I
Annual
Report
2018
Pureprofile Limited ABN 37 167 522 901
For personal use only Contents
Our Mission, Vision & Values .......................................................................
Financial Highlights ............................................................................................
Chairman’s Letter ...............................................................................................
CEO’s Report .........................................................................................................
Meet our Directors ............................................................................................
Directors’ Report ...............................................................................................
Auditor’s Independence Declaration ....................................................
Financial Statements .......................................................................................
Notes to the Financial Statements .........................................................
Independent Auditor’s Report ..................................................................
Corporate Directory ........................................................................................
Shareholder Information ...........................................................................
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77
WE BELIEVE IN A WORLD WHERE CONSUMERS
HAVE ACCESS TO MORE OF WHAT THEY WANT,
AND BUSINESSES HAVE THE OPPORTUNITY TO
CONNECT WITH MORE OF THE PEOPLE THAT MATTER.
General Information
The financial statements cover Pureprofile Ltd. as a group consisting of Pureprofile Ltd. and the entities it controlled at the end of, or during, the
year. The financial statements are presented in Australian dollars, which is Pureprofile Ltd.’s functional and presentation currency. Pureprofile
Ltd. is a listed public Company limited by shares, incorporated and domiciled in Australia. Its registered and principal business address is: Level
20, 233 Castlereagh Street, Sydney NSW 2000. A description of the nature of the group’s operations and its principal activities are included
in the directors’ report, which is not part of the financial statements. The financial statements were authorised for issue in accordance with a
resolution of directors, on 28 September 2018. The directors have the power to amend and reissue the financial statements.
For personal use only Our
Mission,
Vision &
Values
1
Mission: Help people thrive in the new world.
Vision: Create a world where people know what’s important.
Values: Reflect our identity and help shape our culture.
We are committed to:
• Discovery: We’re always learning, keeping an open
mind, empowering creative thinking and always
innovating.
• Ownership: We take ownership for delivering work
we are proud of and we genuinely care about our
relationships with stakeholders.
• Trust: Honesty, transparency and mutual respect are
non-negotiable. We act with integrity and kindness.
• Teamwork: We work as a team, respect our
stakeholders and get in the trenches and win together.
WE ASPIRE TO BE THE FIRST CONSUMER-TRUSTED DATA BRAND.
Data & Insights, powered by technology
We believe in a world where consumers have access to more of
what they want, and businesses have the opportunity to
connect with more of the people that matter.
Our platform helps businesses identify, connect and engage
with consumers as part of a mutually beneficial relationship.
By capturing declared, first-party data and the formation of
deep consumer profiles, our clients gain the ability to segment,
target and engage with their audiences for the purpose of
research, advertising, customer acquisition and consumer
profiling. In exchange, consumers receive value for their data
and opinions, both as an immediate reward and through the
delivery of preferred, more relevant content and advertising.
Pureprofile is at the nexus of consumers realising the value of
their data and the importance of transparency. We aspire to be
the first consumer-trusted data brand by enabling consumers
to take ownership and control of their data and helping them
derive substantial benefit from it.
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Financial Highlights
Normalised EBITDA for H2 was
$1.0m
up $0.8m on H1 driven by the success
of the cost restructuring program
Gross Margin for H2 was
49%
up from 44% in H1 due to the
increased focus on selling
higher margin services
Other costs were $11.0m in H2, down
$1.4m
on H1 due to the elimination of
approximately $5.0m of annualised costs
Data & Insights growth
continued in FY18 with
21%
global growth with the UK growing
26%
Reduced cost base
as a result of $5m
annualised
savings
Improved
normalised
EBITDA
in H2
Improved
Gross Margin
performance
in H2 v H1
For personal use only Chairman’s Letter
3
DEAR FELLOW INVESTORS,
It’s a true pleasure to present you with Pureprofile’s Annual
Report for the 2018 financial year. And it’s an even greater
pleasure to see the progress the Company has made over
the past 12 months: a cost base in line with expectations, a
positive and improving monthly EBITDA contribution by Q4,
an impressive new executive leadership team, a focus on
bringing products to market, and of course a new CEO.
Nic Jones joined as CEO in December 2017 and inherited a
Company undergoing significant change. Many new
challenges emerged during his first few months but Nic
maintained an impressive enthusiasm for the challenges,
never wavering, and has made a huge, positive difference to
Pureprofile’s structure, culture and performance.
A COST BASE IN LINE WITH EXPECTATIONS, A MONTHLY
POSITIVE EBITDA CONTRIBUTION, AN IMPRESSIVE EXECUTIVE
LEADERSHIP TEAM, A FOCUS ON BRINGING PRODUCTS TO
MARKET, AND OF COURSE A NEW CEO.
It was always my intention to move back to a Non-Executive
role once the new CEO was employed and his probation period
successfully navigated. This occurred in June 2018 and as
of 1st July, I reverted to Non-Executive Chairman albeit still
dedicating some time each week to Pureprofile in support of
Nic’s vision.
I am delighted to have Nic as our new CEO.
We also said farewell to Paul Chan, Pureprofile’s Founder and
former CEO. Paul decided to leave the Company in early 2018
and pursue other entrepreneurial dreams. I have known Paul
for over 15 years and he remains a respected and good friend.
I wish him all the best with his future endeavours.
FY2018 was a year where the focus was squarely placed on
restructuring the Company’s cost base whilst employing the
right calibre of leaders to drive the business forward. Whilst
we all wish that the effects of change could be felt immediately
on financial performance, this is not realistic. What we have
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4
done over the last 12 months has placed the Company in a
position of strength - one of profit generation and net cash
flow positivity.
In FY2018:
• Total revenue for FY2018 was $52m down 2%
compared to FY2017
• The average gross margin was 47% down from 49%
in FY2017
• Normalised EBITDA for FY2018 was $1.2m
down from $3.3m in FY2017
However, as the year progressed the effects of the changes
made began to drop to the bottom line, with the second half
delivering:
• Gross margin of 49%
• Normalised EBITDA of $1.0m
• Average normalised monthly cost base of $1.78m
($21m annualised)
Now is the time to re-engage with profitable revenue growth.
Nic’s background is very much in this space and more of his time
can now be focussed on sales related activities. This, coupled
with the proven sales track record of recent new hires, both
locally and overseas, and a new and invigorated sales culture
across all elements of the Group, gives me confidence that the
Company’s revenue will be back to growth in FY2019.
I am pleased to welcome Sue Klose and Marcelo Ulvert to
the Board of Directors of Pureprofile. Sue brings a wealth of
board experience and has a diverse and extremely relevant
background in digital business growth, strategy and marketing.
Marcelo is a sales and marketing expert, with in-depth
knowledge of the lead generation business that will add
enormous value to the board and the Company. Both
Non-Executive Directors commenced on 1st September 2018.
I would like to thank my board colleagues for their
commitment and support over the year. I’d particularly like
to thank Cliff Rosenberg for his continued focus and support
during a period of great change with limited resource.
ANDREW EDWARDS
CHAIRMAN
Looking ahead I am excited by the momentum of this
Company, the increasing relevance of our product offering and
the opportunities that exist both locally and overseas.
For personal use only
CEO’s Report
5
DEAR SHAREHOLDERS,
I am pleased to share with you my report for the 2018 financial
year, as well as give you a window into the future for
Pureprofile. 2018 was a year of significant change as the
Company laid solid foundations for a future where we deliver
on our promises.
Financial Performance
The Company generated revenues of $52m which were down
1.8% on prior comparable period (pcp). Whilst I am
disappointed with this revenue result, it is important to
understand the major focus of my first six months has been
to get costs under control and fix what could be termed as a
‘pretty leaky bucket’ to ensure a sustainable healthy business
moving forward.
2018 WAS A YEAR OF SIGNIFICANT CHANGE AS
THE COMPANY LAID SOLID FOUNDATIONS FOR A
FUTURE WHERE WE DELIVER ON OUR PROMISES.
At mid-year, we had an annualised cost run rate of over $25m
which is unsustainable for a business writing 45% margins on
$50m+ revenues. It has been vital to understand the structure
of the business and identify where costs could be saved before
investing and speculating to grow revenue. Without due
diligence into the processes and fundamentals of the business
we could not have successfully moved forward.
I am extremely pleased that we are now through that process,
have stabilised our cost base and are now ready to move
forward on firm foundations, a stronger margin (49% in the
second half) and annualised cost base ~$5m lower than the
first half run rate. Despite all this focus on cost, the Data &
Insights business unit continued to grow to $16.1m up 21% on
pcp and further entrenched itself at our core as the engine to
power our media, audience and platform solutions.
Our Audience business unit (formerly Cohort) generated
revenue of $19.6m, struggling to deliver on expected revenue
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6
forecasts due to delays in product investment while retiring the
old platform and a need to be integrated into the overall
business. Both of these issues were confronted in the second
half of the year and continue to be addressed now. The
benefits of these remedial actions will filter through into the
business from the second half of FY2019.
The Media business sits in the extremely competitive and
ever-changing digital and programmatic space. Our core
Media offering to clients has grown $1m, up 17% on pcp,
however overall revenues were $16.4m (down 27% on pcp).
Previously, the Company was able to boost Media revenues
by capitalising on consistent short-term opportunities, which
arose as a result of the constantly evolving digital media
landscape. As this environment matures and becomes more
sophisticated and stable, these short-term opportunities have
also started to decline. As shareholders may be aware, the
Company will be shifting its focus away from these short-term
opportunities to focus on growing the core Media business.
Internationally, our UK business continues to grow the fastest
and has the potential to grow even faster. We have a small
strategic business in the US which has successfully built
relationships with big global brands, and is starting to realise
the potential of the investment made there more than a
year ago.
Staff and Company Culture
Since I joined the Company in December 2017 I have been
excited by the capability and attitude of our staff in what has
been a difficult time. Whilst a change of senior leadership
and a refresh of talent was required in some cases the
overwhelming belief of the staff in the business and their desire
to help it be realised has helped us move more quickly than
would otherwise have been possible. I want to take this
opportunity to thank all of our wonderful staff for their passion,
determination and patience to help ensure the business has
the opportunity to deliver on its enormous promise.
We have an extremely talented Executive Leadership team in
place, with new personnel in the roles of: Chief Technology
Officer, Chief Financial Officer, Head of Revenue and
Operations AUNZ, Head of Marketing and Communications
and Managing Director UK. These executives join our US
Managing Director and our Head of People and Talent. I have
every faith in this team to build Pureprofile into a prosperous
business with sustained growth over the coming years.
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7
It has been important to simplify and clarify our message to
energise the whole Company under the one clear Mission and
Vision as outlined at the beginning of this Annual Report. With
input from all staff to build a set of agreed Values we have
given clear direction of who we are and what we stand for.
Business Focus
One of the major priorities has been to build a stronger sales
culture across all areas of the business; to integrate, streamline
and simplify the solutions we take to market all under the one
Pureprofile brand, whilst keeping our costs under control and
not living beyond our means.
Simply put, we are a Data & Insights business underpinned by
technology that combines research and behavioural data from
multiple sources. This produces enriched insights that power
our media, research and customer acquisition solutions.
We welcome what is becoming a global desire for clarity,
transparency and simplicity in the collection and use of
consumer data. We are very well positioned to help connect
businesses to the right consumers and help consumers better
understand the power of owning their own profile.
Looking Ahead
We are under no illusion that we have work to do. As the world
changes so too does the need for businesses like ours to
innovate as we recognise and meet new challenges.
Growing our international business in the UK will be a major
focus in FY2019. Just as important will be fostering strong
relationships with decision-makers at large global strategic
businesses based in the US to focus on growing our business
there. Late in FY2018 we saw the strength in this strategy as
we successfully signed News Corp as a global partner out of
the US, and kickstarted the initial stages of working with many
other big global brands.
As brands continue to struggle to find the most effective way to
communicate with consumers and maintain relevancy,
Pureprofile has a very strong business opportunity that must,
and will be, better capitalised on and more effectively
implemented.
With our Shareholders’ continued support we will focus on
nourishing and growing our Data & Insights capabilities to
enrich the holistic business across Australia, the UK and the US
in recognition of this wonderful opportunity.
NIC JONES
CEO
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8
Meet our Directors
ANDREW EDWARDS
Non-Executive Chairman
Andrew has more than 30 years of marketing experience and,
prior to joining Pureprofile, was the Chairman and CEO of
internationally-renowned advertising and marketing agency Leo
Burnett Group UK and President of Leo Burnett Central Europe.
Andrew also sat on its Global Executive Leadership Team with the
specific remit of M&A (EMEA) and the rollout of the groups Social and
Mobile Strategy.
Prior to his roles at Leo Burnett, Andrew ran Australia’s
most-awarded direct marketing company, Cartwright Williams.
Andrew now focusses his time on his portfolio of business interests.
NIC JONES
Managing Director & Chief Executive Officer
With over 30 years of industry experience, Nic has led the digital
business for some of the world’s largest media companies. Nic was
most recently Chief Revenue Officer at music video publisher, Vevo.
Based in San Francisco, Nic was responsible for Vevo’s global
commercial interests and international operations including the
United Kingdom, Asia Pacific, Europe and South America.
Prior to Vevo, Nic was also Managing Director of Yahoo! Australia &
New Zealand; Managing Director (News Digital Media) at News Corp;
Managing Director (Digital) AUNZ and Chief Digital Officer (EMEA) at
Starcom MediaVest Group.
Currently, Nic is also chairman of Advertising Week APAC’s advisory
council.
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9
CLIFF ROSENBERG
Non-Executive Director
Cliff has spent more than 20 years working at digital companies leading
innovation and change in the industry, both as an entrepreneur and
senior executive. He was most recently the Managing Director for
LinkedIn South-East Asia, Australia and New Zealand.
Prior to LinkedIn, Cliff was the Managing Director of Yahoo! Australia
and New Zealand, and previously the Founder and Managing Director
of iTouch Australia and New Zealand, one of the largest mobile content
and application service provders in Australia. He currently serves as a
Non-Executive Director to ASX-listed companies Afterpay Touch Group
Limited, Nearmap Limited and Cabcharge Australia Limited.
SUE KLOSE
Non-Executive Director
Sue is an experienced executive, board director and team leader,
with a diverse background in digital business growth, corporate
development, strategy and marketing. Previously the Chief Marketing
Officer of GraysOnline, she was responsible for brand strategy,
marketing operations and digital product strategy.
Prior roles in consulting and global media companies, including 12WBT
and News Ltd, Sue has led strategic planning and development and
helped teams continually seek new opportunities for growth and
innovation. As Director of Digital Corporate Development for News
Ltd, Sue screened hundreds of potential investments, leading multiple
acquisitions, establishing the CareerOne and Carsguide joint ventures.
Sue is currently a Non-Executive Director of ASX-listed Nearmap, and
Aftercare, one of Australia’s largest mental health care providers.
