granted over unissued shares of Nuix that the former
employee holds are exercisable on the occurrence of a sale of Nuix's business in accordance with an options agreement
between the parties. Nuix's options register records that the former employee holds 453,273 options, each over one share at
an exercise price of $2.00 per option and without an expiry date.
PAGE 64 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
Notwithstanding the settlement in 2019, on 23 October 2020 the former employee commenced proceedings against Nuix in
the Federal Court of Australia alleging that Nuix has acted in an unfairly prejudicial or unfairly discriminatory way against him
and seeks orders to amend Nuix’s options register. The substance of his claim is that, as a result of a share split of one
existing share into 50 shares completed by Nuix in March 2017, his options should now represent an entitlement to call for
22,663,650 unissued shares on a sale of Nuix’s business.
Nuix rejects the claim in its entirety and is defending those proceedings.
If the new claim were successful it would result in an additional 22,210,377 shares issuable in relation to equity-based
compensation schemes. This would have the impact of reducing diluted earnings per share for the year ended 30 June 2020
to $0.07 (2019: $0.02; 2018: $0.02).
b. Fair value of Options granted
The assessed fair value at grant date of Options granted during the year ended 30 June 2020 was $1.80
per Option (2019 – $1.80; 2018 - $2.00). The fair value at grant date is independently determined using
an adjusted form of the Black Scholes Model that takes into account the exercise price, the term of the
Option, the impact of dilution (where material), the share price at grant date and expected price volatility
of the underlying share, the expected dividend yield, the risk-free interest rate for the term of the Option
and the correlations and volatilities of the peer group companies.
Options are granted for no consideration and vest over a five-year period subject to remaining employed
at the date of a Corporate Transaction. Vested Options are exercisable following the consummation of
a Corporate Transaction or a date determined by the Board.
The model inputs for Options granted during the year ended 30 June 2020 included:
● exercise price: $2.40 (2019 – $2.40; 2018 - $2.00-$2.40)
● grant date: generally tied to an employee’s hire date
● expiry date: 7 years after grant date for Australian employees and 10 years after grant date for
non-Australian employees (2019 and 2018 – same conditions as 2020)
● share price fair value: $2.40 (2019 – $1.80; 2018 - $2.40)
● expected price volatility of the company’s shares: 19.55% (2019 – 19.55%; 2018 – 19.45%)
● expected dividend yield: 0% (2019 – 0%; 2018 – 0%)
●
risk-free interest rate: 1.65% (2019 – 1.65%; 2018 – 2.70%)
The expected price volatility is based on the historic volatility (based on the remaining life of the Options),
adjusted for any expected changes to future volatility due to publicly available information.
c. Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of
employee benefit expense were as follows:
Equity Compensation Cost
Sales and Marketing
Research and Development
General and Administration
2020
$
2019
$
2018
$
451,980
98,853
97,916
21,415
135,110
29,550
770,504
166,920
230,327
685,006
149,818
1,167,751
PAGE 65 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
25. CASH FLOW INFORMATION
2020
$
2019
(RESTATED)
$
2018
(RESTATED)
$
Reconciliation of Cash Flow from
Operating Activities with Profit for the Year
Profit for the year (before income tax)
32,422,394
11,423,392
7,284,197
Non-cash flows in profit:
Depreciation
5,048,321
4,991,867
2,221,279
Amortisation of intangible assets
23,351,496
17,140,718
8,743,596
Bad debts expense
1,708,639
1,168,022
493,061
Share based payment expense
685,006
149,818
1,167,751
Net exchange rate differences
746,061
86,708
525,056
Fixed assets write-off
197,280
2,579
4,746
Changes in Assets and liabilities:
Increase in trade and other receivables
(16,404,907)
(9,061,339)
(5,034,505)
Decrease / (Increase) in deferred tax asset
2,101,391
1,930,507
-
(Increase) / Decrease in other current assets
(383,687)
415,567
125,861
Increase in trade and other payables
1,458,442
705,340
4,372,039
Increase in deferred revenue
8,308,410
5,541,968
1,129,166
Increase / (Decrease) in employee benefits
2,902,854
(8,334,317)
2,642,719
Decrease in current tax liabilities
(10,015,213)
(212,394)
(234,297)
Increase in deferred tax liabilities
6,431,011
(295,115)
-
Decrease in other liability
-
(507,463)
230,433
Increase in provision for make good
1,141
5,606
3,304
Balance as 30 June
58,558,639
25,151,464
23,674,406
PAGE 66 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Notes to the Consolidated Financial Statements (continued)
26. PARENT ENTITY FINANCIAL INFORMATION
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Retained earnings
Reserves
Total equity
2019
2018
2020
$
(RESTATED)
$
(RESTATED
$
43,521,378
36,495,445
33,213,562
197,306,471
188,078,316
84,557,882
240,827,849
224,573,761
117,771,444
44,276,670
27,275,742
20,372,350
10,641,712
31,935,046
26,835,925
54,918,382
59,210,788
47,208,275
185,909,467
165,362,973
70,563,170
104,227,205
104,227,205
17,809,218
82,327,356
62,465,868
54,233,870
(645,094)
(1,330,100)
(1,479,918)
185,909,467
165,362,973
70,563,170
Profit for the year
19,861,789
11,415,612
31,666,695
Determining the parent entity financial information
The financial information for the parent entity has been prepared on the same basis as the consolidated
financial statements, except as set out in investment in subsidiaries, associates and joint venture entities
(Note 1 (b)) and share-based payments (Note 1(o)).
