Annual
Report
2019
2020
Pureprofile Limited ABN 37 167 522 901
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About Pureprofile
Pureprofile provides consumer insights and media campaign delivery to market researchers and
business decision makers so that they can make better informed decisions.
Since 2000, Pureprofile has been a pioneer in online research, digital media, insights technology and
performance marketing.
Our purpose is to
connect businesses to more of the people that matter.
By capturing declared, first-party data and leveraging deep consumer profiles, our clients gain the
ability to segment, target and engage their audiences for research, marketing and advertising
purposes.
In exchange, consumers receive value for their data, both as an immediate reward and through the
delivery of highly relevant content and personalised experiences.
Pureprofile delivers next-generation marketing solutions for more than 700 brands, publishers and
research groups worldwide.
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Contents
About Pureprofile .....................................................................................................
Our business ...............................................................................................................
Corporate strategy ..................................................................................................
Financial highlights ..................................................................................................
Chairman and CEO’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 HELP DECISION MAKERS TO UNDERSTAND
MORE FROM THE WORLD’S DATA”
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 address is Level 5, 126 Phillip Street,
Sydney NSW 2000. Its principal business address is Level 3, 223 Liverpool Street, Darlinghurst NSW 2010. 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 October 2020. The directors have the power to amend
and reissue the financial statements.
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About Pureprofile
PUREPROFILE PROVIDES CONSUMER INSIGHTS AND MEDIA CAMPAIGN
DELIVERY TO MARKET RESEARCHERS AND BUSINESS DECISION MAKERS
SO THAT THEY CAN MAKE BETTER INFORMED DECISIONS.
Since 2000, Pureprofile has been a pioneer in online research, digital media, insights
technology and performance marketing.
Our purpose is to connect businesses to more of the people that matter.
By capturing declared, first-party data and leveraging deep consumer profiles, our clients
gain the ability to segment, target and engage their audiences for research, marketing and
advertising purposes.
In exchange, consumers receive value for their data, both as an immediate reward and
through the delivery of highly relevant content and personalised experiences.
Pureprofile delivers next-generation marketing solutions for more than 600 brands,
publishers and research groups worldwide.
Decision Makers
Need To Understand
Consumers
Decisions
Made 85%
Repeat Business
Technology
Platform
Service
Consumer
Panels
and Data
Insights
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Our Business
20 YEARS EXPERIENCE IN RESEARCH, PROFILING AND INSIGHTS
Data and Insights
Technology Platform
Understand more of your
customers. Make better
business decisions
Market Research, Audience
Creation and Activation,
Customer Experience
Self-Service Platform
Media
Connecting organisations
with our panel and
consenting consumers
Reach more of the people
that matter with engaging
experiences
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Corporate Strategy
Pureprofile will continue to build on its core data and analytics assets while leveraging them
through commercial applications such as the self-service platform.
1
Focus on building a
stronger and more diverse
global panel and add
complementary data
sources through acquisition
and partnerships
2
Begin distribution of
our SaaS self-service
insights platform
3
Leverage Pureprofile’s
proprietary data
-Media
-Consultancy
-Quick Polls
-Templates
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Financial Highlights
Core D&I business grew revenue
3%
Further expense savings of
25% or $4.4m
on continuing businesses
Operating cash flow improved by
$1.8m
through improved collection of receipts
and reduction in interest payments made
Closing cash at bank of
$1.8m up from $0.5m
on pcp
Continuing EBITDA was up
197%
driven by cost savings
Investment in sales
capability, products
and tools during
FY2020
NPAT loss improved
by $4.6m through
decrease in non-
cash write downs
and the sale of loss
making
business units
New debt facility
announced on
19th October 2020
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Chairman and CEO’s Letter
DEAR SHAREHOLDERS,
Before we reflect on the financial year ending 30 June 2020, it is
important to take a step back and look at where this business
has come from, where it stands today and where we are going
in the future.
In 2018, Pureprofile set upon a turnaround strategy that is
today substantially complete. Most importantly, we’ve defined
and focused the business on data acquisition, analytics
and insights. Without distractions and legacy issues, we’ve
significantly reduced operating costs, whilst embracing
innovative technologies that have allowed us to automate and
give us the momentum to scale globally and profitably.
As a focused ResTech (Research Technology) offering, it was
important that we structure the business as a global operation,
and today, we’re pleased to say that Pureprofile is enjoying
tremendous growth in both the Northern and
Southern hemispheres.
Since year-end FY20 two critical aspects of the business and
the turnaround strategy have been completed.
First, we have appointed a new CEO and I’m delighted to
be writing this shareholder letter together with Martin Filz.
Martin is an industry expert and one of the most respected
professionals in our industry. With Martin leading the team and
joining the board we have further focused the company as a
data business, we have significantly refreshed the executive
team and continued to invest in technology and a business
model that allows us to grow simultaneously in many markets.
The second, post year-end activity has been to recapitalise
the business. Earlier this month (October 2020), Pureprofile
announced that Lucerne, a long-term lender and supporter
of the business, would convert the majority of the business’
debt into equity, forgive a portion of that debt and provide a
new loan facility for the business’ growth. The business also
undertook to raise fresh capital from shareholders through a
Rights Issue.
The recapitalisation of Pureprofile is the final step in a
turnaround strategy that leaves the company substantially
unencumbered by debt, with cash in the bank and positioned
for growth and expansion.
ANDREW EDWARDS
NON-EXECUTIVE CHAIRMAN
MARTIN FILZ
MANAGING DIRECTOR
AND CEO
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Operationally, Pureprofile has already been performing strongly
the past year. EBITDA grew from -1.7 million FY19 to $1.6
million in FY20, and all forecasts suggest this momentum will
accelerate further.
There are also two significant global “mega trends” that are
shaping the world we live in today, both central to Pureprofile’s
world of data acquisition, analytics and insights.
The first is the digital economy, which has been growing fast
over many decades, and has received a boost in 2020 with
COVID-19 effectively forcing large sectors of the global economy
into online and digital-only consumer engagement.
The scale and long-term effect of this seismic shift in the flow of
money through the economy and how brands reach consumers
cannot be underestimated.
Second, is the rise of privacy as a central consumer right.
Google’s decision to move away from cookies is the most
obvious example of how our digital world will fundamentally
change, not sometime in the future but today. The flow of data
is and will increasingly be monitored and ensuring basic privacy
rights has become a major global challenge.
Pureprofile is now strategically positioned with first party data
acquisition, analysis and insights allowing us to grow revenue,
margins, and profits. Importantly, we have a well-resourced and
focused team with a clear and defined business model where
we are capable of significantly increasing our market share in an
industry that itself is growing dramatically.
PUREPROFILE IS NOW STRATEGICALLY POSITIONED WITH FIRST PARTY DATA
ACQUISITION, ANALYSIS AND INSIGHTS ALLOWING US TO GROW REVENUE,
MARGINS, AND PROFITS.
With the team that is open to change and understands
where the insights and media industry is heading it has been
collective work to outline the strategy for the next 3 years. We’re
delighted to be leading Pureprofile with tremendous upside
and we believe investors should be similarly excited about the
company’s future.
As always, we’d like to thank the board for their commitment
and contribution over the year. And we’d also like to thank our
talented and hard-working staff across the globe for all their
efforts. To our shareholders, thank you for your continued
support, we believe that FY2021 will be a year in which
Pureprofile will grow from a position of strength and begin to
unlock shareholder value.
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Meet our Directors
ANDREW EDWARDS
Non-Executive Chairman
Andrew has more than 30 years of marketing experience and, prior to
joining Pureprofile, was the Chairman and CEO of internationally - renowned
advertising and marketing agency Leo Burnett Group UK and President of Leo
Burnett Central Europe.
Andrew also sat on its Global Executive Leadership Team with the specific
remit of M&A (EMEA) and the rollout of the groups Social and Mobile Strategy.
Prior to his roles at Leo Burnett, Andrew ran Australia’s most-awarded
direct marketing company, Cartwright Williams.
Andrew now focusses his time on his portfolio of business interests.
SUE KLOSE
Non-Executive Director
Sue is an experienced executive, board director and team leader, with a
diverse background in digital business growth, corporate development,
strategy and marketing. Previously the Chief Marketing Officer of
GraysOnline, she was responsible for brand strategy, marketing operations
and digital product strategy.
Prior roles in consulting and global media companies, including 12WBT and
News Ltd. 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
mental health care provider, After-care.
MARTIN FILZ
Managing Director and CEO
Martin is one of the most well-respected and influential individuals in the
market research industry and has held senior executive roles as Managing
Director of EMEA and APAC at Research Now (now a part of Dynata)
and CEO of EMEA / APAC at Kantar-owned, Lightspeed GMI. He joined
Pureprofile from Eureka AI, a business intelligence platform, where he was
Managing Director and Chief Revenue Officer.
Martin is active in digital and research bodies including the Association of
Market and Social Research Organisations (AMRSO), ESOMAR, the Australian
Market and Social Research Society (AMSRS), and the Interactive
Advertising Bureau (IAB).
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Directors’
Report
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EBITDA
Pureprofile Ltd
Directors' report
30 June 2020
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 2020.
Directors
The following persons were directors of Pureprofile Ltd during the whole of the financial year and up to the date of this
report, unless otherwise stated:
Andrew Edwards - Non-Executive Chairman (formerly Non-Executive, appointed Executive on 28 August 2019 and re-
appointed Non-Executive on 2 September 2020)
Sue Klose - Non-Executive Director
Martin Filz - Chief Executive Officer and Managing Director (appointed Chief Executive Officer on 3 August 2020 and
appointed Managing Director on 2 September 2020)
Aaryn Nania - Non-Executive Director (appointed on 28 August 2019 and resigned on 2 September 2020)
Nic Jones - Managing Director and 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 $9,829,481 (30 June 2019: $14,460,042).
Earnings before interest, tax, depreciation and amortisation (‘EBITDA’) for the financial year amounted to a profit of
$1,401,152 (30 June 2019: loss of $713,742).
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)
Consolidated
2020
$
2019
$
(9,829,481)
4,350,338
2,107,127
625,027
-
(105)
4,130,173
18,073
(14,460,042)
3,803,103
2,453,010
1,027,054
3,500,000
(3,246)
2,522,508
443,871
1,401,152
(713,742)
The group has adopted Accounting Standard AASB 16 'Leases' for the year ended 30 June 2020 using the modified
retrospective approach and as such the comparatives have not been restated. As a result of adopting AASB 16, EBITDA
has improved in the current period. Operating expenses are now replaced by depreciation and finance costs in profit or
loss.
Total statutory revenue for FY2020 was $24.2m, a decline of 36% on prior comparable period ('pcp') (FY2019: $37.8m).
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. Additionally, COVID-19
negatively impacted all business units in Q4 of FY2020.