MARCELO ULVERT
Non-Executive Director
With 25 years sales and marketing experience, Marcelo oversaw the
inception, development and growth of the global sales and marketing
strategy for Cohort Global, delivering $30m in annual revenue. Marcelo
is a compelling and sought-after speaker with a natural ability to engage
clients and stakeholders, and build confidence within internal teams.
A member of the Australian Institute of Company Directors, since
leaving Cohort, Marcelo has mentored the founders of Lusio Rehab,
a medical tech start-up that is part of Remarkable’s Accelerator
programme, which is funded by the Telstra Foundation. He is also the
Founding Director of Give a Little Love Foundation which has delivered
over $500,000 in funding to many leading charities including Cerebral
Palsy Alliance and ChildFund Australia.
For personal use only
Pureprofile Ltd
Directors' report
30 June 2018
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'group') consisting of Pureprofile Ltd (referred to hereafter as the 'company' or 'parent entity') and the entities it
controlled at the end of, or during, the year ended 30 June 2018.
Directors
The following persons were directors of Pureprofile Ltd during the whole of the financial year and up to the date of this
report, unless otherwise stated:
Andrew Edwards - Non-Executive Chairman
Nic Jones - Managing Director & Chief Executive Officer (appointed on 5 February 2018)
Clifford Rosenberg - Non-Executive Director
Sue Klose - Non-Executive Director (appointed 1 September 2018)
Marcelo Ulvert - Non-Executive Director (appointed 1 September 2018)
Paul Chan - Managing Director & Chief Executive Officer (resigned on 5 February 2018)
Matthew Berriman - Non-Executive Director (resigned on 9 November 2017)
Principal activities
During the financial year the principal continuing activities of the group consisted of the provision of profile marketing and
insights technology services.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the group after providing for income tax amounted to $25,979,877 (30 June 2017: $1,998,302).
Total revenue for the financial year ended 30 June 2018 (‘FY2018’) was down by 2% compared to the financial year ended
30 June 2017 (‘FY2017’). Second half revenues were impacted by the additional time and resources that were focused on
the cost restructuring program. This has eliminated approximately $5 million of annualised costs and resulted in an ongoing
annualised cost base of around $20 million to $21 million for the financial year ending 30 June 2019.
The group also moved away from lower-margin/highly-commoditised services within its Media and Performance business
units, reducing overall sales in these areas but maintaining higher margins.
In this regard, gross margin percentage for the year fell by 2% to 47% (FY2017: 49%). However, the gross margin in the
second half of FY2018 was considerably better than the first half (H2FY2018: 50%; H1FY2018: 44%) which reflects
management’s increased focus on selling higher margin services where the group has stronger competitive advantages.
Normalised earnings before interest, tax, depreciation and amortisation (‘EBITDA’) for the financial year amounted to
$1,220,696 (30 June 2017: $3,257,917).
Normalised EBITDA is a financial measure which is not prescribed by Australian Accounting Standards (‘AAS’) and
represents the profit under AAS adjusted for non-specific non-cash and significant items.
Although normalised EBITDA was down on FY2017, the focus on higher margin products in the second half of the year
started to impact on the bottom line and encouragingly, normalised EBITDA for Q4 FY2018 was positive in each month
and totalled $1,200,000.
The group recognised an impairment to the remaining goodwill of the acquired Cohort business in the current year over
future years. The group also recognised an impairment to Cohort's technology, which would be migrated into Pureprofile's
existing capabilities and decommissioned. These impairments accounted for nearly $18 million of the stated losses.
The following table summarises key reconciling items between statutory loss after income tax and normalised EBITDA:
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Pureprofile Ltd
Directors' report
30 June 2018
Loss after income tax
Add: Depreciation and amortisation
Add: Impairment of assets
Add: Loss on disposal of intangible assets
Less: Interest income
Add: Finance costs
Add: Share-based payment expense
Add: Restructuring, acquisition and IPO costs
Less: Revaluation of earn-out liability
Less: Income tax expense/(benefit)
Normalised EBITDA
Consolidated
2018
$
2017
$
(25,979,877)
5,251,229
17,994,882
1,058,000
(5,584)
1,574,900
90,612
1,745,869
(1,356,699)
847,364
(1,998,302)
3,491,458
-
-
(13,343)
209,272
130,411
2,418,747
(977,778)
(2,548)
1,220,696
3,257,917
Significant changes in the state of affairs
In November 2017, the company secured a $10 million loan facility with global funds manager, Lucerne Finance, replacing
its previous facilities with Commonwealth Bank of Australia. As part of the arrangement, the company issued to Lucerne:
●
950,000 performance rights, which will become convertible to fully paid ordinary shares upon the 60-day volume
weighted average price (‘VWAP’) of the shares reaching $0.40 per share; and
1,150,000 performance rights, which will become convertible to fully paid ordinary shares upon the 60-day VWAP of
the company’s shares reaching $0.60 per share.
●
Matters subsequent to the end of the financial year
No matter or circumstance has arisen since 30 June 2018 that has significantly affected, or may significantly affect the
group's operations, the results of those operations, or the group's state of affairs in future financial years.
Likely developments and expected results of operations
During the financial year ended 30 June 2019, the group's management team will continue to focus on cost control with the
recent appointment of its new Chief Financial Officer. Further margin improvements are expected to be realised through
targeted revenue growth, enhanced by the appointments of the group’s new Head of Revenue and Operations (ANZ) and
Managing Director (UK/EU) in revenue-focused roles.
Environmental regulation
The group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
11
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Pureprofile Ltd
Directors' report
30 June 2018
Information on directors
Name:
Title:
Experience and expertise:
Andrew Edwards
Non-Executive Chairman
Andrew has more than 30 years of marketing experience behind him. Most recently,
he was Chairman and CEO of internationally-renowned advertising and marketing
agency Leo Burnett Group UK and President of Leo Burnett Central Europe. Andrew
joined Leo Burnett as the Global Discipline Lead for DM and CRM of Arc in 2003 and
was soon promoted to Managing Director of Leo Burnett Sydney, incorporating Arc.
During his tenure, the agency topped the new business league, and in September
2005, Leo Burnett/Arc was voted Australia’s number one agency. For over 10 years,
Andrew was appointed to several senior roles within the company, including
President of Arc for the EMEA region, Chairman of Arc UK and Deputy Chairman of
the Leo Burnett Group London, before becoming CEO of the UK Group in November
2007 and Chairman in December 2010. Andrew was a member of the Global
Executive Board and was tasked to drive Leo Burnett's Global Strategy for Social and
Mobile and Acquisitions in EMEA. Prior to his roles for Leo Burnett and Arc. Andrew
ran Australia’s most-awarded Database and Direct Marketing company, Cartwright
Williams. Andrew now focusses his time on his growing portfolio of business interests.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Contractual rights to shares:
Chairman of the Audit Committee and member of the Nomination and Remuneration
Committee
984,691 ordinary shares
400,000 options over ordinary shares
None
None
Name:
Title:
Qualifications:
Experience and expertise:
Nic Jones
Managing Director & Chief Executive Officer (appointed on 5 February 2018)
Nic holds a bachelor's degree in Social Psychology and Sociology
Nic brings a wide and deep range of experience on online and digital media. His
career spans over 30 years, including roles as Managing Director of Yahoo! Australia
and New Zealand; Managing Director (Digital Media) at News Corp; Managing
Director (Digital) AUNZ and Chief Digital Officer (EMEA) at Starcom MediaVest
Group; and most recently as Chief Revenue Officer of music video publisher, Vevo,
based in both London and San Francisco. Nic is also Chairman of Advertising Week
APAC's advisory council.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Contractual rights to shares:
Member of the Audit Committee and member of the Nomination and Remuneration
Committee
1,067,548 ordinary shares
None
None
None
12
For personal use only
Pureprofile Ltd
Directors' report
30 June 2018
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Clifford Rosenberg
Non-Executive Director
Cliff holds a Master of Science degree in Management, as well as a Bachelor of
Business Science in Economics and Marketing. He is also a member of the Australian
Institute of Company Directors (AICD).
Cliff Rosenberg has worked at companies driving innovation and change in the digital
space for more than 20 years, both as an entrepreneur and senior executive. He was
most recently the Managing Director for LinkedIn South East Asia, Australia and New
Zealand. Prior to this, Cliff was the Managing Director of Yahoo! Australia and New
Zealand, where he was responsible for all aspects of the local operation for more than
three years. Prior to joining Yahoo!, Cliff was the Founder and Managing Director of
iTouch Australia and New Zealand, a leading wireless application service provider.
He grew the Australian office to one of the largest mobile content and application
providers in Australia, forming key partnerships with companies such as Telstra and
Ninemsn. Previously, Cliff was also head of corporate strategy for Vodafone
Australasia and served as an international management consultant with Gemini
Consulting and Bain Consulting.
Non-Executive Director of Nearmap (ASX: NEA), Afterpay Touch Group Ltd (ASX:
APT) and Cabcharge Australia Limited (ASX:CAB)
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Contractual rights to shares:
Name:
Title:
Qualifications:
Experience and expertise:
Member of the Audit Committee and Chairman of the Nomination and Remuneration
Committee
233,000 ordinary shares
400,000 options over ordinary shares
None
None
Sue Klose
Non-Executive Director (appointed on 1 September 2018)
Sue has an MBA in Finance, Strategy and Marketing from the JL Kellogg School of
Management at Northwestern University, and a Bachelor of Science in Economics
from the Wharton School of the University of Pennsylvania.
Sue is an experienced executive, board director and team leader, with a diverse
background
in digital business growth, corporate development, strategy and
marketing. Previously the Chief Marketing Officer of GraysOnline, Sue was
responsible for brand strategy, marketing operations and digital product strategy.
In prior roles in consulting and global media companies, including 12WBT and News
Ltd, Sue has led strategic planning and development and is passionate about helping
teams continually seek new opportunities for growth and innovation. As Director of
Digital Corporate Development for News Ltd, Sue screened hundreds of potential
investments, leading multiple acquisitions, establishing the CareerOne and Carsguide
joint ventures, and holding multiple board roles in high-growth digital and SaaS
business.
Non-Executive Director of Nearmap (ASX: NEA)
Other current directorships:
Former directorships (last 3 years): None
None
Special responsibilities:
None
Interests in shares:
None
Interests in options:
None
Interests in rights:
None
Contractual rights to shares:
13
For personal use only
Pureprofile Ltd
Directors' report
30 June 2018
Name:
Title:
Qualifications:
Experience and expertise:
Marcelo Ulvert
Non-Executive Director (appointed on 1 September 2018)
Marcelo is a member of the Australian Institute of Company Directors (AICD).
With 25 years sales and marketing experience, Marcelo oversaw the inception,
development and growth of the global sales and marketing strategy for Cohort,
delivering $30m in annual revenue.
A commercial innovator, Marcelo has a proven ability to drive strategic partnerships
with blue chip brands and conceptualize and develop mutually profitable relationships
across a global client base. He executes independently whilst mentoring and driving
the teams around him, ensuring a level of continuity through the business. Marcelo is
a compelling and sought-after speaker with a natural ability to engage clients and
stakeholders and build confidence within internal teams.
A member of the Australian Institute of Company Directors, since leaving Cohort,
Marcelo has mentored the founders of Lusio Rehab, a medical tech start-up that is
part of Remarkable’s Accelerator programme, which is funded by the Telstra
Foundation. He is also the Founding Director of Give a Little Love Foundation, which
has delivered over $500,000 in funding to many leading charities including Cerebral
Palsy Alliance and ChildFund Australia.
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
3,888,889 ordinary shares
Interests in shares:
None
Interests in options:
None
Interests in rights:
None
Contractual rights to shares:
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
Company secretary
Kohei Katagiri was appointed Company Secretary on 1 May 2018. Kohei has been integral to many of the company’s
major achievements, including its IPO. Kohei is an admitted solicitor and holds a Bachelor of Arts (Psychology) / Bachelor
of Laws from Macquarie University, and a Graduate Diploma in Taxation and a Master of Laws from the University of
Sydney. He is an associate member of the Governance Institute of Australia.
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') and of each Board committee held during the
year ended 30 June 2018, and the number of meetings attended by each director were:
Full Board
Attended
Held
Nomination and
Remuneration Committee
Attended
Held
Audit and Risk Committee
Attended
Held
Andrew Edwards
Nic Jones
Paul Chan
Clifford Rosenberg
Matthew Berriman
Andrew Edwards
Paul Chan
6
3
3
6
-
6
3
3
6
3
14
1
1
-
1
-
1
1
-
1
-
1
1
-
1
-
1
1
-
1
-
Board sub-
committee
Attended
Board sub-
committee
Held
1
1
1
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Directors' report
30 June 2018
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the group, in accordance
with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the group's executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives
and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of
reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good
reward governance practices:
●
●
●
●
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
The Nomination and Remuneration Committee is responsible for reviewing and making recommendations to the Board on
remuneration packages and policies relating to the directors and executives and to ensure that the remuneration policies
and practices are consistent with the group's strategic goals and human resource objectives.
In consultation with external remuneration consultants (refer to the section 'use of remuneration consultants' below), the
Nomination and Remuneration Committee has structured an executive remuneration framework that is market competitive
and complementary to the reward strategy of the group.
The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it
should seek to enhance shareholders' interests by:
●
●
having economic profit as a core component of plan design
focussing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value
attracting and retaining high calibre executives
●
Additionally, the reward framework should seek to enhance executives' interests by:
●
●
●
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Non-executive directors' remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive
directors' fees and payments are reviewed annually by the Nomination and Remuneration Committee. The Nomination and
Remuneration Committee may, from time to time, receive advice from independent remuneration consultants to ensure
non-executive directors' fees and payments are appropriate and in line with the market. The chairman's fees are
determined independently to the fees of other non-executive directors based on comparative roles in the external market.
The chairman is not present at any discussions relating to the determination of his own remuneration. Non-executive
directors do not receive short-term incentives and their remuneration must not include a commission on, or a percentage
of, operating revenue.
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ASX listing rules require the aggregate non-executive directors remuneration be determined periodically by a general
meeting. Under the company’s constitution and as set out in the IPO Prospectus, total aggregate remuneration available to
non-executive directors is set currently at $600,000 per annum. Non-executive director fees (directors' fees and committee
fees, inclusive of superannuation) proposed for the year ending 30 June 2019 are summarised as follows:
Name
Andrew Edwards
Clifford Rosenberg
Sue Klose
Marcelo Ulvert
FY 2019 Fees
$120,000
$70,000
$70,000
$70,000
All directors are also eligible for additional long term incentives under the company's Long Term Incentive plan ('LTI'). The
company has granted each of Clifford Rosenberg and Andrew Edwards 400,000 share options under the LTI. Refer to
Long Term Incentives section below for key terms and conditions of the LTI.
Executive remuneration
The group aims to reward executives based on their position and responsibility, with a level and mix of remuneration which
has both fixed and variable components.