27. EVENTS AFTER THE REPORTING DATE
On 29th September 2020, the Company held an Extraordinary General Meeting which passed the
following resolution: (1) change the type of the Company from proprietary company to public company
limited by shares; (2) change the name of the Company from Nuix Pty Ltd. to Nuix Limited; and (3) change
the Company constitution due to these changes.
These changes are expected to take effect from 6th November 2020.
On 19th October 2020 a former contractor to the Company filed a general protections claim under the Fair
Work Act 2009 in the Fair Work Commission against the Company. The claim and subsequent
correspondence seeks compensation and pecuniary penalties. Damages in the jurisdiction are uncapped
and legal fees in defending such matters can be significant. The Company rejects the foundation of the
claim but continues to assess its position given that the claim is not yet fully particularised and accordingly
it is not possible to reliably estimate the potential financial impact of the claim.
No other matters or circumstances have arisen since the end of the financial year which significantly
affected or may significantly affect the operations of the Group, the results of those operations, or the
state of affairs of the Group in future financial years.
PAGE 67 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Director’s Declaration
The Directors have determined that the Company is a reporting entity and that this general purpose financial
report should be prepared in accordance with the accounting policies described in Note 1 to the financial
statements.
The Directors of the Company declare that:
a. The financial statements and notes as set out on pages 16 to 67 are in accordance with the
Corporations Act 2001, including:
(i)
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements, and
giving a true and fair view of the Company’s financial position as at 30 June 2020 and of its
performance for the financial year ended on that date, and
b. At the date of this declaration, there are reasonable grounds to believe that the Company will be able
to pay its debts as and when they become due and payable.
Note 1 confirms that the financial statements also comply with the International Financial Reporting Standards
as issued by the International Accounting Standards Board.
This declaration is made in accordance with a resolution of the Directors.
SIGNED: ______________________________________
Daniel Phillips
Chairman
Sydney, Australia
30 October 2020
PAGE 68 of 74
Auditor’s Independence Declaration
As lead auditor for the audit of Nuix Pty Limited for the year ended 30 June 2020, I declare that to the
best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Nuix Pty Limited and the entities it controlled during the period.
Scott Walsh
Partner
PricewaterhouseCoopers
Sydney
30 October 2020
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Independent auditor’s report
To the members of Nuix Pty Limited
Our opinion
In our opinion:
The accompanying financial report of Nuix Pty Limited (the Company) and its controlled entities
(together the Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 30 June 2020 and of its
financial performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
●
●
●
●
●
●
the consolidated statement of financial position as at 30 June 2020
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include a summary of significant
accounting policies
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2020, but does not include the
financial report and our auditor’s report thereon.
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar3.pdf. This description forms part of our
auditor's report.
PricewaterhouseCoopers
Scott Walsh
Partner
Sydney
30 October 2020
Nuix Pty Ltd and Controlled Entities Annual Report
Shareholder Information
The shareholder information set out below was applicable as at 30 June 2020.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Largest 20 shareholders
Number of holders
Number of shares
% of issued
capital
-
-
-
2
27
29
-
150,000
265,250,633
265,400,633
0.06%
99.94%
100.00%
Name
Number of shares
1 Macquarie Corporate Holdings Pty Ltd
Cavill Armitage Services Pty Ltd
2
Blackall Limited
3
4
Killorgan Investments Pty Ltd
5 Morgan Sheehy
RPG Management Pty Ltd
6
David Sitsky
7
Ross Doyle
8
9
Stephen Stewart
10 Philip Jaime Florence
11 Daniel Noll
12 Rob Feigenbaum
James Kent
13
14 Eddie Sheehy
15
Luke Quinane
16 Alex Vasiliev
17 Keith Player
John Bargiel
18
19
Jill Brown
20 Other current and ex-employee shareholders
TOTAL
202,186,139
17,939,783
13,345,750
7,653,350
4,064,700
3,564,211
3,500,000
2,000,000
1,500,000
1,355,000
1,300,000
750,000
700,000
681,700
650,000
600,000
600,000
600,000
400,000
2,010,000
265,400,633
% of issued capital
76.18%
6.76%
5.03%
2.88%
1.53%
1.34%
1.32%
0.75%
0.57%
0.51%
0.49%
0.28%
0.26%
0.26%
0.24%
0.23%
0.23%
0.23%
0.15%
0.76%
100.00%
Unquoted equity securities
Ordinary shares
Number on issue
Number of holders
265,400,633
29
PAGE 72 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
Substantial shareholders
Substantial holders in the Company are set out below:
Macquarie Corporate Holdings Pty Ltd
Cavill Armitage Services Pty Ltd
Blackall Limited
Number of ordinary
shares held
Percentage of ordinary
shares issued
202,186,139
17,939,783
13,345,750
76.18%
6.76%
5.03%
Voting rights
The voting rights attached to ordinary shares are set out below.
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.
There are no other classes of equity securities.
PAGE 73 of 74
Nuix Pty Ltd and Controlled Entities Annual Report
CUSTOMERS
FOCUS, DELIVER, DELIGHT
TEAMWORK
STRONGER TOGETHER
INNOVATION
UNLEASH COLLECTIVE GENIUS
PASSION
COMMITTED TO THE MISSION
INTEGRITY
AUTHENTIC AND ACCOUNTABLE
PEOPLE
RESPECT, ENCOURAGE, REWARD
PAGE 74 of 74