Pembina Pipeline
Annual Report 2022

Plain-text annual report

Annual Report y n o l 2022 e s u l a n o s r e p r o F Pureprofile’s vision is to deliver more value from the world’s information 1 l y n o e s u l a n o s r e p r o F ANNUAL REPORT 2022 1 SECTION SEVEN Data, Media & Innovation SECTION EIGHT Meet our Directors pg 47 pg 51 SECTION NINE Director’s Report, Financial Report & Auditor’s Report pg 57 41 Table of Contents SECTION ONE About Pureprofile SECTION TWO Our Business SECTION THREE Our Corporate Strategy SECTION FOUR Our Year in Review SECTION FIVE Chairman & CEO’s Letter SECTION SIX Our People & Culture pg 3 pg 11 pg 19 pg 23 pg 35 pg 41 3 SECTION ONE • ABOUT PUREPROFILE 4 SECTION ONE About Pureprofile l y n o e s u l a n o s r e p r o F 29% of Australians say they don’t feel represented in portrayals of families/households in advertising ANNUAL REPORT 2022 5 SECTION ONE • ABOUT PUREPROFILE ANNUAL REPORT 2022 6 How Pureprofile works We are in the business of using data to help businesses thrive Market Research tells you why something is happening Digital Advertising helps you enhance or change it h c r a e s e R t e k r a M Our established online panel network of deeply profiled & highly engaged consumers allows us to conduct in-depth, authentic studies for our global clients Data lies at the core of our business • It powers the insights we generate for market research projects • It gives us critical information to accurately deliver digital advertising solutions Our SaaS technology accelerates the way we can use data across our business - and allows us to deliver solutions to our clients quickly and intelligently D i g Leveraging the power of our consumer panels, and the first-party data they generate, we provide full-service programmatic and digital advertising solutions i t a l A d v e r t i s i n g l y n o e s u l a n o s r e p r o F 7 SECTION ONE • ABOUT PUREPROFILE Our advantage l y n o Humans aren’t one dimensional, they’re complex. We hold the key to understanding the depth of human behaviour, empowering brands to truly know their audience. 34 years old Single, no dependants CMO at a Tier 1 not-for-profit Lives in Byron Bay Earns $145k e s u l a n o s r e p r o F Preferences Likes high-end products, eco-products Reads Frankie magazine Gets her news from The New Yorker Beliefs Drives a Lexus Hybrid Is a vegetarian Volunteers at a wildlife conservation centre Donates 10% of her salary to charity 8 Prime candidate for high-end hybrid cars Interested in ethical health insurance products Climate change is the biggest issue that influences her vote Habits Drinks 4 almond lattes a day Walks her dog every day Ideal target for Christmas donor acquisition activity ANNUAL REPORT 2022 9 SECTION ONE • ABOUT PUREPROFILE About Pureprofile Pureprofile at a glance Pureprofile’s vision is to deliver more value from the world’s information l y n o e s u l a n o s r e p r o F We are a global data and insights organisation providing online research and digital advertising services for agencies, marketers, researchers and publishers. Our research division delivers rich insights into real human behaviour and provides the “Why” behind the “What” through ResTech and SaaS solutions. Our digital advertising division taps into these rich insights on behalf of advertisers and publishers and executes impactful, targeted digital marketing strategies. We build in-depth profiles of consumers via our proprietary and partner panels and give businesses the ability to understand, target, and ultimately engage with their audiences. The Company, founded in 2000 and based in Surry Hills, Australia, now operates in North America, Europe and APAC and has delivered solutions for over 700 clients. Our aspiration Pureprofile insights are used by every company in their decision making. Our vision To deliver more value from the world’s information, allowing deeper connections between organisations and their audiences. Our mission To reward people for sharing their thoughts, opinions and behaviours and provide valuable, actionable insights to businesses for better decision making. ANNUAL REPORT 2022 10 Our values Discovery We invite our people to continually ask questions and be open to new ideas. To be inquisitive and to understand that we are on a journey together, learning from one another at every step. Ownership We encourage our people to take responsibility for everything they do and say, to be bold and fearless and to lead with passion. We encourage our team to challenge themselves daily. Trust We foster a culture of trust at Pureprofile. We trust ourselves, colleagues and clients. We also trust the process - things don’t always go to plan but hard work and integrity always yield the best results. Team We know that we are one team and appreciate how much strength there is in that. We always treat others with respect and compassion. We show kindness to everyone. 11 SECTION TWO • OUR BUSINESS 12 SECTION TWO Our Business l y n o e s u l a n o s r e p r o F ¼ of Singaporeans feel university degrees are not useful ANNUAL REPORT 2022 13 SECTION TWO • OUR BUSINESS Our Our business business l y n o e s u l a n o s r e p r o F Why clients work with us Our client value proposition Global reach Direct access to millions of deeply profiled consumers Trusted Over 20 years of experience in the field of internet market research Service Quick response, personal service and dedicated teams What services we offer our clients Our divisions Data & Insights Enabling organisations to understand their audiences Self-service platform Access insights and campaigns through our technology platform Pure.amplify media Through first-party data our advertising campaigns reach the right people at the right time How we grow our business Our corporate strategy Global business Focus on expanding our business outside of Australia, growing our global panel, and adding complementary data sources through strategic partnerships More data, more insights Leverage Pureprofile proprietary data Self-service Innovate and enhance our SaaS solutions 14 Our divisions We provide our global clients with the ammunition to make better business decisions Our commitment to delivering best-in-class research & digital advertising solutions is evidenced via our three core divisions: Data & Insights Online market research solutions conducted via a global network of highly engaged, demographically diverse consumers. We connect our clients to groups of deeply profiled people and offer a range of market-leading services to deliver critical insights quickly and effectively. Self-service platform Research technology that delivers consumer intelligence for the future. Our tools allow clients to manage, enrich and activate their data via cutting-edge ResTech and SaaS solutions, placing us at the forefront of the data & insights industry. Pure.amplify media Powerful insights-driven digital media solutions fit for a cookie-less world. We plan, execute and optimise every step of our clients’ digital advertising campaigns for maximum impact, connecting our clients to the right consumers on the right channels. ANNUAL REPORT 2022 15 SECTION TWO • OUR BUSINESS Our vision is to deliver more value from the world’s information l y n o 16 Data & Insights Pure.amplify Platform Operations Hub e s u l a n o s r e p r o F UK Mainland Europe 2022 2022 USA 9 offices globally (FY21 - 7) 757 clients globally (FY21 - 700) 202 staff globally (FY21 – 155) $37.5m in revenue from repeat clients (FY21 - $27.2m) $9.0m in annuity revenue (FY21 - $5.7m ) India Philippines Singapore Malaysia 2022 2022 2022 2022 Australia New Zealand ANNUAL REPORT 2022 17 SECTION TWO • OUR BUSINESS ANNUAL REPORT 2022 18 Delivering global insights l y n o e s u l a n o s r e p r o F We are a truly global company completing studies in 91 countries so far this year Insights from these countries 19 SECTION THREE • OUR CORPORATE STRATEGY 20 SECTION THREE Our Corporate Strategy l y n o e s u l a n o s r e p r o F 50% of Brits, Americans, Aussies and Kiwis say they’re using their car less due to rising fuel costs ANNUAL REPORT 2022 21 SECTION THREE • OUR CORPORATE STRATEGY Our corporate strategy ANNUAL REPORT 2022 22 l y n o e s u l a n o s r e p Data and analytics lie at the core of our 3-stage strategy. Through all stages of this strategy we will continue to leverage these assets through our rigorous commercial applications Focus on building a stronger and more diverse global panel and add complementary data sources through strategic partnerships usin e s s B al b o l G T e c h n o l o g y Clear corporate growth strategy M oredata, mor e i n s i g h ts r o F Leverage Pureprofile proprietary data - Data & Insights - Media Advertising Accelerate our SaaS self-service solutions Company restructure & recapitalisation • • Restructure the company operations by divesting unprofitable or non-core business units Strengthen the balance sheet with a capital raise and debt to equity swap to provide the foundation to deliver on growth ambitions • Refresh executive team to provide sector expertise and to enhance leadership capability Invest in people, panels & technology • • Replicate successful Australian Data & Insights business unit in new markets outside of Australia Focus on global panel expansion through a combination of new partnerships, acquisitions or organic growth • Drive efficiency and improve project profitability to improve margin by increasing automation, improving processes and providing greater client service • Continue to evolve our core technology by implementing new technology solutions • Develop a highly motivated organisational culture with a clear goal of enhancing shareholder value and employee experience Overlay end client facing technology • • Provide end to end solutions directly to brands providing an integrated suite of products, services and tools Enable brands to reach consumers using 1st party data allowing them to build better relationships with their customers, providing more value, and optimising their marketing campaigns • Continue to identify acquisition opportunities that can help accelerate growth and fill technological gaps 1 E G A T S 2 E G A T S 3 E G A T S we are here 23 SECTION FOUR • OUR YEAR IN REVIEW 24 SECTION FOUR Our Year in Review 37% of Australians are renting their homes l y n o e s u l a n o s r e p r o F ANNUAL REPORT 2022 25 SECTION FOUR • OUR YEAR IN REVIEW Financial highlights l y n o Accelerated revenue growth e s u l Positive operating net cash flow Closing cash at bank balance of $5.3m up from $3.6m on pcp a n o s r e p r o F Total revenue up 39% to $41.7m EBITDA up 28% to $4.0m Operating net cash flow up 63% to $3.9m SaaS platform revenue up 217% to $3.5m Global Data & Insights revenue up 31% to $32.1m Operational KPIs ANNUAL REPORT 2022 26 48% of new clients from new markets 22% YOY increase in project volume 19% YOY increase in active clients 217% growth in number of SaaS clients 4.4 years average tenure of clients $6.2m of Data & Insights revenue is annuity revenue (past 12 months) 43% growth in panel acquisition $37.5m of revenue coming from repeat clients 80 Net Promoter Score which places Pureprofile in the top quartile of global organisations for client loyalty 35% YOY increase in completed surveys 434+ million ads delivered by Pure.amplify 27 SECTION FOUR • OUR YEAR IN REVIEW 28 Unearthing real healthcare perceptions across countries Shedding light on pet parent spending habits While access to safe and affordable healthcare is paramount for a well-functioning society, there is a large variance across countries in the level of care provided to citizens. Compare the Market were seeking to understand the perceptions and feelings people have towards their own and other countries’ healthcare systems - to provide consumers and healthcare providers with a deeper understanding of each country’s approach to medicine. The solution Tapping into our extensive global panel network, a multi-country study was launched in order to understand key healthcare variances across America, Canada and Australia. 01 02 03 Three groups of nationally representative audiences were created - targeting according to age, gender, and location to get an accurate snapshot of the general population in each country We developed an engaging study via an 18-question survey in order to unearth insights into how consumers perceive their local healthcare system The data was provided in a variety of raw and visualised formats, giving the client a comprehensive topline overview - and the ability to dig deeper for more granular insights Client case studies The challenge l y n o e s u l a n o s r e p r o F Key results Almost 1/2 Over 2/5 The challenge The cost of maintaining a happy and healthy pet is on the rise - with pet expenses increasing each year. Pet Circle wanted to help pet parents understand how they could save money on their pet expenses, but still ensure they get what they need. So they were looking to identify: • Exactly how much pet parents were spending on their pets each year • What the expenses comprised • Spending habits of pet parents to see where the opportunities were to save The solution An in-depth research study was launched in order to identify the spending habits of pet parents in Australia. This was achieved by: 01 Connecting to niche research audiences: We were able to instantly connect Pet Circle to Pureprofile’s audience of self-verified pet owners. This eliminated unnecessary project costs - as there was no need for custom audience creation or additional screening questions 02 Curating in-depth insights for the pet parenting community: In order for Pet Circle to provide practical guidance on how to save on pet-related costs, a robust study was launched - asking pet parents a range of detailed questions about how they care for their pets Key results of the population in all three countries surveyed said that they had delayed getting the medical care they needed Food and veterinary care were the biggest expenses for pet parents, with dog owners spending an average of $612 on food and $640 on vet services The majority of Australians (49%) and Canadians (47%) said they were somewhat satisfied with their country’s healthcare, only 37% of Americans agree of Australians and Canadians say healthcare is somewhat affordable. However, 24% of Americans say it’s extremely unaffordable What our client had to say “As a research partner, Pureprofile really go the extra mile. The team really understood our brief and delivered on exactly what was promised. They were fast and efficient with excellent communication. We will definitely be using them again.” - Chris Ford | General Manager Media & Communications Only 1/5 of pet parents ask for the best price when shopping for pet products, and only about 30% compare prices before making a purchase The average dog owner spent $3,350 on their pet last year - compared to just $2,377 spent on the typical cat What our client had to say “Pureprofile worked in partnership with our PR and data team to ensure that we produced a robust piece of research that had media relevance and longevity. It not only allowed us to position ourselves as a leading pet retailer in media, we were also able to use the research to provide genuine advice and tips to our customers to help them pet better, which is the core of our mission.” - Larissa Rembisz| PR Manager ANNUAL REPORT 2022 29 SECTION FOUR • OUR YEAR IN REVIEW Our client community Our NPS score for FY22 was 80 which places Pureprofile in the top quartile* of organisations for client loyalty ** l y n o e s u l a n o s r e p r o F ‘‘ The Pureprofile team is an absolute joy to work with - they set a true standard for customer service in our industry. - GreenBook ‘‘ Very personalised service. Quick and knowledgeable response to inquiries. Professional but also very caring to specific needs of the research. - University of Melbourne ‘‘ I would 110% recommend Pureprofile and have done so already. Their ability to understand our needs and turn them around in a fast and cost effective way was outstanding and I will not hesitate to use them again. - Flight Centre NZ ‘‘ Pureprofile is the best platform partner for us! Their profiling capabilities allow us to target our core audience and conduct research in a cost-effective way – with high quality and fast turnarounds. - Vitaco Health ‘‘ Thank you for getting this done earlier than scheduled! Very happy with the service and delivery - Starburst Insights ‘‘ You guys are my favourite fieldwork provider to work with. - RFI Intelligence * ** Top quartile NPS is defined as 72 and above. Our NPS score reflects our loyal clients who continually work with Pureprofile. Account holder highlights ANNUAL REPORT 2022 30 ‘‘ Absolutely love being a member of Pureprofile. So many relevant survey opportunities, quick to accumulate a healthy reward balance and good variety of payment options. A long time member and glad to see the introduction of new competitions which make it even more rewarding. ‘‘ I love that I can earn some money by doing these surveys, even if I only have 20mins to do it in. Pureprofile is one of the only survey sites I have found that allows me to deposit directly into my account too! ‘‘ I love doing surveys on Pureprofile as I feel that I am doing my bit to help shape the future of everyday products for myself, my pets, family and other consumers. It’s nice to make a difference and that companies are thankful for your valued input. ‘‘The thing I like the most about Pureprofile is that the rewards contribute towards petrol costs. Especially now with the price per litre skyrocketing! ‘‘ I love being paid to give my opinion on a wide variety of topics. It’s so easy to do via the Pureprofile app and it can be done at times that suit me! Thanks Pureprofile ‘‘I love Pureprofile because there are so many great reward options, the site and app make it easy to share my opinions and I enjoy being part of shaping future products and services. ‘‘ I like Pureprofile as it’s an easy & fun way to pass time while waiting for my children to finish school. ‘‘I like the versatility and practicality of Pureprofile. I can log in at any hour, any time of the week, and there is always a bunch of interesting surveys waiting for me! The duration of the survey is also listed so I can easily work around my schedule. 