Annual
Report
2019
Pureprofile Limited ABN 37 167 522 901
Contents
Our Mission, Vision & Values .......................................................................
Financial Highlights ............................................................................................
Chairman’s Letter ...............................................................................................
Meet our Directors ............................................................................................
Directors’ report ..................................................................................................
Auditor’s independence declaration ......................................................
Statement of profit or loss & other comprehensive income...
Statement of financial position .................................................................
Statement of changes in equity ................................................................
Statement of cash flows .................................................................................
Notes to the financial statements ...........................................................
Directors’ declaration .......................................................................................
Independent auditor’s report to the members of Pureprofile Ltd
Corporate directory ..........................................................................................
Shareholder information ...............................................................................
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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 27 September 2019. The directors have the power to amend and reissue the financial statements.
Our
Mission,
Vision &
Values
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.
Financial Highlights
Discontinued
declining / lower
margin
businesses
NPAT loss improved
by $11.5m through
decrease in non-
cash write down
of intangibles and
amortisation
expenses
Extension on
all debt
facilities
to 1 October 2020
Revenue on continuing businesses was
$26.7m up 5%
on pcp
D&I business grew revenue
14%
with UK growing
89%
Media business grew
revenue 3%, ramping up to
23%
in H2
Further cost savings of
$0.5m
on continuing businesses
Operating cash flow improved by
$1.9m
through increased collection
of receipts in H2
Continuing EBITDA was up
49%
driven by growth in revenue,
gross margin and cost savings
Chairman’s Letter
DEAR FELLOW INVESTORS,
It is my privilege to present to you Pureprofile’s FY2019 Annual
Report. There is no doubt that it has been a year of challenges
and changes, most recently to the composition of the Board
and senior management, which included me stepping back into
an executive role as Executive Chairman.
With a leaner and more agile team to continue the focus on
growing our core business, I am confident that we will return
to positive operating cash flow and EBITDA. In this regard, we
have provided to the market an FY20 EBITDA guidance of
$2.7m - $3.0m.
We have reached this position after completing the first phase
of our turnaround strategy, which included:
• a $5m reduction in the annualised cost base;
•
simplification of the business with the sale of the
Company’s media trading and ANZ lead
generation business units; and
revenue growth of its core Data & Insights and
Media offerings.
•
I am especially pleased that the next phase of the Company’s
turnaround will be led by Mrs Melinda Sheppard, who has
been promoted from Chief Financial Officer to Chief Operating
Officer. Melinda has been instrumental over the past year in
ensuring that the Company’s finances continue to be managed
tightly and prudently.
WITH A LEANER AND MORE AGILE TEAM TO CONTINUE THE FOCUS
ON GROWING OUR CORE BUSINESS, I AM CONFIDENT THAT WE WILL
RETURN TO POSITIVE OPERATING CASH FLOW AND EBITDA.
In working with her, Melinda has not been afraid to roll up her
sleeves and get down into the weeds and she shows genuine
enthusiasm to see this Company succeed. I can think of no one
better to take on the day-to-day management responsibilities
for Pureprofile and she has the strongest confidence and
support of the Board.
I welcome our latest board appointment, Mr Aaryn Nania,
as a non-executive director. Aaryn is also a co-founder and
director of Lucerne Investment Partners, Pureprofile primary
lender. Lucerne has been supportive of Pureprofile’s for almost
2 years and to have Aaryn on board as a director shows the
commitment Lucerne has to working with us as true partners.
The past 18 months have been challenging for Pureprofile as it
has undergone a fundamental transformation. Notwithstanding
this, the underlying fundamentals of the Company are
encouraging and continue to improve. On a continuing business
basis:
• Total revenue was $26.7m, up 5% on FY2018
• Gross margin was 58%, down 1% on FY2018
• EBITDA was ($1.3m), up 49% on FY2018
It is even more impressive to note that the Company’s core
D&I and Media businesses grew 14% and 3% respectively over
the year. More challenging though was the Performance UK
business unit, which declined 35%.
On a statutory basis (which includes the discontinued
businesses that were sold during the year), the results are:
• Total statutory revenue of $37.8m
• Net Profit (Loss) After Tax of ($14.5m)
• Operating cash flow improvement of $1.9m
The NPAT position was primarily attributable to the final, non-
cash write down of intangibles relating to the sale of the Media
Trading and Performance ANZ businesses. Accordingly, with the
impact of these material write downs behind us, it is expected
that NPAT will significantly improve in the coming financial year.
There is still much work to do as we enter the next phase of
Pureprofile’s turnaround. However, the direction and strategic
focus of the business is clear: maintain net positive cash flow;
continue to grow revenue; and explore capital restructuring
initiatives that reduce our debt exposure.
As always, I’d like to thank my board colleagues for their
commitment and contribution over the year. I’d also like to thank
our talented, hard-working staff across the globe for all their
efforts. And, of course, to our shareholders, whose continued
patience and support is greatly appreciated.
ANDREW EDWARDS
CHAIRMAN
Meet our Directors
ANDREW EDWARDS
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 Presi-
dent 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.
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 Offi-
cer 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 After-
care, one of Australia’s largest mental health care providers.
AARYN NANIA
Non-Executive Director
Aaryn is co-founder and Head of Funds Management at Lucerne Investment
Partners – an active, long-term investor in both listed and unlisted compa-
nies globally. Prior to Lucerne, Aaryn was a Portfolio Manager at Canadian
investment bank Canaccord Genuity (Australia) where he established and
managed the Absolute Return Portfolio.
In addition to his directorship at Lucerne, Aaryn is currently a non-
executive director of Headware, an optometry group, Connexion Telematics,
an ASX-listed software company, holds a Bachelor of Commerce from the
University of Melbourne and is a Member of the Australian Institute of Com-
pany Directors.
Directors’
Report
Pureprofile Ltd
Directors' report
30 June 2019
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 2019.
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 - Executive Chairman (formerly Non-Executive, appointed Executive on 28 August 2019)
Sue Klose - Non-Executive Director (appointed on 1 September 2018)
Aaryn Nania - Non-Executive Director (appointed on 28 August 2019)
Marcelo Ulvert - Non-Executive Director (appointed on 1 September 2018 and resigned on 12 February 2019)
Clifford Rosenberg - Non-Executive Director (resigned on 28 February 2019)
Nic Jones - Managing Director & Chief Executive Officer (resigned on 28 August 2019)
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 $14,460,042 (30 June 2018: $25,979,877).
Earnings before interest, tax, depreciation and amortisation (‘EBITDA’) for the financial year amounted to a loss of
$713,742 (30 June 2018: profit of $740,914).
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.
The following table summarises key reconciling items between statutory loss after income tax and EBITDA:
Loss after income tax
Add: Depreciation and amortisation
Add: Impairment of assets
Add: Loss on disposal of intangible assets
Add: Derecognition of goodwill on disposal of businesses
Less: Interest income
Add: Finance costs
Less: Income tax expense/(benefit)
EBITDA
Consolidated
2019
$
2018
$
(14,460,042)
(25,979,877)
5,251,229
3,803,103
2,453,010 17,994,882
1,058,000
1,027,054
3,500,000
-
(5,584)
(3,246)
1,574,900
2,522,508
847,364
443,871
(713,742)
740,914
Total statutory revenue for FY2019 was $37.8m, a decline of 27% on prior comparable period (pcp) (FY2018: $52.0m).
However, the decline was largely due to the group not having the benefit of full-year results of the Media Trading and
Performance (ANZ) businesses, which were sold in October 2018 and March 2019 respectively. These businesses were
sold as they were forecast to have declining revenues and with lower margins compared to the group’s core business
units. Following the release of the preliminary financials on 28 August 2019, an additional amount of ($3.8m) was
recognised, which impacted the group's NPAT. This included a non-cash write down of intangibles relating to the disposal
of the Media Trading business ($3.5m); provision for retroactively applied council rates in the UK ($0.2m); and revenue
reversal ($0.1m). This accounts for the difference in the statutory NPAT of ($14.5m) compared to NPAT of ($10.7m) stated
in the preliminary financials.
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Pureprofile Ltd
Directors' report
30 June 2019
On a continuing business basis, total revenue was $26.7m, a 5% increase on pcp (FY2018: $25.4m). The full impact of the
growth from the core businesses was masked by the decline of the retained Performance business in the UK, which was
down 35% on pcp (FY19: $2.2m; FY18: $3.4m) due to unforeseen reduction in sales resources and capability. Data &
Insights was up 14% on pcp (FY19: $18.4m, FY18: 16.1m). Of this growth, the D&I business in the UK grew 95%. The
Media business also showed modest growth for the year of 3% (FY19: $6.1m, FY18: $5.9m) though it significantly ramped
up in the second half with growth of 23% on pcp.
Gross margin remained relatively stable at 58%, a 1% decline on pcp. The decline was more marked across the Media
Trading and Performance ANZ businesses, which were sold. Had these business units not been divested, it is likely that
gross margin levels would have declined further.