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Pureprofile Ltd
Directors' report
30 June 2020
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On a continuing business basis, total revenue was $25.1m, a 7% decrease on pcp (FY2019: $27m). Revenue was
impacted by COVID19 in Q4 FY2020 This resulted in the continued Media and Performance business declining on pcp and
growth in the core Data and Insights business improving slightly with a 3% increase on pcp.
Gross margin remained stable at 58%. Other operating expenses were $13m, a 25% decrease on pcp (FY2019: $17.4m).
This was achieved due to the success of the cost restructuring program implemented in prior years. During FY2020, the
Executive team was restructured and other savings were realised through automation of business processes, technology
rationalisation and occupancy.
The reduction in operating expenses during FY2020 had a positive impact on EBITDA on continuing businesses, which
improved by 197%, up from ($1.7m) in FY2019 to $1.6m in FY2020. Statutory net profit (loss) after tax was also improved
by 32% (FY2020: ($9.8m); FY2019: ($14.5m)), largely due to the sale of loss making business units and any associated
non-cash write-downs of intangibles that were recognised in FY2019.
Significant changes in the state of affairs
The following significant changes in the state of affairs occurred during the year:
Board resignations: Mr Nic Jones, Managing Director and Chief Executive Officer, resigned from the Board on 28
August 2019.
Debt facilities: the group agreed amended terms on its existing debt facility with Lucerne Finance Pty Ltd ('Lucerne)'.
Under the revised terms, the group extended the maturity date to 1 April 2021 and secured an increase in the line of
credit for Facility C to $7,000,000. Additionally, all facility covenants were removed. There are no other financial
covenants under the Facility. The Facility was further amended on 19 October 2020 (for further information, see
below).
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 19 October 2020, the group announced to the ASX that it was undertaking a fully underwritten renounceable pro-rata
entitlement offer of 8 shares for every 1 share held by eligible shareholders to raise up to $18,804,170 (before expenses
and subject to rounding) (the Entitlement Offer) and the group intended to use the proceeds of the Entitlement Offer as
follows:
significantly restructure its balance sheet by converting a large proportion of the group’s debt to equity;
partially pay down the group’s existing debt to $3,000,000;
inject further funds into the sales team and global panel partnership;
commercialisation of the group’s technology;
provide working capital for the group; and
pay the costs of the Entitlement Offer.
On 19 October 2020, the group and its existing lender, Lucerne, entered into a new agreement in respect of its debt facility
(the New Facility), which is conditional on the completion of the Entitlement Offer outlined above.
Key terms of the agreement:
● Debt forgiveness - following completion of the Entitlement Offer and allocation of funds under that offer against the
existing debt, the remaining balance of the facilities (~ $7,300,000 of debt as at 30 September 2020) will be forgiven;
● New $3,000,000 Facility - replacing the previous facilities will be a new, fully-drawn $3,000,000 loan facility;
● Interest on New Facility - interest rate of 8.5% per annum (payable quarterly);
● Maturity of New Facility - 3 years from the date of completion of the Entitlement Offer and payable in advance at the
group’s discretion;
● No performance covenants - the New Facility does not contain business performance covenants; and
● Performance rights cancelled - the performance rights that were previously issued to Lucerne have been cancelled.
The New Facility is subject to warranties, indemnities, fees and default fees and terms, which the group considers usual for
a transaction of this size and scope.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect
the group's operations, the results of those operations, or the group's state of affairs in future financial years.
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Pureprofile Ltd
Directors' report
30 June 2020
Likely developments and expected results of operations
Information on likely developments in the operations of the group and the expected results of operations have not been
included in this report because the directors believe it would be likely to result in unreasonable prejudice to the group.
The group will continue to build on its core Data and Analytics assets while leveraging them through commercial
applications such as its self-service platform. The group’s corporate strategy is three-fold:
(1) Focus on building a stronger and more diverse global panel and add complementary data sources through acquisition
and partnerships.
(2) Begin distribution of our Saas self-service insights platform.
(3) Leverage Pureprofile’s proprietary data.
Although the economic outlook for the year ahead is uncertain, we will focus on the execution of our corporate strategy and
investment to drive earnings growth and positive cash flows from operating activities.
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
Non-Executive Chairman
Andrew has more than 30 years of marketing experience behind him. Most recently,
he was Chairman and CEO of internationally-renowned advertising and marketing
agency Leo Burnett Group UK and President of Leo Burnett Central Europe. Andrew
joined Leo Burnett as the Global Discipline Lead for DM and CRM of Arc in 2003 and
was soon promoted to Managing Director of Leo Burnett Sydney, incorporating Arc.
During his tenure, the agency topped the new business league, and in September
2005, Leo Burnett/Arc was voted Australia’s number one agency. For over 10 years,
Andrew was appointed to several senior roles within the company, including
President of Arc for the EMEA region, Chairman of Arc UK and Deputy Chairman of
the Leo Burnett Group London, before becoming CEO of the UK Group in November
2007 and Chairman in December 2010. Andrew was a member of the Global
Executive Board and was tasked to drive Leo Burnett's Global Strategy for Social and
Mobile and Acquisitions in EMEA. Prior to his roles for Leo Burnett and Arc. Andrew
ran Australia’s most-awarded Database and Direct Marketing company, Cartwright
Williams. Andrew now focuses his time on his growing portfolio of business interests.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Contractual rights to shares:
Chairman of the Audit Committee and Chairman of the Nomination and Remuneration
Committee
984,691 ordinary shares
None
None
None
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Pureprofile Ltd
Directors' report
30 June 2020
Name:
Title:
Qualifications:
Experience and expertise:
Sue Klose
Non-Executive Director
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
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Contractual rights to shares:
Qualifications:
Experience and expertise:
Martin Filz
Chief Executive Officer (appointed on 3 August 2020) and Managing Director
(appointed 2 September 2020)
Institutional Management - Northampton College
Martin is one of the most well-respected and influential individuals in the market
research industry and has held senior executive roles as Managing Director of EMEA
& APAC at Research Now (now a part of Dynata) and CEO of EMEA / APAC at
Kantar-owned, Lightspeed GMI. Most recently Martin was the Managing Director and
Chief Revenue Officer of Eureka AI, a business intelligence platform, which generates
actionable insights from mobile data.
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
None
Interests in shares:
None
Interests in options:
None
Interests in rights:
'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.
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Name:
Title:
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Pureprofile Ltd
Directors' report
30 June 2020
Andrew Edwards
Nic Jones
Sue Klose
Aaryn Nania
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Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') held during the year ended 30 June 2020, and
the number of meetings attended by each director were:
Full Board
Attended
Held
Nomination and
Remuneration Committee
Attended
Held
Audit and Risk Committee
Attended
Held
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3
11
6
11
4
11
7
-
-
-
-
-
-
-
-
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
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 who were engaged in previous financial years, 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 has considered that it
should seek to enhance shareholders' interests by:
●
●
having economic profit as a core component of plan design;
focusing 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.
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Pureprofile Ltd
Directors' report
30 June 2020
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 2021 are summarised as follows:
Sue Klose
Andrew Edwards*
Reverted to Non-Executive Chairman on 2 September 2020.
FY 2021 Fees
$64,167
$120,450
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.
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.
*
Name
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15
Pureprofile Ltd
Directors' report
30 June 2020
●
●
●
●
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The short-term incentives ('STI') program is designed to align the targets of the business units with the performance
hurdles of executives. Under the STI, eligible executives may be offered cash incentives ('rewards') which may be subject
to vesting conditions set by the Board. Each offer of rewards under the STI is, or will be, on the terms generally described
as follows:
●
●
the Board will determine the total dollar amount of the STI, calculated as a percentage of their salary package;
the payment (or part payment) of the STI will be subject to fulfilment (or part fulfilment) of performance conditions set
by the Board;
any STI that becomes payable will be paid in cash and, at the discretion of the Board, by the grant of rights to receive
shares ('service rights') of equivalent value (as determined by the Board at the time of grant);
if granted, the service rights will vest 13 months from grant date provided that the eligible employee is still employed
by the company at the vesting date;
on vesting employees will receive the shares that are subject to the service rights without payment of any exercise
price;
service right holders are not entitled to participate in new issues of shares or other securities made by the company to
holders of shares without receiving the shares that are subject to the service rights before the record date for the
relevant issue;
if, prior to the receipt of shares that are subject to the service right, the company makes a pro rata bonus issue to the
holders of its shares, and the shares that are subject to the service right are not issued prior to the record date in
respect of that bonus issue, the service right will, when vested, entitle the holder to one share plus the number of
bonus shares which would have been issued to the holder if the shares that are subject to the service right had been
issued prior to the record date; and
if, prior to the receipt of shares that are subject to the service right, the company undergoes a reorganisation of capital
(other than by way of a bonus issue for cash), the terms of the service rights will be changed to the extent necessary
to comply with the ASX Listing Rules as they apply at the relevant time.
●
●
The long-term incentives include long service leave and share-based payments. The company has adopted a long term
incentive plan ('LTI') in order to assist in the motivation and retention of key staff. The LTI is designed to align the interest
of eligible executives and employees more closely with the interests of the shareholders by providing an opportunity for
eligible executives and employees to receive an equity interest in the company.
Under the LTI, eligible executives and employees may be given options to acquire shares which may be subject to vesting
conditions set by the Board. Each grant of options under the LTI is, or will be, on the terms generally described as follows:
●
●
●
●
●
the Board will determine the number of options to be granted to each eligible employee;
options will vest progressively over the periods which were determined by the Board at the time of the grant;
the expiration date will be determined by the Board at the time of the grant;
the exercise price is set by the Board at the time of the grant;
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.
16
Pureprofile Ltd
Directors' report
30 June 2020
Share price
2020
2019
2018
$0.006
$0.010
$0.140
Use of remuneration consultants
During the financial year ended 30 June 2020, 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 2019 Annual General Meeting ('AGM')
At the 2019 AGM, 96.7% of the votes received supported the adoption of the remuneration report for the year ended 30
June 2019. 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 (appointed Executive on 28 August 2019 and re-appointed Non-Executive on
2 September 2020)
Sue Klose - Non-Executive Director
Aaryn Nania - Non-Executive Director (appointed on 28 August 2019 and resigned 2 September 2020)
Nic Jones - Managing Director and Chief Executive Officer (resigned 28 August 2019)
●
●
●
And the following person:
● Melinda Sheppard - Chief Operating Officer/Chief Financial Officer
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Other
$
Super-
annuation
$
Employee
leave
$
Equity-
settled*
$
78,618
32,690
120,500
184,951
236,250
653,009
-
-
-
-
-
-
-
-
-
-
-
-
4,049
3,106
7,600
15,402
22,444
52,601
-
-
-
-
-
-
Total
$
82,667
35,796
128,100
200,353
258,694
705,610
-
-
-
-
-
-
Non-Executive Directors:
S. Klose
A. Nania*
Executive Directors:
A. Edwards
N. Jones*
Other Key Management
Personnel:
M. Sheppard
Represents remuneration from the date of appointment and/or to the date of resignation
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2020
*
17
Pureprofile Ltd
Directors' report
30 June 2020
Non-Executive Directors:
S. Klose*
C. Rosenberg*
M. Ulvert*
Executive Directors:
A. Edwards
N. Jones*
Other Key Management
Personnel:
M. Sheppard
*
2019
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Name
Non-Executive Directors:
S. Klose
A. Nania
C. Rosenberg
M. Ulvert
Executive Directors:
A. Edwards
N. Jones
Other Key Management Personnel:
M. Sheppard
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Other
$
Super-
annuation
$
Employee
leave
$
Equity-
settled*
$
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
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed
remuneration
2020
2019
At risk - STI
2020
At risk - LTI
2020
100%
100%
-
-
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
Details of these agreements are as follows:
Pureprofile Ltd
Directors' report
30 June 2020
Name:
Title:
Agreement commenced:
Term of agreement:
Name:
Title:
Agreement commenced:
Term of agreement:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Details:
Details:
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Andrew Edwards
Non-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 2020 of $120,000 plus superannuation, to be
reviewed from time to time by the Nomination and Remuneration Committee in
accordance with constitution and policies 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. As from March 2020, consistent with
the group’s COVID-19 cost saving measures, Andrew has stopped receiving director
fees voluntarily for the remainder of the financial year. The base salary has been
reinstated from August 2020, after the group has seen its recovery from the
pandemic. From 12 August 2019, Andrew has also received an additional $1,500 per
week for additional services provided to the group. This has ceased from March 2020.