31 SECTION FOUR • OUR YEAR IN REVIEW Pureprofile in the news ANNUAL REPORT 2022 32 l y n o The world is talking about Pureprofile e s u 749 individual feature articles and press mentions during FY22 in multiple countries across various media formats including publications, radio and TV. l a n o s r e p r o F 33 SECTION FOUR • OUR YEAR IN REVIEW 34 What our panellists think We’re on the pulse of consumer insights We conduct marketing surveys regularly to determine what our members think about current world events. Insights are used to create infographics, shared across all of our platforms and social media channels. l y n o e s u l a n o s r e p r o F ANNUAL REPORT 2022 35 SECTION FIVE • CHAIRMAN AND CEO'S LETTER 36 SECTION FIVE Chairman & CEO’s Letter 50% of Kiwis said rising interest rates are a cause of concern l y n o e s u l a n o s r e p r o F ANNUAL REPORT 2022 37 SECTION FIVE • CHAIRMAN AND CEO'S LETTER ANNUAL REPORT 2022 38 Chairman’s letter l y n o Andrew Edwards Non-Executive Chairman e s u l a n o s r e p r o F Pureprofile has created a global business structure and way of working. This empowers our talented team and provides a platform for sustainable growth Dear fellow shareholder, I am truly proud of the turnaround that Pureprofile has achieved in a few short years. From the difficult times, leading up to the recapitalisation of the Company in late 2020, we have now pivoted our focus from one of survival to one of sustainable global growth. Over the last two years, Pureprofile has recorded cumulative annual sales growth of 31% and earnings before interest, tax, depreciation & amortisation (EBITDA) growth of 69%. Our strong free cashflow generation has also enabled the Company to continue to shore up its balance sheet, with cash at bank on 30 June 2022 of $5.3 million. This was achieved during a year of investment, primarily committed to the establishment of new international offices, further development of our new SaaS platforms, growth in market research panellists, and a substantial upgrade to our technology. We also embarked on a robust recruitment program across the leadership team, senior sales & marketing personnel and support staff. Tailwinds from global trends Global trends continue to remain favourable for Pureprofile. The onset of COVID-19 and the technological benefits of operating in cloud-based environments has accelerated the transition to remote working and online shopping. As a result, consumer buying habits have, and should continue to change substantially. In addition, regulatory requirements relating to data protection and privacy continue to tighten up around the world. To meet these regulatory obligations, major players like Apple and Google have either already, or are in the process of, committing to no longer supporting third-party cookies which assist in consumer targeting for advertising campaigns. We expect that for brands to stay on top of these evolving consumer habits, and with reducing access to third-party data, our competitive advantage of providing insights through first-party data should provide Pureprofile with tailwinds into the foreseeable future. Board enhancement As the Company embarks on the next stage of its growth strategy, the need to strengthen the Board’s functions, and capabilities across mergers and acquisitions and industry expertise have been largely addressed. As such, it was a pleasure to welcome Tim Hannon as a Non-Executive Director. Tim was appointed on 1 January 2022 and brings experience in banking and finance, including in mergers & acquisitions and capital markets within senior management roles across the private sector. Tim has previously held senior management positions at Goldman Sachs and is currently the principal of Conrad Capital Partners and Managing Director of Gaia Natural Capital, corporate advisory and funds management businesses. He was instrumental in supporting the recapitalisation of Pureprofile and has been contributing very positively to our growth. I am also pleased to welcome Albert Hitchcock to the Board. Albert has, for the last 8 months, been assisting the Board in an advisory capacity. Effective 26 July 2022, Albert accepted a role as Non-Executive Director. Albert brings to the Board 30 years of experience in the technology industry. More recently, Albert was Chief Technology Officer at Pearson, the world’s leading learning company. Before that, Albert was Chief Information Officer for the Vodafone Group. Closing remarks On behalf of the Board, I would like to express my deepest appreciation in particular to Martin Filz, Melinda Sheppard, the senior leadership team, and all of the staff of Pureprofile. Without the dedication, experience, and support of this great team, Pureprofile could not have achieved the success that it has to-date. As we head into FY23 and beyond, I am very optimistic that Pureprofile has established strong foundations from which it will continue to prosper as we seek growth opportunities across the globe. 39 SECTION FIVE • CHAIRMAN AND CEO'S LETTER ANNUAL REPORT 2022 40 l y n o e s u l a n o s r e p r o F CEO’s letter Core to Pureprofile’s success is its reputation and reliability in answering the questions that brand owners have about their consumers, easily, accurately, and effectively. It’s in our DNA Martin Filz Managing Director and CEO I am delighted to report another solid year for Pureprofile and to have achieved all of our goals for the year. During FY22, we continued to lay the foundations for long-term sustainable growth, whilst delivering record performances across our key financial and operating metrics. We opened our 9th international office, signed new strategic partnerships, onboarded 136 new global clients, increased our global panellists significantly, and generated consumer insights from over 90 countries. In a year of disciplined investment, our global team grew by 50 with senior appointments across all 9 countries. With a core objective of improving our clients, panellists, and team’s user experiences and operating efficiency for the business, we also undertook a substantial upgrade of our technology. We replaced in-house legacy with ‘best of breed’ third-party systems across global panel management, reporting and research quality suite. It was pleasing to see our efforts rewarded, with existing clients spending 30% more with us in FY22, volumes of multi-country studies increasing 18%, and repeat client business climbing 5 ppts to 90% on the prior year. Operating performance Revenue grew strongly across all business units to a record $41.9 million, an improvement of 39% on the prior year. This being driven by Pureprofile continuing to win market share from competitors and accelerated growth outside of Australia in Asia, the UK, Europe and US. During FY22, SaaS platform revenue rose 217%, benefitting from growing support for our Audience Intelligence, Audience Builder, and Insights Builder solutions. Our Data & Insights UK/ EU/US business grew revenue by 50%, as we leveraged global market opportunities. Pure.amplify Media revenue grew 42%, are solving their everyday needs. Our team are passionate and curious, and provide flexible and bespoke solutions as and when required. Processes and systems are also an important consideration for our clients. As such, our investment decisions are also driven with regard for our clients’ needs. Our approach ensures that our clients like and want to work with us and this was reflected in the growth of existing key client business and the successful contracting of new clients during the year. This was further acknowledged by another year of achieving a Net Promoter Score of 80 and above. Any NPS score of 72 or above is world class. To put this into perspective the average NPS score globally is 32. Being client centric, listening to their needs and ensuring our team is engaged, passionate, curious and consultative drives this score and resultant revenues. Strategy, priorities, and outlook We are now halfway through the first phase of our journey of building a truly global, leading Data & Insights business. During FY23, we will further invest in our sales capability, panels, technologies, and platforms to enable us to scale our business and to leverage the opportunities we see in our existing and new markets and geographies. We are fortunate that the current market environment is presenting prospects to acquire small to medium size businesses. These may provide opportunities to enhance our panels, enter and further develop our businesses in key target markets and attract senior executives. We will continue to actively assess these opportunities throughout the year. Partnerships remain a core component of our growth strategy and can provide an effective entry into new markets and territories. Discussions with potential new partners are ongoing in the UK, US and Asia, and we are optimistic about announcing new agreements during the year. This will help to increase panellists and data points and drive revenues and profits. Whilst we see FY23 as being another year of investment towards building a sustainable global business, we plan to maintain our disciplined approach towards balancing our investment spend against our profitability and cash flow generation. We are in a good place with our key commercial hubs namely Singapore, UK and Netherlands. FY23 will see us grow regionally from these hubs and focus on expanding our US business. In closing, I would like to thank the support and guidance of our Board, the enthusiastic and tireless efforts of our leadership team and staff, our clients for believing in Pureprofile, our honest and engaged panellists, and our supportive shareholders, bankers and advisors. consumers, whilst creating new revenue streams and encouraging member loyalty for our partners. We grew our active community members for partners by 62k to 136k. They completed 1.7m surveys, and generated 336.5m reward points. We welcomed new partners, both domestically and abroad to augment our already successful partnerships. Flybuys in Australia continues to perform strongly with member surveys up more than 500% on FY21. In January 2022, we announced a new partnership with theAsianparent, the largest content and community platform for parents, reaching 35 million users per month, across 11 countries throughout Southeast Asia. Brand refresh During FY22 we successfully undertook a refresh of Pureprofile’s corporate branding across our website, social media applications, and sales and marketing materials. Our intention was to elicit a sense of curiosity, discovery, and openness, while capturing the essence of who we are, what we value, and what we do best. Awards and accolades It was pleasing to be recognised for achievements by our peers, clients and employees. In October our Audience Intelligence platform was recognised as an ABA100 Winner for SaaS Innovation in The Australian Business Awards 2021. In December, Pureprofile was also awarded the winner of Forsta’s 2021 Achievement in Insight and Research (AIR) Awards. This was for designing and implementing innovation, and for breaking new ground in the merging of Market Research, Insight, and Voice of the Customer. People The Companies that thrive not only have great people, but are also the ones that provide the right culture, work environment and importantly a level of trust. At Pureprofile we absolutely put our people first. We recruit the best, most curious and most passionate team members to Pureprofile. We provide them with a supportive, collaborative, open and flexible environment. We give them a voice and invest in their personal and professional development. We also have embraced the post covid ways of working with fully flexible home and office options as well as a work anywhere in the world policy under our globetrotters program. In return, our team rewards us with a high level of engagement, inspiration and innovation. Translating to higher client satisfaction and returns for the business. In our annual Global Engagement Survey, it was pleasing to see an excellent engagement score of 82%, with 95% of our people recommending Pureprofile as a great place to work and over 50% of our new hires coming from team referrals. Further validation came from the achievement of “Great Place to Work” certification during the year. We achieved a 98% rating from our employees. This compares very positively against 55% for a typical Australian Company. Clients Pureprofile prides itself as a client centric business. We may be global, but we think local. We put ourselves in our clients’ shoes, working closely with them to ensure that we while more clients entrusted Pureprofile to activate the insights gained from our solutions. Closer to home, our APAC Data & Insights business continued to grow strongly, with revenue up 22% on the prior year. EBITDA grew by 28% to $4.0 million in FY22 over the prior year. As a result of increased re-investment in the second half of the year, margin declined over the year from 10.3% to 9.6%. Net cash from operating activities was $3.9 million for the year, up from $2.4 million on the prior year, resulting in a strong closing cash balance of $5.3 million, up from $3.6 million in FY21. Panels strengthening During the year we were active in growing the number of market research panellists and improving the quality and engagement with our panellists. Total panel numbers increased by 35% including a 43% increase in offshore panellists. The quality and engagement of our panellists are core to Pureprofile’s strength. As such, in addition to enhancing our panel member experience through technological improvements, new redemption policies were adopted during the year, providing panellists the opportunity of earning more and giving ourselves a higher yield per panellist. Partnerships and SaaS platforms We continue to offer our clients greater insights through the build-out of our new SaaS-based products and platforms. A highlight of the year was seeing our Audience Intelligence platform recognised through signing marquee clients, such as household names Coles and UberEats. Audience Builder is also proving a beneficial tool for assisting clients to stay on top of the dynamic buying behaviours of 41 SECTION SIX • OUR PEOPLE AND CULTURE 42 SECTION SIX Our People & Culture l y n o e s u l a n o s r e p r o F 70% of Australians prefer to stream video content on Smart TVs rather than their smartphones or tablets ANNUAL REPORT 2022 43 SECTION SIX • OUR PEOPLE AND CULTURE Our people and culture l y n o e s u Michelle Mowle Global Head of Talent and Culture l a n o s r e p r o F Engagement, retention & talent acquisition FY22 proved to be another year of disruptions due to the global pandemic, although for somewhat paradoxical reasons to the prior two years. With rapid wage inflation and unemployment dropping to rates not experienced since the 70’s, the competition for talent in a niche market was more fierce than ever. Despite this, our annual Global Engagement Survey saw a favourable engagement score of 82%, with 95% of our people recommending Pureprofile as a great place to work and over 50% of our new hires coming from team referrals. With Gallup’s recent release of State of the Global Workforce 2022 confirming ‘60% of employees are emotionally detached at work and 19% are miserable’, our results put Pureprofile in a powerful position to attract and retain industry leading talent. In FY22, we saw global headcount grow by 35%, from 155 people to 205 strong. With 80% of these roles being market-diverse revenue generating positions, we have been able to support the company’s global growth strategy. Our already diverse culture has been further enhanced by the engagement of new team members in the Philippines, Netherlands, Thailand and Malaysia. To support this growth, we invested in our HR function, engaging an in-house Talent Acquisition Specialist (bringing our recruitment costs down and allowing us to have a dedicated focus on our Employee Value Proposition), a HR Manager based in India (to increase local efficiencies and adopt local best practice talent management), and a HR Generalist based in Sydney (to ensure we maintain our high levels of engagement and retention). The team is dedicated to embedding innovative people practices, driving engagement & productivity across our organisation in a scalable format - whilst not losing sight of our core values - Discovery, Trust, Ownership and Team. Learning & development Armed with the knowledge that employees are seeking both flexibility/work-life balance and opportunities to learn and grow, we invested considerable effort into ensuring these two areas remain a key focus of our value proposition. We partnered with LinkedIn Learning, revisited and amplified our support for study assistance and delivered a customised leader/management training program for over 30 managers. The result was an increase in employee satisfaction of 7 points to 84%, favourable of their L&D experience, whilst work-life blend increased a further 5 points to 92%. Hybrid working & other employee benefits Ongoing efforts have been made with respect to bringing our people back into the office under a hybrid working model, with new office spaces secured in Melbourne, Singapore, London and Mumbai. In light of the highly collaborative nature of our culture there remains a high appetite for social connection, whilst still balancing the desire for flexibility and the feeling of empowerment that comes with employees being able to work to their own schedule. The opportunity to reconnect in offices - to participate in in-person learning, mentoring and idea sharing has been exceptionally well received, with the common understanding that there are definite advantages to spending time in an office environment including increased connection, collaboration and overall wellbeing. With travel reopening in the latter half of FY22, we didn’t hesitate to promote our Globetrotters program, enabling our people to work from anywhere in the world for up to 3 months. We had team members at all levels and across functions work from various locations including Bali, Mexico, Canada, India and Australia. This initiative means that people who have been separated from loved ones over the last few years, have been able to meaningfully reconnect with them, whilst still being able to work - and thosewho desire world travel after a long period of isolation, can do so without having to part ways from Pureprofile. 