The revenue growth had a positive impact on EBITDA on continuing businesses, which improved by 49%, up from ($2.5m)
in FY2018 to ($1.3m) in FY2019. Statutory net profit (loss) after tax was also improved by 44% (FY2019: ($14.5m);
FY2018: ($26.0m)), largely due to the reduction in non-cash write-downs of intangibles that were recognised in FY2018.
Significant changes in the state of affairs
The following significant changes in the state of affairs occurred during the year:
●
●
●
Board resignations: Mr Marcelo Ulvert and Mr Cliff Rosenberg resigned from the Board on 12 February 2019 and 28
February 2019, respectively.
Debt facilities: the group agreed new terms on its existing debt facility with Lucerne Investment Partners (Lucerne).
Under the revised terms, the group secured an additional line of credit of $3m in February 2019 and $2.6m in June
2019.
Sales of businesses: the group divested its Media Trading and Performance (ANZ) businesses (in October 2018 and
March 2019 respectively), which were considered to be declining in revenue with lower margins compared to its core
businesses.
There were no other significant changes in the state of affairs of the group during the financial year.
Matters subsequent to the end of the financial year
On 28 August 2019, Mr Nic Jones resigned as CEO and Managing Director, with Mr Andrew Edwards taking over in an
ongoing executive capacity as Executive Chairman. At the same time, CFO, Mrs Melinda Sheppard, was promoted to
Chief Operating Officer, with responsibility for managing finance, HR, operational delivery and corporate services. Mr
Aaryn Nania was also appointed Non-Executive Director to replace Mr Jones on the board.
Effective 1 September 2019, the following changes were made to the group’s existing debt facilities with Lucerne:
●
●
●
Maturity date: the maturity date on all facilities has been extended to 1 October 2020;
Interest rate: the interest rate has been set at 20% on all drawn facilities and the group has the option to capitalise
interest and repay it with the principal upon maturity; and
Repayment fee: the ‘Repayment Fee’, which Lucerne would have been entitled to on the happening of a ‘Control
Transaction’ (as disclosed to the ASX on 28 February 2019), has been removed.
Effective 27 September 2019, the group’s debt facilities with Lucerne were increased by $5,400,000. The line of credit on
Facility C was increased from $2,600,000 to $7,000,000. The maturity date and interest rate remain unchanged from the
amendments made to the facility on 1 September 2019.
No other matter or circumstance has arisen since 30 June 2019 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
Revenue growth for the group’s core Data & Insights and Media business units are expected to continue while revenues for
the Performance UK business is expected to recover after a decline in FY2019.
The group has provided EBITDA guidance of $2.7m - $3.0m (excluding the impact of AASB16 lease accounting standard).
The group further expects to realise net positive cash flows from operating activities and will continue to explore capital
restructuring initiatives and other strategic options to reduce its debt exposure.
3
Pureprofile Ltd
Directors' report
30 June 2019
Environmental regulation
The group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Information on directors
Name:
Title:
Experience and expertise:
Andrew Edwards
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:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
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 Chairman of the Nomination and Remuneration
Committee
984,691 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)
Member of the Audit Committee and Member of the Nomination and Remuneration
Committee
None
None
None
None
4
Pureprofile Ltd
Directors' report
30 June 2019
Name:
Title:
Qualifications:
Experience and expertise:
Aaryn Nania
Non-Executive Director (appointed on 28 August 2019)
Bachelor of Commerce from the University of Melbourne and is a Member of the
Australian Institute of Company Directors
Aaryn is co-founder and Head of Funds Management at Lucerne Investment Partners
– an active, long-term investor in both listed and unlisted companies globally. Prior to
Lucerne, Aaryn was a Portfolio Manager at Canadian investment bank Canaccord
Genuity (Australia) where he established and managed the Absolute Return
Portfolio.In addition to his directorship at Lucerne, Aaryn is currently a Non-Executive
director of Headware, an optometry group, Connexion Telematics Ltd, an ASX-listed
software company.
Non-Executive director of Connexion Telematics Ltd (ASX: CXZ)
Member of the Audit Committee and Member of the Nomination and Remuneration
Committee
None
None
None
None
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
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 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') held during the year ended 30 June 2019, and
the number of meetings attended by each director were:
Full Board
Nomination and
Remuneration Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
Andrew Edwards
Nic Jones
Cliff Rosenberg
Sue Klose
Marcelo Ulvert
9
9
5
7
2
9
9
7
7
3
-
-
-
-
-
-
-
-
-
-
1
1
1
-
-
1
1
1
-
-
Held: represents the number of meetings held during the time the director held office.
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
5
Pureprofile Ltd
Directors' report
30 June 2019
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; and
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; and
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; and
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.
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 2020 are summarised as follows:
Name
Sue Klose
Aaryn Nania
FY 2020 Fees
$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 from time to time grant Director share options under the LTI. Refer to Long Term Incentives section below for key
terms and conditions of the LTI.
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Pureprofile Ltd
Directors' report
30 June 2019
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; and
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.
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.
7
Pureprofile Ltd
Directors' report
30 June 2019
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. 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.
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
2019
2018
2017
$0.01
$0.14
$0.34
Use of remuneration consultants
During the financial year ended 30 June 2019, 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.
Voting and comments made at the company's 2018 Annual General Meeting ('AGM')
At the 2018 AGM, 96.5% of the votes received supported the adoption of the remuneration report for the year ended 30
June 2018. The company did not receive any specific feedback at the AGM regarding its remuneration practices.
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:
●
●
●
●
●
Andrew Edwards - Executive Chairman
Sue Klose - Non-Executive Director (appointed on 1 September 2018)
Marcelo Ulvert - Non-Executive Director (appointed on 1 September 2018 and resigned on 12 February 2019)
Clifford Rosenberg - Non-Executive Director (resigned on 28 February 2019)
Nic Jones - Managing Director & Chief Executive Officer (appointed on 5 February 2018 and resigned on 28 August
2019)
And the following person:
●
Melinda Sheppard - Chief Operating Officer/Chief Financial Officer
8
Pureprofile Ltd
Directors' report
30 June 2019
2019
Non-Executive Directors:
S. Klose*
C. Rosenberg*
M. Ulvert*
Executive Directors:
A. Edwards
N. Jones*
Other Key Management
Personnel:
M. Sheppard
Short-term benefits
Cash salary
and fees
$
Cash
bonus
$
Other
$
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Super-
annuation
$
Employee Equity-
settled*
$
leave
$
53,273
52,500
32,083
120,000
417,469
275,119
950,444
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,061
-
-
11,400
20,531
20,531
57,523
-
-
-
-
-
-
-
Total
$
58,334
52,500
32,083
131,400
438,000
-
-
-
-
-
-
295,650
- 1,007,967
*
Represents remuneration from the date of appointment and/or to the date of resignation
Short-term benefits
Cash salary
and fees
$
Cash
bonus
$
Other
$
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Super-
annuation
$
Employee Equity-
settled*
$
leave
$
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 remuneration from the date of appointment and/or to the date of resignation
9
Pureprofile Ltd
Directors' report
30 June 2019
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
S. Klose
C. Rosenberg
M. Ulvert
M. Berriman
Executive Directors:
A. Edwards
N. Jones
P. Chan
Other Key Management Personnel:
M. Sheppard
Fixed
remuneration
2019
2018
At risk - STI
2019
At risk - LTI
2019
100%
100%
100%
-
100%
100%
-
-
100%
-
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Andrew Edwards
Executive Chairman
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 2019 of $120,000 including superannuation,
to be reviewed from time to time by the Nomination and Remuneration Committee in
accordance with constitution and policies. From 1 July 2019, Andrew will receive an
additional $1,500 per week for additional services provided to the group. 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.
Sue Klose
Non-Executive Director
1 September 2018
Appointment until next Annual General Meeting, at which she 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. From 1 July 2019, Sue will receive an additional $1,500 per week
for additional services provided to the group.
Aaryn Nania
Non-Executive Director
28 August 2019
Appointment until next Annual General Meeting, at which he will be eligible for
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.
10
Pureprofile Ltd
Directors' report
30 June 2019
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Melinda Sheppard
Chief Operating Officer/Chief Financial Officer
25 June 2018
No fixed end date
Base salary for the year ended 30 June 2019 of $275,000 including 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 $151,250 and eligibility to long-term incentives, under the Incentives Scheme,
which defines the amount, form, frequency, KPI’s 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 2019 (2018: nil).
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
Vesting date and
exercisable date
29/05/2015 (a)
31/08/2017
Expiry date
29/05/2020
Fair value
per option
Exercise price at grant date
$0.60
$0.0931
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) 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 2019 are set out below:
Number of
Number of
Number of
Number of
options
granted
during the
year
2019
options
granted
during the
year
2018
options
vested
options
vested
during the
year
2019
during the
year
2018
Total number
of options
vested as at
30 June
2019
Total number
of options
vested at as
30 June
2018
Andrew Edwards
Cliff Rosenberg
-
-
-
-
-
-
166,667
133,334
400,000
400,000
400,000
400,000
Service rights
There were no service rights over ordinary shares issued to directors and other key management personnel as part of
compensation that were outstanding as at 30 June 2019.