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 for the year ended 30 June 2020 plus superannuation, 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. As from March 2020, consistent with the group’s COVID-
19 cost saving measures, Sue has stopped receiving director fees voluntarily for the
remainder of the financial year. The base salary has been reinstated from August
2020, after the group has seen its recovery from the pandemic. From 1 September
2019, Sue has also received an additional $1,500 per week for additional services
provided to the group. This has ceased from March 2020.
Martin Filz
Chief Executive Officer and Managing Director
3 August 2020
No fixed end date
Base salary of $273,750 including superannuation, to be reviewed from time to time
by the Nomination and Remuneration Committee in accordance with constitution and
in
policies. Reimbursement of
connection with the performance of duties. 3 month termination notice period by
either party. Eligibility to short-term and long-term incentives, under the Incentives
Scheme, which defines the amount, form, frequency, KPI’s and targets to which the
incentives relate.
reasonable out-of-pocket expenses
incurred
19
Pureprofile Ltd
Directors' report
30 June 2020
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 2020 of $275,000 plus 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, KPIs and targets to which the incentives
relate. As from April 2020, consistent with the group’s COVID-19 cost saving
measures, Melinda has voluntarily taken a temporary 50% salary cut in Q4 FY20 and
20% salary cut in Q1 FY21. The salary has been reinstated to normal from October
2020, after the group has seen its recovery from the pandemic.
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 2020 (2019: nil).
Options
There were no options over ordinary shares issued to directors and other key management personnel as part of
compensation that were outstanding as at 30 June 2020.
There were no options over ordinary shares granted to or vested by directors and other key management personnel as part
of compensation during the year ended 30 June 2020.
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 2020.
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 2020.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key
management personnel of the group, including their personally related parties, is set out below:
Ordinary shares
Andrew Edwards
Nic Jones
Balance at
the start of
the year
Received
as part of
remuneration
Additions
Disposals/
other*
Balance at
the end of
the year
984,691
1,067,548
2,052,239
-
-
-
-
-
-
-
(1,067,548)
(1,067,548)
984,691
-
984,691
Disposals/other represents a member no longer being designated as a KMP and does not represent a disposal of
holding.
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*
20
Pureprofile Ltd
Directors' report
30 June 2020
*
Y
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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
Balance at
the start of
the year
400,000
400,000
Granted
Expired
Disposals/
other*
Balance at
the end of
the year
-
-
(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 $2,612 (2019: $7,098) were reimbursed to key management personnel.
This concludes the remuneration report, which has been audited.
Shares under option
There were no unissued ordinary shares of Pureprofile Ltd under option outstanding at the date of this report.
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 2020
and up to the date of this report.
Shares under service rights
There were no unissued ordinary shares of Pureprofile Ltd under service rights outstanding at the date of this report.
Shares issued on the exercise of service rights
There were no ordinary shares of Pureprofile Ltd issued on the exercise of service rights during the year ended 30 June
2020 and up to the date of this report.
Shares under performance rights
There were no unissued ordinary shares of Pureprofile Ltd under retention rights outstanding at the date of this report.
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 2020 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.
21
Pureprofile Ltd
Directors' report
30 June 2020
Non-audit services
There were no non-audit services provided during the financial year by the auditor.
Officers of the company who are former partners of Grant Thornton
There are no officers of the company who are former partners of Grant Thornton.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in the
Directors' Report and Financial Report have been rounded to the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
Auditor
Grant Thornton continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the directors
___________________________
Andrew Edwards
Non-Executive Chairman
27 October 2020
Sydney
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22
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 Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Pureprofile
Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:
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.
b
a
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Grant Thornton Audit Pty Ltd
Chartered Accountants
S M Coulton
Partner – Audit & Assurance
Sydney, 27 October 2020
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.
23
Pureprofile Ltd
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
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
Impairment of goodwill
Loss on disposal of intangible assets
Technology, engineering and licence fees
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
Loss after income tax expense from discontinued operations
Loss after income tax expense for the year attributable to the owners of
Pureprofile Ltd
Other comprehensive loss
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive loss for the year, net of tax
Total comprehensive loss for the year attributable to the owners of Pureprofile
Ltd
Total comprehensive loss for the year is attributable to:
Continuing operations
Discontinued operations
Y
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S
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A
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Consolidated
Note
2020
$
2019
$
5
6
7
7
8
9
24,186,722
26,734,213
899,243
105
232,055
1,145
(10,507,493)
(8,995,359)
-
(4,350,338)
(2,107,127)
(625,027)
(2,116,084)
(326,859)
(1,568,018)
(4,130,173)
(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)
(9,640,408)
(7,911,777)
(18,073)
(443,871)
(9,658,481)
(8,355,648)
(171,000)
(6,104,394)
(9,829,481)
(14,460,042)
(32,900)
36,356
(32,900)
36,356
(9,862,381)
(14,423,686)
(9,691,381)
(171,000)
(8,319,292)
(6,104,394)
(9,862,381)
(14,423,686)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
24
Pureprofile Ltd
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
Loss per share for loss from continuing operations attributable to the owners
of Pureprofile Ltd
Basic earnings per share
Diluted earnings per share
Loss per share for loss from discontinued operations attributable to the
owners of Pureprofile Ltd
Basic earnings per share
Diluted earnings per share
Loss per share for loss attributable to the owners of Pureprofile Ltd
Basic earnings per share
Diluted earnings per share
Consolidated
Note
2020
$
2019
$
Cents
Cents
38
38
38
38
38
38
(8.22)
(8.22)
(7.02)
(7.02)
(0.15)
(0.15)
(8.36)
(8.36)
(5.13)
(5.13)
(12.15)
(12.15)
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
25
Pureprofile Ltd
Statement of financial position
As at 30 June 2020
Assets
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Other
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangibles
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Lease liabilities
Income tax
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total deficiency in equity
Consolidated
Note
2020
$
2019
$
10
11
12
13
14
15
16
18
19
20
21
22
23
24
1,768,401
3,717,695
402,593
797,253
6,685,942
524,322
6,413,738
412,903
688,267
8,039,230
187,540
2,374,240
7,434,547
9,996,327
222,226
-
11,121,341
11,343,567
16,682,269
19,382,797
5,956,450
377,687
24,392,384
489,534
40,275
2,015,580
33,271,910
8,509,075
331,421
17,245,355
-
95,174
1,997,449
28,178,474
2,024,027
124,958
2,148,985
-
80,568
80,568
35,420,895
28,259,042
(18,738,626)
(8,876,245)
25
26
41,461,502
237,659
(60,437,787)
41,461,502
270,559
(50,608,306)
(18,738,626)
(8,876,245)
The above statement of financial position should be read in conjunction with the accompanying notes
26
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)
41,461,502
270,559
(50,608,306)
(8,876,245)
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
deficiency in
equity
$
41,461,502
270,559
(50,608,306)
(8,876,245)
-
-
-
-
(32,900)
(9,829,481)
-
(9,829,481)
(32,900)
(32,900)
(9,829,481)
(9,862,381)
41,461,502
237,659
(60,437,787)
(18,738,626)
Pureprofile Ltd
Statement of changes in equity
For the year ended 30 June 2020
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
Balance at 30 June 2019
Consolidated
Balance at 1 July 2019
Loss after income tax expense for the year
Other comprehensive loss for the year, net of tax
Total comprehensive loss for the year
Balance at 30 June 2020
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U
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A
N
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The above statement of changes in equity should be read in conjunction with the accompanying notes
27
Consolidated
Note
2020
$
2019
$
40
14
16
9
28,878,388
(27,359,407)
44,802,722
(42,797,944)
1,518,981
234,000
105
(255,653)
(75,064)
2,004,778
-
3,246
(2,226,449)
(152,357)
1,422,369
(370,782)
(30,387)
(2,375,521)
-
-
(52,848)
(2,742,282)
650,000
9,354
(2,405,908)
(2,135,776)
5,600,000
(2,069,339)
(1,267,371)
4,400,000
(3,883,147)
-
2,263,290
516,853
1,279,751
524,322
(35,672)
(1,989,705)
2,481,770
32,257
10
1,768,401
524,322
Pureprofile Ltd
Statement of cash flows
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Receipts from Government grant
Interest received
Interest and other finance costs paid
Income taxes paid
Net cash from/(used in) operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
Proceeds from disposal of business
Proceeds from disposal of intangibles
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
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
Cash and cash equivalents at the end of the financial year
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N
O
E
S
U
L
A
N
O
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R
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P
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O
F
The above statement of cash flows should be read in conjunction with the accompanying notes
28
Pureprofile Ltd
Notes to the financial statements
30 June 2020
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 are:
Registered office
Level 5
126 Phillip Street
Sydney NSW 2000
Australia
Principal place of business
Level 3
223 Liverpool Street
Darlinghurst NSW 2010
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 October 2020. 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.
With the exception of AASB 2020-4 Amendment to Australian Accounting Standards - Covid-19 - Related Rent
Concessions, 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:
Interpretation 23 Uncertainty over Income Tax
The group has adopted Interpretation 23 from 1 July 2019. The interpretation clarifies how to apply the recognition and
measurement requirements of AASB 112 ‘Income Taxes’ in circumstances where uncertain tax treatments exists. The
interpretation requires: the group to determine whether each uncertain tax treatment should be treated separately or
together, based on which approach better predicts the resolution of the uncertainty; the group to consider whether it is
probable that a taxation authority will accept an uncertain tax treatment; and if the group concludes that it is not probable
that the taxation authority will accept an uncertain tax treatment, it shall reflect the effect of uncertainty in determining the
related taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates, measuring the tax uncertainty
based on either the most likely amount or the expected value. In making the assessment it is assumed that a taxation
authority will examine amounts it has a right to examine and have full knowledge of all related information when making
those examinations. Interpretation 23 was adopted using the modified retrospective approach and as such comparatives
have not been restated. There was no impact of adoption on opening accumulated losses as at 1 July 2019.