44 Leadership & connectivity What’s next? Our leadership and management team put considerable effort into remaining connected, informative and supportive of their people. Communication takes place via numerous forums including monthly All Hands meetings, fortnightly updates, weekly WIPS, one-on-one meetings and ad hoc, fun global sessions. With 91% of our people agreeing the leaders at Pureprofile keep them informed about what is happening and 97% agreeing their managers care about their wellbeing, we’re proud to have exceptional and people focused leaders across our business. As we look forward to FY23, we are committed to building on our people-first philosophy with programs centering around strengths-based career growth, global mobility and customised reward & recognition. With no sign of the competitive employment market slowing down, and continued pressure around salary inflation and benefits, Pureprofile is well positioned as an employer of choice, with authentic flexible working, rewarding benefits and a strong and supportive culture. In light of Gallup’s research showing that organisations who have a highly engaged workforce have 23% increased profit than one who has unhappy workers, we are confident in our thriving culture driving the achievement of further growth in 2023. Environment, social and governance (ESG) Environment Social Governance Digital business model Diversity & inclusion ASX listed company We are committed to reducing our environmental footprint by working fully online and reducing paper consumption. Amazon web services We use AWS for all our infrastructure services, reducing our carbon impact. AWS data centres are more energy-efficient than enterprise sites due to their comprehensive efficiency programs. Flexible and hybrid working environment We are helping to cut emissions by allowing our employees to work from home for part or all of their working week. Transportation is currently Australia’s third largest source of carbon emissions, with the fastest pace of growth. Reduction in permanent office space We conduct meetings and townhalls online, reducing our collective energy consumption and realising other carbon saving benefits. We are committed to providing a working environment in which our people contribute to our success irrespective of gender, marital status, ethnic origin, nationality, religion, sexual orientation or age. Employee engagement Engaged employees are an integral part of our business. Our focus continues to be all hands, fortnightly company-wide updates, one on one meetings, learning and development career discussions. Employee wellness, health and safety We are committed to ensuring that our employees feel part of a caring culture with a strong sense of support and wellbeing at work. Data protection and privacy The protection and security of our employee, client and panel data is fundamental to our business and a key priority. We comply with the ASX Corporate Governance Council’s 4th edition Corporate Governance Principles. ISO 20252:2019 certified This certification reflects our commitment to quality, consistency, and operational excellence across our market research services. GDPR compliance We strictly adhere to local privacy legislation in the countries where we operate, we place a high premium on respecting the privacy of our panellists’ data. Ethical behaviour At all times we require our employees to maintain high professional, ethical and moral standards. ANNUAL REPORT 2022 45 SECTION SIX • OUR PEOPLE AND CULTURE Employee spotlights l y n o e s u l a n o s r e p r o F Boni Krishnaswamy Role: Amy Davis Role: Manager- Panel Management Account Manager Length of time at company: 6 yrs, 8 months Length of time at company: 3 yrs, 9 months Tell us a little bit about yourself: I grew up in a small town outside of Mumbai called Dombivli. Before Pureprofile I’ve had many different roles - from recruiting to process training at a large tech company. I also worked in fraud investigations at JP Morgan Chase - and a few other bits and pieces in between. Who inspires you and why? My mother is my biggest inspiration. She was a refugee from Sri Lanka, while also being the eldest daughter among 10 children. Despite a life of hardship, she is the most warm-hearted person I have ever met. She has inspired me to have a skip in my step and hope in my heart, no matter what life throws at me. Tell us a little bit about yourself: I grew up in Wollongong, Australia. After completing my business degree, I began working as a Junior Marketing Coordinator for a Schoolies organisation. Being hands-on with clients is something I was missing from previous roles, so I joined Pureprofile three years ago as an Account Manager - and could not have asked for a better team and clients to work with! In another life, I’m pretty sure I was a… Detective or forensic scientist Anything else we should know? I’m absolutely obsessed with dogs! Jessica Gorzynski Role: Programmatic Manager Sumedh Gaikwad Role: Manager - Business Process & Systems Length of time at company: Length of time at company: 3 years, 8 months 7 yrs, 10 months Tell us a little bit about yourself: I grew up in Toronto. I started my career in media planning before deciding to take some time off to travel Southeast Asia with my partner. I landed in Oz in 2017 to continue my career in programmatic and operations. The rest is history! If I won the lottery tomorrow, I’d invest heavily in renewable energy, buy all of the pets, and, you know, keep working at Pure.amplify Who inspires you and why? Literally any woman who is proud and confident in who they are. Girl power! Tell us a little bit about yourself: I started working in the financial sector, growing my skills in management, operations and data quality, before entering the market research space around 9 years ago. At Pureprofile, I’ve worked in various roles across Data & Insights, PCI and Project Management - I’m currently working with the Technology & Operations divisions, developing the systems and processes we need to support our rapid growth. If I won the lottery tomorrow, I would retire and travel the world - and earn the accreditations required to be a football coach, so I could teach the next generation of football players. ANNUAL REPORT 2022 46 Charlotte Watkins Role: Bhanu Singh Role: Business Development Manager Ad Operations Team Lead Length of time at company: 6 years, 7 months Length of time at company: 3 yrs, 3 months Tell us a little bit about yourself: I was born on the Isle of Man, a little island just off mainland England, but grew up in and around London. I studied Sociology and Criminology at University and began working in recruitment when I graduated. A friend introduced me to the market research industry 8 years ago and I haven’t looked back since. What’s one thing about you that’s not on your LinkedIn profile? I spent a couple of weeks in Calais a few years ago volunteering at a non-profit organisation called Help Refugees - it was a very rewarding and insightful experience. Tell us a little bit about yourself: I’m from a village called Saropatti, which is in the Bihar region of India’s north. Before Pure. amplify, I worked at a few different agencies - expanding my knowledge across the ad operations space. Who inspires you and why? No specific person - I find life itself to be inspiring. I believe that human beings are born to do good things in life. What’s your favourite quote? “Genius is one per cent inspiration and 99 per cent perspiration” - Thomas Edison Stavros Pontikis Role: Project Manager Length of time at company: 1 year, 8 months Tell us a little bit about yourself: I grew up in Athens where I studied Electrical Engineering. I then completed my MSc in Management in the UK and became a Project Manager in the travel and online outsourcing industry. Before I knew it, I’d been in London for 4 years! I followed my passion for the digital world, and joined Pureprofile in Thessaloniki, Greece in 2020. In another life, I’m pretty sure I was… An explorer - I’m always curious and examining new things and objects in detail to understand how they work or how to resolve an issue. Eline Rekers Role: Account Manager, Mainland Europe Length of time at company: 10 months Tell us a little bit about yourself: I grew up in Rosmalen, south of the Netherlands. After university and a short time in the UK I returned and joined the market research industry in 2018. I went on to work with Joris for the second time last year at Pureprofile, and instantly knew it was the best decision I’d made. What does success mean to you? To me success is not about status or reaching a certain level. It’s doing something you love and having joy in your work and with colleagues so want to open up your laptop in the morning and start the day. 47 SECTION SEVEN • DATA, MEDIA AND INNOVATION 48 SECTION SEVEN Data, Media & Innovation l y n o e s u l a n o s r e p r o F 30% of Brits, Americans, Aussies and Kiwis say COVID has made them review their work routines ANNUAL REPORT 2022 49 SECTION SEVEN • DATA, MEDIA AND INNOVATION ANNUAL REPORT 2022 50 Data and Innovation l y n o e s u Young Ham Global Head of Innovation & Partnerships l a n o s r e p r o F The Data and Insights industry had a busy FY22, with business and government alike monitoring consumer sentiment closely. We saw several data- centric businesses grow and expand into new markets, emphasising the importance of consistent insight to guide decision-making in turbulent times. External markets Increasingly over FY22, the market wanted to understand how businesses and decision-makers would respond to external influences. We saw a number of nimble, boutique research agencies emerge offering one-stop-shop solutions for streamlined insights with quality respondents. Their technology focussed on easy UI and UX that clients could utilise without training. Pureprofile set a goal to strengthen our B2B targeting capabilities and we are progressing extremely well, enabling us to cement our positioning as an invaluable source of niche audience insights. Moving into FY23, the industry will need to offer customers a range of DIY (Do It Yourself), DIT (Do It Together), and DIFM (Do It For Me) options as time, resource and cost constraints dictate clients’ research needs. Global trends Organisations across Europe and America focussed on their in-house research capabilities, aiming to reduce reliance on external providers, speed up the research process, and save on costs. This has driven demand for simple, scalable solutions that allow brands to launch, collect, analyse and visualise data with ease and speed. Organisations want solutions at scale, with the ability to conduct extensive research seamlessly across multiple markets without having to manage multiple vendors. New products Artificial Intelligence (AI) was a major theme in FY22 and continues to be central to new product innovation. Machine learning and the ability to handle mass amounts of data make AI an ideal fit for market research and in turn, enables more comprehensive predictive analytics and behavioural research. Many platforms began exploring automated insights in FY 22 by highlighting key findings and applying a nascent layer of automated interpretation over this so that clients would be able to readily read into the importance of certain data and results. FY23 outlook The coming economic challenges will test industries in new and different ways, and market research will have to respond with speed and agility. There will be a continued focus on automation and machine learning as the market turns to solutions that provide predictive analytics at scale. The trend towards utilising existing data repositories for passive research will also persist. At Pureprofile, we have done the hard work to set us up for a solid foundation for success in FY23. Our expansive panel, premium data and enhanced technological capabilities mean that our teams are well placed to respond adeptly to evolving needs of clients as we head into the next period of changeable market conditions. Pure.amplify Media Tasneem Ali General Manager, Pure.amplify FY22 was a pivotal period for the advertising industry with Dentsu ad spend forecasts showing a global growth of 9.2% in 2022. The market is expected to reach US$745 billion, exceeding 2019 pre-pandemic spend levels by US$117.2 billion. Within this is a significant shift toward digital advertising, which is anticipated to account for a 55.5% share. eMarketer also predicts that in 2022, over 90% of digital display ad dollars will be transacted programmatically at US$ 115 billion, as agencies and brands alike continue to embrace automated media buying as standard practice in their advertising strategies. Throughout FY22, Pure.amplify focussed on onboarding brands directly and managing their global omnichannel campaigns. A key highlight for us was our first global RFP win with a key player in the healthcare sector. We also established several strategic partnerships with leading customer intelligence and data enrichment platforms with integrated identity solutions. This enables us to provide our clients with unparalleled bespoke audience targeting and activation, complete with extensive insights and measurement. Bespoke cookieless solutions The delay in Google’s deprecation of third-party cookies to 2024 allowed Pure.amplify time to further develop our bespoke cookieless solutions - building upon our ability to connect with customers in premium environments in a more targeted way using first-party data and world-class technology. This was achieved by leveraging first-party assets to build campaigns for bespoke audiences, then connecting with them programmatically across the proven media channels these audiences were browsing. The result: highly-targeted advertising that exceeded campaign goals. By using proprietary measurement methodologies via our research division, we were able to successfully gauge brand uplift and awareness, and make these available to clients pre-, mid- and post- campaign. With more advertisers preparing for a post-cookie future, we expect to further hone these offerings in FY23. Growth channels The growth of TikTok and connected TV (CTV) were the predominant channel trends of FY22. At the start of the year, 4.62 billion people were using social media with an average of 2 hours and 27 minutes being spent on these platforms daily. TikTok was a driving force of these high numbers, with the platform boasting close to 750 million monthly users worldwide. With Australia’s average household now containing 6.7 video-capable screens, CTV usage also increased in FY22. After totalling US$16.6 billion in 2021, global CTV ad spending is projected to rise another 23% by the end of 2022 to US$20.3 billion- a nearly 12% share of total global TV ad spend (US$171 billion). The shift in media consumption is driving the trend toward consumer interaction, rather than one- way messaging, leading to an increased focus on conversational marketing and sentiment analysis. FY23 outlook The advertising industry is set to evolve rapidly in the coming 12 months with video being the key driver for the ad market and new media categories rapidly emerging. Global retailer media, led by traditional retailers and Amazon, is expected to grow by 25% per year to US$100 billion over the next five years and will account for over 25% of total digital media spending by 2026. Additionally, after being valued at US$59.14 billion in 2021, the video streaming market is predicted to expand by 21.3% from 2022 to 2030. FY23 will see brands gravitate towards omnichannel campaigns, powered by advanced adtech that enables programmatic, customisable advertising across proven channels, with regular feedback on brand impact. 