There were no performance rights over ordinary shares granted to or vested by directors and other key management
personnel as part of compensation during the year ended 30 June 2019.
11
Pureprofile Ltd
Directors' report
30 June 2019
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:
Balance at Received
as part of
the start of
the year
remuneration Additions
Ordinary shares
Andrew Edwards
Sue Klose
Nic Jones
Clifford Rosenberg
Marcelo Ulvert
Melinda Sheppard
984,691
-
1,067,548
233,000
3,888,889
-
6,174,128
-
-
-
-
-
-
-
Disposals/
other*
Balance at
the end of
the year
-
-
-
-
-
-
-
-
-
(1,067,548)
(233,000)
(3,888,889)
-
(5,189,437)
984,691
-
-
-
-
-
984,691
*
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
Clifford Rosenberg
Balance at
the start of
the year
Granted
Disposals/
other*
Balance at
the end of
the year
Exercised
400,000
400,000
800,000
-
-
-
-
-
-
-
(400,000)
(400,000)
400,000
-
400,000
*
Disposals/other represents a member no longer being designated as a KMP and does not represent a disposal of
holding.
Other transactions with key management personnel and their related parties
During the financial year, expenses totalling $7,098 (2018: $362) were reimbursed to key management personnel.
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 2019
and up to the date of this report.
12
Pureprofile Ltd
Directors' report
30 June 2019
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
There were no ordinary shares of Pureprofile Ltd issued on the exercise of service rights during the year ended 30 June
2019 and up to the date of this report.
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 2019 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.
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.
13
Pureprofile Ltd
Directors' report
30 June 2019
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
Executive Chairman
27 September 2019
Sydney
14
Level 17, 383 Kent Street
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 2019, 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, 27 September 2019
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
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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.
15
Pureprofile Ltd
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2019
Revenue from continuing operations
Other income
Interest revenue calculated using the effective interest method
Expenses
Direct costs of revenue
Employee benefits expense
Foreign exchange loss
Depreciation and amortisation expense
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 from continuing operations
Income tax expense
Loss after income tax expense from continuing operations
Note
Consolidated
2019
$
2018
$
5
6
7
7
8
26,734,213 25,365,966
232,055
1,145
57,471
786
(11,263,048)
(11,037,117)
(360,666)
(3,439,595)
(424,665)
(2,637,564)
-
-
(1,408,087)
(1,931,355)
(2,377,093)
(10,492,712)
(10,702,569)
(123,354)
(2,729,882)
-
(2,653,058)
(82,425)
(24,666)
(1,372,564)
(2,451,619)
(1,338,138)
(7,911,777)
(6,546,764)
(443,871)
(847,364)
(8,355,648)
(7,394,128)
Loss after income tax expense from discontinued operations
9
(6,104,394)
(18,585,749)
Loss after income tax expense for the year attributable to the owners of
Pureprofile Ltd
(14,460,042)
(25,979,877)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
36,356
17,581
36,356
17,581
Total comprehensive loss for the year attributable to the owners of Pureprofile
Ltd
(14,423,686)
(25,962,296)
Total comprehensive loss for the year is attributable to:
Continuing operations
Discontinued operations
(8,319,292)
(6,104,394)
(7,376,547)
(18,585,749)
(14,423,686)
(25,962,296)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
16
Pureprofile Ltd
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2019
Note
Consolidated
2019
$
2018
$
Cents
Cents
Earnings per share for loss from continuing operations attributable to the
owners of Pureprofile Ltd
Basic earnings per share
Diluted earnings per share
Earnings per share for loss from discontinued operations attributable to the
owners of Pureprofile Ltd
Basic earnings per share
Diluted earnings per share
Earnings per share for loss attributable to the owners of Pureprofile Ltd
Basic earnings per share
Diluted earnings per share
36
36
36
36
36
36
(7.02)
(7.02)
(6.32)
(6.32)
(5.13)
(5.13)
(15.89)
(15.89)
(12.15)
(12.15)
(22.22)
(22.22)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
17
Pureprofile Ltd
Statement of financial position
As at 30 June 2019
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
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
Contract liabilities
Borrowings
Income tax
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets/(liabilities)
Equity
Issued capital
Reserves
Accumulated losses
Total equity/(deficiency)
Note
Consolidated
2019
$
2018
$
10
11
12
13
524,322
2,481,770
6,413,738 12,430,953
268,481
516,938
8,039,230 15,698,142
412,903
688,267
14
15
16
222,226
377,982
11,121,341 19,144,187
422,870
-
11,343,567 19,945,039
19,382,797 35,643,181
17
18
19
20
331,421
16,469,339
95,174
1,997,449
9,285,091 11,327,255
385,556
5,628,290
303,676
1,977,229
28,178,474 19,622,006
21
22
- 10,000,000
132,085
80,568
80,568 10,132,085
28,259,042 29,754,091
(8,876,245)
5,889,090
23
24
41,461,502 41,803,151
234,203
(36,148,264)
270,559
(50,608,306)
(8,876,245)
5,889,090
The above statement of financial position should be read in conjunction with the accompanying notes
18
Pureprofile Ltd
Statement of changes in equity
For the year ended 30 June 2019
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 23)
Share-based payments (note 37)
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
Consolidated
Balance at 1 July 2018
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
Transactions with owners in their capacity as owners:
Share buy-back
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
deficiency in
equity
$
41,803,151
234,203
(36,148,264)
5,889,090
-
-
-
-
36,356
(14,460,042)
-
(14,460,042)
36,356
36,356
(14,460,042)
(14,423,686)
(341,649)
-
-
(341,649)
Balance at 30 June 2019
41,461,502
270,559
(50,608,306)
(8,876,245)
The above statement of changes in equity should be read in conjunction with the accompanying notes
19
Pureprofile Ltd
Statement of cash flows
For the year ended 30 June 2019
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
Note
Consolidated
2019
$
2018
$
44,802,722 54,824,312
(55,104,783)
(42,797,944)
2,004,778
3,246
(2,226,449)
(152,357)
(280,471)
5,584
(1,574,900)
(452,673)
Net cash used in operating activities
38
(370,782)
(2,302,460)
Cash flows from investing activities
Final payments for prior period's purchase of subsidiary
Payments for property, plant and equipment
Payments for intangibles
Proceeds from disposal of business
Proceeds from disposal of intangibles
14
15
9
Net cash used in investing activities
Cash flows from financing activities
Share issue transaction costs
Proceeds from borrowings
Repayment of borrowings
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
-
(52,848)
(2,742,282)
650,000
9,354
(4,298,856)
(306,354)
(3,914,542)
-
-
(2,135,776)
(8,519,752)
-
(810)
4,400,000 15,628,290
(4,000,000)
(3,883,147)
516,853 11,627,480
(1,989,705)
2,481,770
32,257
805,268
1,676,502
-
Cash and cash equivalents at the end of the financial year
10
524,322
2,481,770
The above statement of cash flows should be read in conjunction with the accompanying notes
20
Pureprofile Ltd
Notes to the financial statements
30 June 2019
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 27 September 2019.
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.
The following Accounting Standards and Interpretations are most relevant to the group:
The group has adopted AASB 9 from 1 July 2018, using the modified retrospective approach. The standard introduced 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 that are solely principal and interest. A debt investment shall be measured at fair value through other
comprehensive income if it is held within a business model whose objective is to both hold assets in order to collect
contractual cash flows which arise on specified dates that are solely principal and interest as well as selling the asset on
the basis of its fair value. All other financial assets are 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 or contingent consideration recognised in a business combination) in other comprehensive income
('OCI'). Despite these requirements, a financial asset may be irrevocably designated as measured at fair value through
profit or loss to reduce the effect of, or eliminate, an accounting mismatch. For financial liabilities designated at fair value
through profit or loss, 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 use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment is measured using 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. For receivables, a simplified approach to measuring expected credit losses
using a lifetime expected loss allowance is available.
21
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
The group has adopted AASB 15 from 1 July 2017, using the fully retrospective approach. The standard provides a single
comprehensive model for revenue recognition. The core principle of the standard is that an entity shall recognise revenue
to depict the transfer of promised goods or services to customers at an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or services. The standard introduced a new contract-based
revenue recognition model with a measurement approach that is based on an allocation of the transaction price. This is
described further in the accounting policies below. Credit risk is presented separately as an expense rather than adjusted
against revenue. Contracts with customers are 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. Customer acquisition costs and costs to fulfil a contract can, subject to certain criteria, be capitalised as an asset
and amortised over the contract period.