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●
●
●
●
●
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Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
AASB 16 Leases
The group has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees eliminates
the classifications of operating leases and finance leases. Except for short-term leases and leases of low-value assets,
right-of-use assets and corresponding lease liabilities are recognised in the statement of financial position. Straight-line
operating lease expense recognition is replaced with a depreciation charge for the right-of-use assets (included in
operating costs) and an interest expense on the recognised lease liabilities (included in finance costs). In the earlier
periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease
expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results
improve as the operating expense is now replaced by interest expense and depreciation in profit or loss. For classification
within the statement of cash flows, the interest portion is disclosed in operating activities and the principal portion of the
lease payments are separately disclosed in financing activities. For lessor accounting, the standard does not substantially
change how a lessor accounts for leases.
When adopting AASB 16 from 1 July 2019, the group has applied the following practical expedients:
applying a single discount rate to the portfolio of leases with reasonably similar characteristics;
accounting for leases with a remaining lease term of 12 months as at 1 July 2019 as short-term leases;
excluding any initial direct costs from the measurement of right-of-use assets;
using hindsight in determining the lease term when the contract contains options to extend or terminate the lease; and
not apply AASB 16 to contracts that were not previously identified as containing a lease.
Impact of adoption
AASB 16 was adopted using the modified retrospective approach and as such the comparatives have not been restated.
The impact of adoption on the statement of financial position as at 1 July 2019 was as follows (increase/(decrease)):
Assets
Right-of-use assets (AASB 16)
Total assets
Liabilities
Lease liabilities - current (AASB 16)
Lease liabilities - non-current (AASB 16)
Lease incentive liability (AASB 117)
Total liabilities
Equity
Accumulated losses
Total equity
Reconciliation from operating lease commitments disclosure at 30 June 2019 to the right-of-use assets at 1 July 2019:
Operating lease commitments as at 30 June 2019 (AASB 117)
Reverse of lease commitments due to revised lease term and incentive received
Adjustment for foreign currency differences
Operating lease commitments discount based on the weighted average incremental borrowing rate between
9.00% - 11.00% (AASB 16)
Short-term leases not recognised as a right-of-use asset (AASB 16)
Right-of-use asset recognised at 1 July 2019
30
1 July 2019
$
2,937,297
2,937,297
795,702
2,446,479
(304,884)
2,937,297
-
-
1 July 2019
$
5,732,875
(1,602,825)
129,806
(1,093,842)
(228,717)
2,937,297
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
AASB 2020-4 Amendment to Australian Accounting Standards - Covid-19-Related Rent Concessions
The group has early adopted the amendment to AASB 16 from 1 July 2019. The amendment provides a practical
expedient for lessees to account for COVID-19-related rent concessions that: result in lease payments that are
substantially the same as, or less than, the consideration for the lease immediately prior to the change; where any
reduction in the lease payments affects only payments originally due on or before 30 June 2021; and where there is no
substantive change to other terms and conditions of the lease. The practical expedient allows an entity not to assess rent
concessions meeting the criteria as a lease modification. As a result, to the extent that lease concessions represent a
forgiveness or waiver of lease payments, such concessions are treated as variable lease payments recognised in profit or
loss with a corresponding adjustment to the lease liability. To the extent that the lease concession in substance represents
a delay in lease repayments such that lease consideration is not changed, the lease liability is not extinguished. Interest
continues to accrue for that period. The group has applied the practical expedient to all rent concessions that meet the
abovementioned criteria.
Going concern
The directors have prepared the financial statements 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 $9,829,481 (2019: loss after income tax of $14,460,042) and was in a net
current liability position of $26,585,968 (2019: $20,139,244). The group generated positive cash flows from operations of
$1,422,369 (2019: negative cash flows from operations of $370,782).
●
●
●
The directors believe that there are reasonable grounds to conclude that the group will continue as a going concern, after
consideration of the following factors:
●
the group has executed on a number of strategic decisions during FY2020, including a restructure of the executive
team. This included the hire of a new CEO with a research industry background and knowledge of data and
technology, who is also sales-focused;
the group has invested in greater sales capability and new products and tools to reach new customers during FY2020;
the group has realised further savings through automation, technology rationalisation and occupancy during FY2020;
the group is undertaking a fully underwritten renounceable pro-rata entitlement offer of 8 shares for every 1 share held
by eligible shareholders to raise up to $18,804,170 (before expenses and subject to rounding) (the Entitlement Offer);
and
the group intends to use the proceeds of the Entitlement Offer as follows:
(i) significantly restructure its balance sheet by converting a large proportion of the group’s debt to equity;
(ii) partially pay down the group’s existing debt to $3,000,000;
(iii) inject further funds into the sales team and global panel partnership;
(iv) commercialisation of the group’s technology;
(v) provide working capital for the group;
(vi) pay the costs of the Entitlement Offer; and
(vii) grow the business in order to generate profits and positive cash flows in the future.
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.
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31
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Pureprofile Ltd ('company'
or 'parent entity') as at 30 June 2020 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.
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Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Revenue recognition
The group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the group is expected to be entitled in
exchange for transferring goods or services to a customer. For each contract with a customer, the group: identifies the
contract with a customer; identifies the performance obligations in the contract; determines the transaction price 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.
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Pureprofile Ltd
Notes to the financial statements
30 June 2020
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.
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them
with the costs that they are intended to compensate.
Government grants received which do not relate to any specific costs are recognised as income received in the period in
which they are 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.
34
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Pureprofile Ltd
Notes to the financial statements
30 June 2020
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.
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.
35
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Leases (AASB 117 - prior year)
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and
requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets
and the arrangement conveys a right to use the asset.
A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the
risks and benefits incidental to the ownership of leased assets, and operating leases, under which the lessor effectively
retains substantially all such risks and benefits.
Finance leases are capitalised. A lease asset and liability are established at the fair value of the leased assets, or if lower,
the present value of minimum lease payments. Lease payments are allocated between the principal component of the
lease liability and the finance costs, so as to achieve a constant rate of interest on the remaining balance of the liability.
Leased assets acquired under a finance lease are depreciated over the asset's useful life or over the shorter of the asset's
useful life and the lease term if there is no reasonable certainty that the consolidated entity will obtain ownership at the end
of the lease term.
Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-line
basis over the term of the lease.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in
the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset,
and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the group expects to obtain ownership of the leased asset at the end of
the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted
for any remeasurement of lease liabilities.
The group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with
terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss
as incurred.
Intangible assets
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.
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36
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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
Acquired membership database is amortised over 7 years, on a straight line basis.
Membership base
In November 2016, Pureprofile, with the acquisition of the Cohort Group, acquired a membership database which will be
amortised over its useful economic life of 7 years, on a straight line basis. 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.
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.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease
or, if that rate cannot be readily determined, the group's incremental borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option
is reasonably certain to occur, and any anticipated termination penalties.
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37
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are
incurred. Variable lease payments include rent concessions in the form of rent forgiveness or a waiver as a direct
consequence of the Coronavirus (COVID-19) pandemic and which relate to payments originally due on or before 30 June
2021.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use
asset is fully written down.
Group as a lessor
Leases in which the group transfers substantially all the risks and rewards of ownership of an asset are classified as
finance leases held by the customer. Lease receivables are recognised at an amount equal to the net investment in the
lease which represents the gross investment discounted at the implicit interest rate. Lease payments received are
accounted for as a repayment of principal and receipt of income. Interest income is calculated on the principal balance
outstanding and is brought to account to produce a constant rate of return over the lease term.
Leases in which the group does not transfer substantially all the risks and rewards incidental to ownership of an asset are
classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is
included in revenue in the statement of profit or loss due to its operating nature. Initial direct costs incurred in negotiating
and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term
on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
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.
38
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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Share-based payments
Equity-settled share-based compensation benefits are provided to employees. Equity-settled transactions are awards of
shares, or options over shares, that are provided to employees in exchange for the rendering of services.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently determined
using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do
not determine whether the group receives the services that entitle the employees to receive payment. No account is taken
of any other vesting conditions.
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already
recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other
conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair
value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the group or employee and is not satisfied during the vesting period,
any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, they are treated as if they had vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and
new award are treated as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair
value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either
not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge
and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an
analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison,
where applicable, with external sources of data.
Issued capital
Ordinary shares are classified as equity.
39
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Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to
profit or loss.
On the acquisition of a business, the group assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the group's operating or
accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the group remeasures its previously held equity interest in the
acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is
recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within
equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling
interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment
in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair
value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a
gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and
measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred
and the acquirer's previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the
provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based
on new information obtained about the facts and circumstances that existed at the acquisition-date. The measurement
period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the
information possible to determine fair value.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Pureprofile Ltd, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part
of the expense.
40
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Rounding of amounts
The company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191,
issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this Report have
been rounded to the nearest dollar.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the group for the annual reporting period ended 30 June 2020. 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.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and
early adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new
guidance on measurement that affects several Accounting Standards. Where the group has relied on the existing
framework in determining its accounting policies for transactions, events or conditions that are not otherwise dealt with
under the Australian Accounting Standards, the group may need to review such policies under the revised framework. At
this time, the application of the Conceptual Framework is not expected to have a material impact on the group's financial
statements.
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.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may
have, on the consolidated entity based on known information. This consideration extends to the nature of the products and
services offered, customers, supply chain, staffing and geographic regions in which the group operates. Other than as
addressed in specific notes, there does not currently appear to be either any significant impact upon the financial
statements or any significant uncertainties with respect to events or conditions which may impact the group unfavourably
as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
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.
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Pureprofile Ltd
Notes to the financial statements
30 June 2020
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Note 3. Critical accounting judgements, estimates and assumptions (continued)
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected
credit loss rate for each group. These assumptions include recent sales experience, historical collection rates, the impact
of the Coronavirus (COVID-19) pandemic and forward-looking information that is available. The allowance for expected
credit losses, as disclosed in note 11, is calculated based on the information available at the time of preparation. The
actual credit losses in future years may be higher or lower.
Capitalised software development costs
Distinguishing the research and development phases of a new customised software project and determining whether the
recognition requirements for the capitalisation of development costs are met requires judgement. After capitalisation,
management monitors whether the recognition requirement continue to be met and whether there are any indicators that
capitalised costs may be impaired.
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.
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.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the
underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods
to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical
incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease
commencement date. Factors considered may include the importance of the asset to the group's operations; comparison of
terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold
improvements; and the costs and disruption to replace the asset. The group reassesses whether it is reasonably certain to
exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in
circumstances.