51 SECTION EIGHT • MEET OUR DIRECTORS 52 SECTION EIGHT Meet our Directors 13% of Brits identify as a ‘rule breaker’ l y n o e s u l a n o s r e p r o F ANNUAL REPORT 2022 53 SECTION EIGHT • MEET OUR DIRECTORS Meet our directors l y n o e s u l a n o s r e p r o F Andrew Edwards Non-Executive Chairman Andrew has more than 30 years of marketing and executive leadership experience. Prior to joining Pureprofile, Andrew was Chairman and CEO of internationally renowned advertising and marketing agency, Leo Burnett Group UK and Ireland and President of Leo Burnett Central Europe. Andrew was also a Global Board Director with the specific remit of driving mergers and acquisitions in Europe, the Middle East, Africa and roll out of the group’s social and mobile strategy. Prior to his roles at Leo Burnett, Andrew ran Australia’s most successful and awarded direct and database marketing company, Cartwright Williams. Andrew now focuses his time on Pureprofile and his portfolio of other business interests. 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 (AMSRO), ESOMAR, the Australian Market and Social Research Society (AMSRS), and the Interactive Advertising Bureau (IAB). 54 Sue Klose Non-Executive Director Sue Klose is an experienced Non-Executive Director and executive, with a diverse background in digital business growth and operations, corporate development, strategy and marketing. Previously the Chief Marketing Officer of GraysOnline and COO of 12WBT, she brings deep experience in digital operations, marketing and brand strategy, and digital product development. As Director of Digital Corporate Development for News Ltd, Sue screened hundreds of potential investments, leading multiple acquisitions and establishing the CareerOne and CarsGuide joint ventures. She is currently a Non-Executive Director of Envirosuite (ASX: EVS), Nearmap (ASX: NEA), Stride and Honan Insurance Group. Tim Hannon Non-Executive Director Tim is the Managing Director of GAIA Natural Resources, an investment firm dedicated to linking capital markets to the restoration of the natural environment. Tim has 25 years’ experience in the investment and securities markets. He was a former partner of Goldman Sachs where he enjoyed an 18-year tenure, holding roles such as Head of Australian Equities, Head of Real Estate and co-manager of Global Real Estate Securities portfolios. He was also founder and co-manager of the Goldman Sachs Australian Infrastructure Securities Fund, and co-manager of the award-winning Goldman Sachs Emerging Leaders Fund. Tim holds a Bachelor of Economics, Postgraduate Finance qualifications and an MBA from Melbourne Business School. Albert Hitchcock Non-Executive Director Albert Hitchcock was the Chief Technology and Operations Officer for Pearson, the world’s leading learning company from March 2014 until January 2022. In this role Albert led Digital product development, Information technology, Operations encompassing Supply chain, Procurement, Customer service, Real Estate and shared services across Finance, HR and Technology. Albert spent a 28-year career in the technology industry working for BAE systems, Racal Electronics and Nortel Networks. In January 2007 Albert joined Vodafone and was appointed into the role of Vodafone Group Chief Information Officer. Albert is currently a Non-Executive Director of Nationwide Building Society. Albert is a Fellow of the Institute of Engineering and Technology and a Chartered Engineer. Albert is based in London. ANNUAL REPORT 2022 55 SECTION EIGHT • MEET OUR DIRECTORS ANNUAL REPORT 2022 56 FY22 Summary l y n o e s u l a n o s r e p r o F Accelerated revenue growth Positive EBITDA and Operating cash flow Investing for the future Highly engaged employees Loyal and satisfied clients Strategic outlook Expansion of our global business People Investment in technology, solutions and platforms Clients Acquisitions • • • • • • • • • • • • • Further global expansion into new markets across Southeast Asia and Europe Further expand our partnership program with new publishers, financial institutions and loyalty programs in multiple countries Targeting 50% of total revenue from markets outside of Australia Continue to recruit industry leaders across the globe Enhance our employee benefits and salary packages to remain an employer of choice Support employee growth and development through tailored online learning programs and by providing pathways for career progression Develop industry leading technologies to make client goals easier to achieve Continue to look for opportunities to increase automation and improve processes in order to meet the evolving needs of our clients Improve our operational efficiency and increase project profitability Continue to work with industry leading brands Offer a consultative, solution-oriented client service Continue to deliver a client-first experience Execute M&A strategy to help accelerate growth and expand access to new panellists 57 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 58 SECTION NINE Director’s Report, Financial Report & Auditor’s Report l y n o e s u l a n o s r e p r o F 80% of Aussies believe healthcare is the nation’s top priority 59 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 60 Pureprofile Ltd Directors' report 30 June 2022 Pureprofile Ltd Directors' report 30 June 2022 During FY22, the group continued to execute on stage 2 of its corporate strategy focused on investment in people, panels and technology as below: ● Global business - Focus on building a stronger global business, global panel and adding complementary data sources through strategic partnerships. ● More data, more insights - Leverage Pureprofile proprietary data via its Data & Insights and Pure.amplify divisions. ● Technology - Accelerate our technology solutions focusing on client facing solutions, Internal efficiency and SaaS solutions including Audience Builder, Audience Intelligence and Insights Builder. At the end of the financial year, the group delivered a number of initiatives consistent with its corporate strategy. Key highlights included: ● ● ● ● ● Revenue growth from markets outside of Australia was up 48% on pcp. Pureprofile generated consumer insights from over 90 countries during FY22 with growth in the volume of multi-country studies increasing 18% on pcp. 136 new global clients were signed in FY22. ● ● Market research panellists grew by 43% in the past 12 months. ● ● New partners signed during FY22 include theAsianparent (11 countries) and iGoDirect (Australia). Pureprofile was recognised as a 2021 AIR agency winner by Forsta in its fourth annual Achievement in Insight and Research (AIR) Awards for designing and implementing innovation, and breaking new ground in the merging of Market Research, Insight and Voice of the Customer. Pureprofile’s SaaS solution, Audience Intelligence was recognised as an ABA100 Winner for SaaS Innovation in The Australian Business Awards 2021. Internal efficiency - continual improvement with new systems including global project management system, new feasibility tool and enhanced reporting for panel management team. Delivering improved speed, client quality and efficiency. The addition of data security solution, CleanID to our operations, following the completion of a successful pilot. Developed by OpinionRoute, CleanID is a best-in-class fraud and duplication detection system built to analyse and identify device level attributes to eliminate known data threats in real time. The group delivered record continuing business revenue for the year, driven by strong growth from both new and existing clients across all markets. Revenue from existing clients was up 30% on pcp with the top 20 existing clients contributing an additional $2.7m during FY22. Revenue from new clients delivered an incremental $5.3m during FY22. Additionally, the group's focus on providing industry-leading research solutions and services continues to drive client loyalty and share of wallet, with revenue from repeat clients and annuity revenue continuing to grow each quarter. As a result, average revenue per project increased by 13% during FY22. l y n o e s u l a n o s r e p r o F 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 2022. 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 Sue Klose - Non-Executive Director Martin Filz - Chief Executive Officer and Managing Director Tim Hannon - Non-Executive Director (appointed on 1 January 2022) Albert Hitchcock - Non-Executive Director (appointed on 26 July 2022) 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 $2,164,277 (30 June 2021: profit of $2,811,156). Earnings before interest, tax, depreciation, amortisation and significant items (‘EBITDA excluding significant items’) for the financial year amounted to a profit of $4,005,964 (30 June 2021: profit of $3,141,689). EBITDA excluding significant items 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)/profit after income tax and EBITDA excluding significant items: (Loss)/profit after income tax Less: Interest Add back: Finance cost Income tax expense Depreciation and amortisation expense Loss on disposal of intangible assets Interest expense (lease) EBITDA Less: Gain from loan forgiveness Add back: Restructuring, acquisition and capital raising costs Share-based payment expense Professional fees and payroll tax on share-based payments EBITDA (excluding significant items) Revenue from ordinary activities of $41,710,969 was up 39.0% on the prior comparable period ('pcp'). Consolidated 2022 $ 2021 $ (2,164,277) 2,811,156 - (815) 351,387 96,085 3,246,427 - 145,313 1,674,935 2,504,246 43,097 3,747,842 258,906 204,227 9,568,659 - (8,416,780) - 2,238,811 92,218 848,202 1,141,608 - 4,005,964 3,141,689 61 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 62 Pureprofile Ltd Directors' report 30 June 2022 l y n o e s u l a n o s r e p r o F The group made a number of commercial appointments with strong research industry experience during the prior year which supported the strong global growth in the core Data & Insights operating segment (which includes SaaS platform) of 39% on pcp. The Data & Insights division (excluding the SaaS Platform division) delivered growth of 31% on pcp. EBITDA (excluding significant Items) was $4,005,964 which was up 28% on pcp. This was due to the strong revenue growth in the Data & Insights operating segment. The group delivered strong EBITDA growth whilst continuing to invest in people, panel and technology to deliver continued top line growth in FY23. Net cash from operating activities was $3,891,762 which was 63% up on pcp due to the continuing revenue growth and the proactive debt collection process. The group has delivered strong revenue growth and cash collections which has positively impacted the operating cash flow during FY22 which resulted in a closing cash at bank balance of $5.3m. Business risks The following is a summary of material business risks that could adversely affect our financial performance and growth potential in future years and how we propose to mitigate such risks. Macroeconomic risks The group’s financial performance is somewhat determined by current and future economic conditions such as increases in interest rates and inflation. To some extent, this is mitigated by the fact that Pureprofile operates in a number of international markets. Additionally, one of the many benefits of market research is that it helps alleviate uncertainty that brands and companies experience during these periods of economic pressures. As a result, market research companies are best positioned to take advantage of the chaos and change. When consumers feel the impact from economic pressures like inflation or a recession, they start to shop more discriminately. Understanding why consumers buy a product or service is important for any brand to know and understand. Market research can often reveal opportunities in price, competitor intelligence gathering, new markets, customer satisfaction, product development, target groups, and overall demand. Competitive market and changes to market trends The group predominantly operates in the Data and Insights industry. The increasing complexity of the industry is due to the surging global interest to understand humans and the world. Innovation is constant and technology is playing an increasingly important component to deliver insights. We manage this risk through maintaining product development and technology teams that are highly experienced and remain abreast of the latest technological advances and implications for the industry we operate in. Privacy and data breach The group handles personal and sensitive information. The group continues to invest in technology and resources to manage privacy and data risks led by the Chief Technology Officer. The group has privacy policies in place and which are reviewed on a regular basis for all jurisdictions the group operates in. An European Union ('EU') representative has been engaged to represent Pureprofile with regards to our General Data Protection Regulation ('GDPR') requirements and compliance practices. Reliance on key personnel There are a number of key personnel who are important to the group. They include the CEO, executive team and several commercial sales, operations and technology roles. The loss of one or more of these key personnel could have a negative impact on the business. Pureprofile seeks to mitigate this risk through maintaining its people first culture, succession planning and providing incentives (cash and equity) linked to performance and tenure. Pureprofile Ltd Directors' report 30 June 2022 Platform and Technology Risks Pureprofile relies on its own proprietary technology and the technology of other suppliers in order to service its clients and to support and maintain its panels. There are risks that the technology may fail, become unreliable or obsolete. Regulatory compliance The company is a listed entity subject to a number of Australian and International laws and regulations such as consumer protection laws, importation laws, privacy laws and those relating to workplace health and safety. The group maintains sufficient internal controls to ensure continued compliance. The Board and the Executive team are supported by qualified external legal advisors in all jurisdictions that the group operates in. Cybersecurity and Information technology ('IT') infrastructure The group reviews its cybersecurity resilience by conducting regular penetration and security testing. The group has worked with an external IT consultant to implement the essential 8 framework which is a series of mitigation strategies to combat cyber security incidents. Amazon web services ('AWS') is used for all infrastructure services providing access to comprehensive compliance controls. AWS supports and implements a number of security standards and compliance certifications, helping Pureprofile to satisfy compliance requirements for all regulatory agencies around the globe. The group has two factor authentication enforced on all web based systems. All third party suppliers are ISO 27001 accredited. Significant changes in the state of affairs There were no significant changes in the state of affairs of the group during the financial year. Matters subsequent to the end of the financial year Mr Albert Hitchcock was appointed to the Board of Directors on the 26th July 2022. No other matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly affect the group's operations, the results of those operations, or the group's state of affairs in future financial years. Likely developments and expected results of operations In line with its stated corporate strategy, the group remains on track to expand the international business into the larger UK, European and US markets, whilst continuing to grow in Australia. The group will continue its disciplined investment approach into FY23, further developing sales and operational capability and continuing to maintain positive operating cashflow over FY23. The group will continue delivering best-in-class research, services and solutions via our three core divisions. The group’s key initiatives for FY23 include: Expansion of our global business ● ● Further global expansion into new markets across SE Asia and Europe Further expand our partnership program with new publishers, financial institutions and loyalty programs in multiple countries 50% of total revenue from markets outside of Australia ● People ● ● ● Continue to recruit industry leaders across the globe Enhance our employee benefits and salary packages to remain an employer of choice Support employee growth and development through tailored online learning programs and by providing pathways for career progression Investment in technology, solutions and platforms ● ● Develop industry leading technologies to make client goals easier to achieve Continue to look for opportunities to increase automation and improve processes in order to meet the evolving needs of our clients Improve our operational efficiency and increase project profitability ● Clients ● ● ● Continue to work with industry leading brands Offer a consultative, solution-oriented client service Continue to deliver a client-first experience 63 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 64 Pureprofile Ltd Directors' report 30 June 2022 Pureprofile Ltd Directors' report 30 June 2022 l y n o e s u l a n o s r e p r o F Acquisitions ● Execute M&A strategy that can help accelerate growth and expand access to new panellists 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 than 30 years of marketing and executive leadership Andrew has more joining Pureprofile, Andrew was Chairman and CEO of to experience. Prior internationally renowned advertising and marketing agency, Leo Burnett Group UK and Ireland and President of Leo Burnett Central Europe. Andrew was also a Global Board Director with the specific remit of driving mergers and acquisitions in Europe, the Middle East and Africa and roll out of the group's social and mobile strategy. Prior to his roles at Leo Burnett, Andrew ran