The executive remuneration and reward framework has four components:
●
●
●
●
base pay and non-monetary benefits
short-term performance incentives
share-based payments
other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration. The remuneration packages for executives are
considered by the Nomination and Remuneration Committee and approved by the Board. At the absolute discretion of the
Nomination and Remuneration Committee, the company may seek external advice on the appropriate level and structure
of remuneration packages from time to time.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, is reviewed annually by the
Nomination and Remuneration Committee, based on individual and business unit performance, the overall performance of
the group and comparable market remuneration.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle
benefits) where it does not create any additional costs to the group and provides additional value to the executive.
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The short-term incentives ('STI') program is designed to align the targets of the business units with the performance
hurdles of executives. Under the STI, eligible executives may be offered cash incentives ('rewards') which may be subject
to vesting conditions set by the Board. Each offer of rewards under the STI is, or will be, on the terms generally described
as follows:
●
●
the Board will determine the total dollar amount of the STI, calculated as a percentage of their salary package;
the payment (or part payment) of the STI will be subject to fulfilment (or part fulfilment) of performance conditions set
by the Board;
any STI that becomes payable will be paid in cash and, at the discretion of the Board, by the grant of rights to receive
shares ('service rights') of equivalent value (as determined by the Board at the time of grant);
if granted, the service rights will vest 13 months from grant date provided that the eligible employee is still employed
by the company at the vesting date;
on vesting employees will receive the shares that are subject to the service rights without payment of any exercise
price;
service right holders are not entitled to participate in new issues of shares or other securities made by the company to
holders of shares without receiving the shares that are subject to the service rights before the record date for the
relevant issue;
if, prior to the receipt of shares that are subject to the service right, the company makes a pro rata bonus issue to the
holders of its shares, and the shares that are subject to the service right are not issued prior to the record date in
respect of that bonus issue, the service right will, when vested, entitle the holder to one share plus the number of
bonus shares which would have been issued to the holder if the shares that are subject to the service right had been
issued prior to the record date; and
if, prior to the receipt of shares that are subject to the service right, the company undergoes a reorganisation of capital
(other than by way of a bonus issue for cash), the terms of the service rights will be changed to the extent necessary
to comply with the ASX Listing Rules as they apply at the relevant time.
●
●
●
●
●
●
The long-term incentives include long service leave and share-based payments. The company has adopted a long term
incentive plan ('LTI') in order to assist in the motivation and retention of key staff. The LTI is designed to align the interest
of eligible executives and employees more closely with the interests of the shareholders by providing an opportunity for
eligible executives and employees to receive an equity interest in the company.
Under the LTI, eligible executives and employees may be given options to acquire shares which may be subject to vesting
conditions set by the Board. Each grant of options under the LTI is, or will be, on the terms generally described as follows:
●
●
the Board will determine the number of options to be granted to each eligible employee;
options will vest progressively over the periods which were determined by the Board at the time of the grant. As
outlined in the prospectus, for the initial grant of options under the LTI, one third of the options vested on completion
of the IPO; another one third of the options vested on 31 August 2016 and the remaining one third of the options
vested on 31 August 2017;
the options will expire five years from the vesting date;
the exercise price is set by the Board at the time of the grant. For the initial grant of options under the LTI as outlined
in the prospectus, the exercise price is $0.60 for non-executive directors and $0.50 for all other executives and
employees issued options;
options holders are not entitled to participate in new issues of shares or other securities made by the company to
holders of shares without exercising the options before the record date for the relevant issue;
if, prior to the exercise of an option, the company makes a pro rata bonus issue to the holders of its shares, and the
option is not exercised prior to the record date in respect of that bonus issue, the option will, when vested, entitle the
holder to one share plus the number of bonus shares which would have been issued to the holder if the option had
been exercised prior to the record date; and
if, prior to the exercise of an option, the company undergoes a reorganisation of capital (other than by way of a bonus
issue for cash), the terms of the options will be changed to the extent necessary to comply with the ASX Listing Rules
as they apply at the relevant time.
●
●
●
●
●
Group performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the group. A portion of cash bonus and
incentive payments are dependent on defined earnings per share targets being met. The remaining portion of the cash
bonus and incentive payments are at the discretion of the Nomination and Remuneration Committee.
The Nomination and Remuneration Committee is of the opinion that the adoption of performance based compensation will
have a positive impact on its earnings, which in turn will have a positive impact on its share price. This is expected to
increase shareholder wealth if maintained over the coming years.
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Consequences of performance on shareholder wealth
In considering the group's performance and benefits to shareholder wealth, the remuneration committee has had regard to
the share price in respect of the current financial year and the previous three financial years.
Share price
2018
2017
2016
$0.14
$0.34
$0.58
Use of remuneration consultants
During the financial year ended 30 June 2018, the company did not engage remuneration consultants to review its existing
remuneration policies and provide recommendations on how to improve both the STI and LTI programs.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the group are set out in the following tables.
The key management personnel of the group consisted of the following directors of Pureprofile Ltd:
●
●
●
●
● Matthew Berriman - Non-Executive Director (resigned on 9 November 2017)
Andrew Edwards - Non-Executive Chairman
Nic Jones - Managing Director & Chief Executive Officer (appointed on 5 February 2018)
Clifford Rosenberg - Non-Executive Director
Paul Chan - Managing Director & Chief Executive Officer (resigned on 5 February 2018)
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Other
$
Super-
annuation
$
Employee
leave
$
Equity-
settled*
$
Total
$
62,832
29,165
242,451
237,821
330,351
902,620
-
-
-
-
-
-
-
-
-
-
-
-
1,518
-
20,049
17,679
20,049
59,295
-
-
-
-
-
-
778
-
65,128
29,165
778
-
23,345
24,901
263,278
255,500
373,745
986,816
2018
Non-Executive Directors:
C. Rosenberg
M. Berriman**
Executive Directors:
A. Edwards
N. Jones**
P. Chan**
Represents share options granted to KMP
*
** Represents remuneration from the date of appointment and/or to the date of resignation
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2017
Non-Executive Directors:
C. Rosenberg
M. Berriman**
Executive Directors:
A. Edwards
P. Chan
G. Nesbitt***
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
$
Super-
annuation
$
Employee
leave
$
Equity-
settled*
$
Total
$
63,927
45,338
189,027
326,243
281,217
905,752
-
-
-
-
-
-
-
-
-
-
-
-
6,073
-
16,228
24,157
18,783
65,241
-
-
-
-
-
-
6,049
-
76,049
45,338
211,304
6,049
381,426
31,026
11,480
311,480
54,604 1,025,597
Represents share options granted to KMP
*
** Represents remuneration from the date of appointment
*** Resigned from position of Executive Director on 8 June 2017 but remained in office as Chief Financial Officer.
Represents remuneration for the 12 months to 30 June 2017.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
C. Rosenberg
M. Berriman
Executive Directors:
A. Edwards
N. Jones
P. Chan
G. Nesbitt
Fixed
remuneration
2018
2017
At risk - STI
2018
At risk - LTI
2018
2017
100%
100%
100%
100%
100%
-
92%
100%
97%
-
92%
96%
-
-
-
-
-
-
-
-
-
-
-
-
8%
-
3%
-
8%
4%
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
Details of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Andrew Edwards
Non-Executive Chairman (Executive Chairman from 8 November 2016 to 30 June
2018)
12 June 2015
Appointment until next Annual General Meeting, at which he will be eligible for re-
election
Base salary for the year ended 30 June 2018 of $262,500 including superannuation,
to be reviewed from time to time by the Nomination and Remuneration Committee in
accordance with constitution and policies. Share options of up to 400,000 granted in
year 1, and eligibility to short-term and long-term incentives under the Incentives
Scheme, which defines the amount, form, frequency KPIs and targets to which the
incentives relate.
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Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Nic Jones
Managing Director and Chief Executive Officer
1 December 2017
No fixed end date
Base salary for the year ended 30 June 2018 of $400,000 p.a. plus statutory
superannuation, to be reviewed from time to time by the Nomination and
Remuneration Committee
in accordance with constitution and policies.
Reimbursement of reasonable out-of-pocket expenses incurred in connection with the
performance of duties. 3 month termination notice period by either party. Eligibility to
short-term incentive reward of up to $200,000 and long-term incentives of 3,000,000
options under the Incentives Scheme, which defines the amount, form, frequency,
KPIs and targets to which the incentives relate.
Clifford Rosenberg
Non-Executive Director
12 June 2015
Appointment until next Annual General Meeting, at which he will be eligible for re-
election
Base salary for the year ended 30 June 2018 of $70,000 plus superannuation and
any GST, to be reviewed from time to time by the Nomination and Remuneration
Committee in accordance with constitution and policies. Share options of up to
400,000 granted in year 1, and eligibility to long-term incentives under the Incentives
Scheme, which defines the amount, form, frequency KPIs and targets to which the
incentives relate.
Sue Klose
Non-Executive Director
1 September 2018
Appointment until next Annual General Meeting, at which he will be eligible for re-
election
Base salary of $70,000 plus superannuation and any GST, to be reviewed from time
to time by the Nomination and Remuneration Committee in accordance with
constitution and policies. Eligibility to long-term incentives under the Incentives
Scheme, which defines the amount, form, frequency KPIs and targets to which the
incentives relate.
Marcelo Ulvert
Non-Executive Director
1 September 2018
Appointment until next Annual General Meeting, at which he will be eligible for re-
election
Base salary of $70,000 plus superannuation and any GST, to be reviewed from time
to time by the Nomination and Remuneration Committee in accordance with
constitution and policies. Eligibility to long-term incentives under the Incentives
Scheme, which defines the amount, form, frequency KPIs and targets to which the
incentives relate.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the year
ended 30 June 2018.
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Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key
management personnel in this financial year or future reporting years are as follows:
Grant date
29/05/2015 (a)
29/05/2015 (b)
Vesting date and
exercisable date
31/08/2017
31/08/2017
Expiry date
29/05/2020
29/05/2020
Fair value
per option
Exercise price at grant date
$0.50
$0.60
$0.0931
$0.0789
All options were granted over unissued fully paid ordinary shares in the company. Options vest based on the provision of
service over the vesting period whereby the executive becomes beneficially entitled to the option on vesting date. Options
are exercisable by the holder as from the vesting date. There has not been any alteration to the terms or conditions of the
grant since the grant date. There are no amounts paid or payable by the recipient in relation to the granting of such options
other than on their potential exercise.
(a) Paul Chan was granted 500,000 options
(b) Andrew Edwards and Clifford Rosenberg were each granted 400,000 options
Options granted carry no dividend or voting rights.
The number of options over ordinary shares granted to and vested by directors and other key management personnel as
part of compensation during the year ended 30 June 2018 are set out below:
Number of
options
granted
during the
year
2018
Number of
options
granted
during the
year
2017
Number of
options
vested
Number of
options
vested
during the
year
2018
during the
year
2017
Total number
of options
vested as at
30 June
2018
Total number
of options
vested at as
30 June
2017
Paul Chan
Andrew Edwards
Cliff Rosenberg
-
-
-
-
-
-
133,334
166,666
133,334
133,333
166,667
166,667
500,000
400,000
400,000
333,334
266,666
266,666
Service rights
The terms and conditions of each grant of service rights over ordinary shares affecting remuneration of directors and other
key management personnel in this financial year or future reporting years are as follows:
Name
Paul Chan
Number of
rights
granted
Grant date
Vesting date and
exercisable date
Expiry date
Fair value
per right
at grant date
115,067 19/12/2016
31/01/2018
28/02/2018
$0.3500
Service rights granted carry no dividend or voting rights.
The number of service rights over ordinary shares granted to and vested by directors and other key management
personnel as part of compensation during the year ended 30 June 2018 are set out below:
Name
Paul Chan
Number of
rights
granted
during the
year
2018
Number of
rights
granted
during the
year
2017
Number of
rights
vested
during the
year
2018
Number of
rights
vested
during the
year
2017
-
115,067
115,067
-
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Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key
management personnel of the group, including their personally related parties, is set out below:
Ordinary shares
Andrew Edwards
Nic Jones
Clifford Rosenberg
Paul Chan
Matthew Berriman
Balance at
the start of
the year
Received
as part of
remuneration
Additions
Disposals/
other*
Balance at
the end of
the year
384,691
-
233,000
7,200,989
212,300
8,030,980
-
-
-
-
-
-
600,000
1,067,548
-
-
-
1,667,548
-
-
-
(7,200,989)
(212,300)
(7,413,289)
984,691
1,067,548
233,000
-
-
2,285,239
*
Disposals/other represents a member no longer being designated as a KMP and does not represent a disposal of
holding.
Option holding
The number of options over ordinary shares in the company held during the financial year by each director and other
members of key management personnel of the group, including their personally related parties, is set out below:
Options over ordinary shares
Andrew Edwards
Paul Chan
Clifford Rosenberg
Balance at
the start of
the year
400,000
500,000
400,000
1,300,000
Granted
Exercised
-
-
-
-
Disposals/
other*
Balance at
the end of
the year
-
-
-
-
-
(500,000)
-
(500,000)
400,000
-
400,000
800,000
*
Disposals/other represents a member no longer being designated as a KMP and does not represent a disposal of
holding.
Service rights holding
The number of service rights over ordinary shares in the company held during the financial year by each director and other
members of key management personnel of the group, including their personally related parties, is set out below:
Service rights over ordinary shares
Paul Chan
Balance at
the start of
the year
115,067
115,067
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
(115,067)
(115,067)
-
-
-
-
Other transactions with key management personnel and their related parties
During the financial year, expenses totalling $362 were reimbursed to key management personnel.
During the financial year, sales to Publicis Group (director-related entity of Andrew Edwards) of nil (2017: $1,925) were
made. The current amount receivable at 30 June 2018 was $nil (2017: $2,118). All transactions were made on normal
commercial terms and conditions and were at market rates.
During the financial year, sales to AfterPay Holdings Limited (director-related entity of Clifford Rosenberg) of $nil (2017:
$4,750) were made. All transactions were made on normal commercial terms and conditions and were at market rates.
During the financial year, expenses for subscription and recruitment services from LinkedIn (director-related entity of
Clifford Rosenberg) of $nil (2017: $30,814) were incurred. The current amount payable at 30 June 2018 was $nil (2017:
$2,956). All transactions were made on normal commercial terms and conditions and were at market rates.
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During the financial year, expenses for services from Straight6 Group Pty Ltd (director-related entity of Matthew Berriman)
of $nil (2017: $45,338) were incurred. All transactions were made on normal commercial terms and conditions and were at
market rates.
This concludes the remuneration report, which has been audited.
Shares under option
Unissued ordinary shares of Pureprofile Ltd under option at the date of this report are as follows:
Grant date
29/05/2015
29/05/2015
Expiry date
29/05/2020
29/05/2020
Exercise
price
Number
under option
$0.50
$0.60
2,009,000
1,200,000
3,209,000
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of
the company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of Pureprofile Ltd issued on the exercise of options during the year ended 30 June 2018
and up to the date of this report.