The adoption of these standards resulted in the following adjustments:
interest receivable is now shown on the face of profit or loss;
●
provision for impairment of receivables is now reclassified as allowance for expected credit loss;
●
accrued revenue (previously classified in other current assets) now reclassified as contract asset; and
●
deferred revenue now reclassified as contract liability.
●
There was no change in the carrying amounts on adoption of AASB 9 as at 1 July 2018 and AASB 15 as at 1 July 2017.
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 $14,460,042 (2018: loss after income tax of $25,979,877) and was in a net
current liability position of $20,139,244 (2018: $3,923,864). The group generated negative cash flows from operations of
$370,782 (2018: cash outflows of $2,302,460).
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:
●
the group has restructured its debt facility with the Lender to support its 3-year forecast, including the following, which
have already been secured:
(i) an extension to its existing $10,000,000 debt facility to October 2020; and
(ii) 2 additional facilities totalling $10,000,000 used to fund working capital.
the group has executed on a number of strategic decisions during the first half of FY2019, including the sale of the
Media Trading business, the Adsparc business and the ANZ Performance business. The discontinuation of these
business units, which have historically generated declining revenues and lower gross margins, is expected to improve
the group’s gross margin and EBITDA as a result;
restructuring activities which were executed during FY2019 and the ongoing identification of further cost saving
initiatives during FY2020 continue to better align expenses to revenue and to strengthen EBITDA;
the above changes complemented by robust processes for cash management will support the cash needs during the
transition to a simpler business model; and
existing Lender continues to be supportive of the group and its turnaround strategy.
●
●
●
●
Accordingly, the directors believe the group 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 group 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 group be unable to continue as a going concern and meet its debts as and when they fall due.
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.
22
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
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 33.
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 2019 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 the company's functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average
exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange
differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
23
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
Revenue recognition
The group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the group is expected to be entitled in
exchange for transferring goods or services to a customer. For each contract with a customer, the group: identifies the
contract with a customer; identifies the performance obligations in the contract; determines the transaction price which
takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the
separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be
delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the
transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable
consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly
probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement
constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts
received that are subject to the constraining principle are recognised as a refund liability.
Sales revenue - data and insights
Revenue relating to the provision of services for Data & Insights encapsulates online market research services which helps
businesses connect to, and receive feedback from, consumers who are registered to www.pureprofile.com. The group
generates sales revenue by charging clients for access to its online panel for survey responses and may additionally
charge for set-up and support services. Contracts with clients generally comprise a single distinct performance obligation,
being the provision of market research services and the transaction price is allocated to the single performance obligation.
Some contracts contain multiple deliverables – such as set-up and support services. In such circumstances, these multiple
deliverables are considered to represent a single distinct performance obligation, given there is a significant integration
performed by the group in delivering the services. For fixed-price contracts, revenue is recognised over time and is based
on the actual service provided to the end of the reporting period as a proportion of the total services to be provided
because the customer receives and uses the benefits simultaneously. This is determined based on the actual surveys
completed relative to the total expected surveys.
Sales revenue - media
Revenue relating to the provision of services for Media sales including programmatic buying and selling of ad inventory,
online marketing solutions for advertisers and advertising yield optimisation solutions for online publishers. The group
generates sales revenue for managed campaign (programmatic trading) services by charging clients for purchasing ad
inventory and managing the placement of ads on their behalf (at a marked-up price to the ad inventory purchased or as a
service fee). The group also generates sales revenue for Media Trading service by buying and reselling ad inventory. The
group also generates sales revenue by helping publishers to increase yield through programmatically selling their ad
inventory. Contracts with clients generally comprise a single distinct performance obligation, being the provision of Media
services described above and the transaction price is allocated to the single performance obligation. Fees for the provision
of services are recognised as revenue as the services are rendered, in accordance with the terms and conditions of the
service agreement.
Sales revenue - performance
Revenue relating to the provision of services for digital marketing by providing lead generation and email marketing
services. The group generates sales revenue for lead generation services by charging clients on a price per lead basis.
The group generates sales revenue from email marketing by various revenue models including cost per thousand (CPM),
cost per click (CPC) and cost per acquisition (CPA). Contracts with clients generally comprise a single distinct performance
obligation, being the provision of Lead Generation and Email marketing services described above and the transaction price
is allocated to the single performance obligation. For fixed-price contracts, revenue is recognised based on the actual
service provided to the end of the reporting period as a proportion of the total services to be provided because the
customer receives and uses the benefits simultaneously. This is determined based on the actual leads obtained relative to
the total expected leads.
24
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
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.
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.
25
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
Discontinued operations
A discontinued operation is a component of the group that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to
dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The
results of discontinued operations are presented separately on the face of the statement of profit or loss and other
comprehensive income.
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.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within
30 days.
The group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Contract assets
Contract assets are recognised when the group has transferred goods or services to the customer but where the group is
yet to establish an unconditional right to consideration. Contract assets are treated as financial assets for impairment
purposes.
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.
26
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
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. The
Cohort Group was subsequently disposed during the year ended 30 June 2019 and the Customer and partnership network
relationships intangible assets were subsequently disposed of and/or impaired.
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. The Membership base was not disposed as part
of sale of the Performance ANZ business.
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.
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.
27
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
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.
Contract liabilities
Contract liabilities represent the group's obligation to transfer goods or services to a customer and are recognised when a
customer pays consideration, or when the group recognises a receivable to reflect its unconditional right to consideration
(whichever is earlier) before the group has transferred the goods or services to the customer.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
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 high quality
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.
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.
28
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
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.
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.
29
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
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.
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.
30
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
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 2019. 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 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 has elected to apply the modified retrospective approach as permitted by AASB 16. The cumulative effect of
adopting AASB 16 will be recognised as an adjustment to the opening balance of retained earnings at 1 July 2019 with no
restatement of comparative information.
The group has chosen to measure the existing operating leases at the present value of the remaining lease payments,
discounted using the group's incremental borrowing rate at the date of initial application.
Recognition of right-of-use assets on adoption of AASB 16
Recognition of lease liability on adoption of AASB 16
Net impact on retained earnings at 1 July 2019
1 July 2019
$
4,426,507
(4,426,507)
-
The effect on NPAT is not expected to be significant. However, EBITDA will be positively affected because the operating
lease expense will be replaced by depreciation and interest charges, which are recorded below the EBITDA line.
31
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
New Conceptual Framework for Financial Reporting
A revised Conceptual Framework for Financial Reporting has been issued by the AASB and is applicable for annual
reporting periods beginning on or after 1 January 2020. This release impacts for-profit private sector entities that have
public accountability that are required by legislation to comply with Australian Accounting Standards and other for-profit
entities that voluntarily elect to apply the Conceptual Framework. Phase 2 of the framework is yet to be released which will
impact for-profit private sector entities. The application of new definition and recognition criteria as well as new guidance on
measurement will result in amendments to several accounting standards. The issue of AASB 2019-1 Amendments to
Australian Accounting Standards – References to the Conceptual Framework, also applicable from 1 January 2020,
includes such amendments. Where the group has relied on the conceptual framework in determining its accounting policies
for transactions, events or conditions that are not otherwise dealt with under Australian Accounting Standards, the group
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.
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.
Following the disposal of the business units during the year ended 30 June 2019, goodwill has been apportioned between
continuing operations and goodwill disposed of through the discontinued operations. Considerable judgement is required in
determining the amounts to be apportioned between the continuing and discontinued operations.
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.
32
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 3. Critical accounting judgements, estimates and assumptions (continued)
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. Operating segments
Identification of reportable operating segments
The Group is organised into three operating segments:
● Data & Insights;
● Media; and
● Performance
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.
Other segments represent the corporate headquarters of the consolidated entity.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies
adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.
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
On 4 October 2018, the group entered into a binding agreement to sell its media trading business unit which acquired as
part of the acquisition of Sparcmedia in 2015 and on 1 March 2019 the group sold 100% of its interest in Cohort Holdings
Australia Pty Ltd and its controlled entities. Both business units were part of the media segment. Refer note 9 for further
information.
Major customers
During the years ended 30 June 2019 and 30 June 2018 no single customer contributed more than 10% to the Group's
external revenue.