Australia’s most successful and awarded direct and database marketing company, Cartwright Williams. Andrew now focuses his time on Pureprofile and his portfolio of other business interests. Other current directorships: None Former directorships (last 3 years): None Special responsibilities: Interests in shares: Interests in options: Interests in rights: Contractual rights to shares: Name: Title: Qualifications: Experience and expertise: Other current directorships: Former directorships (last 3 years): None Special responsibilities: Interests in shares: Interests in options: Interests in rights: Contractual rights to shares: Chairman of the Audit Committee and Member of the Nomination and Remuneration Committee 8,862,219 ordinary shares 4,930,156 14,000,000 None 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 Klose is an experienced non-executive director and executive, with a diverse background in digital business growth and operations, corporate development, strategy and marketing. Previously the Chief Marketing Officer of GraysOnline and COO of 12WBT, she brings deep experience in digital operations, marketing and brand strategy, and digital product development. As Director of Digital Corporate Development for News Ltd, Sue screened hundreds of potential investments, leading multiple acquisitions and establishing the CareerOne and CarsGuide joint ventures. She is currently a non-executive director of Envirosuite (ASX: EVS), a provider of real- time environmental intelligence management systems, Nearmap (ASX: NEA), a provider of aerial imagery and location intelligence; Stride, one of Australia’s largest mental health care providers; and Honan Insurance Group, an insurance, risk and financial solutions provider. Non-Executive Director of Nearmap (ASX: NEA), Non-Executive Director of Envirosuite (ASX: EVS), Non-Executive Director of Halo Food Co. Limited (ASX: HLF) Chair of the Nomination and Remuneration Committee and Member of the Audit Committee None 2,000,000 1,750,000 None Name: Title: Qualifications: Experience and expertise: Martin Filz Chief Executive Officer and Managing Director 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: 15,591,616 ordinary shares Interests in shares: 21,911,805 Interests in options: 12,468,750 Interests in rights: Experience and expertise: Name: Title: Qualifications: Tim Hannon Non-Executive Director Tim holds a Bachelor of Economics, Postgraduate Finance qualifications and an MBA from Melbourne Business School. Tim is the Managing Director of GAIA Natural Resources, and investment firm dedicated to linking capital markets to the restoration of the natural environment. Tim has 25 years’ experience in the investment and securities markets. He was a former partner of Goldman Sachs where he enjoyed an 18-year tenure, holding roles such as Head of Australian Equities, Head of Real Estate and co-manager of Global Real Estate Securities portfolios. He was also founder and co-manager of the Goldman Sachs Australian Infrastructure Securities Fund, and co-manager of the award-winning Goldman Sachs Emerging Leaders Fund. Other current directorships: None Former directorships (last 3 years): None None Special responsibilities: 13,478,821 Interests in shares: None Interests in options: None Interests in rights: None Contractual rights to shares: Name: Title: Qualifications: Experience and expertise: Albert Hitchcock Non-Executive Director (appointed on 26 July 2022) Albert holds a Dip.MBA (Distinction) from Exeter University, a Post Graduate Certificate in Management Studies from Exeter Business School, a ONC & HNC in Electronic Engineering from South Devon College of Arts & Technology. Albert is a Chartered Engineer (CEng) and is a Fellow of the Institute of Engineering & Technology (FIET). Albert Hitchcock was the Chief Technology and Operations Officer for Pearson, the world’s leading learning company from March 2014 until January 2022. In this role technology, Operations Albert encompassing Supply chain, Procurement, Customer service, Real Estate and shared services across Finance, HR and Technology. Albert spent a 28-year career in the technology industry working for BAE systems, Racal Electronics and Nortel Networks. In January 2007 Albert joined Vodafone and was appointed into the role of Vodafone Group Chief Information Officer. Albert is currently a Non-Executive Director of Nationwide Building Society. Albert is a Fellow of the Institute of Engineering and Technology and a Chartered Engineer. Albert is based in London. Nationwide Building Society (LON: NBS) led Digital product development, Information Other current directorships: Former directorships (last 3 years): None None Special responsibilities: 473,355 Interests in shares: None Interests in options: None Interests in rights: None Contractual rights to shares: 65 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 66 Pureprofile Ltd Directors' report 30 June 2022 Pureprofile Ltd Directors' report 30 June 2022 l y n o e s u l a n o s r e p r o F '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 Lee Tamplin was appointed Company Secretary on 14 December 2020. Lee has almost 20 years’ experience in a variety of roles covering investment management, financial services and corporate governance in both Australia and the UK. Lee is currently Company Secretary for a number of ASX listed, NSX listed and unlisted public and private companies across a range of industries. Lee has a Degree in Financial Services, a diploma in Financial Planning and is a Graduate of the Australian Institute of Company Directors Course. He is also a member of the Governance Institute of Australia. Prior to joining Automic, Lee was a Senior Client Relationship and Business Development Manager for a global share registry. Meetings of directors The number of meetings of the company's Board of Directors ('the Board') held during the year ended 30 June 2022, and the number of meetings attended by each director were: Andrew Edwards Sue Klose Martin Filz Tim Hannon Full Board Attended Held Nomination and Remuneration Committee Attended Held Audit and Risk Committee Attended Held 9 8 9 5 9 9 9 9 - - - - - - - - - - - - - - - - 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. 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. 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 director's 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 2023 are summarised as follows: Name Sue Klose Andrew Edwards Tim Hannon Albert Hitchcock FY 2023 Fees $70,639 $132,600 $70,000 $70,000 All directors are also eligible for additional long term incentives under the company's Long Term Incentive plan ('LTI'). The company from time to time grants directors 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 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. 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. 67 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 68 Pureprofile Ltd Directors' report 30 June 2022 Pureprofile Ltd Directors' report 30 June 2022 l y n o ● e s u ● ● ● ● l a n o s r e p r o F Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, is reviewed annually by the Nomination and Remuneration Committee, based on individual and business unit performance, the overall performance of the group and comparable market remuneration. Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits) where it does not create any additional costs to the group and provides additional value to the executive. The short-term incentives ('STI') program is designed to align the targets of the business units with the performance hurdles of executives. Under the STI, eligible executives may be offered cash incentives ('rewards'), rights or options to acquire shares which may be subject to vesting conditions set by the Board. Each offer of rewards, grant of rights or options 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 or by the grant of rights or by the grant of options to receive shares of equivalent value (as determined by the Board at the time of grant); rights or 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; rights or 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 rights or options before the record date for the relevant issue; if, prior to the exercise of a right or option, the company makes a pro rata bonus issue to the holders of its shares, and the right or option is not exercised prior to the record date in respect of that bonus issue, the right or 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 right or option had been exercised prior to the record date; and if, prior to the exercise of a right or option, the company undergoes a reorganisation of capital (other than by way of a bonus issue for cash), the terms of the rights or options 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 rights or options to acquire shares which may be subject to vesting conditions set by the Board. Each grant of rights or options under the LTI is, or will be, on the terms generally described as follows: ● ● ● ● ● the Board will determine the number of rights or options to be granted to each eligible employee; rights or 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; rights or 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 rights or options before the record date for the relevant issue; if, prior to the exercise of a right or option, the company makes a pro rata bonus issue to the holders of its shares, and the right or option is not exercised prior to the record date in respect of that bonus issue, the right or 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 right or option had been exercised prior to the record date; and if, prior to the exercise of a right or option, the company undergoes a reorganisation of capital (other than by way of a bonus issue for cash), the terms of the rights or 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 revenue and earnings 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. 2022 2021 2020 2019 Share price $0.044 $0.027 $0.006 $0.010 Use of remuneration consultants During the financial year ended 30 June 2022, the group engaged PricewaterhouseCoopers ('PwC') to review the group's share-based incentive programs and provide recommendations on how to improve the LTI program. PwC were paid $22,950 for these services. Voting and comments made at the company's 2021 Annual General Meeting ('AGM') At the 2021 AGM, 97.85% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2021. 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. Andrew Edwards - Non-Executive Chairman Sue Klose - Non-Executive Director The key management personnel of the group consisted of the following directors of Pureprofile Ltd: ● ● ● Martin Filz - Chief Executive Officer and Managing Director ● ● Tim Hannon - Non-Executive Director (appointed on 1 January 2022) Aaryn Nania - Non-Executive Director (appointed on 28 August 2019 and resigned 2 September 2020) 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** $ Total $ 120,000 63,927 31,818 - - - 416,432 393,600 284,086 916,263 - 393,600 - - - - - - 12,000 6,393 - 23,568 23,568 65,529 - - - - - - - - - 132,000 70,320 31,818 583,532 1,417,132 649,498 1,233,030 957,152 2,608,422 2022 Non-Executive Directors: A. Edwards S. Klose T. Hannon* Executive Directors: M. Filz Other Key Management Personnel: M. Sheppard * ** Represents remuneration from the date of appointment and/or to the date of resignation Share-based payments for M. Filz consists of options of $218,239 and performance rights of $365,293. Share-based payments for M. Sheppard consists of options of $561,157 and performance rights of $88,342. 69 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 70 Pureprofile Ltd Directors' report 30 June 2022 l y n o 2021 Non-Executive Directors: A. Edwards S. Klose A. Nania* Executive Directors: M. Filz* Other Key Management Personnel: M. Sheppard e s u * ** l a n o s r e p r o F Name Non-Executive Directors: A. Edwards S. Klose T. Hannon A. Nania Executive Directors: M. Filz Other Key Management Personnel: M. Sheppard Name: Title: Agreement commenced: Term of agreement: Details: Short-term benefits Post- employment benefits Long-term benefits Share- based payments Cash salary and fees $ Cash bonus $ Other $ Super- annuation $ Employee leave $ Equity- settled** $ Total $ 110,000 58,600 - 326,521 262,173 757,294 - - - - - - - - - - - - 10,450 5,567 - 20,229 22,390 58,636 - - - - - - 411,213 72,511 - 531,663 136,678 - 326,225 672,975 112,068 922,017 396,631 1,737,947 Represents remuneration from the date of appointment and/or to the date of resignation Share-based payments for A. Edwards consists of options of $75,213 and share rights of $336,000. Share-based payments for S. Klose consists of options of $30,511 and share rights of $42,000. Share-based payments for M. Filz consists of options of $189,437 and performance rights of $136,788. Share-based payments for M. Sheppard consists of options of $58,855 and performance rights of $53,213. The proportion of remuneration linked to performance and the fixed proportion are as follows: Fixed remuneration 2021 2022 At risk - STI At risk - LTI 2022 2021 2022 2021 100% 100% 100% - 23% 47% - - - - - - 77% 53% - - - - - - 31% 52% 28% 48% 41% 32% 72% - 28% 68% - - - - - - 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 2022 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. 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 2022 Name: Title: Agreement commenced: Term of agreement: Details: Name: Title: Agreement commenced: Term of agreement: Details: Name: Title: Agreement commenced: Term of agreement: Details: Name: Title: Agreement commenced: Term of agreement: Details: 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 2022 including 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. Martin Filz Chief Executive Officer and Managing Director 3 August 2020 No fixed end date Base salary of $400,000 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 and long-term incentives, under the Incentives Scheme, which defines the amount, form, frequency, KPI’s and targets to which the incentives relate. Tim Hannon Non-Executive Director 1 January 2022 Appointment until next Annual General Meeting, at which he will be eligible for re- election Base salary for the year ended 30 June 2022 of $70,000 including superannuation and any GST, 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. Melinda Sheppard Chief Operating Officer/Chief Financial Officer 25 June 2018 No fixed end date Base salary for the year ended 30 June 2022 of $283,669 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. 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 2022 (2021: nil). 71 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 72 Pureprofile Ltd Directors' report 30 June 2022 Pureprofile Ltd Directors' report 30 June 2022 Options The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key management personnel in this financial year or future reporting years are as follows: Name M. Filz M. Sheppard Number of options granted Grant date Vesting date and exercisable date Expiry date Exercise price at grant date Fair value per option 10,955,902 29/01/2021 10,955,902 29/01/2021 10,955,903 29/01/2021 4,208,906 01/04/2021 4,208,906 01/04/2021 4,208,907 01/04/2021 8,479,240 16/09/2021 8,479,240 16/09/2021 2,826,413 16/09/2021 2,826,413 16/09/2021 2,826,413 16/09/2021 01/09/2021 01/09/2022 01/09/2023 01/09/2021 01/09/2022 01/09/2023 16/09/2022 16/09/2023 01/09/2022 01/09/2023 01/09/2024 01/04/2026 01/04/2026 01/04/2026 01/04/2026 01/04/2026 01/04/2026 16/09/2026 16/09/2026 16/09/2026 16/09/2026 16/09/2026 $0.020 $0.020 $0.020 $0.020 $0.020 $0.020 $0.027 $0.027 $0.027 $0.027 $0.027 $0.0153 $0.0153 $0.0153 $0.0161 $0.0161 $0.0161 $0.0340 $0.0340 $0.0340 $0.0340 $0.0340 Options granted carry no dividend or voting rights. All options were granted over unissued fully paid ordinary shares in the company. The number of options granted was determined having regard to the satisfaction of performance measures and weightings as described above in the section 'Group performance and link to remuneration'. Options vest based on the provision of service over the vesting period whereby the executive becomes beneficially entitled to the option on vesting date. Options are exercisable by the holder as from the vesting date. There has not been any alteration to the terms or conditions of the grant since the grant date. There are no amounts paid or payable by the recipient in relation to the granting of such options other than on their potential exercise. Values of options over ordinary shares granted, exercised and forfeited for directors and other key management personnel as part of compensation during the year ended 30 June 2022 are set out below: Performance rights The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of directors and other key management personnel in this financial year or future reporting years are as follows: Name M. Filz M. Sheppard Number of rights granted Grant date 4,937,500 29/01/2021 2,468,750 29/01/2021 2,468,750 29/01/2021 3,333,333 26/10/2021 3,333,333 26/10/2021 3,333,334 26/10/2021 3,125,000 01/04/2021 1,562,500 01/04/2021 1,562,500 01/04/2021 Vesting date and exercisable date 29/07/2021 29/01/2022 29/01/2023 01/09/2022 01/09/2023 01/09/2024 01/04/2021 01/04/2022 01/04/2023 Expiry date 01/04/2026 01/04/2026 01/04/2026 26/10/2026 26/10/2026 26/10/2026 01/04/2026 01/04/2026 01/04/2026 Fair value per right at grant date $0.0240 $0.0240 $0.0240 $0.0604 $0.0604 $0.0604 $0.0250 $0.0250 $0.0250 Performance rights granted carry no dividend or voting rights. All performance rights were granted over unissued fully paid ordinary shares in the company. The number of performance rights granted was determined having regard to the satisfaction of performance measures and weightings as described above in the section 'Group performance and link to remuneration'. Performance rights vest based on the provision of service over the vesting period whereby the executive becomes beneficially entitled to the rights on vesting date. Performance rights are exercisable by the holder as from the vesting date. There has not been any alteration to the terms or conditions of the grant since the grant date. There are no amounts paid or payable by the recipient in relation to the granting of such rights other than on their potential exercise. Values of performance rights over ordinary shares granted, vested and lapsed for directors and other key management personnel as part of compensation during the year ended 30 June 2022 are set out below: Value of options granted during the year $ Value of options exercised during the year $ Value of options forfeited during the year $ - 865,358 167,140 67,713 - 51,546 Name M. Filz M. Sheppard Value of rights granted during the year $ Value of rights exercised during the year $ Value of rights lapsed during the year $ 604,034 - 177,750 117,187 - - Share rights There were no share rights over ordinary shares issued to directors and other key management personnel that affect their remuneration in this financial year or future financial years. 