42
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to
discount future lease payments to measure the present value of the lease liability at the lease commencement date. Such
a rate is based on what the group estimates it would have to pay a third party to borrow the funds necessary to obtain an
asset of a similar value to the right-of-use asset, with similar terms, security and economic environment.
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 group.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation, adjusted for non-cash and
significant items). 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
During the financial year ended 30 June 2019, 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). On 1 March 2019 the group
also 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 2020 and 30 June 2019 no single customer contributed more than 10% to the group's
external revenue.
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43
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 4. Operating segments (continued)
Operating segment information (continuing and discontinued operations)
Consolidated - 2020
Revenue
Sales to external customers
Interest
Total revenue
EBITDA
Depreciation and amortisation
Impairment of intangible assets
Loss on disposal of intangible assets
Interest
Interest expense on leases
Finance costs
Profit/(loss) before income tax expense
Income tax expense
Loss after income tax expense
Consolidated - 2019
Revenue
Sales to external customers
Interest
Total revenue
EBITDA
Depreciation and amortisation
Impairment of intangible assets
Loss on disposal of intangible assets
Derecognition of goodwill on disposal of
businesses
Finance interest
Finance costs
Profit/(loss) before income tax expense
Income tax expense
Loss after income tax expense
Data &
Insights
$
Media
$
Performance
$
Other
segments
$
Total
$
18,866,160
-
18,866,160
3,471,696
-
3,471,696
1,848,866
-
1,848,866
-
105
105
24,186,722
105
24,186,827
6,176,341
(3,104,740)
-
(409,068)
-
-
-
2,662,533
491,461
(159,576)
(2,107,127)
(215,959)
-
-
-
(1,991,201)
245,836
-
-
-
-
-
-
245,836
(5,512,486)
(1,086,022)
-
-
105
(258,152)
(3,872,021)
(10,728,576)
1,401,152
(4,350,338)
(2,107,127)
(625,027)
105
(258,152)
(3,872,021)
(9,811,408)
(18,073)
(9,829,481)
Data &
Insights
$
Media
$
Performance
$
Other
segments
$
Total
$
18,375,807
-
18,375,807
11,574,006
-
11,574,006
7,852,283
-
7,852,283
-
3,246
3,246
37,802,096
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)
All assets and liabilities, including taxes are not allocated to the operating segments as they are managed on an overall
group basis.
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
44
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 4. Operating segments (continued)
Revenue by geographical area (continuing and discontinued operations)
The group operates in 3 (2019: 3) regions. The sales revenue for each region is as follows:
Sales to external customers
Australasia
Europe
United States
Note 5. Revenue
From continuing operations
Data & Insights
Media
Performance
Revenue from continuing operations
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
Consolidated
2020
$
2019
$
16,642,458
6,837,556
706,708
30,740,479
5,679,573
1,382,044
24,186,722
37,802,096
Consolidated
2020
$
2019
$
18,866,160
3,471,696
1,848,866
18,375,807
6,145,245
2,213,161
24,186,722
26,734,213
Consolidated
2020
$
2019
$
11,545
-
348,000
516,049
23,649
-
10,203
-
171,950
49,902
899,243
232,055
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 2020 and 30 June 2019, all revenue was recognised based on services
transferred over time.
Note 6. Other income
Net foreign exchange gain
Net gain on disposal of property, plant and equipment
Government grants (COVID-19)
Rental income
Other income
Other income
Government grants (COVID-19) represents grants received from the Government comprising of JobKeeper support
payments. During the Coronavirus (COVID-19) pandemic, the group has received JobKeeper support payments from the
Australian Government which are passed on to eligible employees. These have been recognised as government grants in
the financial statements and recorded as other income over the periods in which the related employee benefits are
recognised as an expense. The group is eligible for JobKeeper support from the government on the condition that
employee benefits continue to be paid.
45
Loss before income tax from continuing operations includes the following specific expenses:
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 7. Expenses
Depreciation
Right-of-use assets
Office and computer equipment
Total depreciation
Amortisation
Software
Membership base
Total amortisation
Impairment
Goodwill
Total depreciation and amortisation
Finance costs expensed
Leases
Short-term lease payments
COVID-19 related rent concessions
Low-value assets lease payments
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
Finance costs
Interest and finance charges paid/payable on borrowings
Interest and finance charges paid/payable on lease liabilities
Superannuation expense
Defined contribution superannuation expense
Employee benefits expense excluding superannuation
Employee benefits expense excluding superannuation
46
Consolidated
2020
$
2019
$
906,059
114,118
-
147,693
1,020,177
147,693
2,951,985
378,176
2,900,551
391,351
3,330,161
3,291,902
4,350,338
3,439,595
2,107,127
-
3,872,021
258,152
2,377,093
-
4,130,173
2,377,093
254,197
(34,824)
4,717
224,090
-
-
-
-
645,736
697,096
8,349,623
10,340,021
Pureprofile Ltd
Notes to the financial statements
30 June 2020
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 17)
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 effect amounts which are not deductible/(taxable) in calculating taxable income:
Tax at the statutory tax rate of 30%
Entertainment expenses
Eligible research and development expenditure
Thin capitalisation - deduction denial amount
Sundry items
Adjustment recognised for prior periods
Current year tax losses not recognised
Current year temporary differences 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
Income tax expense
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
47
Consolidated
2020
$
2019
$
99,035
-
(80,962)
21,001
422,870
-
18,073
443,871
-
422,870
(9,640,408)
(171,000)
(7,911,777)
(6,104,394)
(9,811,408)
(14,016,171)
(2,943,422)
(4,204,851)
11,615
-
834,007
632,759
8,723
95,843
-
1,065,470
(1,465,041)
(80,962)
1,272,366
303,018
-
-
-
(11,308)
-
(3,034,815)
-
2,570,636
-
(211,087)
422,870
729,415
62,695
(95,843)
18,073
443,871
Consolidated
2020
$
2019
$
5,469,681
4,212,824
Tax losses not recognised
Potential unused tax benefit for which no deferred tax asset has been recognised
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.
Pureprofile Ltd
Notes to the financial statements
30 June 2020
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.
During the financial year ended 30 June 2020, the discontinued operations represented additional expenses incurred by
the group in relation to Cohort Holdings Australia Pty Ltd.
Financial performance information
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
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 intangible assets
Loss on disposal of intangible assets
Technology, engineering and licence fees
Occupancy costs
Other expenses
Finance costs
Total expenses
Loss before income tax expense
Income tax expense
Loss after income tax expense
Loss on disposal before income tax
Income tax expense
Loss on disposal after income tax expense
Loss after income tax expense from discontinued operations
48
Consolidated
2020
$
2019
$
-
-
-
-
11,067,883
2,101
11,069,984
179,738
-
-
-
-
-
-
-
-
(171,000)
-
(171,000)
(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)
(171,000)
-
(3,112,648)
-
(171,000)
(3,112,648)
-
-
-
(2,991,746)
-
(2,991,746)
(171,000)
(6,104,394)
Pureprofile Ltd
Notes to the financial statements
30 June 2020
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*
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
*
49
Consolidated
2020
$
2019
$
-
-
-
-
-
-
-
-
-
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
2020
$
2019
$
-
-
-
-
-
991,499
(3,787,669)
(195,576)
(2,991,746)
(2,991,746)
Consolidated
2020
$
2019
$
1,758,741
9,660
513,991
10,331
1,768,401
524,322
Cash on deposit of $9,660 (2019: $10,331) is a restricted cash balance which is held and maintained as security over
the group's leased properties.
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 11. Current assets - trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
Other receivables
Consolidated
2020
$
2019
$
3,765,943
(94,422)
3,671,521
6,560,276
(266,091)
6,294,185
46,174
119,553
3,717,695
6,413,738
Allowance for expected credit losses
The group has recognised a loss of $57,355 (2019: $39,865) in profit or loss in respect of impairment of receivables for the
year ended 30 June 2020.
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
Expected credit loss rate
2020
%
2019
%
Carrying amount
2019
$
2020
$
Allowance for expected
credit losses
2020
$
2019
$
0.0331%
0.0323%
23.3055%
65.6366%
-
0.7928%
4.0846%
41.3430%
2,720,076
923,775
40,678
127,588
4,760,821
1,002,303
324,352
592,353
900
298
9,480
83,744
-
7,946
13,248
244,897
3,812,117
6,679,829
94,422
266,091
The group has increased its monitoring of debt recovery as there is an increased probability of customers delaying
payment or being unable to pay, due to the Coronavirus (COVID-19) pandemic. As a result, the calculation of expected
credit losses has been revised as at 30 June 2020 and rates have increased in each category up to 6 months overdue.
Movements in the allowance for expected credit losses are as follows:
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
Consolidated
2020
$
2019
$
266,091
57,355
(229,024)
-
615,897
222,345
(389,671)
(182,480)
94,422
266,091
Consolidated
2020
$
2019
$
402,593
412,903
50
Pureprofile Ltd
Notes to the financial statements
30 June 2020
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:
Allowance for expected credit losses
The allowance for expected credit losses on contract assets for the year ended 30 June 2020 is $nil (2019: $nil).
Opening balance
Additions
Cumulative catch-up adjustments
Transfer to trade receivables
Disposals/write off of assets
Closing balance
Note 13. Current assets - other
Prepayments
Note 14. Non-current assets - property, plant and equipment
Office and computer equipment - at cost
Less: Accumulated depreciation
Consolidated
2020
$
2019
$
412,903
403,808
(1,236)
(412,331)
(551)
268,482
412,312
26
(267,917)
-
402,593
412,903
Consolidated
2020
$
2019
$
797,253
688,267
Consolidated
2020
$
2019
$
737,841
(550,301)
862,755
(640,529)
187,540
222,226
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
51
Office and
computer
equipment
$
377,982
55,407
(1,401)
(25,478)
2,231
(186,515)
222,226
88,380
(4,213)
(4,735)
(114,118)
187,540
Consolidated
2020
$
2019
$
2,931,316
(557,076)
2,374,240
-
-
-
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 14. Non-current assets - property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2018
Additions
Disposals
Sale of businesses
Exchange differences
Depreciation expense
Balance at 30 June 2019
Additions
Disposals
Exchange differences
Depreciation expense
Balance at 30 June 2020
Note 15. Non-current assets - right-of-use assets
Right-of-use assets
Less: Accumulated depreciation
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
The group leases buildings for its offices and plant and equipment under agreements of between 1 to 5 years with, in some
cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are
renegotiated.