Shares under service rights
There were no unissued ordinary shares of Pureprofile Ltd under service rights outstanding at the date of this report.
Shares issued on the exercise of service rights
The following ordinary shares of Pureprofile Ltd were issued during the year ended 30 June 2018 and up to the date of this
report on the exercise of performance rights granted:
Date performance rights granted
19 December 2016
Exercise
price
Number of
shares issued
$0.00
435,125
Shares under performance rights
Unissued ordinary shares of Pureprofile Ltd under performance rights at the date of this report are as follows:
Grant date
Expiry date
Exercise
price
Number
under rights
12 December 2017
2 November 2019
$0.00
2,100,000
No person entitled to exercise the performance rights had or has any right by virtue of the performance right to participate
in any share issue of the company or of any other body corporate.
Shares issued on the exercise of performance rights
There were no ordinary shares of Pureprofile Ltd issued on the exercise of performance rights during the year ended 30
June 2018 and up to the date of this report.
Indemnity and insurance of officers
The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director
or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the
company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
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Indemnity and insurance of auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
company or any related entity against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company
or any related entity.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking
responsibility on behalf of the company for all or part of those proceedings.
Non-audit services
There were no non-audit services provided during the financial year by the auditor.
Officers of the company who are former partners of Grant Thornton
There are no officers of the company who are former partners of Grant Thornton.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in the
Directors' Report and Financial Report have been rounded to the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
Auditor
Grant Thornton continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the directors
___________________________
Andrew Edwards
Non-Executive Chairman
28 September 2018
Sydney
24
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Sydney NSW 2000
Correspondence to:
Locked Bag Q800
QVB Post Office
Sydney NSW 1230
T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Pureprofile Ltd
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Pureprofile
Ltd for the year ended 30 June 2018, I declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
S M Coulton
Partner – Audit & Assurance
Sydney, 28 September 2018
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
25
For personal use only
Pureprofile Ltd
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2018
Revenue
Other income
Expenses
Direct costs of revenue
Employee benefits expense
Foreign exchange loss
Depreciation and amortisation expense
Impairment of assets
Loss on disposal of intangible assets
Technology, engineering and licence fees
Share-based payment expense
Restructuring, acquisition and IPO costs
Occupancy costs
Other expenses
Finance costs
Loss before income tax (expense)/benefit
Income tax (expense)/benefit
Consolidated
Note
2018
$
2017
$
6
7
8
8
9
51,989,693
52,937,637
1,427,802
977,778
(27,787,670)
(14,744,668)
(150,672)
(5,251,229)
(17,994,882)
(1,058,000)
(3,556,234)
(90,612)
(1,745,869)
(1,655,542)
(2,939,730)
(1,574,900)
(27,021,542)
(14,993,576)
(319,932)
(3,491,458)
-
-
(3,273,108)
(130,411)
(2,418,747)
(1,112,155)
(2,946,064)
(209,272)
(25,132,513)
(2,000,850)
(847,364)
2,548
Loss after income tax (expense)/benefit for the year attributable to the owners
of Pureprofile Ltd
(25,979,877)
(1,998,302)
Other comprehensive loss
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive loss for the year, net of tax
Total comprehensive loss for the year attributable to the owners of Pureprofile
Ltd
Basic earnings per share
Diluted earnings per share
Refer to note 4 for detailed information on Restatement of comparatives.
17,581
(101,851)
17,581
(101,851)
(25,962,296)
(2,100,153)
Cents
Cents
35
35
(22.22)
(22.22)
(2.08)
(2.08)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
26
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Pureprofile Ltd
Statement of financial position
As at 30 June 2018
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Deferred tax
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Income tax
Provisions
Deferred revenue
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
Note
2018
$
2017
$
10
11
12
13
14
15
16
17
18
19
20
2,481,770
6,802,663
785,419
10,069,852
4,047,928
12,081,363
877,304
17,006,595
377,982
19,144,187
422,870
19,945,039
356,863
39,248,521
1,228,421
40,833,805
30,014,891
57,840,400
11,497,849
-
303,676
1,806,635
385,556
13,993,716
18,339,640
3,496,426
714,536
2,067,296
297,039
24,914,937
10,000,000
132,085
10,132,085
2,875,000
155,546
3,030,546
24,125,801
27,945,483
5,889,090
29,894,917
21
22
41,803,151
234,203
(36,148,264)
39,937,294
126,010
(10,168,387)
5,889,090
29,894,917
Refer to note 4 for detailed information on Restatement of comparatives.
The above statement of financial position should be read in conjunction with the accompanying notes
27
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Pureprofile Ltd
Statement of changes in equity
For the year ended 30 June 2018
Consolidated
Balance at 1 July 2016
Loss after income tax benefit for the year
Other comprehensive loss for the year, net of tax
Total comprehensive loss for the year
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
19,190,010
97,450
(8,170,085)
11,117,375
-
-
-
-
(101,851)
(1,998,302)
-
(1,998,302)
(101,851)
(101,851)
(1,998,302)
(2,100,153)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 21)
Share-based payments (note 36)
20,747,284
-
-
130,411
-
-
20,747,284
130,411
Balance at 30 June 2017
39,937,294
126,010
(10,168,387)
29,894,917
Refer to note 4 for detailed information on Restatement of comparatives.
Consolidated
Balance at 1 July 2017
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 21)
Share-based payments (note 36)
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
39,937,294
126,010
(10,168,387)
29,894,917
-
-
-
-
17,581
(25,979,877)
-
(25,979,877)
17,581
17,581
(25,979,877)
(25,962,296)
1,865,857
-
-
90,612
-
-
1,865,857
90,612
Balance at 30 June 2018
41,803,151
234,203
(36,148,264)
5,889,090
The above statement of changes in equity should be read in conjunction with the accompanying notes
28
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Pureprofile Ltd
Statement of cash flows
For the year ended 30 June 2018
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Interest and other finance costs paid
Income taxes (paid)/refunded
Net cash from operating activities
Cash flows from investing activities
Payment for purchase of business, net of cash acquired
Payment for purchase of subsidiary, net of cash acquired
Final payments for prior period's purchase of subsidiary
Payment for expenses relating to acquisitions
Payments for property, plant and equipment
Payments for intangibles
Proceeds from disposal of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Proceeds from borrowings
Repayment of borrowings
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Consolidated
Note
2018
$
2017
$
37
32
32
13
14
21
60,452,603
(54,606,462)
52,176,548
(49,589,590)
5,846,141
5,584
(1,574,900)
(452,673)
2,586,958
13,343
(209,272)
(15,499)
3,824,152
2,375,530
-
-
(4,298,856)
(498,322)
(306,354)
(3,914,542)
-
(300,000)
(14,680,244)
-
(2,238,747)
(133,540)
(5,194,100)
42,697
(9,018,074)
(22,503,934)
-
(810)
10,000,000
(4,000,000)
17,000,416
(620,732)
4,000,000
(125,000)
5,999,190
20,254,684
805,268
1,676,502
-
126,280
1,622,628
(72,406)
Cash and cash equivalents at the end of the financial year
10
2,481,770
1,676,502
The above statement of cash flows should be read in conjunction with the accompanying notes
29
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Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 1. General information
The financial statements cover Pureprofile Ltd as a group consisting of Pureprofile Ltd and the entities it controlled at the
end of, or during, the year. The financial statements are presented in Australian dollars, which is Pureprofile Ltd's functional
and presentation currency.
Pureprofile Ltd is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office
and principal place of business is:
Level 20
233 Castlereagh Street
Sydney NSW 2000
Australia
A description of the nature of the group's operations and its principal activities are included in the directors' report, which is
not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 28 September 2018.
The directors have the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these
Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of
the group.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Going concern
The financial statements have been prepared on a going concern basis, which contemplates continuity of normal activities
and realisation of assets and settlement of liabilities in the normal course of business.
The group incurred a loss after income tax of $25,979,877 (2017: loss after income tax of $1,998,302) and was in a net
current liability position of $3,923,864 (2017: $7,908,342, of which $4,000,000 represented shares that were issued in
November 2017). The group generated positive cash flows from operations of $3,824,152 (2017: cash inflows of
$2,375,530).
The directors believe that there are reasonable grounds to conclude that the consolidated entity will continue as a going
concern, after consideration of the following factors:
net cash from operating activities are positive;
●
EBITDA and gross margin performance has improved strongly in the second half of FY2018 following the execution of
●
strategic decisions on the Group’s operating segments;
further margin improvements are projected to be realised through targeted revenue growth in 2019. This initiative will
be supported by the recent appointments of Head of Revenue and Operations (ANZ) and Managing Director UK/EU in
revenue-focused roles; and
restructuring activities were executed in the second half of FY2018, which resulted in cost savings through the
identification of synergies between existing infrastructure and the elimination of non-value-add activities.
●
●
Accordingly, the directors believe the consolidated entity will be able to continue as a going concern and that it is
appropriate to adopt the going concern basis in the preparation of the consolidated financial report. Should the
consolidated entity be unable to continue as a going concern it may be required to release its assets and discharge its
liabilities other than in the normal course of business and at amounts different to those stated in the financial statements.
The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying
value amounts of the amounts of liabilities that might result should the consolidated entity be unable to continue as a going
concern and meet its debts as and when they fall due.
30
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Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 2. Significant accounting policies (continued)
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the group only.
Supplementary information about the parent entity is disclosed in note 31.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Pureprofile Ltd ('company'
or 'parent entity') as at 30 June 2018 and the results of all subsidiaries for the year then ended. Pureprofile Ltd and its
subsidiaries together are referred to in these financial statements as the 'group'.
Subsidiaries are all those entities over which the group has control. The group controls an entity when the group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the group.
The acquisition of common control subsidiaries is accounted for at book value. The acquisition of other subsidiaries is
accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is
accounted for as an equity transaction, where the difference between the consideration transferred and the book value of
the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.
Where the group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The group
recognises the fair value of the consideration received and the fair value of any investment retained together with any gain
or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same
basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the
allocation of resources to operating segments and assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Pureprofile Ltd's functional and presentation
currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
31
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Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 2. Significant accounting policies (continued)
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average
exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange
differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
Revenue is recognised when it is probable that the economic benefit will flow to the group and the revenue can be reliably
measured. Revenue is measured at the fair value of the consideration received or receivable, after taking into account any
trade discounts and volume rebates allowed.
Sales revenue - data and insights, media and performance
Revenue relating to the provision of services, consisting of data and insights, media and performance, is recognised with
reference to the stage of completion of the transaction at the end of the reporting period.
Stage of completion is measured by reference to the services performed to date as a percentage of total anticipated
services to be performed. Where the contract outcome cannot be reliably estimated, revenue is only recognised to the
extent of the recoverable costs incurred to date.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest
rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset
to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Grant income
Grant income received is recognised as income in the period in which it is received.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to
temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when
the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted,
except for:
● When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting
nor taxable profits; or
● When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and
the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the
foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for
the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is
probable that there are future taxable profits available to recover the asset.
32
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Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 2. Significant accounting policies (continued)
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Pureprofile Ltd. (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax consolidated
group with tax funding agreements, under the tax consolidation regime, effective 7 November 2014. The head entity and
each subsidiary in the tax consolidated group continue to account for their own current and deferred tax amounts. The tax
consolidated group has applied the 'separate taxpayer within group' approach in determining the appropriate amount of
taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax
consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the
intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a
contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the group's
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash
and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on the
statement of financial position.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any provision for impairment.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written
off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is
objective evidence that the group will not be able to collect all amounts due according to the original terms of the
receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial
reorganisation and default or delinquency in payments are considered indicators that the trade receivable may be impaired.
The amount of the impairment allowance is the difference between the asset's carrying amount and the present value of
estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables
are not discounted if the effect of discounting is immaterial.
Other receivables are recognised at amortised cost, less any provision for impairment.
33
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Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 2. Significant accounting policies (continued)
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
over their expected useful lives as follows:
Office and computer equipment
3 to 9 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
Leasehold improvements (including make-good asset) and plant and equipment under lease are depreciated over the
unexpired period of the lease or the estimated useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Leases
Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-line
basis over the term of the lease.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value
at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible
assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss
arising from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the
carrying amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually.
Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation
method or period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for
impairment, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at
cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not
subsequently reversed.
Software
Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that will contribute
to future period financial benefits through revenue generation and/or cost reductions are capitalised. Costs capitalised
include external direct costs of materials and service and employee costs. Software development costs include only those
costs directly attributable to the development phase and are only recognised following completion of technical feasibility
and where the group has an intention and ability to use the asset. Software costs are amortised on a straight-line basis
over the period of their expected benefit, being their finite life of between four and five years.
Customer and partnership network relationships
In November 2016, Pureprofile, with the acquisition of the Cohort Group, acquired customer and partner network
relationships which will be amortised over their useful economic life of between 6 to 8 years, on a straight line basis.
Membership base
In November 2016, Pureprofile, with the acquisition of the Cohort Group, acquired a membership database which will be
amortised over its useful economic life of 7 years, on a straight line basis.
Brand names
Acquired brand names are not amortised. Instead, brand names are tested annually for impairment, or more frequently if
events or changes in circumstances indicate that they might be impaired, and is carried at cost less accumulated
impairment losses.
34
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Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 2. Significant accounting policies (continued)
Impairment of non-financial assets
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment,
or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-financial assets
are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30-45 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
Provisions
Provisions are recognised when the group has a present (legal or constructive) obligation as a result of a past event, it is
probable the group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value
of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the
provision resulting from the passage of time is recognised as a finance cost.
Reward redemption
The group invites its internet panel members to complete surveys in exchange for a cash or points-based incentive. These
amounts are not paid until a predetermined target value has accrued on a members account. An assessment of incentives
likely to be paid (present obligation) is made taking into account past behaviour and activity. This is recognised as an
expense in the period in which the service is provided.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
Other long-term employee benefits
The liability for employee benefits not expected to be settled wholly within 12 months of the reporting date are measured as
the present value of expected future payments to be made in respect of services provided by employees up to the
reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and
periods of service. Expected future payments are discounted using market yields at the reporting date on corporate bonds
with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
35
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Notes to the financial statements
30 June 2018
Note 2. Significant accounting policies (continued)
Share-based payments
Equity-settled share-based compensation benefits are provided to employees. Equity-settled transactions are awards of
shares, or options over shares, that are provided to employees in exchange for the rendering of services.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently determined
using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do
not determine whether the group receives the services that entitle the employees to receive payment. No account is taken
of any other vesting conditions.
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already
recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other
conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair
value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the group or employee and is not satisfied during the vesting period,
any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, they are treated as if they had vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and
new award are treated as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair
value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either
not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge
and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an
analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison,
where applicable, with external sources of data.