33
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 4. Operating segments (continued)
Operating segment information (continuing and discontinued operations)
Consolidated - 2019
Revenue
Sales to external customers
Interest
Total revenue
EBITDA
Depreciation and amortisation
Impairment of assets
Loss on disposal of intangible assets
Derecognition of goodwill on disposal of
businesses
Finance costs
Finance costs
Profit/(loss) before income tax expense
Income tax expense
Loss after income tax expense
Consolidated - 2018
Revenue
Sales to external customers
Interest
Total revenue
Data &
Insights
$
Media
$
Performance
$
Other
segments
$
Total
$
18,375,807 11,574,006
-
-
18,375,807 11,574,006
7,852,283
-
7,852,283
- 37,802,096
3,246
3,246
3,246 37,805,342
6,534,540
(2,493,136)
-
(212,987)
2,235,106
(405,550)
-
(602,389)
(271,498)
(686,834)
(2,453,010)
(211,678)
(9,211,890)
(217,583)
-
-
(713,742)
(3,803,103)
(2,453,010)
(1,027,054)
-
-
-
3,828,417
(3,500,000)
-
-
(2,272,833)
-
-
-
(3,623,020)
-
3,246
(2,522,508)
(11,948,735)
(3,500,000)
3,246
(2,522,508)
(14,016,171)
(443,871)
(14,460,042)
Data &
Insights
$
Media
$
Performance
$
Other
segments
$
Total
$
16,058,862 16,359,632 19,565,615
-
16,058,862 16,359,632 19,565,615
-
-
- 51,984,109
5,584
5,584
5,584 51,989,693
EBITDA
Depreciation and amortisation
Impairment of assets
Loss on disposal of intangible assets
Interest revenue
Finance costs
Profit/(loss) before income tax expense
Income tax expense
Loss after income tax expense
5,417,563
(2,154,816)
-
-
-
-
3,262,747
1,428,644
(433,136)
-
-
-
-
995,508
1,370,476
(2,346,525)
(17,994,882)
(1,058,000)
-
-
(20,028,931)
(7,475,769)
(316,752)
-
-
5,584
(1,574,900)
(9,361,837)
740,914
(5,251,229)
(17,994,882)
(1,058,000)
5,584
(1,574,900)
(25,132,513)
(847,364)
(25,979,877)
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 (continuing and discontinued operations)
The group operates in 3 (2018: 3) regions. The sales revenue for each region is as follows:
34
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 4. Operating segments (continued)
Sales to external customers
Australasia
Europe
United States
Note 5. Revenue
From continuing operations
Data & Insights
Media
Performance
Revenue from continuing operations
Consolidated
2019
$
2018
$
30,740,479 45,861,718
5,245,252
877,139
5,679,573
1,382,044
37,802,096 51,984,109
Consolidated
2019
$
2018
$
18,375,807 16,058,862
5,890,299
3,416,805
6,145,245
2,213,161
26,734,213 25,365,966
Disaggregation of revenue
Refer to note 4 'Operating segments' for analysis of revenue by major product line and geographical region.
During the financial years ended 30 June 2019 and 30 June 2018, all revenue was recognised based on services
transferred over time.
Note 6. Other income
Net gain on disposal of property, plant and equipment
Rental income
Other income
Other income
Consolidated
2019
$
2018
$
10,203
171,950
49,902
-
57,471
-
232,055
57,471
35
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 7. Expenses
Loss before income tax from continuing operations includes the following specific expenses:
Depreciation
Office and computer equipment
Amortisation
Software
Membership base
Total amortisation
Total depreciation and amortisation
Finance costs
Interest and finance charges paid/payable
Superannuation expense
Defined contribution superannuation expense
Share-based payments expense
Share-based payments expense
Consolidated
2019
$
2018
$
147,693
207,901
2,900,551
391,351
2,521,982
-
3,291,902
2,521,982
3,439,595
2,729,883
2,377,093
1,338,138
697,096
655,753
-
90,612
Employee benefits expense excluding superannuation
Employee benefits expense excluding superannuation
10,340,021 10,046,815
36
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 8. Income tax expense
Income tax expense
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustment recognised for prior periods
Aggregate income tax expense
Deferred tax included in income tax expense comprises:
Decrease in deferred tax assets (note 16)
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense from continuing operations
Loss before income tax expense from discontinued operations
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
Derecognition of deferred tax liability on sale of subsidiary
Reversal of deferred tax asset on carried forward losses
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
Consolidated
2019
$
2018
$
21,001
422,870
-
116,814
805,551
(75,001)
443,871
847,364
422,870
805,551
(7,911,777)
(6,104,394)
(6,546,764)
(18,585,749)
(14,016,171)
(25,132,513)
(4,204,851)
(7,539,754)
8,723
-
95,843
-
-
-
1,065,470
(3,034,815)
-
2,570,636
(211,087)
422,870
729,415
62,695
(95,843)
-
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)
443,871
847,364
Consolidated
2019
$
2018
$
Tax losses not recognised
Potential unused tax benefit for which no deferred tax asset has been recognised
5,026,658
2,464,379
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.
37
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 9. Discontinued operations
Description
On 4 October 2018, the group entered into a binding agreement to sell its media trading business unit ('Media Trading
Business') which was acquired as part of the acquisition of Sparcmedia in 2015. The Media Trading Business was sold for
total consideration of $541,499 comprising $200,000 which was paid in cash and $341,649 by way of a buy-back of the
company's shares.
On 1 March 2019, the group sold 100% of its interest in Cohort Holdings Australia Pty Ltd and its controlled entities to
Unity4. The sale price for the transaction is $450,000 which was paid in cash.
Financial performance information
Revenue from contracts with customers
Interest revenue calculated using the effective interest method
Total revenue
Other income
Direct cost of sales
Employee benefits expense
Foreign exchange gain/(loss)
Depreciation and amortisation expense
Impairment of assets
Loss on disposal of intangible assets
Technology, engineering and licence fees
Share-based payment expense
Occupancy costs
Other expenses
Finance costs
Total expenses
Loss before income tax expense
Income tax expense
Loss after income tax expense
Gain on disposal before income tax
Income tax expense
Loss on disposal after income tax expense
Consolidated
2019
$
2018
$
11,067,883 26,618,143
4,798
11,069,984 26,622,941
2,101
179,738
1,366,000
(7,877,896)
(2,141,435)
(57,167)
(363,508)
(2,453,010)
(602,389)
(290,295)
-
(225,026)
(206,229)
(145,415)
(14,362,370)
(17,294,958)
(5,289,646)
(27,318)
(2,521,347)
(17,994,882)
(1,058,000)
(903,176)
(8,187)
(282,978)
(957,436)
(236,762)
(46,574,690)
(3,112,648)
-
(18,585,749)
-
(3,112,648)
(18,585,749)
(2,991,746)
-
(2,991,746)
-
-
-
Loss after income tax expense from discontinued operations
(6,104,394)
(18,585,749)
38
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 9. Discontinued operations (continued)
Carrying amounts of assets and liabilities disposed
Cash and cash equivalents
Trade and other receivables
Property, plant and equipment
Intangibles
Total assets
Trade and other payables
Provisions
Total liabilities
Net assets
Details of the disposal
Total sale consideration
Carrying amount of net assets disposed
Less working capital adjustment
Loss on disposal before income tax
Loss on disposal after income tax
Note 10. Current assets - cash and cash equivalents
Cash at bank
Cash on deposit*
Consolidated
2019
$
2018
$
164,114
1,660,648
25,478
3,667,991
5,518,231
1,623,470
107,092
1,730,562
3,787,669
Consolidated
2019
$
2018
$
991,499
(3,787,669)
(195,576)
(2,991,746)
(2,991,746)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Consolidated
2019
$
2018
$
513,991
10,331
2,289,560
192,210
524,322
2,481,770
* Cash on deposit of $10,331 (2018: $192,210) is a restricted cash balance which is held and maintained as security over
the group's bank overdraft facility, bank guarantees and leased properties.
39
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 11. Current assets - trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
Other receivables
Consolidated
2019
$
2018
$
6,560,276 12,894,416
(615,897)
(266,091)
6,294,185 12,278,519
119,553
152,434
6,413,738 12,430,953
Allowance for expected credit losses
The group has recognised a loss of $39,865 (2018: $528,941) in profit or loss in respect of impairment of receivables for
the year ended 30 June 2019.
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Consolidated
Not overdue
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Movements in the allowance for expected credit losses are as follows:
Expected
credit loss
rate
2019
%
Carrying
amount
2019
$
Allowance
for expected
credit losses
2019
$
-
0.7928%
4.0846%
41.3430%
4,760,821
1,002,303
324,352
592,353
-
7,946
13,248
244,897
6,679,829
266,091
Consolidated
2019
$
2018
$
615,897
222,345
(389,671)
(182,480)
199,302
540,090
(112,347)
(11,148)
266,091
615,897
Consolidated
2019
$
2018
$
412,903
268,481
Opening balance
Additional provisions recognised
Receivables written off during the year as uncollectable
Unused amounts reversed
Closing balance
Note 12. Current assets - contract assets
Contract assets (2018: accrued revenue)
40
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 12. Current assets - contract assets (continued)
Reconciliation
Reconciliation of the written down values at the beginning and end of the current and previous financial year are set out
below:
Recognition of contract assets on adoption of AASB 15
Additions
Cumulative catch-up adjustments
Transfer to trade receivables
Closing balance
Allowance for expected credit losses
The allowance for expected credit losses on contract assets for the year ended 30 June 2019 is $nil.