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 2019 - initial recognition
Additions
Exchange differences
Depreciation expense
Balance at 30 June 2020
Right-of-use
assets
$
2,937,297
432,196
(89,194)
(906,059)
2,374,240
52
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 16. Non-current assets - intangibles
Goodwill - at cost
Less: Impairment
Software - at cost
Less: Accumulated amortisation
Less: Impairment
Membership base - at cost
Less: Accumulated amortisation
Brand names - at cost
Customer contracts and partner network arrangement - at cost
Less: Accumulated amortisation
Less: Impairment
Consolidated
2020
$
2019
$
15,503,285
(15,503,285)
-
15,503,285
(13,396,158)
2,107,127
24,972,053
(14,301,775)
(4,598,724)
6,071,554
23,854,594
(11,982,825)
(4,598,724)
7,273,045
3,622,000
(1,168,990)
(2,453,010)
-
3,622,000
(1,168,990)
(2,453,010)
-
2,694,410
(1,425,417)
1,268,993
2,694,410
(1,047,241)
1,647,169
94,000
94,000
7,434,547
11,121,341
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
$
2,725,572
-
-
-
(2,453,010)
(272,562)
-
-
-
-
-
-
Goodwill
$
Software
$
5,607,127
-
-
(3,500,000)
-
-
2,107,127
-
-
(2,107,127)
-
8,678,968
2,742,880
(1,028,137)
(167,991)
-
(2,952,675)
7,273,045
2,375,521
(625,027)
-
(2,951,985)
-
6,071,554
Membership
base
$
Brand
names
$
2,038,520
-
-
-
-
(391,351)
1,647,169
-
-
-
(378,176)
94,000
-
-
-
-
-
94,000
-
-
-
-
Total
$
19,144,187
2,742,880
(1,028,137)
(3,667,991)
(2,453,010)
(3,616,588)
11,121,341
2,375,521
(625,027)
(2,107,127)
(3,330,161)
1,268,993
94,000
7,434,547
Consolidated
Balance at 1 July 2018
Additions
Disposals
Sale of businesses
Impairment of assets
Amortisation expense
Balance at 30 June 2019
Additions
Disposals
Impairment of assets
Amortisation expense
Balance at 30 June 2020
Impairment testing
Goodwill
Goodwill and brand names are tested annually for impairment or at each reporting date if an indicator of impairment exists.
Goodwill and brand names are allocated to the Media cash generating unit.
53
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 16. Non-current assets - intangibles (continued)
At the reporting date for the half-year ended 31 December 2019, the Media CGU generated a loss for the half-year to 31
December 2019, which gave rise to an indicator of potential impairment and the CGU was subsequently tested for
impairment at 31 December 2019.
Other definite life intangible assets
Definite life intangible assets are tested for impairment at each reporting date if an indicator of impairment exists. COVID-
19 has had a significant impact on the Australian and global economy. The current and prospective deterioration in the
economy due to COVID-19 has triggered an indicator of impairment. The remaining definite life intangible assets not
allocated to the Media CGU have been tested for impairment at 30 June 2020. All remaining definite life intangible assets
are allocated to the Data & Insights CGU.
Impairment testing methodology
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 in revenue
Long-term growth rate
Discount rate (post-tax)
Data & Insights CGU
Growth in revenue in Year 1
Growth in revenue from Year 2 - Year 5
Long term growth rate
Discount rate (post-tax)
Probability weighting
2020
2019
6% - 16%
0%
17.4%
5% - 18%
1%
16.8%
Lower case
Base case
Upper case
3.1%
2.8%
0%
17.4%
10%
14.2%
8.0%
0%
17.4%
80%
24.5%
10.0%
1%
17.4%
10%
Impairment test results - Media CGU
Based on the testing performed the recoverable amount of the CGU did not exceed its carrying value and the group
recognised an impairment to goodwill of $2,107,127 (2019: $nil), reducing its carrying value to nil.
Impact of possible changes in assumptions - Media CGU
Management believes that reasonable changes in the key assumptions on which the recoverable amount of the CGU is
based would not result in any additional impairment.
Impairment test results - Data & Insights CGU
Based on the testing performed no impairment was recognised for this CGU, for the year ended 30 June 2020.
Impact of possible changes in assumptions - Data & Insights CGU
The directors have considered three scenarios (the Base case; Lower case; and Upper case) when making judgments and
estimates in respect of impairment testing of the CGU’s non-current assets. Should these judgments and estimates not
occur the resulting recoverable amount of the CGU’s non-current assets may differ. The sensitivities specific to the D&I
CGU are as follows:
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
54
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 16. Non-current assets - intangibles (continued)
the probability weighting applied to the lower case scenario would be required to increase to 34% and the probability
weighting applied to the base case scenario reduced to 56% before it gives rise to an impairment, with all other
assumptions remaining constant;
budgeted revenue growth in the year 1 (FY21) in the base case would be required to reduce to 9.3% before it gives
rise to an impairment, with all other assumptions remaining constant;
budgeted revenue growth in the year 2 ~ 5 (FY22 ~ FY25) in the base case would be required to reduce to 6.5%
before it gives rise to an impairment, with all other assumptions remaining constant; and
the discount rate would be required to increase to 24.30% before it gives rise to an impairment, with all other
assumptions remaining constant.
Management believes that other reasonable changes in the key assumptions on which the recoverable amount of
intangibles is based would not cause the cash-generating unit's carrying amount to exceed its recoverable amount.
Note 17. Non-current assets - deferred tax
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Allowance for expected credit losses
Prepayments
Capitalised expenditure
Brand names
Employee benefits
Accrued expenses and other payables
Provision for reward redemptions
Other assets
Business related capital expenditure
Research and development expenditure
Unrealised FX Loss
Deferred tax asset
Movements:
Opening balance
Charged to profit or loss (note 8)
Closing balance
Consolidated
2020
$
2019
$
8,606
(1,186)
(565,035)
(28,200)
206,513
62,940
419,148
(694,188)
152,413
410,224
28,765
-
-
-
-
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
(422,870)
-
The group has unused tax losses of $5,469,681 (2019: $4,212,824) 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 offset the
tax losses.
●
●
●
●
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
55
Reconciliation
Reconciliation of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
2020
$
2019
$
2,281,193
2,352,800
1,322,457
4,153,807
2,964,957
1,390,311
5,956,450
8,509,075
Consolidated
2020
$
2019
$
377,687
331,421
Consolidated
2020
$
2019
$
331,421
668,431
(549,855)
(72,113)
(197)
385,556
447,358
(497,607)
(3,886)
-
377,687
331,421
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 18. Current liabilities - trade and other payables
Trade payables
Accrued expenses
Other payables
Contract liabilities
Note 19. Current liabilities - contract liabilities
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
Opening balance
Payments received in advance
Transfer to revenue
Disposals
Foreign exchange differences
Closing balance
Within 6 months
6 to 12 months
12 to 18 months
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 $377,687 as at 30 June 2020 ($331,421 as at 30 June 2019) and is expected to be recognised as
revenue in future periods as follows:
Consolidated
2020
$
2019
$
296,487
74,700
6,500
231,561
99,860
-
377,687
331,421
56
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 20. Current liabilities - borrowings
Loans
Interest accrued on loans
Trade receivables financing facility
As at 30 June 2020, the loan comprises 3 facilities as follows:
(a) Facility A is $10,000,000 (30 June 2019: $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 April 2021. As at 30 June 2020, the facility is fully used and
there are no unused amounts.
(b) Facility B is $3,000,000 (30 June 2019: $3,000,000). Interest is fixed at 20% per annum and is payable on the date
the loan expires. The facility expires on 1 April 2021. As at 30 June 2020, the facility is fully used and there are no
unused amounts.
(c) Facility C is $7,000,000 (30 June 2019: $2,600,000). Interest is fixed and payable at 20% per annum and is payable
on the date the facility expires. The facility expires on 1 April 2021. As at 30 June 2020, the facility is fully used and
there are no unused amounts.
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
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
57
Consolidated
2020
$
2019
$
20,000,000
4,392,384
-
14,400,000
776,016
2,069,339
24,392,384
17,245,355
Consolidated
2020
$
2019
$
20,000,000
14,400,000
Consolidated
2020
$
2019
$
20,000,000
-
20,000,000
15,600,000
2,069,339
17,669,339
20,000,000
-
20,000,000
14,400,000
2,069,339
16,469,339
-
-
-
1,200,000
-
1,200,000
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 21. Current liabilities - lease liabilities
Lease liability
Refer to note 28 for further information on financial instruments.
Note 22. Current liabilities - provisions
Employee benefits
Reward redemption
Rent straight-lining
Lease liability
Refer to note 28 for further information on financial instruments.
Note 24. Non-current liabilities - provisions
Employee benefits
Lease make good
58
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.
The rent straight-lining provision is no longer recognised under AASB 16. Following the adoption of AASB 16 on 1 July
2019, the provision was de-recognised.
Refer to note 24 for further information.
Note 23. Non-current liabilities - lease liabilities
Consolidated
2020
$
2019
$
489,534
-
Consolidated
2020
$
2019
$
410,515
1,605,065
-
453,584
1,155,052
388,813
2,015,580
1,997,449
Consolidated
2020
$
2019
$
2,024,027
-
Consolidated
2020
$
2019
$
64,015
60,943
80,568
-
124,958
80,568
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 24. Non-current liabilities - provisions (continued)
Lease make good
The provision represents the present value of the estimated costs to make good the premises leased by the group at the
end of the respective lease terms.
Movements in provisions
Movements in each class of provision (current and non-current) during the current financial year, other than employee
benefits, are set out below:
Consolidated - 2020
Carrying amount at the start of the year
Change in accounting policy
Additional provisions recognised
Amounts used
Payments
Foreign exchange differences
Unused amounts reversed
Carrying amount at the end of the year
Note 25. Equity - issued capital
Ordinary shares - fully paid
Movements in ordinary share capital
Balance
Share buy-back
Less: adjustment for prior year share issue costs net
of taxation
Reward
redemption
$
Rent
straight-lining
$
Lease make
good
$
1,155,052
-
4,316,192
(3,859,335)
182,767
(2,762)
(186,849)
388,813
(388,813)
-
-
-
-
-
-
-
60,943
-
-
-
-
1,605,065
-
60,943
Consolidated
2020
Shares
2019
Shares
2020
$
2019
$
117,526,063
117,526,063
41,461,502
41,461,502
Date
Shares
Issue price
$
1 July 2018
24 December 2018
120,495,625
(2,969,562)
-
30 June 2019
117,526,063
30 June 2020
117,526,063
$0.11
$0.00
41,803,151
(341,499)
(150)
41,461,502
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.
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
Details
Balance
Balance
59
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 25. Equity - issued capital (continued)
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 26. Equity - reserves
Consolidated
2020
$
2019
$
(211,582)
449,241
(178,682)
449,241
237,659
270,559
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:
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
Foreign currency reserve
Share-based payments reserve
Consolidated
Balance at 1 July 2018
Foreign currency translation
Balance at 30 June 2019
Foreign currency translation
Balance at 30 June 2020
Foreign
currency
$
Share-based
payments
$
Total
$
(215,038)
36,356
(178,682)
(32,900)
449,241
-
449,241
-
234,203
36,356
270,559
(32,900)
(211,582)
449,241
237,659
60
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 27. Equity - dividends
Note 28. Financial instruments
There were no dividends paid, recommended or declared during the current or previous financial year.
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.