Issued capital
Ordinary shares are classified as equity.
36
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Notes to the financial statements
30 June 2018
Note 2. Significant accounting policies (continued)
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to
profit or loss.
On the acquisition of a business, the group assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the group's operating or
accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the group remeasures its previously held equity interest in the
acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is
recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within
equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling
interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment
in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair
value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a
gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and
measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred
and the acquirer's previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the
provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based
on new information obtained about the facts and circumstances that existed at the acquisition-date. The measurement
period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the
information possible to determine fair value.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Pureprofile Ltd, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part
of the expense.
37
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Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 2. Significant accounting policies (continued)
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Rounding of amounts
The company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191,
issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this Report have
been rounded to the nearest dollar.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the group for the annual reporting period ended 30 June 2018. The group's
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the group,
are set out below.
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all
previous versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition and
Measurement'. AASB 9 introduces new classification and measurement models for financial assets. A financial asset shall
be measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to collect
contractual cash flows, which arise on specified dates and solely principal and interest. All other financial instrument assets
are to be classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on
initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive
income ('OCI'). For financial liabilities, the standard requires the portion of the change in fair value that relates to the
entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge
accounting requirements are intended to more closely align the accounting treatment with the risk management activities of
the entity. New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance.
Impairment will be measured under a 12-month ECL method unless the credit risk on a financial instrument has increased
significantly since initial recognition in which case the lifetime ECL method is adopted. The standard introduces additional
new disclosures. The group will adopt this standard from 1 July 2018. It is not expected to significantly impact the financial
statements on the basis that the main financial assets recognised represent cash and cash equivalent and trade
receivables that do not carry a significant financing component and involve a single cash flow representing the repayment
of principal, which in the case of trade receivables is the transaction price. Both asset classes will continue to be measured
at face value. Other financial asset classes are not material to the group. Financial liabilities of the consolidated entity are
not impacted as the group does not carry them at fair value.
38
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Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 2. Significant accounting policies (continued)
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a
single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict
the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal or
implied) to be identified, together with the separate performance obligations within the contract; determine the transaction
price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate
performance obligations on a basis of relative stand-alone selling price of each distinct good or service, or estimation
approach if no distinct observable prices exist; and recognition of revenue when each performance obligation is satisfied.
Credit risk will be presented separately as an expense rather than adjusted to revenue. For goods, the performance
obligation would be satisfied when the customer obtains control of the goods. For services, the performance obligation is
satisfied when the service has been provided, typically for promises to transfer services to customers. For performance
obligations satisfied over time, an entity would select an appropriate measure of progress to determine how much revenue
should be recognised as the performance obligation is satisfied. Contracts with customers will be presented in an entity's
statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship
between the entity's performance and the customer's payment. Sufficient quantitative and qualitative disclosure is required
to enable users to understand the contracts with customers; the significant judgments made in applying the guidance to
those contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer. The group will
adopt this standard from 1 July 2018. It is not expected to significantly impact the financial statements on the basis that
most of the group's revenue is recognised at the time of transfer of units to customers which represents the satisfaction of
the primary performance obligation.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB
117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions,
a 'right-of-use' asset will be capitalised in the statement of financial position, measured as the present value of the
unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12
months or less and leases of low-value assets (such as personal computers and small office furniture) where an
accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit
or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease
prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or
dismantling costs. Straight-line operating lease expense recognition will be replaced with a depreciation charge for the
leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in finance
costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when
compared to lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and
Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation in profit
or loss under AASB 16. For classification within the statement of cash flows, the lease payments will be separated into
both a principal (financing activities) and interest (either operating or financing activities) component. For lessor accounting,
the standard does not substantially change how a lessor accounts for leases. The group will adopt this standard from 1
July 2019 and the impact of the its adoption is yet to be assessed by the group.
IASB revised Conceptual Framework for Financial Reporting
The revised Conceptual Framework has been issued by the International Accounting Standards Board ('IASB'), but the
Australian equivalent has yet to be published. The revised framework is applicable for annual reporting periods beginning
on or after 1 January 2020 and the application of the new definition and recognition criteria may result in future
amendments to several accountings standards. Furthermore, entities who rely on the conceptual framework in determining
their accounting policies for transactions, events or conditions that are not otherwise dealt with under Australian Accounting
Standards may need to revisit such policies. The group will apply the revised conceptual framework from 1 July 2020 and
is yet to assess its impact.
39
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Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates
and assumptions on historical experience and on other various factors, including expectations of future events,
management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will
seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next
financial year are discussed below.
Share-based payment transactions
The group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-
Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts
of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.
Estimation of useful lives of assets
The group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant
and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical
innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less
than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be
written off or written down.
Goodwill and other indefinite life intangible assets
The group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill
and other indefinite life intangible assets have suffered any impairment, in accordance with the accounting policy stated in
note 2. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations.
These calculations require the use of assumptions, including estimated discount rates based on the current cost of capital
and growth rates of the estimated future cash flows.
Impairment of non-financial assets other than indefinite life intangible assets
The group assesses impairment of non-financial assets other than indefinite life intangible assets at each reporting date by
evaluating conditions specific to the group and to the particular asset that may lead to impairment. If an impairment trigger
exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-in-use
calculations, which incorporate a number of key estimates and assumptions.
Income tax
The group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in
determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary
course of business for which the ultimate tax determination is uncertain.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the group considers it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Reward redemption provision
In determining the level of provision required for reward redemptions the group has made judgements in respect of the
expected outflows necessary to settle the redemptions. The provision represents the maximum amount that the group
estimates is likely to be claimed by panel members and is based on estimates made from historical data and likely
redemption patterns. Balances accrued by panel members that have been inactive (i.e. not completed any transaction) for
more than one year are written back to profit or loss.
Note 4. Restatement of comparatives
Correction of error
The contingent consideration for the acquisition of Cohort Australia Holdings Pty Limited and its controlled entities was not
revalued as at 30 June 2017, resulting in an adjustment to increase other income and decrease trade and other payables
by $977,778 for the year ended 30 June 2017. This adjustment to the financial statements is shown as follows:
40
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 4. Restatement of comparatives (continued)
Reclassification
The deferred tax assets and deferred tax liabilities have been reclassified to present total deferred taxes on a net basis.
Statement of profit or loss and other comprehensive income
Revenue
Other income
Expenses
Direct costs of revenue
Employee benefits expense
Foreign exchange loss
Depreciation and amortisation expense
Technology, engineering and licence fees
Share-based payment expense
Restructuring, acquisition and IPO costs
Occupancy costs
Other expenses
Finance costs
2017
$
Reported
Consolidated
$
Adjustment
2017
$
Restated
52,937,637
-
52,937,637
-
977,778
977,778
(27,021,542)
(14,993,576)
(319,932)
(3,491,458)
(3,273,108)
(130,411)
(2,418,747)
(1,112,155)
(2,946,064)
(209,272)
-
-
-
-
-
-
-
-
-
-
(27,021,542)
(14,993,576)
(319,932)
(3,491,458)
(3,273,108)
(130,411)
(2,418,747)
(1,112,155)
(2,946,064)
(209,272)
Loss before income tax benefit
(2,978,628)
977,778
(2,000,850)
Income tax benefit
2,548
-
2,548
Loss after income tax (expense)/benefit for the year attributable to the
owners of Pureprofile Ltd
(2,976,080)
977,778
(1,998,302)
Other comprehensive loss
Foreign currency translation
Other comprehensive loss for the year, net of tax
(101,851)
(101,851)
-
-
(101,851)
(101,851)
Total comprehensive loss for the year attributable to the owners of
Pureprofile Ltd
(3,077,931)
977,778
(2,100,153)
Basic earnings per share
Diluted earnings per share
Cents
Reported
Cents
Adjustment
Cents
Restated
(3.10)
(3.10)
1.02
1.02
(2.08)
(2.08)
Statement of financial position at the beginning of the earliest comparative period
When there is a restatement of comparatives, it is mandatory to provide a third statement of financial position at the
beginning of the earliest comparative period, being 1 July 2016. However, as there were no adjustments made as at 1 July
2016, the group has elected not to show the 1 July 2016 statement of financial position.
41
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Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 4. Restatement of comparatives (continued)
Statement of financial position at the end of the earliest comparative period
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Deferred tax
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Income tax
Provisions
Deferred revenue
Total current liabilities
Non-current liabilities
Borrowings
Deferred tax
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note 5. Operating segments
Identification of reportable operating segments
The Group is organised into three operating segments:
● Data & Insights;
● Media; and
● Performance
42
2017
$
Reported
Consolidated
$
Adjustment
2017
$
Restated
4,047,928
12,081,363
877,304
17,006,595
-
-
-
-
4,047,928
12,081,363
877,304
17,006,595
356,863
39,248,521
3,951,547
43,556,931
-
-
(2,723,126)
(2,723,126)
356,863
39,248,521
1,228,421
40,833,805
60,563,526
(2,723,126)
57,840,400
19,317,418
3,496,426
714,536
2,067,296
297,039
25,892,715
(977,778)
-
-
-
-
(977,778)
18,339,640
3,496,426
714,536
2,067,296
297,039
24,914,937
2,875,000
2,723,126
155,546
5,753,672
-
(2,723,126)
-
(2,723,126)
2,875,000
-
155,546
3,030,546
31,646,387
(3,700,904)
27,945,483
28,917,139
977,778
29,894,917
39,937,294
126,010
(11,146,165)
-
-
977,778
39,937,294
126,010
(10,168,387)
28,917,139
977,778
29,894,917
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 5. Operating segments (continued)
These operating segments are based on the internal reports that are reviewed and used by the Board of Directors (who are
identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of
resources. There is no aggregation of operating segments.
Types of products and services
The principal products and services are as follows:
Data & Insights
Media
Performance
Conducting market research and providing research technology platforms
Buying and selling online advertising inventory on behalf of advertisers and publishers
Generates leads for clients through its consumer database and proprietary and partner
digital assets
Major customers
During the years ended 30 June 2018 and 30 June 2017 no customer contributed more than 10% to the Group's external
revenue.
Operating segment information
Consolidated - 2018
Revenue
Sales revenue from continuing operations
Interest
Total revenue
Profit/(loss) before significant items, net
finance costs, tax, depreciation and
amortisation
Depreciation and amortisation
Loss on disposal of intangible assets
Impairment of assets
Interest revenue
Finance costs
Loss before income tax expense
Income tax expense
Loss after income tax expense
Consolidated - 2017
Revenue
Sales revenue from continuing operations
Interest
Total revenue
Profit/(loss) before significant items, net
finance costs, tax, depreciation and
amortisation
Depreciation and amortisation
Interest revenue
Finance costs
Profit/(loss) before income tax benefit
Income tax benefit
Loss after income tax benefit
Data &
Insights
$
Media
$
Performance
$
Corporate
$
Total
$
16,058,862
-
16,058,862
16,359,632
-
16,359,632
19,565,615
-
19,565,615
-
5,584
5,584
51,984,109
5,584
51,989,693
586,065
(1,535,246)
-
-
-
-
(949,181)
483,307
(1,228,676)
-
-
-
-
(745,369)
(328,458)
(2,487,307)
(1,058,000)
(17,994,882)
-
-
(21,868,647)
-
-
-
-
5,584
(1,574,900)
(1,569,316)
740,914
(5,251,229)
(1,058,000)
(17,994,882)
5,584
(1,574,900)
(25,132,513)
(847,364)
(25,979,877)
Data &
Insights
$
Media
$
Performance
$
Corporate
$
Total
$
13,278,947
-
13,278,947
22,289,882
-
22,289,882
17,355,465
-
17,355,465
-
13,343
13,343
52,924,294
13,343
52,937,637
1,535,285
(1,566,601)
-
-
(31,316)
4,632,505
(449,283)
-
-
4,183,222
2,841,148
(1,436,539)
-
-
1,404,609
(7,322,401)
(39,035)
13,343
(209,272)
(7,557,365)
1,686,537
(3,491,458)
13,343
(209,272)
(2,000,850)
2,548
(1,998,302)
43
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Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 5. Operating segments (continued)
All assets and liabilities, including taxes are not allocated to the operating segments as they are managed on an overall
group basis.
Revenue by geographical area
The group operates in 3 (2017: 3) regions. The sales revenue for each region is as follows:
Consolidated
2018
$
2017
$
35,434,931
9,467,086
7,082,092
31,084,737
11,268,833
10,570,724
51,984,109
52,924,294
Consolidated
2018
$
2017
$
16,058,862
16,359,632
19,565,615
51,984,109
13,278,947
22,289,882
17,355,465
52,924,294
5,584
13,343
51,989,693
52,937,637
Consolidated
2018
$
2017
$
1,356,699
71,103
977,778
-
1,427,802
977,778
Sales to external customers
Australasia
Europe
United States
Note 6. Revenue
Sales revenue
Data & Insights
Media
Performance
Other revenue
Interest
Revenue
Note 7. Other income
Revaluation of earn-out liability
Rental income
Other income
44
For personal use only
Consolidated
2018
$
2017
$
285,235
197,502
4,025,693
545,125
395,176
2,681,939
351,303
260,714
4,965,994
3,293,956
5,251,229
3,491,458
13,396,158
4,598,724
17,994,882
-
-
-
1,574,900
209,272
1,616,732
1,012,511
996,683
1,118,872
90,612
130,411
13,747,985
13,874,704
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 8. Expenses
Loss before income tax includes the following specific expenses:
Depreciation
Office and computer equipment
Amortisation
Software
Customer contracts and partner network arrangement
Membership base
Total amortisation
Total depreciation and amortisation
Impairment
Goodwill
Software
Total impairment
Finance costs
Interest and finance charges paid/payable
Rental expense relating to operating leases
Minimum lease payments
Superannuation expense
Defined contribution superannuation expense
Share-based payments expense
Share-based payments expense
Employee benefits expense excluding superannuation
Employee benefits expense excluding superannuation
45
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 9. Income tax expense/(benefit)
Income tax expense/(benefit)
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustment recognised for prior periods
Aggregate income tax expense/(benefit)
Deferred tax included in income tax expense/(benefit) comprises:
Decrease/(increase) in deferred tax assets (note 15)
Numerical reconciliation of income tax expense/(benefit) and tax at the statutory rate
Loss before income tax (expense)/benefit
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Entertainment expenses
Share-based payments
Eligible research and development expenditure
Impairment/Revaluation on Cohort earn-out payment
Merger and acquisition expenditure
Disposal of intangible assets
Sundry items
Adjustment recognised for prior periods
Current year tax losses not recognised
Prior year deferred tax balances no longer recognised
Difference in overseas tax rates
Research and development tax concession
Tax refund previously not provided for
Income tax expense/(benefit)
Amounts credited directly to equity
Deferred tax assets (note 15)
Consolidated
2018
$
2017
$
116,814
805,551
(75,001)
131,625
(591,500)
457,327
847,364
(2,548)
805,551
(591,500)
(25,132,513)
(2,000,850)
(7,539,754)
(600,255)
20,157
20,610
146,795
4,991,455
7,064
317,400
(15,509)
(2,051,782)
(75,001)
2,169,532
962,283
33,202
(176,773)
(14,097)
29,288
42,504
194,775
-
312,997
-
(149,934)
(170,625)
457,327
-
-
(37,761)
(251,489)
-
847,364
(2,548)
Consolidated
2018
$
2017
$
-
(167,600)
Tax losses not recognised
Potential unused tax benefit for which no deferred tax asset has been recognised
2,464,379
294,847
The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax
losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business test
is passed.