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 A. Edwards M. Filz M. Sheppard Balance at the start of the year Received as part of remuneration Additions* Disposals/ other Balance at the end of the year 8,862,219 375,000 250,000 9,487,219 - - - - - 15,216,616 7,006,736 22,223,352 - - - - 8,862,219 15,591,616 7,256,736 31,710,571 * Additions for M. Filz consist of exercise of options of 7,630,366 shares, exercise of performance rights of 7,406,250 shares and purchase of 180,000 shares. Additions for M. Sheppard consist of exercise of options of 2,319,236 shares and exercise of performance rights of 4,687,500 shares. l y n o e s u l a n o s r e p r o F Name M. Filz M. Sheppard 73 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 74 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: Pureprofile Ltd Directors' report 30 June 2022 l y n o Options over ordinary shares A. Edwards S. Klose M. Filz M. Sheppard e s u Options over ordinary shares A. Edwards S. Klose l a n o s r e p Share rights over ordinary shares A. Edwards S. Klose Share rights over ordinary shares A. Edwards S. Klose Balance at the start of the year 4,930,156 2,000,000 32,867,707 12,626,719 52,424,582 Granted Exercised Forfeited Balance at the end of the year - - - 25,437,719 25,437,719 - - (10,955,902) (4,208,906) (15,164,808) - - - (1,515,239) (1,515,239) 4,930,156 2,000,000 21,911,805 32,340,293 61,182,254 Vested and Vested and exercisable unexercisable Balance at the end of the year 4,930,156 2,000,000 6,930,156 - - - 4,930,156 2,000,000 6,930,156 Balance at the start of the year 14,000,000 1,750,000 15,750,000 Granted Exercised Expired/ forfeited/ other Balance at the end of the year - - - - - - - - - 14,000,000 1,750,000 15,750,000 Vested and Vested and exercisable unexercisable Balance at the end of the year 14,000,000 1,750,000 15,750,000 - - - 14,000,000 1,750,000 15,750,000 Share rights holding The number of share rights over ordinary shares in the company held during the financial year by each director and other members of key management personnel of the group, including their personally related parties, is set out below: Performance rights holding The number of performance rights over ordinary shares in the company held during the financial year by each director and other members of key management personnel of the group, including their personally related parties, is set out below: r o F Performance rights over ordinary shares M. Filz M. Sheppard Balance at the start of the year Granted Exercised Expired/ forfeited/ other Balance at the end of the year 9,875,000 6,250,000 16,125,000 10,000,000 - 10,000,000 (7,406,250) (4,687,500) (12,093,750) - - - 12,468,750 1,562,500 14,031,250 Pureprofile Ltd Directors' report 30 June 2022 Performance rights over ordinary shares M. Filz M. Sheppard Vested and Vested and exercisable unexercisable Balance at the end of the year - - - - - - - - - Other transactions with key management personnel and their related parties During the financial year, expenses totalling $12,330 (2021: $7,934) were reimbursed to key management personnel. There were no loans to or from key management personnel at the current and previous reporting date. This concludes the remuneration report, which has been audited. Shares under option Unissued ordinary shares of Pureprofile Ltd under option at the date of this report are as follows: Grant date 19/10/2020 29/01/2021 29/01/2021 29/01/2021 01/04/2021 01/04/2021 16/09/2021 17/09/2021 Expiry date 08/12/2022 01/04/2026 01/04/2026 01/04/2026 01/04/2026 01/04/2026 16/09/2026 17/09/2026 Exercise price Number under option $0.030 $0.020 $0.020 $0.020 $0.020 $0.020 $0.027 $0.027 1,200,000 4,930,156 2,000,000 21,911,805 8,417,813 22,501,869 25,437,720 39,288,326 125,687,689 Shares issued on the exercise of options The following ordinary shares of Pureprofile Ltd were issued during the year ended 30 June 2022 and up to the date of this report on the exercise of options granted: Date options granted 19/10/2020 01/04/2021 29/01/2021 01/04/2021 24/05/2021 01/04/2021 Exercise price Number of shares issued $0.030 $0.000 $0.000 $0.000 $0.030 $0.000 13,800,000 4,527,701 9,512,861 1,995,961 4,000,000 390,502 34,227,025 75 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 76 Pureprofile Ltd Directors' report 30 June 2022 Pureprofile Ltd Directors' report 30 June 2022 Shares under share rights Unissued ordinary shares of Pureprofile Ltd under share rights at the date of this report are as follows: No person entitled to exercise the share rights had or has any right by virtue of the service right to participate in any share issue of the company or of any other body corporate. Shares issued on the exercise of share rights The following ordinary shares of Pureprofile Ltd were issued during the year ended 30 June 2022 and up to the date of this report on the exercise of performance rights granted: l y n o Grant date 29/01/2021 29/01/2021 01/04/2021 03/02/2022 09/02/2022 e s u l a n o s r e p r o F Date share rights granted 01/04/2021 01/04/2021 01/04/2021 Grant date 29/01/2021 01/04/2021 26/10/2021 Date performance rights granted 29/01/2021 01/04/2021 01/04/2021 29/01/2021 Expiry date 01/04/2026 01/04/2026 01/04/2026 03/02/2027 09/02/2027 Number under rights 14,000,000 1,750,000 230,587 15,653 15,653 16,011,893 Exercise price Number of shares issued $0.000 $0.000 $0.000 327,322 146,033 2,493,950 2,967,305 Expiry date 01/04/2026 01/04/2026 26/10/2026 Number under rights 2,468,750 1,562,500 10,000,000 14,031,250 Exercise price Number of shares issued $0.000 $0.000 $0.000 $0.000 4,937,500 3,125,000 1,562,500 2,468,750 12,093,750 Shares under performance rights Unissued ordinary shares of Pureprofile Ltd under performance rights at the date of this report are as follows: No person entitled to exercise the performance rights had or has any right by virtue of the performance rights to participate in any share issue of the company or of any other body corporate. Shares issued on the exercise of performance rights The following ordinary shares of Pureprofile Ltd were issued during the year ended 30 June 2022 and up to the date of this report on the exercise of performance rights granted: Indemnity and insurance of officers The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith. During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. Indemnity and insurance of auditor The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the company or any related entity against a liability incurred by the auditor. During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company or any related entity. Proceedings on behalf of the company No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or part of those proceedings. Non-audit services Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined in note 30 to the financial statements. The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are of the opinion that the services as disclosed in note 30 to the financial statements do not compromise the external auditor's independence requirements of the Corporations Act 2001 for the following reasons: ● all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risks and rewards. ● Officers of the company who are former partners of Grant Thornton Australia There are no officers of the company who are former partners of Grant Thornton Australia. 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. 77 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 78 Pureprofile Ltd Directors' report 30 June 2022 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 30 August 2022 Sydney l y n o e s u l a n o s r e p r o F 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 2022, I declare that, to the best of my knowledge and belief, there have been: a b no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. Grant Thornton Audit Pty Ltd Chartered Accountants S M Coulton Partner – Audit & Assurance Sydney, 30 August 2022 ACN-130 913 594 www.grantthornton.com.au Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ‘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 Limited 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. Liability limited by a scheme approved under Professional Standards Legislation. 79 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT 80 Pureprofile Ltd Statement of profit or loss and other comprehensive income For the year ended 30 June 2022 Pureprofile Ltd Statement of financial position As at 30 June 2022 Revenue 41,710,969 30,002,038 Assets l y n o e s u l a n o s r e p Other income Interest revenue calculated using the effective interest method Gain on loan forgiveness Expenses Direct costs of revenue Employee benefits expense Foreign exchange loss Depreciation and amortisation expense Loss on disposal of intangible assets Loss on disposal of property, plant and equipment Technology, engineering and licence fees Share-based payment expense Professional fees and payroll tax on share-based payments Restructuring, acquisition and capital raising costs Occupancy costs Other expenses Finance costs (Loss)/profit before income tax expense Income tax expense (Loss)/profit 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)/profit for the year attributable to the owners of Pureprofile Ltd Consolidated Note 2022 $ 2021 $ 5 6 7 37 7 8 617,209 - - 843,454 815 8,416,780 (20,182,045) (13,047,971) - (3,246,427) - (33,914) (3,159,168) (2,238,811) (92,218) - (141,641) (1,757,475) (496,700) (13,210,595) (10,339,644) (30,813) (3,747,842) (258,906) - (2,222,129) (1,141,608) - (848,202) (62,449) (1,838,173) (2,708,473) (2,068,192) 2,854,253 (96,085) (43,097) (2,164,277) 2,811,156 (4,601) (4,700) (4,601) (4,700) (2,168,878) 2,806,456 Cents Cents 36 36 (0.20) (0.20) 0.43 0.42 Basic earnings per share Diluted earnings per share 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 Lease liabilities Income tax Provisions Total current liabilities Non-current liabilities Borrowings Lease liabilities Provisions Total non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Total equity Consolidated Note 2022 $ 2021 $ 9 10 11 12 13 14 15 17 18 19 20 21 22 23 5,298,389 6,972,902 685,778 1,121,648 14,078,717 3,621,675 5,700,828 689,083 1,056,642 11,068,228 77,503 1,107,139 5,766,959 6,951,601 147,611 1,945,484 6,237,541 8,330,636 21,030,318 19,398,864 8,869,380 954,838 150,079 68,434 2,488,205 12,530,936 7,172,052 733,321 362,007 66,584 2,453,258 10,787,222 3,000,000 990,006 148,237 4,138,243 3,000,000 1,750,327 112,859 4,863,186 16,669,179 15,650,408 4,361,139 3,748,456 24 25 60,426,781 3,725,266 (59,790,908) 59,892,781 1,482,306 (57,626,631) 4,361,139 3,748,456 The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes The above statement of financial position should be read in conjunction with the accompanying notes ANNUAL REPORT 2022 81 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 82 Pureprofile Ltd Statement of changes in equity For the year ended 30 June 2022 Consolidated Balance at 1 July 2020 Profit after income tax expense for the year Other comprehensive loss for the year, net of tax Total comprehensive (loss)/profit for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 24) Share-based payments (note 37) Balance at 30 June 2021 Consolidated l Balance at 1 July 2021 Issued capital $ Reserves $ Accumulated losses $ Total equity $ 41,461,502 237,659 (60,437,787) (18,738,626) - - - - (4,700) 2,811,156 - 2,811,156 (4,700) (4,700) 2,811,156 2,806,456 18,431,279 - - 1,249,347 - - 18,431,279 1,249,347 59,892,781 1,482,306 (57,626,631) 3,748,456 Issued capital $ Reserves $ Accumulated losses $ Total equity $ 59,892,781 1,482,306 (57,626,631) 3,748,456 Pureprofile Ltd Statement of cash flows For the year ended 30 June 2022 Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Receipts from government grants Interest received Interest and other finance costs paid Income taxes paid Net cash from operating activities Cash flows from investing activities Payments for property, plant and equipment Payments for intangibles Proceeds from disposal of property, plant and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Share issue transaction costs Repayment of borrowings Repayment of lease liabilities Loss after income tax expense for the year Other comprehensive loss for the year, net of tax - (4,601) (2,164,277) - (2,164,277) (4,601) - - - Total comprehensive loss for the year (4,601) (2,164,277) (2,168,878) Net cash from financing activities Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 24) Share-based payments (note 37) Consultancy fee paid as share rights (note 37) Balance at 30 June 2022 534,000 - - - 2,238,811 8,750 - - - 534,000 2,238,811 8,750 60,426,781 3,725,266 (59,790,908) 4,361,139 Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial year 9 5,298,389 3,621,675 Consolidated Note 2022 $ 2021 $ 38 13 15 24 43,364,234 (39,113,843) 30,331,757 (28,246,741) 4,250,391 - - (263,887) (94,742) 2,085,016 478,500 815 (175,681) (37,683) 3,891,762 2,350,967 (52,492) (2,217,326) 4,205 (43,736) (2,012,257) 8,841 (2,265,613) (2,047,152) 534,000 - - (453,429) 13,396,878 (1,080,749) (9,896,878) (863,588) 80,571 1,555,663 1,706,720 3,621,675 (30,006) 1,859,478 1,768,401 (6,204) l y n o e s u a n o s r e p r o F The above statement of changes in equity should be read in conjunction with the accompanying notes The above statement of cash flows should be read in conjunction with the accompanying notes 83 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 84 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 1. General information l y n o e s u l a n o s r e p r o F 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 263 Riley Street Surry Hills 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 30 August 2022. The directors have the power to amend and reissue the financial statements. Note 2. Significant accounting policies The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. New or amended Accounting Standards and Interpretations adopted The group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the group. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Basis of preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB'). Historical cost convention The financial statements have been prepared under the historical cost convention. Critical accounting estimates The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3. 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 2022 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. Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 2. Significant accounting policies (continued) 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. 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. 85 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 86 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 2. Significant accounting policies (continued) l y n o e s u l a n o s r e p r o F 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 - Pure.amplify Media AU Revenue relating to Media sales is generated through the programmatic buying and selling of ad inventory, provision of 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 - Pure.amplify Media UK Revenue relating to the provision digital marketing is generated 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 using 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. Interest Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. Other revenue Other revenue is recognised when it is received or when the right to receive payment is established. Government grants Grants from the government are recognised at their fair value when there is reasonable assurance that the grant will be received and that the group will comply with all attached conditions. Government grants relating to costs are deferred and recognised in profit or loss as other income over the periods 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. Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 2. Significant accounting policies (continued) 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. 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. 87 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 88 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 2. Significant accounting policies (continued) l y n o e s u l a n o s r e p 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. 