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 2020 and 30 June 2019, 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. As disclosed in note 11, due to the Coronavirus (COVID-19) pandemic, the calculation
of expected credit losses has been revised as at 30 June 2020 and rates have increased in each category up to 6 months
overdue.
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.
61
Loans
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 28. Financial instruments (continued)
The group had a concentration of credit risk exposure with its debtors financing facility as at 30 June 2019, however the
facility expired during the year ended 30 June 2020 and the group is no longer exposed to a concentration of credit risk at
30 June 2020. As at 30 June 2019, the finance provider was owed $2,069,339 from the group's trade receivables. In the
event that the group's trade receivables were not collected the group was liable for amounts owed to the finance provider.
Amounts owed represented 31.5% of trade receivables at 30 June 2019. The group recognised a provision for impairment
of receivables of $94,422 at 30 June 2019. There were no guarantees against these receivables but management closely
monitored 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:
Consolidated
2020
$
2019
$
-
1,200,000
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 - 2020
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Reward redemption provision
Interest-bearing - fixed rate
Loans
Lease liability
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
$
-
-
-
2,281,193
1,322,457
1,605,065
-
-
-
-
-
-
-
-
-
2,281,193
1,322,457
1,605,065
20.00%
8.59%
24,392,384
489,534
30,090,633
-
319,959
319,959
-
787,525
787,525
-
916,545
916,545
24,392,384
2,513,563
32,114,662
62
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 28. Financial instruments (continued)
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
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
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Note 29. Fair value measurement
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.
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.
Note 30. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the group is set out
below:
Short-term employee benefits
Post-employment benefits
Consolidated
2020
$
2019
$
653,009
52,601
950,444
57,523
705,610
1,007,967
63
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:
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 31. Remuneration of auditors
Audit services - Grant Thornton
Audit or review of the financial statements
Other services - Grant Thornton
Taxation services
Audit services - other firms
Audit or review of the financial statements
Other services - other firms
Taxation services
Assistance in financial due diligence
Note 32. Contingent liabilities
Note 33. Commitments
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
The group had no contingent liabilities as at 30 June 2020 (2019: the group has given a bank guarantee of $182,337 to its
landlord for leased property).
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
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.
Operating lease commitments were disclosed under the requirements of AASB 117 'Leases'. AASB 117 was superseded
by AASB 16 'Leases' effective 1 July 2019. Operating leases commitments are no longer disclosed under AASB 16. Refer
to note 2 for further information.
Note 34. Related party transactions
Parent entity
Pureprofile Ltd is the parent entity.
64
Consolidated
2020
$
2019
$
162,000
158,593
37,412
-
199,412
158,593
37,892
50,935
42,146
37,500
116,507
35,300
79,646
151,807
117,538
202,742
Consolidated
2020
$
2019
$
-
-
-
-
1,542,243
2,701,710
1,488,922
5,732,875
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 34. Related party transactions (continued)
Subsidiaries
Interests in subsidiaries are set out in note 36.
Key management personnel
Disclosures relating to key management personnel are set out in note 30 and the remuneration report included in the
directors' report.
Transactions with related parties
The following transactions occurred with related parties:
Payment for goods and services:
Payment for expenses reimbursed to key management personnel
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.
Consolidated
2020
$
2019
$
2,612
7,098
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 35. 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
Parent
2020
$
2019
$
(79,331)
(14,423,686)
(79,331)
(14,423,686)
65
Parent
2020
$
2019
$
399,839
176,684
12,321,126
6,937,633
1,275,924
15,813,878
21,275,924
15,813,878
41,462,460
(180)
449,241
(50,866,319)
41,461,502
-
449,241
(50,786,988)
(8,954,798)
(8,876,245)
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 37), under which it guarantees the debts of certain of
its subsidiaries as at 30 June 2020 and 30 June 2019.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2020 and 30 June 2019 other than those disclosed in note 32.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2020 and 30 June 2019.
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.
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 35. Parent entity information (continued)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Issued capital
Foreign currency reserve
Share-based payments reserve
Accumulated losses
Total deficiency in equity
Equity
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
66
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Principal place of business /
Country of incorporation
Ownership interest
2019
2020
%
%
USA
Australia
Australia
United Kingdom
United Kingdom
USA
Australia
Australia
Australia
Australia
India
Poland
New Zealand
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:
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'.
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 36. Interests in subsidiaries
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
Deregistered on 22 July 2020.
Note 37. Deed of cross guarantee
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
Deregistered on 22 July 2020.
*
Name
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
*
67
Set out below is a consolidated statement of profit or loss and other comprehensive income and statement of financial
position of the 'Closed Group'.
2020
$
2019
$
21,410,640
418,641
41
(9,039,325)
(6,712,830)
-
(3,612,888)
(2,107,127)
(625,027)
-
(2,048,392)
(9,279)
(2,455,650)
(4,053,322)
29,177,873
568,359
1,145
(13,432,576)
(8,719,075)
(359,413)
(3,053,627)
-
(4,527,054)
(8,416,100)
(2,782,531)
-
(2,151,142)
-
(8,834,518)
-
(13,694,141)
(502,669)
(8,834,518)
(14,196,810)
-
-
(8,834,518)
(14,196,810)
2020
$
2019
$
(53,782,960)
(8,834,518)
(39,586,150)
(14,196,810)
(62,617,478)
(53,782,960)
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 37. Deed of cross guarantee (continued)
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
Depreciation and amortisation expense
Impairment of goodwill
Loss on disposal of intangible assets
Loss on disposal of investments
Technology, engineering and licence fees
Occupancy costs
Other expenses
Finance costs
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
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
68
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 37. 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
Right-of-use assets
Intangibles
Deferred tax
Investment in subsidiary
Total assets
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Lease liabilities
Income tax
Provisions
Related party payables
Non-current liabilities
Lease liabilities
Provisions
Total liabilities
Net liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total deficiency in equity
Note 38. Earnings per share
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
Loss per share for loss from continuing operations
Loss after income tax attributable to the owners of Pureprofile Ltd
69
2020
$
2019
$
1,083,923
3,226,853
398,025
867,761
5,576,562
43,573
420,296
6,165,555
1,311,230
765,465
8,706,119
406,371
6,165,058
287,049
507,812
7,366,290
75,319
-
9,474,174
1,311,230
765,465
11,626,188
14,282,681
18,992,478
4,886,037
280,764
24,392,385
354,655
1,275,924
1,813,028
1,937,603
34,940,396
8,046,896
316,186
16,543,518
-
1,275,924
596,884
3,063,216
29,842,624
73,410
64,015
137,425
-
1,070,794
1,070,794
35,077,821
30,913,418
(20,795,140)
(11,920,940)
41,462,461
359,877
(62,617,478)
41,461,502
400,518
(53,782,960)
(20,795,140)
(11,920,940)
Consolidated
2020
$
2019
$
(9,658,481)
(8,355,648)
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 38. Earnings per share (continued)
Weighted average number of ordinary shares used in calculating basic earnings per share
Weighted average number of ordinary shares used in calculating diluted earnings per share
Basic earnings per share
Diluted earnings per share
Loss per share for loss from discontinued operations
Loss after income tax attributable to the owners of Pureprofile Ltd
Weighted average number of ordinary shares used in calculating basic earnings per share
Weighted average number of ordinary shares used in calculating diluted earnings per share
Basic earnings per share
Diluted earnings per share
Loss per share for loss
Loss after income tax attributable to the owners of Pureprofile Ltd
Weighted average number of ordinary shares used in calculating basic earnings per share
Weighted average number of ordinary shares used in calculating diluted earnings per share
Basic earnings per share
Diluted earnings per share
Options have been excluded from the diluted earnings per share as they were anti-dilutive.
Number
Number
117,526,063
118,966,097
117,526,063
118,966,097
Cents
Cents
(8.22)
(8.22)
(7.02)
(7.02)
Consolidated
2020
$
2019
$
(171,000)
(6,104,394)
Number
Number
117,526,063
118,966,097
117,526,063
118,966,097
Cents
Cents
(0.15)
(0.15)
(5.13)
(5.13)
Consolidated
2020
$
2019
$
(9,829,481)
(14,460,042)
Number
Number
117,526,063
118,966,097
117,526,063
118,966,097
Cents
Cents
(8.36)
(8.36)
(12.15)
(12.15)
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Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 39. Share-based payments
2020
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Share options and service rights
A long term incentive plan ('LTI') and short term incentive plan ('STI') have been established by the group, whereby the
group may, at the discretion of the Board, grant options or performance rights (in the case of an LTI) or service rights (in
the case of an STI) over ordinary shares in the company to certain key management personnel and employees of the
group. The existing options are issued for consideration and are granted in accordance with guidelines established by the
Board. The existing service rights are issued for nil consideration and are granted in accordance with performance
guidelines established by the Board.
The general terms under which the share options and service rights are granted are summarised in the Remuneration
report section of the Directors' report.
Performance rights
On 12 December 2017, the company issued 2,100,000 performance rights to its finance facility provider, as part
consideration for the financing facility obtained in November 2017. 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. These performance rights expired in November 2019.
Share-based payments expense for the financial year was $nil (2019: $nil).
Set out below are summaries of options granted under the long term incentive plan:
Grant date
29/05/2015
29/05/2015
Expiry date
29/05/2020
29/05/2020
Weighted average exercise price
Grant date
29/05/2015
29/05/2015
Expiry date
29/05/2020
29/05/2020
Weighted average exercise price
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
$0.50
$0.60
2,009,000
1,200,000
3,209,000
-
-
-
-
-
-
(2,009,000)
(1,200,000)
(3,209,000)
-
-
-
$0.54
$0.00
$0.00
$0.54
$0.00
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
$0.50
$0.60
2,009,000
1,200,000
3,209,000
-
-
-
-
-
-
-
-
-
2,009,000
1,200,000
3,209,000
$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
29/05/2015
29/05/2015
Expiry date
29/05/2020
29/05/2020
2020
Number
2019
Number
-
-
-
2,009,000
1,200,000
3,209,000
The weighted average share price during the financial year was $0.01 (2019: $0.07).
The weighted average remaining contractual life of options outstanding at the end of the financial year was nil (2019: 0.9
years).
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2020
2019
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Notes to the financial statements
30 June 2020
Note 39. Share-based payments (continued)
No service rights are exercisable at the end of the financial year (2019: nil)
Set out below are summaries of performance rights granted under the plan:
Grant date
12/12/2017
Expiry date
Exercise
price
02/11/2019
$0.00
Balance at
the start of
the year
2,100,000
2,100,000
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
-
(2,100,000)
(2,100,000)
-
-
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was nil
(2019: 0.3 years).