46
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 10. Current assets - cash and cash equivalents
Cash at bank
Cash on deposit*
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial
year as shown in the statement of cash flows as follows:
Balances as above
Bank overdraft (note 17)
Balance as per statement of cash flows
Consolidated
2018
$
2017
$
2,289,560
192,210
3,855,542
192,386
2,481,770
4,047,928
2,481,770
-
4,047,928
(2,371,426)
2,481,770
1,676,502
* Cash on deposit of $192,210 (2017: $192,386) is a restricted cash balance which is held and maintained as security over
the group's bank overdraft facility, bank guarantees and leased properties.
Note 11. Current assets - trade and other receivables
Trade receivables
Less: Provision for impairment of receivables
Other receivables
Consolidated
2018
$
2017
$
7,266,126
(615,897)
6,650,229
12,063,992
(199,302)
11,864,690
152,434
216,673
6,802,663
12,081,363
The group has recognised a loss of $528,941 (2017: $116,581) in profit or loss in respect of impairment of receivables for
the year ended 30 June 2018.
The ageing of the impaired receivables provided for above are as follows:
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Consolidated
2018
$
2017
$
93,858
31,229
490,810
10,841
24,566
163,895
615,897
199,302
47
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 11. Current assets - trade and other receivables (continued)
Movements in the provision for impairment of receivables are as follows:
Opening balance
Additional provisions recognised
Receivables written off during the year as uncollectable
Unused amounts reversed
Closing balance
Consolidated
2018
$
2017
$
199,302
540,090
(112,347)
(11,148)
109,276
127,482
(26,555)
(10,901)
615,897
199,302
Past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to $3,612,073 as at 30 June
2018 ($1,755,837 as at 30 June 2017).
The group did not consider a credit risk on the aggregate balances after reviewing the credit terms of customers based on
recent collection practices.
The ageing of the past due but not impaired receivables are as follows:
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Note 12. Current assets - other
Other current assets
Prepayments
Note 13. Non-current assets - property, plant and equipment
Office and computer equipment - at cost
Less: Accumulated depreciation
48
Consolidated
2018
$
2017
$
3,140,665
303,550
167,858
1,588,043
108,108
59,686
3,612,073
1,755,837
Consolidated
2018
$
2017
$
268,481
516,938
82,191
795,113
785,419
877,304
Consolidated
2018
$
2017
$
1,235,488
(857,506)
704,352
(347,489)
377,982
356,863
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 13. Non-current assets - property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Office and
computer
equipment
$
256,828
133,540
213,112
(49,115)
(197,502)
356,863
306,354
(285,235)
Total
$
256,828
133,540
213,112
(49,115)
(197,502)
356,863
306,354
(285,235)
377,982
377,982
Consolidated
2018
$
2017
$
19,003,285
(13,396,158)
5,607,127
19,003,285
-
19,003,285
22,745,638
(9,467,946)
(4,598,724)
8,678,968
18,831,095
(5,442,252)
-
13,388,843
3,622,000
(896,428)
2,725,572
2,694,410
(655,890)
2,038,520
3,622,000
(351,303)
3,270,697
2,694,410
(260,714)
2,433,696
94,000
1,152,000
19,144,187
39,248,521
Consolidated
Balance at 1 July 2016
Additions
Additions through business combinations (note 32)
Disposals
Depreciation expense
Balance at 30 June 2017
Additions
Depreciation expense
Balance at 30 June 2018
Note 14. Non-current assets - intangibles
Goodwill - at cost
Less: Impairment
Software - at cost
Less: Accumulated amortisation
Less: Impairment
Customer contracts and partner network arrangement - at cost
Less: Accumulated amortisation
Membership base - at cost
Less: Accumulated amortisation
Brand names - at cost
49
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 14. Non-current assets - intangibles (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Customer
contracts and
partner
network
arrangement
$
Goodwill
$
Software
$
Membership
base
$
Brand
names
$
Total
$
5,607,127
-
5,386,682
5,194,100
-
-
47,175
-
94,000
-
11,134,984
5,194,100
13,396,158
-
5,490,000
(2,681,939)
3,622,000
(351,303)
2,647,235
(260,714)
1,058,000
-
26,213,393
(3,293,956)
19,003,285
-
-
(13,396,158)
-
13,388,843
3,914,542
-
(4,598,724)
(4,025,693)
3,270,697
-
-
-
(545,125)
2,433,696
-
-
-
(395,176)
1,152,000
-
(1,058,000)
-
-
39,248,521
3,914,542
(1,058,000)
(17,994,882)
(4,965,994)
Consolidated
Balance at 1 July 2016
Additions
Additions through business
combinations (note 32)
Amortisation expense
Balance at 30 June 2017
Additions
Disposals
Impairment of assets
Amortisation expense
Balance at 30 June 2018
5,607,127
8,678,968
2,725,572
2,038,520
94,000
19,144,187
Impairment testing
Goodwill and brand names are tested annually for impairment. Goodwill and brand names are allocated to two cash-
generating units ('CGU'), which is based on the consolidated entity's media and performance operating segments. Goodwill
and brand names are allocated to the CGU's as follows:
Media
Performance
Consolidated
2018
$
2017
$
5,607,127
-
5,607,127
13,396,158
5,607,127
19,003,285
The recoverable amount of the CGU has been determined based on a value in use calculation. This calculation uses a 5
year cash flow projection based upon financial budgets approved by management. Cash flows beyond the five year period
are extrapolated using the long term growth rate stated below. The growth rate does not exceed the long term average
growth rate for the business.
Key assumptions used in the value in use calculations
Media CGU
- Forecast growth 8%-12% (2017: 8%-12%);
- Long-term growth rate 1.0% (2017: 3.0%); and
- Pre-tax discount rate 17.00% (2017: 18.76%).
Performance CGU
- Forecast growth 2%-12% (2017: 2%-12%);
- Long-term growth rate 3.0% (2017: 1.0%); and
- Pre-tax discount rate 17.00% (2017: 17.67%).
50
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 14. Non-current assets - intangibles (continued)
Impairment test results - Media CGU
Based on the testing performed no impairment was recognised for this CGU, for the year ended 30 June 2018.
Impairment test results - Performance CGU
Based on the testing performed an impairment of $13,396,158 was recognised against goodwill and an impairment of
$4,598,724 was recognised against software, for the year ended 30 June 2018. The recoverable amount of the
Performance CGU was $2,931,000 based on the value in use calculation.
Impact of possible changes in assumptions
The directors have made judgments and estimates in respect of impairment testing of goodwill. Should these judgments
and estimates not occur the resulting goodwill carrying may decrease. The sensitivities specific to the Media CGU are as
follows:
(a) budgeted revenue growth would be required to be less than 6% before further goodwill and other intangibles assets
(b)
would be impaired, with all other assumptions remaining constant.
the discount rate would be required to increase to 18.5% before goodwill and other intangibles assets would be
impaired, with all other assumptions remaining constant.
Management believes that other reasonable changes in the key assumptions on which the recoverable amount of goodwill
is based would not cause the cash-generating unit's carrying amount to exceed its recoverable amount.
Note 15. Non-current assets - deferred tax
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses
Impairment of receivables
Prepayments
Capitalised expenditure
Deferred research and development credit
Membership base
Brand names
Employee benefits
Accrued expenses and other payables
Provision for reward redemptions
Other assets
Unrealised foreign exchange loss
Business related capital expenditure
Research and development expenditure
Borrowing costs
Deferred tax asset
Movements:
Opening balance
Credited/(charged) to profit or loss (note 9)
Credited to equity (note 9)
Additions through business combinations (note 32)
Closing balance
51
Consolidated
2018
$
2017
$
422,870
137,315
(936)
(1,802,235)
-
(792,107)
(28,200)
216,943
146,352
349,105
5,507
(15,312)
535,218
1,205,199
43,151
342,553
50,152
(2,319)
(2,323,946)
(396,861)
-
-
293,619
173,211
454,254
-
-
748,429
1,889,329
-
422,870
1,228,421
1,228,421
(805,551)
-
-
1,446,608
591,500
167,600
(977,287)
422,870
1,228,421
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 15. Non-current assets - deferred tax (continued)
The group has unused tax losses of $2,464,379 (2017: $294,847) for which no tax benefit has been recognised. Based on
management's assessment, taking into consideration the group's future forecasts, deferred tax assets on tax losses have
only been recognised to the extent that it is probable that there will be taxable future income from which to off set the tax
losses.
Note 16. Current liabilities - trade and other payables
Trade payables
Contingent consideration
Accrued expenses
Other payables
Consolidated
2018
$
2017
$
5,276,716
-
4,663,772
1,557,361
5,300,111
7,522,222
3,346,962
2,170,345
11,497,849
18,339,640
Refer to note 24 for further information on financial instruments.
As at 30 June 2017, contingent consideration of $7,522,222 represented consideration for the acquisition of Cohort
Australia Holdings Pty Limited and its controlled entities which at 30 June 2017 was payable subject to the achievement of
certain performance criteria. Contingent consideration comprised 8,888,889 of Pureprofile Ltd's shares at $0.34 per share
to be issued and $4,500,000, in either cash or Pureprofile Ltd's shares at the discretion of the vendor. During the year
ended 30 June 2018, contingent consideration of $4,298,856 was paid to the vendor of Cohort in cash, $1,866,667 of
Pureprofile Ltd's shares were issued (8,888,889 shares at $0.21 per share) in lieu of cash and $1,356,699 (2017:
$977,778) was written back to the profit or loss due to a change in share price impacting the valuation and an adjustment
related to the final tranche of the earn-out consideration.
Note 17. Current liabilities - borrowings
Bank overdraft
Bank loans
Refer to note 24 for further information on financial instruments.
Note 18. Current liabilities - provisions
Employee benefits
Lease make good
Reward redemption
Consolidated
2018
$
2017
$
-
-
-
2,371,426
1,125,000
3,496,426
Consolidated
2018
$
2017
$
529,616
-
1,277,019
538,542
16,327
1,512,427
1,806,635
2,067,296
Lease make good
The provision represents the present value of the estimated costs to make good the premises leased by the group at the
end of the respective lease terms.
52
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 18. Current liabilities - provisions (continued)
Reward redemption
This provision represents the estimated costs of rewards awarded to customers in respect of services sold. The provision
is estimated based on historical reward redemption information, sales levels and any recent trends that may suggest future
reward redemptions could differ from historical amounts.
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out below:
Consolidated - 2018
Carrying amount at the start of the year
Additional provisions recognised
Amounts used
Payments
Unused amounts reversed
Carrying amount at the end of the year
Note 19. Non-current liabilities - borrowings
Bank loans
Refer to note 24 for further information on financial instruments.
Lease
make good
$
Reward
redemption
$
16,327
-
(2,985)
-
(13,342)
1,512,427
3,048,823
-
(2,419,380)
(864,851)
-
1,277,019
Consolidated
2018
$
2017
$
10,000,000
2,875,000
$10,000,000 bank loan facility
The loan is repayable on 2 November 2019 with interest only payments to be made monthly in arrears. Interest is fixed and
payable at 9.5% per annum. The facility expires on 2 November 2019. As at 30 June 2018, the facility is fully used and
there are no unused amounts. The loan is secured over all the assets to the group.
As part consideration for the financing facility the group also issued the following performance rights to the lender:
●
950,000 performance rights, which will convert to fully paid-up ordinary shares upon the 60-day volume weighted
average price ('VWAP') of Pureprofile shares reaching $0.40 per share; and
1,150,000 performance rights, which will convert to fully paid-up ordinary shares upon the 60-day VWAP of
Pureprofile shares reaching $0.60 per share.
●
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Bank overdraft
Bank loans
The bank overdraft and bank loan are secured by the assets of the group.
Consolidated
2018
$
2017
$
-
10,000,000
2,371,426
4,000,000
10,000,000
6,371,426
53
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 19. Non-current liabilities - borrowings (continued)
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities
Bank overdraft
Bank loans
Bank guarantees
Used at the reporting date
Bank overdraft
Bank loans
Bank guarantees
Unused at the reporting date
Bank overdraft
Bank loans
Bank guarantees
Note 20. Non-current liabilities - provisions
Employee benefits
Note 21. Equity - issued capital
Consolidated
2018
$
2017
$
-
10,000,000
-
10,000,000
3,000,000
4,000,000
500,000
7,500,000
-
10,000,000
-
10,000,000
2,371,426
4,000,000
127,904
6,499,330
-
-
-
-
628,574
-
372,096
1,000,670
Consolidated
2018
$
2017
$
132,085
155,546
Ordinary shares - fully paid
120,495,625 111,171,611
41,803,151
39,937,294
Consolidated
2018
Shares
2017
Shares
2018
$
2017
$
54
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 21. Equity - issued capital (continued)
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
Shares issued on acquisition of Sparc Media
Issue of shares
Issue of shares
Issue of shares
Shares issued on acquisition of Cohort
Less: share issue costs net of taxation
1 July 2016
29 July 2016
28 September 2016
7 November 2016
8 November 2016
8 November 2016
Balance
Shares issued on acquisition of Cohort
Conversion of performance rights to ordinary shares 7 May 2018
Less: share issue costs net of taxation
30 June 2017
8 November 2017
63,727,181
3,000,000
8,660,448
28,450,649
666,666
6,666,667
-
111,171,611
8,888,889
435,125
-
Balance
30 June 2018
120,495,625
$0.40
$0.45
$0.45
$0.45
$0.45
$0.00
$0.21
$0.00
$0.00
19,190,010
1,200,000
3,897,202
12,803,214
300,000
3,000,000
(453,132)
39,937,294
1,866,667
-
(810)
41,803,151
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the
company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The group's objectives when managing capital is to safeguard its ability to continue as a going concern so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce
the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
The group would look to raise capital when an opportunity to invest in a business or company was seen as value adding
relative to the current company's share price at the time of the investment. The group is not actively pursuing additional
investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies.
The group is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk
management decisions. There have been no events of default on the financing arrangements during the financial year.
The capital risk management policy remains unchanged from the previous period.