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. r o F 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. Pureprofile Ltd Notes to the financial statements 30 June 2022 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 contracts and partner network arrangements Acquired membership database is amortised over 7 years, on a straight line basis. Membership base Membership bases acquired are amortised over their useful economic life of 7 years on a straight line basis. Brand names Acquired brand names are not amortised. Instead, brand names are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired, and are 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 Trade and other payables 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 59 days of recognition. Contract liabilities Contract liabilities represent the group's obligation to transfer goods or services to a customer and are recognised when a customer pays consideration, or when the group recognises a receivable to reflect its unconditional right to consideration (whichever is earlier) before the group has transferred the goods or services to the customer. Borrowings Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method. Lease liabilities A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the group's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred. 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. 89 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 90 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 2. Significant accounting policies (continued) l y n o e s u l a n o s r e p r o F 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. 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. Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 2. Significant accounting policies (continued) The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the group receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions. The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods. Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied. If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification. If the non-vesting condition is within the control of the group or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the group or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited. If equity-settled awards are cancelled, they are treated as if they had vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award are treated as if they were a modification. Fair value measurement When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market. Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value measurement. For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data. Issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Business combinations The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other assets are acquired. 91 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 92 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 2. Significant accounting policies (continued) l y n o e s u l a n o s r e p r o F The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued, or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss. On the acquisition of a business, the group assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic conditions, the group's operating or accounting policies and other pertinent conditions in existence at the acquisition-date. Where the business combination is achieved in stages, the group remeasures its previously held equity interest in the acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is recognised in profit or loss. Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the acquirer. Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value. Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to the owners of Pureprofile Ltd, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. Goods and Services Tax ('GST') and other similar taxes Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position. 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. Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 2. Significant accounting policies (continued) 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 2022. The group has not yet assessed the impact of these new or amended Accounting Standards and Interpretations. 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 group 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. 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 10, 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. 93 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 94 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 4. Operating segments (continued) Types of products and services The principal products and services are as follows: Data & Insights Pure.amplify Media AU Pure.amplify Media UK Conducting market research and accessing insights and campaigns through our proprietary self-service platform 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 financial year 2021, the media and performance operating segments were rebranded under Pure.amplify division. The media operating segment is now known as Pure.amplify Media AU and the performance operating segment is now known as Pure.amplify Media UK. Major customers During the years ended 30 June 2022 and 30 June 2021, no single customer contributed more than 10% to the group's external revenue. Operating segment information (continuing and discontinued operations) Consolidated - 2022 Revenue Sales to external customers Interest Total revenue Data & Insights $ Pure.amplify Media AU $ Pure.amplify Media UK $ Corporate $ Total $ 35,544,435 - 35,544,435 4,901,233 - 4,901,233 1,265,301 - 1,265,301 - - - 41,710,969 - 41,710,969 EBITDA Depreciation and amortisation Share-based payment expense Professional fees and payroll tax on share- based payments Interest expense on leases Finance costs (Loss)/profit before income tax expense Income tax expense Loss after income tax expense 10,821,810 (2,687,909) - - - - 8,133,901 492,736 - - - - - 492,736 (53,732) - - (7,254,850) (558,518) (2,238,811) 4,005,964 (3,246,427) (2,238,811) - - - (53,732) (92,218) (145,313) (351,387) (10,641,097) (92,218) (145,313) (351,387) (2,068,192) (96,085) (2,164,277) l y 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 2022 Note 3. Critical accounting judgements, estimates and assumptions (continued) 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. Income tax The group is subject to income taxes in the jurisdictions in which it operates. Significant judgement and estimates are required in recognising and measuring current and deferred tax amounts. For any uncertain tax treatment adopted relating to transactions or events, the group recognises and measures tax related amounts having regard to both the probability that such amounts may be challenged by a tax authority and the expected resolution of such uncertainties. In such circumstances, tax balances are determined based on either most-likely amount or expected-value probability based outcomes. Where final tax outcomes vary from what is estimated, such differences will impact the current and deferred tax provisions recognised in the financial statements. 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. 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; ● Pure.amplify Media AU; and ● Pure.amplify Media UK. 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 adjusted 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. 95 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 96 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 5. Revenue (continued) During the financial years ended 30 June 2022 and 30 June 2021, all revenue was recognised based on services transferred over time. Note 6. Other income Net foreign exchange gain Net gain on disposal of intangible assets, property, plant and equipment Government grants (COVID-19) Rental income Gain on lease modification Miscellaneous Other income Consolidated 2022 $ 2021 $ 10,825 - - 291,082 281,788 33,514 - 8,841 364,500 468,997 - 1,116 617,209 843,454 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. Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 4. Operating segments (continued) Consolidated - 2021 Revenue Sales to external customers Interest Total revenue EBITDA Depreciation and amortisation Gain on loan forgiveness Share-based payment expense Restructuring, acquisition and capital raising costs Loss on disposal of intangible assets Interest Interest expense on leases Finance costs (Loss)/profit before income tax expense Income tax expense Profit after income tax expense Data & Insights $ Pure.amplify Media AU $ Pure.amplify Media UK $ Corporate $ Total $ 25,651,046 - 25,651,046 3,253,125 - 3,253,125 1,097,867 - 1,097,867 - 815 815 30,002,038 815 30,002,853 8,951,635 (2,950,357) - - - (164,906) - - - 5,836,372 225,639 - - - - - - - - 225,639 (66,589) - - - - - - - - (66,589) (5,968,996) (797,485) 8,416,780 (1,141,608) (848,202) (94,000) 815 (204,227) (2,504,246) (3,141,169) 3,141,689 (3,747,842) 8,416,780 (1,141,608) (848,202) (258,906) 815 (204,227) (2,504,246) 2,854,253 (43,097) 2,811,156 All assets and liabilities, including taxes are not allocated to the operating segments as they are managed on an overall group basis. Revenue by geographical area (continuing and discontinued operations) The group has operations in 7 countries working with clients based in 3 (2021: 3) regions. The sales revenue based on each client region is as follows: l y n o e s u l a n o s r e p r o F Sales to external customers Australasia Europe United States Note 5. Revenue Data & Insights Data & Insights - SaaS Platform Pure.amplify Media AU Pure.amplify Media UK Revenue Consolidated 2022 $ 2021 $ 28,332,293 8,958,077 4,420,599 21,318,089 6,359,052 2,324,897 41,710,969 30,002,038 Consolidated 2022 $ 2021 $ 32,091,966 3,452,469 4,901,233 1,265,301 24,560,948 1,090,098 3,253,125 1,097,867 41,710,969 30,002,038 Disaggregation of revenue Refer to note 4 'Operating segments' for analysis of revenue by major product line and geographical region. 97 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 98 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 7. Expenses (Loss)/profit before income tax includes the following specific expenses: Depreciation Right-of-use assets Office and computer equipment Total depreciation Amortisation Software Membership base Total amortisation Total depreciation and amortisation Finance costs Interest and finance charges paid/payable on borrowings Interest and finance charges paid/payable on lease liabilities Finance costs expensed Leases Short-term lease payments COVID-19 related rent concessions Low-value assets lease payments Superannuation expense Defined contribution superannuation expense Employee benefits expense excluding superannuation Employee benefits expense excluding superannuation l y n o e s u l a n o s r e p r o F Consolidated 2022 $ 2021 $ 476,674 81,845 711,103 86,382 558,519 797,485 2,309,732 378,176 2,572,181 378,176 2,687,908 2,950,357 3,246,427 3,747,842 351,387 145,313 2,504,246 204,227 496,700 2,708,473 22,495 - 2,630 - (22,916) 3,970 25,125 (18,946) 887,261 680,932 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 8. Income tax expense Income tax expense Current tax Adjustment recognised for prior periods Aggregate income tax expense Numerical reconciliation of income tax expense and tax at the statutory rate (Loss)/profit before income tax expense Tax at the statutory tax rate of 30% Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Entertainment expenses Share-based payments Capital gain from loan forgiveness Thin capitalisation - deduction denial amount Intercompany loan write-off disallowed Disposal of intangible assets Sundry items Adjustment recognised for prior periods Current year tax losses not recognised Prior year tax losses not recognised now recouped Current year temporary differences not recognised Difference in overseas tax rates Income tax expense Consolidated 2022 $ 2021 $ 86,604 9,481 66,929 (23,832) 96,085 43,097 (2,068,192) 2,854,253 (620,458) 856,276 4,540 671,643 - - - - (1,508) 54,217 9,481 39,934 (64,162) 104,017 (47,402) 12,682 342,482 (3,959,962) 591,038 1,434,928 77,672 2,347 (642,537) (23,832) 450,232 (12,211) 283,295 (11,850) 96,085 43,097 Consolidated 2022 $ 2021 $ 12,160,710 9,658,712 Tax losses not recognised Potential unused tax benefit for which no deferred tax asset has been recognised 1,099,223 4,820,760 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. Note 9. Current assets - cash and cash equivalents Cash at bank Cash on deposit* Consolidated 2022 $ 2021 $ 5,289,175 9,214 3,612,716 8,959 5,298,389 3,621,675 * Cash on deposit of $9,214 (2021: $8,959) is a restricted cash balance which is held and maintained as security over the group's leased properties. 99 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 100 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 10. Current assets - trade and other receivables Trade receivables Less: Allowance for expected credit losses Other receivables Allowance for expected credit losses The group has recognised a loss of $49,047 (2021: $31,576) in profit or loss in respect of impairment of receivables for the year ended 30 June 2022. 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 2022 % 2021 % Carrying amount 2021 $ 2022 $ Allowance for expected credit losses 2022 $ 2021 $ - - 30.0270% 58.3035% - 0.0081% 35.3873% 53.7664% 5,896,384 952,412 157,234 33,779 4,774,602 847,180 68,994 74,698 - - 47,213 19,694 - 69 24,415 40,162 7,039,809 5,765,474 66,907 64,646 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 2022 and rates have increased in the over 6 months overdue category. Movements in the allowance for expected credit losses are as follows: Consolidated 2022 $ 2021 $ 6,938,442 (66,907) 6,871,535 5,700,476 (64,646) 5,635,830 101,367 64,998 6,972,902 5,700,828 Consolidated 2022 $ 2021 $ 64,646 49,047 (46,786) 94,422 31,576 (61,352) 66,907 64,646 Consolidated 2022 $ 2021 $ 685,778 689,083 Opening balance Additional provisions recognised Receivables written off during the year as uncollectable Closing balance Note 11. Current assets - contract assets Contract assets l y 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 2022 Note 11. 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: Opening balance Additions Cumulative catch-up adjustments Transfer to trade receivables Closing balance Consolidated 2022 $ 2021 $ 689,083 686,993 (12,707) (677,591) 402,593 690,298 5,826 (409,634) 685,778 689,083 Allowance for expected credit losses The allowance for expected credit losses on contract assets for the year ended 30 June 2022 is $nil (2021: $nil). Note 12. Current assets - other Prepayments Note 13. Non-current assets - property, plant and equipment Office and computer equipment - at cost Less: Accumulated depreciation Consolidated 2022 $ 2021 $ 1,121,648 1,056,642 Consolidated 2022 $ 2021 $ 378,041 (300,538) 784,294 (636,683) 77,503 147,611 101 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 102 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 13. Non-current assets - property, plant and equipment (continued) Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: l Balance at 30 June 2022 Note 14. Non-current assets - right-of-use assets l y n o e s u a n o s r e p r o F Consolidated Balance at 1 July 2020 Additions Disposals Exchange differences Depreciation expense Balance at 30 June 2021 Additions Disposals Exchange differences Depreciation expense Buildings - right-of-use Less: Accumulated depreciation Consolidated Balance at 1 July 2020 Additions Exchange differences Depreciation expense Balance at 30 June 2021 Additions Lease modification Exchange differences Depreciation expense Balance at 30 June 2022 Office and computer equipment $ 187,540 43,736 (154) 2,871 (86,382) 147,611 52,492 (38,482) (2,273) (81,845) 77,503 Consolidated 2022 $ 2021 $ 2,449,802 (1,342,663) 2,848,098 (902,614) 1,107,139 1,945,484 Buildings - right-of-use $ 2,374,240 233,413 48,934 (711,103) 1,945,484 1,175,231 (1,390,437) (146,465) (476,674) 1,107,139 The group leases buildings 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: Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 15. Non-current assets - intangibles Goodwill - at cost Less: Impairment Software - at cost Less: Accumulated amortisation Less: Impairment Customer contracts and partner network arrangement - at cost Less: Accumulated amortisation Less: Impairment Membership base - at cost Less: Accumulated amortisation Consolidated 2022 $ 2021 $ 15,503,285 (15,503,285) - 15,503,285 (15,503,285) - 29,036,730 (19,183,688) (4,598,724) 5,254,318 26,819,404 (16,873,956) (4,598,724) 5,346,724 3,622,000 (1,168,990) (2,453,010) - 3,622,000 (1,168,990) (2,453,010) - 2,694,410 (2,181,769) 512,641 2,694,410 (1,803,593) 890,817 5,766,959 6,237,541 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 2020 Additions Disposals Amortisation expense Balance at 30 June 2021 Additions Amortisation expense Balance at 30 June 2022 Software $ Membership base $ Brand names $ 6,071,554 2,012,257 (164,906) (2,572,181) 5,346,724 2,217,326 (2,309,732) 1,268,993 - - (378,176) 890,817 - (378,176) 5,254,318 512,641 94,000 - (94,000) - - - - - Total $ 7,434,547 2,012,257 (258,906) (2,950,357) 6,237,541 2,217,326 (2,687,908) 5,766,959 103 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 104 Deferred tax asset comprises temporary differences attributable to: Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 