Grant date
12/12/2017
Expiry date
Exercise
price
02/11/2019
$0.00
Balance at
the start of
the year
2,100,000
2,100,000
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
-
-
-
2,100,000
2,100,000
Note 40. Cash flow information
Reconciliation of loss after income tax to net cash from/(used in) operating activities
Loss after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Impairment of intangibles
Net loss on disposal of non-current assets
Foreign currency differences
Loss on sale of businesses
Capitalised finance cost
Interest on lease liabilities
Change in operating assets and liabilities:
Decrease in trade and other receivables
Decrease/(increase) in contract assets
Decrease in deferred tax assets
Increase in prepayments
Decrease in trade and other payables
Increase/(decrease) in contract liabilities
Decrease in provision for income tax
Increase in deferred tax liabilities
Decrease in employee benefits
Increase in other provisions
Net cash from/(used in) operating activities
Consolidated
2020
$
2019
$
(9,829,481)
(14,460,042)
4,350,338
2,107,127
629,240
2,482
-
3,616,369
258,152
3,803,103
2,453,010
831,380
1,759
2,991,746
-
-
2,613,240
9,744
-
(108,986)
(2,524,995)
47,148
(54,471)
-
(59,622)
366,084
4,760,248
(144,421)
102,827
(250,815)
(793,288)
(53,606)
(130,019)
320,043
(69,553)
266,846
1,422,369
(370,782)
72
Pureprofile Ltd
Notes to the financial statements
30 June 2020
Note 40. Cash flow information (continued)
Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2018
Net cash from/(used in) financing activities
Changes through discontinued operations
Balance at 30 June 2019
Change in accounting policy
Net cash from/(used in) financing activities
Other changes
Balance at 30 June 2020
Note 41. Events after the reporting period
Trade
receivables
financing
facility
$
Loans
$
Lease
liabilities
$
Total
$
10,000,000
4,400,000
-
5,628,290
(3,883,147)
324,196
-
-
-
15,628,290
516,853
324,196
14,400,000
-
5,600,000
-
2,069,339
-
(2,069,339)
-
-
3,242,181
(126,371)
(602,249)
16,469,339
3,242,181
3,404,290
(602,249)
20,000,000
-
2,513,561
22,513,561
On 19 October 2020, the group announced to the ASX that it was undertaking a fully underwritten renounceable pro-rata
entitlement offer of 8 shares for every 1 share held by eligible shareholders to raise up to $18,804,170 (before expenses
and subject to rounding) (the Entitlement Offer) and the group intended to use the proceeds of the Entitlement Offer as
follows:
significantly restructure its balance sheet by converting a large proportion of the group’s debt to equity;
partially pay down the group’s existing debt to $3,000,000;
inject further funds into the sales team and global panel partnership;
commercialisation of the group’s technology;
provide working capital for the group; and
pay the costs of the Entitlement Offer.
On 19 October 2020, the group and its existing lender, Lucerne, entered into a new agreement in respect of its debt facility
(the New Facility), which is conditional on the completion of the Entitlement Offer outlined above.
Key terms of the agreement:
● Debt forgiveness - following completion of the Entitlement Offer and allocation of funds under that offer against the
existing debt, the remaining balance of the facilities (~ $7,300,000 of debt as at 30 September 2020) will be forgiven;
● New $3,000,000 Facility - replacing the previous facilities will be a new, fully-drawn $3,000,000 loan facility;
● Interest on New Facility - interest rate of 8.5% per annum (payable quarterly);
● Maturity of New Facility - 3 years from the date of completion of the Entitlement Offer and payable in advance at the
group’s discretion;
● No performance covenants - the New Facility does not contain business performance covenants; and
● Performance rights cancelled - the performance rights that were previously issued to Lucerne have been cancelled.
The New Facility is subject to warranties, indemnities, fees and default fees and terms, which the group considers usual for
a transaction of this size and scope.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect
the group's operations, the results of those operations, or the group's state of affairs in future financial years.
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Pureprofile Ltd
Directors' declaration
30 June 2020
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
2020 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 37 to the financial statements.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Andrew Edwards
Non-Executive Chairman
27 October 2020
Sydney
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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 2020, 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 2020 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 (including Independence Standards) (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial statements, where it is disclosed that subsequent to balance date the Group is
undertaking a fully underwritten renounceable pro-rata entitlement offer (the entitlement offer) to raise up to $18,804,170, the
proceeds of which will be used, among other things, to convert a large proportion of the Group’s debt to equity, partially pay
down the Group’s existing debt to $3,000,000 and provide working capital for the Group. At the date of this audit report the
entitlement offer is in progress and therefore the proceeds of the offer have not yet been received by the Group. As disclosed
in note 2, the Group incurred a net loss of $9,829,481 during the year ended 30 June 2020, and as of that date, the Group’s
current liabilities exceeded its current assets by $26,585,968.
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.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
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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 non-current assets, Notes 14, 15 and 16
At 30 June 2020, the Group’s consolidated statement of
financial position included intangible assets of $7,434,547,
right-of-use assets of $2,374,210, and property, plant and
equipment of $187,540.
AASB136 Impairment of Assets requires management to
perform impairment testing when there are indicators of
impairment at each reporting date to ensure that the
recoverable amount of non-current assets is greater than the
carrying value.
There were several indicators of impairment present, including
the current period loss, the loss of key contracts within the
Media business and the economic environment due to the
COVID-19 pandemic.
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 non-
current assets for impairment.
Capitalisation of development costs, Note 16
During the year ended 30 June 2020, the Group capitalised
$2,742,880 of costs related to the development of its software
assets.
AASB 138 Intangible Assets sets out the criteria that are
required to be met in order to record intangible assets arising
from the development phase of a project.
Judgement is required by management in determining if the
internal labour and external supplier costs incurred are directly
attributable to the developmental projects and the
appropriateness of these costs to be capitalised under AASB
138.
We considered this to be a key audit matter given the
magnitude of amounts capitalised and the significant
judgements and estimates involved in determining which costs
may be capitalised throughout the life of the project and
determining the useful life of the asset.
Our procedures included, amongst others:
Assessing the impairment testing model used by
management for compliance with AASB 136, with
involvement from our valuation specialists;
Testing the mathematical accuracy of the model and
assessing the discount rates, with involvement from our
valuation specialists;
Assessing the reasonableness of the underlying
assumptions regarding future cash flows used in the model
by comparing these with approved budgets, historical
performance, business plans, industry forecasts and other
supporting information;
Performing sensitivity analysis on the key assumptions,
focusing on areas where a reasonably possible change in
assumptions could cause the carrying amount to exceed its
recoverable amount and therefore indicate impairment; and
Assessing the adequacy of the disclosures relating to
intangible assets in the financial statements, including
those made with respect to judgements and estimates.
Our procedures included, amongst others:
Assessing management’s assumptions and estimates
made in capitalising development costs;
Testing, on a sample basis, costs capitalised to the
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;
Assessing the reasonableness of the useful lives attributed
to capitalised development costs and evaluating whether
amortisation expense was recorded based upon the
assigned useful lives; and
Assessing the adequacy of the disclosures relating to
intangible assets in the financial statements, including
those made with respect to judgements and estimates.
76
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
Company’s annual report for the year ended 30 June 2020, 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 Company 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.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: https://www.auasb.gov.au/auditors_responsibilites/ar1_2020.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 14 to 21 of the Directors’ report for the year ended 30 June
2020.
In our opinion, the Remuneration Report of Pureprofile Limited, for the year ended 30 June 2020 complies with section
300A of the Corporations Act 2001.
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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 October 2020
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Pureprofile Ltd
Corporate directory
30 June 2020
Directors
Company secretary
Notice of annual general meeting
Registered office
Principal place of business
Share register
Stock exchange listing
Website
Business objectives
Corporate Governance Statement
Auditor
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Andrew Edwards
Martin Filz
Sue Klose
Kohei Katagiri
To be announced
Level 5, 126 Phillip Street
Sydney NSW 2000
Level 3, 223 Liverpool Street
Darlinghurst NSW 2010
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
Pureprofile Ltd. shares are listed on the Australian Securities Exchange (ASX code:
PPL)
pureprofile.investorportal.com.au
Pureprofile Ltd. has used cash and cash equivalents held at the time of listing, in a
way consistent with its stated business objectives.
The directors and management are committed to conducting the business of
Pureprofile Limited in an ethical manner and in accordance with the highest standards
of corporate governance. Pureprofile Limited has adopted and has substantially
complied with the ASX Corporate Governance Principles and Recommendations
(Third Edition) ('Recommendations') to the extent appropriate to the size and nature
of its operations. The group’s Corporate Governance Statement, which sets out the
corporate governance practices that were in operation during the financial year and
identifies and explains any Recommendations that have not been followed, and ASX
Appendix 4G are released to the ASX on the same day the Annual Report is
released. The Corporate Governance Statement can be found on the company’s
website at pureprofile.investorportal.com.au
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Pureprofile Ltd
Shareholder information
30 June 2020
The shareholder information set out below was applicable as at 30 September 2020.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Mr John Darryl May
Mr Paul Augustine Chan (The Chan Family A/C)
Appwam Pty Ltd
Mrs Judith Swaab
Kismar Pty Ltd (The M Kisirwani Fam A/C)
Super Options Fund Pty Ltd (Super Options Fund A/C)
FMG Holdings Pty Ltd
BKLEB Pty Ltd (The BK LEBSANFT SF A/C)
Mr Christopher Wayne Lonergan
Nofusa Pty Ltd (Hersch Family A/C)
BNP Paribas Nominees Pty Ltd (IB AU Noms Retailclient Drp)
Onmell Pty Ltd (ONM BPSF A/C)
Mr Malcolm John Badgery
Dato Lim Sen Yap
Depofo Pty Ltd (Ordinary A/C)
Superjuroko Pty Ltd (Juroko Super Fund A/C)
Pilmore Pty Limited (Miwa Superannuation Fund A/C)
Yucaja Pty Ltd (The Yoegiar Family A/C)
Vadina Pty Limited (Jordan Super Fund A/C)
Miss Alice Jane Li
Unquoted equity securities
There are no unquoted equity securities.
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Number of
holders of
ordinary
shares
% of ordinary
shares held
32
149
82
307
175
745
360
0.01
0.39
0.57
10.52
88.51
100.00
-
Ordinary shares
Number held
% of total
shares
issued
6,883,031
6,202,090
5,000,000
3,921,977
3,592,843
3,234,340
2,868,139
2,700,000
2,500,000
2,500,000
2,472,280
2,411,755
2,000,000
1,758,756
1,737,333
1,671,448
1,660,065
1,625,718
1,600,000
1,443,984
5.86
5.28
4.25
3.34
3.06
2.75
2.44
2.30
2.13
2.13
2.10
2.05
1.70
1.50
1.48
1.42
1.41
1.38
1.36
1.23
57,783,759
49.17
Pureprofile Ltd
Shareholder information
30 June 2020
Substantial holders
Substantial holders in the company are set out below:
Ordinary shares
Number held
% of total
shares
issued
6,883,031
6,202,090
5.86
5.28
Mr John Darryl May
Mr Paul Augustine Chan (The Chan Family A/C)
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
There are no other classes of equity securities.
Y
L
N
O
E
S
U
L
A
N
O
S
R
E
P
R
O
F
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