Note 13. Current assets - other
Consolidated
2019
$
268,482
412,312
26
(267,917)
412,903
Prepayments
Note 14. Non-current assets - property, plant and equipment
Office and computer equipment - at cost
Less: Accumulated depreciation
Consolidated
2019
$
2018
$
688,267
516,938
Consolidated
2019
$
2018
$
862,755
(640,529)
1,235,488
(857,506)
222,226
377,982
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2017
Additions
Depreciation expense
Balance at 30 June 2018
Additions
Disposals
Sale of businesses
Exchange differences
Depreciation expense
Balance at 30 June 2019
41
Office and
computer
equipment
$
356,863
306,354
(285,235)
377,982
55,407
(1,401)
(25,478)
2,231
(186,515)
222,226
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 15. 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
Less: Impairment
Membership base - at cost
Less: Accumulated amortisation
Brand names - at cost
Consolidated
2019
$
2018
$
15,503,285 19,003,285
(13,396,158)
5,607,127
(13,396,158)
2,107,127
23,854,594 22,745,638
(9,467,946)
(4,598,724)
8,678,968
(11,982,825)
(4,598,724)
7,273,045
3,622,000
(1,168,990)
(2,453,010)
-
3,622,000
(896,428)
-
2,725,572
2,694,410
(1,047,241)
1,647,169
2,694,410
(655,890)
2,038,520
94,000
94,000
11,121,341 19,144,187
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
$
19,003,285 13,388,843
3,914,542
-
-
-
(4,598,724)
(13,396,158)
(4,025,693)
-
3,270,697
-
-
-
(545,125)
5,607,127
-
-
(3,500,000)
-
-
8,678,968
2,742,880
(1,028,137)
(167,991)
-
(2,952,675)
2,725,572
-
-
-
(2,453,010)
(272,562)
2,433,696
-
-
-
(395,176)
2,038,520
-
-
-
-
(391,351)
1,152,000 39,248,521
3,914,542
(1,058,000)
(17,994,882)
(4,965,994)
-
(1,058,000)
-
-
94,000 19,144,187
2,742,880
(1,028,137)
(3,667,991)
(2,453,010)
(3,616,588)
-
-
-
-
-
Consolidated
Balance at 1 July 2017
Additions
Disposals
Impairment of assets
Amortisation expense
Balance at 30 June 2018
Additions
Disposals
Sale of businesses
Impairment of assets
Amortisation expense
Balance at 30 June 2019
2,107,127
7,273,045
-
1,647,169
94,000 11,121,341
Impairment testing
Goodwill and brand names are tested annually for impairment. Goodwill and brand names are allocated to the Media GCU.
42
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 15. Non-current assets - intangibles (continued)
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 5%-18% (2018: 8%-12%);
- Long-term growth rate 1% (2018: 1%); and
- Pre-tax discount rate 24% (2018: 17%).
Impairment test results - Media CGU
Based on the testing performed no impairment was recognised for this CGU, for the year ended 30 June 2019.
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 16% for the year ending 30 June 2020 and 4% in
subsequent years before further goodwill and other intangibles assets would be impaired, with all other assumptions
remaining constant.
(b) the discount rate would be required to increase to 28% 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.
43
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 16. Non-current assets - deferred tax
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses
Allowance for expected credit losses
Prepayments
Capitalised expenditure
Partner network arrangements
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
Unrealised FX Loss
Deferred tax asset
Movements:
Opening balance
Charged to profit or loss (note 8)
Closing balance
Consolidated
2019
$
2018
$
-
21,346
(1,769)
(1,350,800)
-
(28,200)
235,493
97,829
321,238
(533,746)
-
326,245
853,930
-
58,434
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
-
-
422,870
422,870
(422,870)
1,228,421
(805,551)
-
422,870
The group has unused tax losses of $5,026,658 (2018: $2,464,379) 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 17. Current liabilities - trade and other payables
Trade payables
Accrued expenses
Other payables
Refer to note 26 for further information on financial instruments.
Note 18. Current liabilities - contract liabilities
Contract liabilities (2018: Deferred revenue)
44
Consolidated
2019
$
2018
$
4,153,807
3,740,973
1,390,311
5,276,716
4,493,178
1,557,361
9,285,091 11,327,255
Consolidated
2019
$
2018
$
331,421
385,556
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 18. Current liabilities - contract liabilities (continued)
Reconciliation
Reconciliation of the written down values at the beginning and end of the current and previous financial year are set out
below:
Recognition of contract liabilities on adoption of AASB 15
Payments received in advance
Transfer to revenue
Disposals
Closing balance
Consolidated
2019
$
385,556
447,358
(497,607)
(3,886)
331,421
Unsatisfied performance obligations
The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied at the end of
the reporting period was $331,421 as at 30 June 2019 and is expected to be recognised as revenue in future periods as
follows:
Within 6 months
6 to 12 months
Note 19. Current liabilities - borrowings
Loans
Trade receivables financing facility
Consolidated
2019
$
231,561
99,860
331,421
Consolidated
2019
$
2018
$
14,400,000
2,069,339
-
5,628,290
16,469,339
5,628,290
Refer to note 26 for further information on financial instruments.
Loan facility
As at 30 June 2019, the loan comprises as 3 facilities as follows:
(a) Facility A was $10,000,000 (2018: $10,000,000). Interest was fixed and payable at 12.5% per annum and was
payable monthly in arrears. The facility expires on 25 October 2019. As at 30 June 2019, the facility is fully used and
there are As at 30 June 2018, the loan was included in non-current liabilities.
(b) Facility B was $3,000,000 (2018: $nil). Interest was fixed and payable at 9.5% per annum and was payable monthly in
arrears. The facility expires on 30 June 2020. As at 30 June 2019, the facility is fully used and there are no unused
amounts.
(c) Facility C was $2,600,000 (2018: $nil). Interest was fixed and payable at 20% per annum and was payable monthly in
arrears. The facility expires on 15 October 2019. As at 30 June 2019, $1,400,000 of the facility was drawn down and
$1,200,000 remains available to be drawn at the discretion of the lender.
45
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 19. Current liabilities - borrowings (continued)
Subsequent to 30 June 2019, the group agreed revised terms on its existing loan facilities. Under the revised terms:
(a) Facility A is $10,000,000 (2018: $10,000,000). Interest is fixed and payable at 20% per annum and is payable on the
date the facility expires. The facility expires on 1 October 2020.
(b) Facility B is $3,000,000 (2018: $nil). Interest is fixed at 20% per annum and is payable on the date the loan expires.
The facility expires on 1 October 2020.
(c) Facility C is $7,000,000 (2018: $nil). Interest is fixed at 20% per annum and is payable on the date the loan expires.
The facility expires on 1 October 2020.
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Loans
Assets pledged as security
The loans are secured by the assets of the group.
Financing arrangements
At the reporting date to the following lines of credit were available:
Total facilities
Loans
Trade receivables financing facility
Used at the reporting date
Loans
Trade receivables financing facility
Unused at the reporting date
Loans
Trade receivables financing facility
*
Unused amounts available to the group at the discretion of the lender.
Note 20. Current liabilities - provisions
Employee benefits
Reward redemption
Rent straight-lining
46
Consolidated
2019
$
2018
$
14,400,000 10,000,000
Consolidated
2019
$
2018
$
15,600,000 10,000,000
5,628,290
17,669,339 15,628,290
2,069,339
14,400,000 10,000,000
5,628,290
16,469,339 15,628,290
2,069,339
1,200,000
-
1,200,000
-
-
-
Consolidated
2019
$
2018
$
453,584
1,155,052
388,813
529,616
1,277,019
170,594
1,997,449
1,977,229
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 20. 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.
Rent straight-lining
The provision represents operating lease incentives received. The incentives are allocated to profit or loss in such a
manner that the rent expense is recognised on a straight-line basis over the lease term.
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out below:
Consolidated - 2019
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 21. Non-current liabilities - borrowings
Loans
Refer to note 26 for further information on financial instruments.
Refer to note 19 for further details.
Note 22. Non-current liabilities - provisions
Employee benefits
Note 23. Equity - issued capital
Reward
Rent
redemption straight-lining
$
$
1,277,019
3,937,250
(3,429,371)
(195,853)
(433,993)
170,594
250,880
(29,568)
(3,093)
-
1,155,052
388,813
Consolidated
2019
$
2018
$
- 10,000,000
Consolidated
2019
$
2018
$
80,568
132,085
Ordinary shares - fully paid
117,526,063 120,495,625 41,461,502 41,803,151
Consolidated
2019
Shares
2018
Shares
2019
$
2018
$
47
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 23. Equity - issued capital (continued)
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
Shares issued on acquisition of Cohort
Conversion of service rights to ordinary shares
Less: share issue costs net of taxation
1 July 2017
8 November 2017
7 May 2018
111,171,611
8,888,889
435,125
-
39,937,294
1,866,667
-
(810)
$0.21
$0.00
$0.00
Balance
Share buy-back
Less: adjustment for prior year share issue costs net
of taxation
30 June 2018
24 December 2018
120,495,625
(2,969,562)
41,803,151
(341,499)
$0.11
-
$0.00
(150)
Balance
30 June 2019
117,526,063
41,461,502
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.