55
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 22. Equity - reserves
Foreign currency reserve
Share-based payments reserve
Consolidated
2018
$
2017
$
(215,038)
449,241
(232,619)
358,629
234,203
126,010
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign
operations.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2016
Foreign currency translation
Share-based payments
Balance at 30 June 2017
Foreign currency translation
Share-based payments
Balance at 30 June 2018
Note 23. Equity - dividends
Foreign
currency
$
Share-based
payments
$
(130,768)
(101,851)
-
(232,619)
17,581
-
228,218
-
130,411
358,629
-
90,612
Total
$
97,450
(101,851)
130,411
126,010
17,581
90,612
(215,038)
449,241
234,203
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 24. Financial instruments
Financial risk management objectives
The group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and
interest rate risk), credit risk and liquidity risk. The 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 derivative financial instruments such as forward foreign exchange contracts to hedge certain risk exposures.
Derivatives are exclusively used for hedging purposes, i.e. not as trading or other speculative instruments. 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, ageing analysis for credit risk and beta analysis in respect of
investment portfolios to determine market risk.
Market risk
Foreign currency risk
The group operates internationally and is exposed to foreign currency risk from various currency exposures, primarily with
respect to the US dollar and GB Pound.
56
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 24. Financial instruments (continued)
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and
cash flow forecasting.
The carrying amount of the group's foreign currency denominated financial assets and financial liabilities at the reporting
date were not significant.
Price risk
The group is not exposed to any significant price risk.
Interest rate risk
The group's main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the group
to interest rate risk. Borrowings issued at fixed rates expose the group to fair value interest rate risk.
As at the reporting date, the group had the following variable rate borrowings outstanding:
Consolidated
Bank overdraft
Bank loans
Net exposure to cash flow interest rate risk
2018
2017
Weighted
average
interest rate
%
Weighted
average
interest rate
%
Balance
$
Balance
$
-
-
-
-
-
6.14%
1.90%
2,371,426
4,000,000
6,371,426
As at the 30 June 2018, the group's borrowings were subject to a fixed interest rate, hence the group was not susceptible
to interest rate risk.
An analysis by remaining contractual maturities is shown in the liquidity section below.
As at the 30 June 2018, the group's borrowings were subject to a fixed interest rate, hence the group was not susceptible
to interest rate risk arising from fluctuation in the variable interest rate. As at 30 June 2017, outstanding borrowing subject
to variable interest rates totalled $6,371,426. For the financial year ended 30 June 2017, an official increase/decrease in
interest rates of 100 basis points would have an adverse/favourable effect on loss before tax of $63,714 per annum. The
percentage change is based on the expected volatility of interest rates using market data and analysts' forecasts.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
group. The group has a strict code of credit, including obtaining agency credit information, confirming references and
setting appropriate credit limits. The group obtains guarantees where appropriate to mitigate credit risk. The maximum
exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for
impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements. The
group does not have any material credit risk exposure to any single debtor or group of debtors and does not hold any
collateral.
The group has a concentration of credit risk exposure with its debtors financing facility. The finance provider, as at 30 June
2018, is owed $5,628,291 (2017: $nil) from the group's trade receivables. In the event that the group's trade receivables
are not collect the group will be liable for amounts owed to the finance provider. Amounts owing represent 81.6% ( 2017:
n/a) of trade receivables at 30 June 2018. The group has recognised a provision for impairment of receivables of $615,897
at 30 June 2018 and management is confident of collection of the remaining trade receivables balances. There are no
guarantees against these receivables but management closely monitors the receivable balance on a monthly basis and is
in regular contact with this customer to mitigate risk.
Liquidity risk
Vigilant liquidity risk management requires the group to maintain sufficient liquid assets (mainly cash and cash equivalents)
and available borrowing facilities to be able to pay debts as and when they become due and payable.
57
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Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 24. Financial instruments (continued)
The group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously
monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Financing arrangements
Unused borrowing facilities at the reporting date:
Bank overdraft
Bank guarantees
Consolidated
2018
$
2017
$
-
-
-
628,574
372,096
1,000,670
Remaining contractual maturities
The following tables detail the group's remaining contractual maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Consolidated - 2018
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Reward redemption provision
Interest-bearing - fixed rate
Bank loans
Total non-derivatives
Consolidated - 2017
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Contingent consideration
Reward redemption provision
Interest-bearing - variable
Bank overdraft
Bank loans
Total non-derivatives
Weighted
average
interest rate 1 year or less
%
$
Between 1
and 2 years
$
Between 2
and 5 years Over 5 years
$
$
-
-
-
5,276,716
1,557,361
1,277,019
-
-
-
9.50%
950,000
9,061,096
10,316,667
10,316,667
-
-
-
-
-
-
-
-
-
-
Weighted
average
interest rate 1 year or less
%
$
Between 1
and 2 years
$
Between 2
and 5 years Over 5 years
$
$
Remaining
contractual
maturities
$
5,276,716
1,557,361
1,277,019
11,266,667
19,377,763
Remaining
contractual
maturities
$
-
-
-
-
5,300,111
2,170,345
4,500,000
1,512,427
-
-
-
-
-
-
-
-
6.14%
1.90%
2,571,032
1,195,656
17,249,571
-
2,290,375
2,290,375
-
627,969
627,969
-
-
-
-
-
-
-
5,300,111
2,170,345
4,500,000
1,512,427
2,571,032
4,114,000
20,167,915
*
Contingent consideration - cash payable to vendor held in escrow at 30 June 2016. It was released to the vendor on
28 July 2016.
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
58
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Notes to the financial statements
30 June 2018
Note 24. Financial instruments (continued)
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short-term nature.
Note 25. Fair value measurement
Fair value hierarchy
The following tables detail the group's assets and liabilities, measured or disclosed at fair value, using a three level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly
Level 3: Unobservable inputs for the asset or liability
Consolidated - 2017
Liabilities
Contingent consideration
Total liabilities
Level 1
$
Level 2
$
Level 3
$
Total
$
-
-
-
-
7,522,222
7,522,222
7,522,222
7,522,222
There were no transfers between levels during the financial year.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market
interest rate that is available for similar financial liabilities.
Valuation techniques for fair value measurements categorised within level 2 and level 3
The fair value of the contingent consideration has been valued using a discounted cash flow model and the fair value of
shares to be issued.
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2016
Additions
Payment of contingent consideration
Fair value movement recognised in profit or loss
Balance at 30 June 2017
Payment of contingent consideration
Issue of shares in lieu of payment
Fair value movement recognised in profit or loss
Balance at 30 June 2018
Contingent
consideration
$
Total
$
1,500,000
8,500,000
(1,500,000)
(977,778)
7,522,222
(4,298,856)
(1,866,667)
(1,356,699)
1,500,000
8,500,000
(1,500,000)
(977,778)
7,522,222
(4,298,856)
(1,866,667)
(1,356,699)
-
-
59
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Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 26. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the group is set out
below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Note 27. Remuneration of auditors
Consolidated
2018
$
2017
$
902,620
59,295
24,901
905,752
65,241
54,604
986,816
1,025,597
During the financial year the following fees were paid or payable for services provided by Grant Thornton, the auditor of the
company, and unrelated firms:
Audit services - Grant Thornton (2017: Pitcher Partners)
Audit or review of the financial statements
Audit services - other firms
Audit or review of the financial statements
Other services - other firms
Taxation services
Assistance in financial due diligence
Consolidated
2018
$
2017
$
160,028
140,344
99,900
43,794
120,899
35,050
82,304
21,316
155,949
103,620
255,849
147,414
Note 28. Contingent liabilities
The group has given a bank guarantee as at 30 June 2018 of $182,337 (2017: $182,337) to its landlord for leased
property.
60
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 29. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
More than five years
Consolidated
2018
$
2017
$
1,271,783
1,161,844
1,806,350
950,171
349,308
-
4,239,977
1,299,479
Operating lease commitments includes contracted amounts for offices and plant and equipment under non-cancellable
operating leases expiring within 1 to 5 years with, in some cases, options to extend. The leases have various escalation
clauses. On renewal, the terms of the leases are renegotiated.
Note 30. Related party transactions
Parent entity
Pureprofile Ltd is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 33.
Key management personnel
Disclosures relating to key management personnel are set out in note 26 and the remuneration report included in the
directors' report.
Transactions with related parties
The following transactions occurred with related parties:
Sale of goods and services:
Sale of services to director-related entity
Payment for goods and services:
Payment for services from director-related entities
Payment for expenses reimbursed to key management personnel
Consolidated
2018
$
2017
$
-
6,675
-
362
30,764
-
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current receivables:
Trade receivables from director-related entity
Current payables:
Payables to director-related entities
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
61
Consolidated
2018
$
2017
$
-
-
2,118
2,956
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 30. Related party transactions (continued)
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 31. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive loss
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Parent
2018
$
2017
$
(32,297,136)
(2,959,549)
(32,297,136)
(2,959,549)
Parent
2018
$
2017
$
227,218
38,576,741
16,040,212
43,683,184
151,122
4,578,427
10,151,122
7,453,427
41,803,151
449,241
(36,363,302)
39,937,294
358,629
(4,066,166)
5,889,090
36,229,757
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity is a party to a deed of cross guarantee (refer note 35), under which it guarantees the debts of certain of
its subsidiaries as at 30 June 2018 and 30 June 2017.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2018 and 30 June 2017 other than those disclosed in note 29 .
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2018 and 30 June 2017.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the group, as disclosed in note 2, except for the
following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
62
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 32. Business combinations
Acquisition of Cohort Holdings Australia Pty Limited and it's controlled entities (prior year)
On 8 November 2016, the Group acquired 100% of the share capital of Cohort Australia Holdings Pty Limited and its
controlled entities (collectively referred to as 'Cohort') for total consideration of $27,542,462. Cohort specialises in digital
marketing and lead generation. It was acquired to accelerate Pureprofile’s expansion into media sales and to access
Cohort’s highly skilled workforce and proprietary technology platforms. The goodwill of $13,396,158 represents the
strategic drivers of the business including enabling Pureprofile to strengthen its pipeline of campaign opportunities as well
as publisher and agency relationships by leveraging Cohort's database with its proprietary and partner digital assets. None
of the goodwill recognised is expected to be deductible for tax purposes. The acquired business contributed revenues of
$17,860,287 and profit after tax of $2,275,951 to the consolidated entity for the period from 8 November 2016 to 30 June
2017. If the acquisition occurred on 1 July 2016, the contributions for the year to 30 June 2017 would have been revenues
of $28,231,456 and profit after tax of $3,240,737.
Details of the acquisition are as follows:
Cash and cash equivalents
Trade receivables
Prepayments
Other current assets
Plant and equipment
Software
Membership base
Customer and partnership relationships
Brand names
Deferred tax asset
Trade payables
Provision for income tax
Deferred tax liability
Employee benefits
Other liabilities
Net assets acquired
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid or payable to vendor
Pureprofile Ltd. shares issued to vendor
Contingent consideration - Pureprofile Ltd. shares and cash to be issued to vendor
Fair value
$
1,362,218
5,078,503
321,633
159,404
213,112
5,490,000
2,647,235
3,622,000
1,058,000
109,313
(3,994,446)
(663,207)
(1,086,600)
(145,143)
(25,718)
14,146,304
13,396,158
27,542,462
16,042,462
3,000,000
8,500,000
27,542,462
63
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 32. Business combinations (continued)
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: cash and cash equivalents
Less: payments made in prior periods
Less: contingent consideration
Less: shares issued by company as part of consideration during the year ended 30 June
2017
Less: shares issued by company as part of consideration during the year ended 30 June
2018
Less: fair value adjustment to contingent consideration during the year ended 30 June 2017
Less: fair value adjustment to contingent consideration during the year ended 30 June 2018
Net cash used
Consolidated
2018
$
2017
$
27,542,462
(1,362,218)
(14,680,244)
-
27,542,462
(1,362,218)
-
(7,522,222)
(3,000,000)
(3,000,000)
(1,866,667)
(977,778)
(1,356,699)
-
(977,778)
-
4,298,856
14,680,244
Total acquisition costs in relation to the acquisition of Cohort of $246,420 (2017: $2,279,984) were expensed to the profit or
loss during the year ended 30 June 2018.
Note 33. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Name
Pureprofile.com, Inc.
Pureprofile Australia Pty Limited
Pureprofile Global Pty Ltd
Pureprofile Media PLC
Pureprofile UK Ltd
Pureprofile US Inc.
Pure Network Pty Ltd
Real Research Global Pty Ltd
Real Research Pty Ltd
Sparc Media Pty Ltd
Funbox India Private Limited
Sparc Media sp. Z o.o.
Pureprofile NZ Ltd
Cohort Holdings Australia Pty Limited
Cohort Australia Pty Ltd
Cohort Developments Pty Ltd
Cohort Global LLC
Cohort Global Ltd
Principal place of business /
Country of incorporation
Ownership interest
2017
2018
%
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
USA
Australia
Australia
United Kingdom
United Kingdom
USA
Australia
Australia
Australia
Australia
India
Poland
New Zealand
Australia
Australia
Australia
USA
United Kingdom
64
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 34. Deed of cross guarantee
The following entities are party to a deed of cross guarantee under which each company guarantees the debts of the
others:
Pureprofile Australia Pty Limited
Pureprofile Global Pty Ltd
Pure Network Pty Ltd
Real Research Global Pty Ltd
Real Research Pty Ltd
Sparc Media Pty Ltd
By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare financial
statements and directors' report under Corporations Instrument 2016/785 issued by the Australian Securities and
Investments Commission.
The above companies represent a 'Closed Group' for the purposes of the Corporations Instrument, and as there are no
other parties to the deed of cross guarantee that are controlled by Pureprofile Ltd, they also represent the 'Extended
Closed Group'.
Set out below is a consolidated statement of profit or loss and other comprehensive income and statement of financial
position of the 'Closed Group'.
Statement of profit or loss and other comprehensive income
Revenue
Other income
Direct costs of revenue
Employee benefits expense
Foreign exchange loss
Depreciation, amortisation and impairment expense
Technology, engineering and licence fees
Share-based payment expense
Restructuring, acquisition and IPO costs
Other expenses
Loss before income tax (expense)/benefit
Income tax (expense)/benefit
Loss after income tax (expense)/benefit
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
Equity - accumulated losses
Accumulated losses at the beginning of the financial year
Loss after income tax (expense)/benefit
Accumulated losses at the end of the financial year
65
2018
$
2017
$
31,706,698
-
(16,094,793)
(9,102,649)
(400,441)
(21,904,282)
(3,177,898)
(68,700)
(23,548)
(5,611,871)
35,325,205
977,778
(17,509,159)
(9,742,018)
(334,904)
(2,045,795)
(2,957,469)
(109,181)
(2,268,747)
(5,799,630)
(24,677,484)
(278,974)
(4,463,920)
1,286,782
(24,956,458)
(3,177,138)
-
-
(24,956,458)
(3,177,138)
2018
$
2017
$
(14,629,692)
(24,956,458)
(11,452,554)
(3,177,138)
(39,586,150)
(14,629,692)
For personal use only
2018
$
2017
$
948,962
4,207,371
437,345
5,593,678
586,562
7,481,528
628,470
8,696,560
125,186
14,393,271
1,559,248
9,181,561
25,259,266
191,097
13,707,959
2,011,686
28,307,923
44,218,665
30,852,944
52,915,225
7,892,508
-
459,101
1,559,815
7,893,261
224,594
18,029,279
14,096,175
3,496,426
618,839
1,803,571
4,193,332
116,442
24,324,785
10,000,000
71,992
10,071,992
2,875,000
71,271
2,946,271
28,101,271
27,271,056
2,751,673
25,644,169
41,803,151
534,672
(39,586,150)
39,937,294
336,567
(14,629,692)
2,751,673
25,644,169
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 34. Deed of cross guarantee (continued)
Statement of financial position
Current assets
Cash and cash equivalents
Trade and other receivables
Other
Non-current assets
Property, plant and equipment
Intangibles
Deferred tax
Investment in subsidiary
Total assets
Current liabilities
Trade and other payables
Borrowings
Income tax
Provisions
Related party payables
Deferred revenue
Non-current liabilities
Borrowings
Provisions
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
66
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 35. Earnings per share
Consolidated
2018
$
2017
$
Loss after income tax attributable to the owners of Pureprofile Ltd
(25,979,877)
(1,998,302)
Weighted average number of ordinary shares used in calculating basic earnings per share
116,934,616
96,032,731
Weighted average number of ordinary shares used in calculating diluted earnings per share
116,934,616
96,032,731
Number
Number
Basic earnings per share
Diluted earnings per share
Options have been excluded from the diluted earnings per share as they were anti-dilutive.
Note 36. Share-based payments
Cents
Cents
(22.22)
(22.22)
(2.08)
(2.08)
Share options and service rights
A long term incentive plan ('LTI') and short term incentive plan ('STI') has been established by the group, whereby the
group may, at the discretion of the Board, grant options or performance rights (in the case of an LTI) or service rights (in
the case of an STI) over ordinary shares in the company to certain key management personnel and employees of the
group. The existing options are issued for consideration and are granted in accordance with guidelines established by the
Board. The existing service rights are issued for nil consideration and are granted in accordance with performance
guidelines established by the Board.
The general terms under which the share options and service rights are granted are summarised in the Remuneration
report section of the Directors' report.
Performance rights
On 12 December 2017, the company issued 2,100,000 performance rights to its finance facility provider, as part
consideration for the financing facility obtained in November 2017. The general terms under which the performance rights
are granted are summarised in note 19.
Share-based payments expense for the financial year was $90,612 (2017: $130,411).
Set out below are summaries of options granted under the long term incentive plan:
2018
Grant date
Expiry date
29/05/2015
29/05/2015
29/05/2020
29/05/2020
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
$0.50
$0.60
2,009,000
1,200,000
3,209,000
-
-
-
-
-
-
-
-
-
2,009,000
1,200,000
3,209,000
Weighted average exercise price
$0.54
$0.00
$0.00
$0.00
$0.54
67
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 36. Share-based payments (continued)
2017
Grant date
Expiry date
29/05/2015
29/05/2015
29/05/2020
29/05/2020
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
$0.50
$0.60
2,111,000
1,200,000
3,311,000
-
-
-
-
-
-
(102,000)
-
(102,000)
2,009,000
1,200,000
3,209,000
Weighted average exercise price
$0.54
$0.00
$0.00
$0.50
$0.54
Set out below are the options that have vested and are exercisable at the end of the financial year:
Grant date
Expiry date
29/05/2015
29/05/2015
29/05/2020
29/05/2020
2018
Number
2017
Number
2,009,000
1,200,000
1,407,336
799,998
3,209,000
2,207,334
The weighted average share price during the financial year was $0.18 (2017: $0.43).
The weighted average remaining contractual life of options outstanding at the end of the financial year was 1.9 years
(2017: 2.9 years).
Set out below are summaries of service rights granted under the short term incentive plan:
2018
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
28/02/2018
31/01/2018
$0.00
435,125
435,125
-
-
(435,125)
(435,125)
2017
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
19/12/2016
31/01/2018
$0.00
-
-
435,125
435,125
-
-
No service rights are exercisable at the end of the financial year (2017: nil)
-
-
-
-
-
-
Balance at
the end of
the year
435,125
435,125
The weighted average remaining contractual life of service rights outstanding at the end of the financial year was nil (2017:
0.6 years).
68
For personal use only
Pureprofile Ltd
Notes to the financial statements
30 June 2018
Note 36. Share-based payments (continued)
Set out below are summaries of performance rights granted under the plan:
2018
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
12/12/2017
02/11/2019
$0.00
-
-
2,100,000
2,100,000
-
-
-
-
2,100,000
2,100,000
No performance rights are exercisable at the end of the financial year (2017: n/a)
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 1.3
years (2017: n/a).
Note 37. Cash flow information
Reconciliation of loss after income tax to net cash from operating activities
Loss after income tax (expense)/benefit for the year
(25,979,877)
(1,998,302)
Consolidated
2018
$
2017
$
Adjustments for:
Depreciation and amortisation
Impairment of intangibles
Share-based payments
Net loss on disposal of non-current assets
Foreign currency differences
Payment for expenses relating to acquisitions
Revaluation of earn-out liability
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Decrease in income tax refund due
Decrease/(increase) in deferred tax assets
Decrease/(increase) in accrued revenue
Decrease/(increase) in prepayments
Increase in trade and other payables
Increase/(decrease) in provision for income tax
Decrease in deferred tax liabilities
Increase/(decrease) in employee benefits
Decrease in other provisions
Net cash from operating activities
5,251,229
17,994,882
90,612
1,058,000
17,581
498,322
(1,356,699)
3,491,458
-
130,411
6,418
(29,445)
2,238,747
(977,778)
5,278,700
-
889,887
(186,290)
278,175
768,948
(410,860)
(84,336)
(32,387)
(251,735)
(1,077,842)
522,124
(532,724)
210,313
(72,189)
481,490
51,329
(58,776)
188,706
(198,410)
3,824,152
2,375,530
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Notes to the financial statements
30 June 2018
Note 37. Cash flow information (continued)
Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2016
Net cash from financing activities
Balance at 30 June 2017
Net cash from financing activities
Balance at 30 June 2018
Note 38. Events after the reporting period
Bank loans
$
Total
$
125,000
3,875,000
125,000
3,875,000
4,000,000
6,000,000
4,000,000
6,000,000
10,000,000
10,000,000
No matter or circumstance has arisen since 30 June 2018 that has significantly affected, or may significantly affect the
group's operations, the results of those operations, or the group's state of affairs in future financial years.
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Directors' declaration
30 June 2018
In the directors' opinion:
●
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the group's financial position as at 30 June
2018 and of its performance for the financial year ended on that date;
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable; and
at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed
Group will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed
of cross guarantee described in note 34 to the financial statements.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Andrew Edwards
Non-Executive Chairman
28 September 2018
Sydney
71
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Sydney NSW 2000
Correspondence to:
Locked Bag Q800
QVB Post Office
Sydney NSW 1230
T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Pureprofile Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Pureprofile Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2018, the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
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Material uncertainty related to going concern
We draw attention to Note 1 in the financial statements, which indicates that the Group incurred a net loss of $25,979,877
during the year ended 30 June 2018, and as of that date, the Group’s current liabilities exceeded its current assets by
$3,923,864. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a
material uncertainty exists that may cast doubt on the Group’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section, we have determined the
matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Carrying value of intangible assets Note 14
At 30 June 2018, the Group’s consolidated statement of
financial position included intangible assets of $19,144,187.
AASB 136 Impairment of Assets requires, for the purposes of
impairment testing, that goodwill acquired in a business
combination be allocated to each of the Group’s cash-
generating units (CGUs). Each CGU to which goodwill has
been allocated must be tested for impairment at least annually
or when indicators of impairment are present.
Management determined that indicators of impairment were
present at 30 June 2018 and performed an impairment
assessment as required by AASB 136. This assessment was
performed by comparing the carrying amount of each CGU
with their recoverable amounts, which were determined using
a value-in–use impairment model.
We considered this to be a key audit matter given the value of
these assets relative to total assets and the significant
judgements and assumptions involved in the application of the
value-in-use model used by management in testing intangible
assets for impairment and determining the impairment write-
down.
Our audit procedures included the following:
Assessed whether the impairment testing model (“the
model”) used by management met the requirements of
Australian Accounting Standard AASB136;
Evaluated the determination of CGUs with respect to the
independence of cash inflows generated by each CGU;
Tested the mathematical accuracy of the models;
Assessed the underlying assumptions regarding future
cash flows used in the model by comparing these to
approved budgets, historical performance, business plans,
industry forecasts and other supporting information;
Evaluated the historical accuracy of the Group’s
forecasting ability;
Assessed the discount rates and the terminal growth rates
used in the model, with involvement from our valuation
specialists;
Considered the sensitivity of the model, focussing on areas
where a reasonably possible change in assumptions could
cause the carrying amount to exceed its recoverable
amount and therefore indicate impairment; and
Assessed the adequacy of the disclosures relating to
intangible assets in the financial statements, including
those made with respect to judgements and estimates.
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Key audit matter
How our audit addressed the key audit matter
Our audit procedures included the following:
Assessed the assumptions used and estimates made in
capitalising development costs;
Assessed whether the useful life of development costs is
appropriate;
Tested on a sample basis, costs capitalised to underlying
evidence including employment contracts, payroll reports
and invoices from external suppliers to assess the nature
and eligibility of development costs for capitalisation as an
intangible asset under AASB 138, and
Considered the adequacy of the financial report
disclosures.
Capitalisation of development costs Note 14
During the year ended 30 June 2018, the Group capitalised
$3,914,542 of costs related to the development of its software
assets.
AASB 138 Intangible Assets sets out the criteria that are
required to be met in order to record intangible assets arising
from the development phase of a project.
Judgment is required by management in determining if the
internal labour and external supplier costs incurred are directly
attributable to the development projects and the
appropriateness of these costs to be capitalised under AASB
138.
Due to the magnitude of amounts capitalised and the
judgments and estimates involved in determining which costs
may be capitalised throughout the life of the project and
determining the useful life of the asset, this was considered to
be a key audit matter.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2018, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of 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 Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
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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 this 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/ar1.pdf. This description forms part of our
auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 15 to 23 of the Directors’ report for the year ended 30 June
2018.
In our opinion, the Remuneration Report of Pureprofile Limited, for the year ended 30 June 2018 complies with section
300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
S M Coulton
Partner – Audit & Assurance
Sydney, 28 September 2018
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Pureprofile Ltd
Corporate directory
30 June 2018
Directors
Andrew Edwards
Nic Jones
Cliff Rosenberg
Sue Klose
Marcelo Ulvert
Company secretary
Kohei Katagiri
Notice of annual general meeting
The details of the annual general meeting of Pureprofile Ltd. are:
Friday, 30 November 2018 at 11:00am at:
Grant Thornton
Level 17, 383 Kent Street
Sydney NSW 2000
Registered office
Principal place of business
Share register
Auditor
Level 20, 233 Castlereagh Street
Sydney
NSW 2000
Tel: +61 2 9333 9700
Level 20, 233 Castlereagh Street
Sydney
NSW 2000
Tel: +61 2 9333 9700
Automic
Level 3/50 Holt St
Surry Hills
NSW 2010
Tel: +61 2 9698 5414
Grant Thornton
Level 17, 383 Kent Street
Sydney
NSW 2000
Tel: +61 2 8297 2400
Stock exchange listing
Pureprofile Ltd. shares are listed on the Australian Securities Exchange (ASX code:
PPL)
Website
www.pureprofile.com
Business objectives
Pureprofile Ltd. has used cash and cash equivalents held at the time of listing, in a
way consistent with its stated business objectives.
Corporate Governance Statement
The Corporate Governance Statement was approved by the Board of Directors at the
same time as the Annual Report and can be found on the Investor Relations page at
https://business.pureprofile.com/investors/
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Pureprofile Ltd
Shareholder information
30 June 2018
The shareholder information set out below was applicable as at 1 September 2018.
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
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Merrill Lynch (Australia) Nominees Pty Limited
Citicorp Nominees Pty Limited
FMG Holdings Pty Ltd
OCP Shelf 2 Pty Ltd
Mr. Paul Augustine Chan (The Chan Family A/C)
Mrs. Leora Shamgar
Est Late Frederick Swaab
MDJU Number 1 Pty Ltd (The MDJU No 3 A/C)
Ribekow Pty Ltd (The Ribekow Family A/C)
HSBC Custody Nominees (Australia) Limited
Onmell Pty Ltd (Onm BPSF A/C)
Pilmore Pty Ltd (Miwa Super Fund A/C)
Myall Resources Pty Ltd (Myall Group Super Fund A/C)
Dato Lim Sen Yap
BNP Paribas Nominees Pty Ltd (IB AU Noms Retailclient DRP)
Nofusa Pty Ltd (Hersch Family A/C)
Depofo Pty Ltd (Super A/C)
Appwam Pty Ltd
Super Options Fund Pty Ltd
Osgood Holdings Pty Ltd (Nicky6 Family A/C)
77
Number
of holders
of options
over
ordinary
shares
Number
of holders
of ordinary
shares
28
174
95
321
128
746
119
-
1
-
7
10
18
-
Ordinary shares
Number held
% of total
shares
issued
11,732,839
10,019,072
8,837,701
6,777,778
6,202,090
4,000,000
3,921,977
3,888,889
3,888,889
2,718,383
2,411,755
1,814,699
1,781,412
1,758,756
1,582,826
1,500,000
1,300,000
1,100,000
1,100,000
1,067,548
9.74
8.31
7.33
5.62
5.15
3.32
3.25
3.23
3.23
2.26
2.00
1.51
1.48
1.46
1.31
1.24
1.08
0.91
0.91
0.89
77,404,614
64.23
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Pureprofile Ltd
Shareholder information
30 June 2018
Unquoted equity securities
Options over ordinary shares
Performance rights over ordinary shares
The following person holds 20% or more of unquoted equity securities:
Number
on issue
Number
of holders
3,209,000
2,100,000
17
1
Name
Lucerne Finance
Class
Number held
Performance rights over ordinary shares issued
2,100,000
Substantial holders
Substantial holders in the company are set out below:
Merrill Lynch (Australia) Nominees Pty Limited
Citicorp Nominees Pty Limited
FMG Holdings Pty Ltd
OCP Shelf 2 Pty Ltd
Mr Paul Augustine Chan (The Chan Family A/C)
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
Number held
11,732,839
10,019,072
8,837,701
6,777,778
6,202,090
% of total
shares
issued
9.74
8.31
7.33
5.62
5.15
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.
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