Note 24. Equity - reserves
Foreign currency reserve
Share-based payments reserve
48
Consolidated
2019
$
2018
$
(178,682)
449,241
(215,038)
449,241
270,559
234,203
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 24. Equity - reserves (continued)
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 2017
Foreign currency translation
Share-based payments
Balance at 30 June 2018
Foreign currency translation
Balance at 30 June 2019
Note 25. Equity - dividends
Foreign
currency
$
Share-based
payments
$
Total
$
(232,619)
17,581
-
358,629
-
90,612
(215,038)
36,356
449,241
-
126,010
17,581
90,612
234,203
36,356
(178,682)
449,241
270,559
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 26. 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
may use 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 and ageing analysis for credit 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.
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.
49
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 26. Financial instruments (continued)
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.
An analysis by remaining contractual maturities is shown in the liquidity section below.
As at the 30 June 2019 and 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.
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 adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables
through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered
representative across all customers of the group based on recent sales experience, historical collection rates and forward-
looking information that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
The group has a concentration of credit risk exposure with its debtors financing facility. The finance provider, as at 30 June
2019, is owed $2,069,339 (2018: $5,628,290) 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
31.5% (2018: 81.6%) of trade receivables at 30 June 2019. The group has recognised a provision for impairment of
receivables of $266,091 at 30 June 2019 (2018: 615,897) 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.
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:
Loans
Consolidated
2019
$
2018
$
1,200,000
-
50
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 26. Financial instruments (continued)
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 - 2019
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Reward redemption provision
Interest-bearing - fixed rate
Loans
Trade receivables financing
facility
Total non-derivatives
Consolidated - 2018
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Reward redemption provision
Interest-bearing - fixed rate
Loans
Trade receivables financing
facility
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
-
4,153,807
1,390,311
1,155,052
20.00% 14,897,427
26.82%
2,069,339
23,665,936
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,153,807
1,390,311
1,155,052
- 14,897,427
-
2,069,339
- 23,665,936
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
-
-
-
9.50%
950,000 10,316,667
26.82%
5,628,290
-
14,689,386 10,316,667
-
-
-
-
-
-
-
-
-
5,276,716
1,557,361
1,277,019
- 11,266,667
-
5,628,290
- 25,006,053
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Note 27. 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
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.
51
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 27. Fair value measurement (continued)
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
During the year ended 30 June 2018, 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 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
Balance at 30 June 2019
Note 28. Key management personnel disclosures
Contingent
consideration
$
7,522,222
(4,298,856)
(1,866,667)
(1,356,699)
-
-
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
Consolidated
2019
$
2018
$
950,444
57,523
-
902,620
59,295
24,901
1,007,967
986,816
52
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 29. Remuneration of auditors
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
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
2019
$
2018
$
158,593
160,028
50,935
99,900
116,507
35,300
120,899
35,050
151,807
155,949
202,742
255,849
Note 30. Contingent liabilities
The group has given a bank guarantee as at 30 June 2019 of $182,337 (2018: $182,337) to its landlord for leased
property.
Note 31. 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
2019
$
2018
$
1,542,243
2,701,710
1,488,922
1,271,783
1,161,844
1,806,350
5,732,875
4,239,977
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 32. Related party transactions
Parent entity
Pureprofile Ltd is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 34.
Key management personnel
Disclosures relating to key management personnel are set out in note 28 and the remuneration report included in the
directors' report.
53
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 32. Related party transactions (continued)
Transactions with related parties
The following transactions occurred with related parties:
Payment for goods and services:
Payment for expenses reimbursed to key management personnel
Consolidated
2019
$
2018
$
7,098
362
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 33. 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/(deficiency)
Parent
2019
$
2018
$
(14,423,686)
(32,297,136)
(14,423,686)
(32,297,136)
Parent
2019
$
2018
$
176,684
227,218
6,937,633 16,040,212
15,813,878
151,122
15,813,878 10,151,122
41,461,502 41,803,151
449,241
(36,363,302)
449,241
(50,786,988)
(8,876,245)
5,889,090
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 2019 and 30 June 2018.
54
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 33. Parent entity information (continued)
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2019 and 30 June 2018 other than those disclosed in note 30.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2019 and 30 June 2018.
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.
Note 34. 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
Note 35. Deed of cross guarantee
Principal place of business /
Country of incorporation
Ownership interest
2018
2019
%
%
USA
Australia
Australia
United Kingdom
United Kingdom
USA
Australia
Australia
Australia
Australia
India
Poland
New Zealand
Australia
Australia
Australia
USA
United Kingdom
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%
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'.
55
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 35. Deed of cross guarantee (continued)
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
Interest revenue calculated using the effective interest method
Direct costs of revenue
Employee benefits expense
Foreign exchange loss
Loss on disposal of intangible assets
Depreciation, amortisation and impairment expense
Loss on disposal of investments
Technology, engineering and licence fees
Share-based payment expense
Restructuring, acquisition and IPO costs
Other expenses
Loss before income tax expense
Income tax expense
Loss after income tax expense
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
Accumulated losses at the end of the financial year
2019
$
2018
$
29,177,873 31,706,698
-
-
(16,094,793)
(9,102,649)
(400,441)
-
(21,904,282)
-
(3,177,898)
(68,700)
(23,548)
(5,611,871)
568,359
1,145
(13,432,576)
(8,719,075)
(359,413)
(4,527,054)
(3,053,627)
(8,416,100)
(2,782,531)
-
-
(2,151,142)
(13,694,141)
(502,669)
(24,677,484)
(278,974)
(14,196,810)
(24,956,458)
-
-
(14,196,810)
(24,956,458)
2019
$
2018
$
(39,586,150)
(14,196,810)
(14,629,692)
(24,956,458)
(53,782,960)
(39,586,150)
56
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 35. Deed of cross guarantee (continued)
Statement of financial position
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Other
Non-current assets
Property, plant and equipment
Intangibles
Deferred tax
Investment in subsidiary
Total assets
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Income tax
Provisions
Related party payables
Non-current liabilities
Borrowings
Provisions
Total liabilities
Net assets/(liabilities)
Equity
Issued capital
Reserves
Accumulated losses
Total equity/(deficiency)
Note 36. Earnings per share
Earnings per share for loss from continuing operations
Loss after income tax attributable to the owners of Pureprofile Ltd
2019
$
2018
$
406,371
6,165,058
287,049
507,812
7,366,290
948,962
4,207,371
-
437,345
5,593,678
75,319
125,186
9,474,174 14,393,271
1,559,248
1,311,230
9,181,561
765,465
11,626,188 25,259,266
18,992,478 30,852,944
8,046,896
316,186
16,543,518
1,275,924
596,884
3,063,216
7,892,508
224,594
-
459,101
1,559,815
7,893,261
29,842,624 18,029,279
- 10,000,000
1,070,794
71,992
1,070,794 10,071,992
30,913,418 28,101,271
(11,920,940)
2,751,673
41,461,502 41,803,151
534,672
(39,586,150)
400,518
(53,782,960)
(11,920,940)
2,751,673
Consolidated
2019
$
2018
$
(8,355,648)
(7,394,128)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
118,966,097 116,934,616
Weighted average number of ordinary shares used in calculating diluted earnings per share 118,966,097 116,934,616
57
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 36. Earnings per share (continued)
Basic earnings per share
Diluted earnings per share
Earnings per share for loss from discontinued operations
Loss after income tax attributable to the owners of Pureprofile Ltd
Cents
Cents
(7.02)
(7.02)
(6.32)
(6.32)
Consolidated
2019
$
2018
$
(6,104,394)
(18,585,749)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
118,966,097 116,934,616
Weighted average number of ordinary shares used in calculating diluted earnings per share 118,966,097 116,934,616
Basic earnings per share
Diluted earnings per share
Earnings per share for loss
Loss after income tax attributable to the owners of Pureprofile Ltd
Cents
Cents
(5.13)
(5.13)
(15.89)
(15.89)
Consolidated
2019
$
2018
$
(14,460,042)
(25,979,877)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
118,966,097 116,934,616
Weighted average number of ordinary shares used in calculating diluted earnings per share 118,966,097 116,934,616
Basic earnings per share
Diluted earnings per share
Options have been excluded from the diluted earnings per share as they were anti-dilutive.
Note 37. Share-based payments
Cents
Cents
(12.15)
(12.15)
(22.22)
(22.22)
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.
58
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 37. Share-based payments (continued)
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. 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.
Share-based payments expense for the financial year was $nil (2018: $90,612).
Set out below are summaries of options granted under the long term incentive plan:
2019
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
29/05/2015
29/05/2015
29/05/2020
29/05/2020
$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
2018
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
29/05/2015
29/05/2015
29/05/2020
29/05/2020
$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
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
2019
2018
Number
Number
2,009,000
1,200,000
2,009,000
1,200,000
3,209,000
3,209,000
The weighted average share price during the financial year was $0.07 (2018: $0.18).
The weighted average remaining contractual life of options outstanding at the end of the financial year was 0.9 years
(2018: 1.9 years).
Set out below are summaries of service rights granted under the short term incentive plan:
2018
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
28/02/2018
31/01/2018
$0.00
435,125
435,125
59
Exercised
-
-
(435,125)
(435,125)
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
-
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 37. Share-based payments (continued)
No service rights are exercisable at the end of the financial year (2018: nil)
The weighted average remaining contractual life of service rights outstanding at the end of the financial year was nil (2018:
nil).
Set out below are summaries of performance rights granted under the plan:
2019
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
12/12/2017
02/11/2019
$0.00
2,100,000
2,100,000
Exercised
-
-
-
-
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
2,100,000
2,100,000
No performance rights are exercisable at the end of the financial year (2018: n/a)
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 0.3
years (2018: 1.3 years).
2018
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
12/12/2017
02/11/2019
$0.00
-
-
2,100,000
2,100,000
-
-
-
-
2,100,000
2,100,000
60
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 38. Cash flow information
Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
(14,460,042)
(25,979,877)
Consolidated
2019
$
2018
$
Adjustments for:
Depreciation and amortisation
Impairment of intangibles
Share-based payments
Net loss on disposal of non-current assets
Foreign currency differences
Revaluation of earn-out liability
Loss on sale of businesses
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Increase in contract assets
Decrease in deferred tax assets
Decrease/(increase) in prepayments
Increase/(decrease) in trade and other payables
Decrease in contract liabilities
Decrease in provision for income tax
Increase/(decrease) in deferred tax liabilities
Decrease in employee benefits
Increase/(decrease) in other provisions
Net cash used in operating activities
Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2017
Net cash from financing activities
Balance at 30 June 2018
Net cash from/(used in) financing activities
Changes through discontinued operations
Balance at 30 June 2019
Note 39. Events after the reporting period
3,803,103
5,251,229
2,453,010 17,994,882
90,612
1,058,000
17,581
(1,356,699)
-
-
831,380
1,759
-
2,991,746
4,760,248
(144,421)
102,827
(250,815)
(793,288)
(53,606)
(130,019)
320,043
(69,553)
266,846
(349,591)
(186,290)
889,887
278,175
768,949
-
(410,860)
(84,336)
(32,387)
(251,735)
(370,782)
(2,302,460)
Trade
receivables
financing
facility
$
Loans
$
4,000,000
6,000,000
-
5,628,290
10,000,000
4,400,000
-
5,628,290
(3,883,147)
324,196
14,400,000
2,069,339
On 28 August 2019, Mr Nic Jones resigned as CEO and Managing Director, with Mr Andrew Edwards taking over in an
ongoing executive capacity as Executive Chairman. At the same time, CFO, Mrs Melinda Sheppard, was promoted to
Chief Operating Officer, with responsibility for managing finance, HR, operational delivery and corporate services. Mr
Aaryn Nania was also appointed Non-Executive Director to replace Mr Jones on the board.
Effective 1 September 2019, the following changes were made to the group’s existing debt facilities with Lucerne:
61
Pureprofile Ltd
Notes to the financial statements
30 June 2019
Note 39. Events after the reporting period (continued)
●
●
●
Maturity date: the maturity date on all facilities has been extended to 1 October 2020;
Interest rate: the interest rate has been set at 20% on all drawn facilities and the group has the option to capitalise
interest and repay it with the principal upon maturity; and
Repayment fee: the ‘Repayment Fee’, which Lucerne would have been entitled to on the happening of a ‘Control
Transaction’ (as disclosed to the ASX on 28 February 2019), has been removed.
Effective 27 September 2019, the group’s debt facilities with Lucerne were increased by $5,400,000. The line of credit on
Facility C was increased from $2,600,000 to $7,000,000. The maturity date and interest rate remain unchanged from the
amendments made to the facility on 1 September 2019.
No other matter or circumstance has arisen since 30 June 2019 that has significantly affected, or may significantly affect
the group's operations, the results of those operations, or the group's state of affairs in future financial years.
62
Pureprofile Ltd
Directors' declaration
30 June 2019
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
2019 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 35 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
Executive Chairman
27 September 2019
Sydney
63
Level 17, 383 Kent Street
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 2019, 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 2019 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.
64
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 $14,460,042
during the year ended 30 June 2019, and as of that date, the Group’s current liabilities exceeded its current assets by
$20,139,244. As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2, 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 15
At 30 June 2019, the Group’s consolidated statement of financial
Our audit procedures included the following:
position included intangible assets of $11.1 million.
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.
During the period, the Group sold two of its Media businesses. As a
result, goodwill of $3.5 million relating to these businesses within the
Media CGU has been disposed. The remaining goodwill balance of
$2.1 million allocated to the Media CGU has been tested for
impairment.
This assessment was performed by comparing the carrying amount of
the Media CGU with its recoverable amount, which was 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.
Evaluating the allocation of goodwill to the businesses disposed of
during the period by considering the underlying transactions which
originated the goodwill;
Assessing whether the impairment testing model (“the model”)
used by management met the requirements of Australian
Accounting Standard AASB136 Impairment of Assets;
Evaluating the determination of Cash Generating Units (CGUs)
with respect to the independence of cash inflows generated by
each CGU;
Testing the mathematical accuracy of the model;
Considering 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 ;
Considering the historical accuracy of the Group’s forecasting
ability;
Assessing the discount rates and the terminal growth rates used in
the model, with involvement from our valuation specialists;
Considering 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
Considering the adequacy of the disclosures relating to intangible
assets in the financial statements, including those made with
respect to judgements and estimates.
65
Key audit matter
How our audit addressed the key audit matter
Capitalisation of development costs Note 15
During the year ended 30 June 2019, the Group capitalised $2.7
million of costs related to the development of its software assets.
Our audit procedures included the following:
Assessing the assumptions used and estimates made in
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.
This was considered to be a key audit matter 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.
capitalising development costs;
Assessing whether the useful life of development costs is
appropriate;
Testing, 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
Considering the adequacy of the financial report disclosures.
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 2019, 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.
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.
66
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 5 to 12 of the Directors’ report for the year ended 30 June
2019.
In our opinion, the Remuneration Report of Pureprofile Limited, for the year ended 30 June 2019 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, 27 September 2019
67
Pureprofile Ltd
Corporate directory
30 June 2019
Directors
Andrew Edwards
Sue Klose
Aaryn Nania
Company secretary
Kohei Katagiri
Notice of annual general meeting
The details of the annual general meeting of Pureprofile Ltd. are:
Thursday, 28 November 2019 at 10:00am at:
Automic
Level 5, 126 Phillip 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 5, 126 Phillip Street
Sydney
NSW 2000
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/
68
Pureprofile Ltd
Shareholder information
30 June 2019
The shareholder information set out below was applicable as at 1 September 2019.
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
Mr Paul Augustine Chan (The Chan Family A/C)
Appwam Pty Ltd
Fmg Holdings Pty Ltd
Super Options Fund Pty Ltd (Super Options Fund A/C)
Mrs Judith Swaab
HSBC Custody Nominees (Australia) Limited
Nofusa Pty Ltd (Hersch Family A/C)
Onmell Pty Ltd (ONM BPSF A/C)
BNP Paribas Nominees Pty Ltd (IB AU Noms Retailclient DRP)
Dato Lim Sen Yap
Pilmore Pty Limited (Miwa Superannuation Fund A/C)
Vadina Pty Limited (Jordan Super Fund A/C)
Mrs Saverina Comperatore
Mr Wouter Dimitri Adam Van Damme
Depofo Pty Ltd (Super A/C)
Mr Malcolm John Badgery
Depofo Pty Ltd (Ordinary A/C)
Mr Lance Sacks
Osgood Holdings Pty Ltd (Nicky6 Family A/C)
69
Number
of holders
of options
over
ordinary
shares
Number
of holders
of ordinary
shares
28
159
82
235
137
641
431
-
1
-
7
10
18
-
Ordinary shares
Number held
% of total
shares
issued
22,998,594
6,202,090
6,000,000
5,868,139
4,500,000
3,921,977
3,870,950
2,500,000
2,411,755
2,046,286
1,758,756
1,660,065
1,600,000
1,360,950
1,350,000
1,300,000
1,200,391
1,150,000
1,073,076
1,067,548
73,840,577
19.57
5.28
5.11
4.99
3.83
3.34
3.29
2.13
2.05
1.74
1.50
1.41
1.36
1.16
1.15
1.11
1.02
0.98
0.91
0.91
62.84
Pureprofile Ltd
Shareholder information
30 June 2019
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
7
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
Mr Paul Augustine Chan (The Chan Family A/C)
Appwam Pty Ltd
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
Number held
22,998,594
6,202,090
6,000,000
% of total
shares
issued
19.57
5.28
5.11
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.
70