16. Non-current assets - deferred tax 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 Business related capital expenditure Unrealised foreign exchange (gain)/loss Deferred tax asset Movements: Opening balance Credited to profit or loss (note 8) Closing balance l y n o e s u l a n o s r e p Trade payables Accrued expenses Other payables Note 18. Current liabilities - contract liabilities r o F Contract liabilities Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 18. Current liabilities - contract liabilities (continued) Consolidated 2022 $ 2021 $ Reconciliation Reconciliation of the written down values at the beginning and end of the current and previous financial year are set out below: 1,048 (2,501) (177,420) - 35,725 (136,196) 76,536 192,923 9,885 8,656 (1,687) (347,054) (28,200) 159,734 (95,835) 31,885 298,940 (26,439) - - - - - - - - Consolidated 2022 $ 2021 $ 3,509,731 4,665,798 693,851 2,424,285 3,944,087 803,680 8,869,380 7,172,052 Consolidated 2022 $ 2021 $ 954,838 733,321 Opening balance Payments received in advance Transfer to revenue Disposals Foreign exchange differences Closing balance Consolidated 2022 $ 2021 $ 733,321 2,004,074 (1,775,220) - (7,337) 377,687 1,170,984 (816,747) (1,339) 2,736 954,838 733,321 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 $954,838 as at 30 June 2022 ($733,321 as at 30 June 2021) and is expected to be recognised as revenue in future periods as follows: Within 6 months 6 to 12 months Note 19. Current liabilities - lease liabilities Lease liability Refer to note 27 for further information on financial instruments. Note 20. Current liabilities - provisions Employee benefits Reward redemption Consolidated 2022 $ 2021 $ 830,485 124,353 666,372 66,949 954,838 733,321 Consolidated 2022 $ 2021 $ 150,079 362,007 Consolidated 2022 $ 2021 $ 737,930 1,750,275 562,760 1,890,498 2,488,205 2,453,258 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. Refer to note 23 for further information. The group has unused tax losses of $1,099,223 (2021: $4,820,760) 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. Note 17. Current liabilities - trade and other payables 105 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 106 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 21. Non-current liabilities - borrowings Loans Refer to note 27 for further information on financial instruments. The debt facility between the group and its existing lender, Lucerne, is $3,000,000, which is effective from 29 December 2020. Interest is fixed and payable at 8.5% per annum and is payable quarterly on the last day of the quarter. The facility expires on 29 December 2023. The facility does not contain business performance covenants. As at 30 June 2022, the facility has been fully drawn. On 1 October 2021, the respective rights and obligations under each of the facility agreement and the general security deeds were novated to Altor Capital Management Pty Ltd. Total secured liabilities The total secured liabilities (current and non-current) are as follows: Loans Assets pledged as security The loans are secured by the assets of the group. Financing arrangements Unrestricted access was available at the reporting date to the following lines of credit: Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 23. Non-current liabilities - provisions Consolidated 2022 $ 2021 $ 3,000,000 3,000,000 Employee benefits Lease make-good Consolidated 2022 $ 2021 $ 77,303 70,934 39,195 73,664 148,237 112,859 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 2022 $ 2021 $ 3,000,000 3,000,000 Consolidated 2022 $ 2021 $ Consolidated - 2022 Carrying amount at the start of the year Additional provisions recognised Amounts used Payments Foreign exchange differences Unused amounts reversed Carrying amount at the end of the year Note 24. Equity - issued capital Reward redemption $ Lease make- good $ 1,890,498 6,222,522 (5,574,720) (303,963) (4,935) (479,127) 73,664 - - - (2,730) - 1,750,275 70,934 Consolidated 2022 Shares 2021 Shares 2022 $ 2021 $ 3,000,000 3,000,000 Ordinary shares - fully paid 1,107,022,671 1,057,734,591 60,426,781 59,892,781 3,000,000 3,000,000 - - Consolidated 2022 $ 2021 $ 990,006 1,750,327 Total facilities Loans Used at the reporting date Loans Unused at the reporting date Loans Note 22. Non-current liabilities - lease liabilities Lease liability Refer to note 27 for maturity analysis of lease liabilities. l y n o e s u l a n o s r e p r o F 107 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 108 l y 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 2022 Note 24. Equity - issued capital (continued) Movements in ordinary share capital Details Balance Issue of shares Issue of shares Issue of shares* Less: share issue costs net of taxation Balance Shares issued on exercise of share rights** Shares issued on exercise of share rights** Shares issued on exercise of share options Shares issued on exercise of share options*/** Shares issued on exercise of performance rights*/** Shares issued on exercise of performance rights*/** Shares issued on exercise of share options*/** Shares issued on exercise of share options*/** Shares issued on exercise of share options Shares issued on exercise of share options* Shares issued on exercise of share rights* Shares issued on exercise of performance rights* Shares issued on exercise of performance rights* Balance Date Shares Issue price $ 1 July 2020 24 November 2020 1 December 2020 8 December 2020 30 June 2021 5 July 2021 6 October 2021 6 October 2021 6 October 2021 6 October 2021 6 October 2021 29 October 2021 18 November 2021 18 November 2021 8 February 2022 1 April 2022 1 April 2022 7 April 2022 117,526,063 353,600,944 186,500,000 400,107,584 - 1,057,734,591 327,322 146,033 13,800,000 4,527,701 4,937,500 3,125,000 9,512,861 1,995,961 4,000,000 390,502 2,493,950 1,562,500 2,468,750 30 June 2022 1,107,022,671 $0.020 $0.020 $0.020 $0.000 41,461,502 7,072,019 3,730,000 8,002,152 (372,892) $0.030 $0.030 59,892,781 - - 414,000 - - - - - 120,000 - - - - 60,426,781 In accordance with the initial award offering, disposal or trading of ordinary shares is restricted until the expiry of 12 months following the date the shares are issued. The exercise price is a notional amount that is not paid in cash. Instead, when the options are exercised, the number of shares issued are reduced by an equivalent number to cover the notional exercise price. Ordinary shares Ordinary shares entitle the holder to participate in any dividends declared and any proceeds attributable to shareholders should the company be wound up in proportions that consider both the number of shares held and the extent to which those shares are paid up. The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised capital. On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. Share buy-back There is no current on-market share buy-back. Capital risk management The group's objectives when managing capital is to safeguard its ability to continue as a going concern so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital. Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents. In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The group would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the current company's share price at the time of the investment. Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 24. Equity - issued capital (continued) 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 25. Equity - reserves Foreign currency reserve Share-based payments reserve Consolidated 2022 $ 2021 $ (220,882) 3,946,148 (216,282) 1,698,588 3,725,266 1,482,306 Foreign currency reserve The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign operations. Share-based payments reserve The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and other parties as part of their compensation for services. Movements in reserves Movements in each class of reserve during the current and previous financial year are set out below: Consolidated Balance at 1 July 2020 Foreign currency translation Share-based payments Share options issued for underwriting services* Share options issued as referral fee for underwriting services Consultancy fee paid as share option Balance at 30 June 2021 Foreign currency translation Share-based payments Consultancy fee paid as share rights Foreign currency $ Share-based payments $ Total $ (211,582) (4,700) - - - - (216,282) (4,601) - - 449,241 - 1,141,608 61,248 37,741 8,750 1,698,588 - 2,238,811 8,750 237,659 (4,700) 1,141,608 61,248 37,741 8,750 1,482,306 (4,601) 2,238,811 8,750 Balance at 30 June 2022 (220,883) 3,946,149 3,725,266 * On 8 December 2020, 15,000,000 unlisted options were granted to Peloton Capital Pty Ltd as consideration for underwriting services provided to the company. The options vested on the date they were granted. Each option has an exercise price of $0.03 and a contractual life of two years. Note 26. Equity - dividends There were no dividends paid, recommended or declared during the current or previous financial year. 109 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 110 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 27. Financial instruments Price risk The group is not exposed to any significant price risk. l l y n o e s u a n o s r e p r o F 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. 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. 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 risk. An analysis by remaining contractual maturities is shown in the liquidity section below. As at the 30 June 2022 and 30 June 2021, 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 10, due to the Coronavirus (COVID-19) pandemic, the calculation of expected credit losses has been revised as at 30 June 2022 and rates have increased in the category of over 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. 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. Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 27. Financial instruments (continued) Remaining contractual maturities The following tables detail the group's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position. Consolidated - 2022 Non-derivatives Non-interest bearing Trade payables Other payables Reward redemption provision Interest-bearing - fixed rate Loans Lease liability Total non-derivatives Consolidated - 2021 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 $ - - - 3,509,731 693,851 1,750,275 - - - - - - - - - 3,509,731 693,851 1,750,275 8.50% 8.44% 255,000 234,525 6,443,382 3,302,151 185,231 3,487,382 - 570,768 570,768 - 542,351 542,351 3,557,151 1,532,875 11,043,883 Weighted average interest rate 1 year or less % $ Between 1 and 2 years $ Between 2 and 5 years Over 5 years $ $ Remaining contractual maturities $ - - - 2,424,285 803,680 1,890,498 - - - - - - - - - 2,424,285 803,680 1,890,498 8.50% 8.59% 255,000 654,368 6,027,831 255,000 238,219 493,219 3,302,151 1,457,942 4,760,093 - 525,367 525,367 3,812,151 2,875,896 11,806,510 The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above. Fair value of financial instruments Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. Note 28. 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. 111 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 112 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 32. Related party transactions (continued) Transactions with related parties The following transactions occurred with related parties: Payment for goods and services: Payment for expenses reimbursed to key management personnel Consolidated 2022 $ 2021 $ 12,330 7,934 Receivable from and payable to related parties There were no trade receivables from or trade payables to related parties at the current and previous reporting date. Loans to/from related parties There were no loans to or from related parties at the current and previous reporting date. Terms and conditions All transactions were made on normal commercial terms and conditions and at market rates. Note 33. Parent entity information Set out below is the supplementary information about the parent entity. Statement of profit or loss and other comprehensive income Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 29. 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: During the financial year the following fees were paid or payable for services provided by Grant Thornton Australia, the auditor of the company, its network firms and unrelated firms: Short-term employee benefits Post-employment benefits Share-based payments Note 30. Remuneration of auditors Audit services - Grant Thornton Australia Audit or review of the financial statements Other services - Grant Thornton Australia Taxation services Audit services - network firms Audit or review of the financial statements Other services - other firms Taxation services Assistance in financial due diligence l y n o e s u l a n o s r e p r o F Note 31. Contingent liabilities The group had no contingent liabilities as at 30 June 2022 (2021: none). Note 32. Related party transactions Parent entity Pureprofile Ltd is the parent entity. Subsidiaries Interests in subsidiaries are set out in note 34. Key management personnel Disclosures relating to key management personnel are set out in note 29. Consolidated 2022 $ 2021 $ 1,309,863 65,529 1,233,030 757,294 58,636 922,017 2,608,422 1,737,947 Consolidated 2022 $ 2021 $ 174,800 158,750 30,400 91,150 205,200 249,900 Loss after income tax Total comprehensive loss 27,512 31,500 Statement of financial position 86,253 37,550 46,414 36,300 123,803 82,714 Total current assets Total assets Total current liabilities Total liabilities Equity Issued capital Foreign currency reserve Share-based payments reserve Accumulated losses Total equity Parent 2022 $ 2021 $ (7,827,883) (3,632,643) (7,827,883) (3,632,643) Parent 2022 $ 2021 $ 6,560 609,839 11,058,133 11,175,375 2,841 1,084,445 9,013,968 4,084,445 60,427,739 (2,877) 3,946,148 (62,326,845) 59,931,480 (2,435) 1,660,847 (54,498,962) 2,044,165 7,090,930 Guarantees entered into by the parent entity in relation to the debts of its subsidiaries The parent entity is a party to a deed of cross guarantee (refer note 35), under which it guarantees the debts of certain of its subsidiaries as at 30 June 2022 and 30 June 2021. 113 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 114 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 33. Parent entity information (continued) Contingent liabilities The parent entity had no contingent liabilities as at 30 June 2022 and 30 June 2021. Capital commitments - Property, plant and equipment The parent entity had no capital commitments for property, plant and equipment as at 30 June 2022 and 30 June 2021. Significant accounting policies The accounting policies of the parent entity are consistent with those of the group, as disclosed in note 2, except for the following: ● Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity. Note 34. Interests in subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 2: Principal place of business / Country of incorporation USA Australia Australia United Kingdom USA Australia India Poland New Zealand United Kingdom Singapore Ownership interest 2021 2022 % % 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% - Name Pureprofile.com, Inc. Pureprofile Australia Pty Limited Pureprofile Global Pty Ltd Pureprofile UK Ltd Pureprofile US Inc. ACN 605 146 567 PTY LTD* Funbox India Private Limited** Sparc Media sp. Z o.o. Pureprofile NZ Ltd Pureprofile Performance Ltd*** Pureprofile Singapore Pte. Ltd**** Formerly known as Sparc Media Pty Ltd. * ** Deregistered on 23 December 2021. *** Formerly known as Cohort Global Ltd. **** Incorporated on 11 April 2022. Note 35. Deed of cross guarantee The following entities are party to a deed of cross guarantee under which each company guarantees the debts of the others: Pureprofile Australia Pty Limited Pureprofile Global Pty Ltd ACN 605 146 567 PTY LTD (formerly known as Sparc Media Pty Ltd) By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare financial statements and directors' report under Corporations Instrument 2016/785 issued by the Australian Securities and Investments Commission. The above companies represent a 'Closed Group' for the purposes of the Corporations Instrument, and as there are no other parties to the deed of cross guarantee that are controlled by Pureprofile Ltd, they also represent the 'Extended Closed Group'. l y 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 2022 Note 35. Deed of cross guarantee (continued) Set out below is a consolidated statement of profit or loss and other comprehensive income and statement of financial position of the 'Closed Group'. Statement of profit or loss and other comprehensive income Revenue Other income Interest revenue calculated using the effective interest method Gain on loan forgiveness Gain from intercompany loan forgiveness Direct costs of revenue Employee benefits expense Foreign exchange loss Depreciation and amortisation expense Loss on disposal of property, plant and equipment Professional fees and payroll tax on share-based payments Technology, engineering and licence fees Share-based payment expense Restructuring, acquisition and capital raising costs Occupancy costs Other expenses Finance costs (Loss)/profit before income tax expense Income tax expense (Loss)/profit after income tax expense Other comprehensive income for the year, net of tax Total comprehensive (loss)/profit for the year Equity - accumulated losses Accumulated losses at the beginning of the financial year (Loss)/profit after income tax expense Accumulated losses at the end of the financial year 2022 $ 2021 $ 38,943,301 23,999 - - - (18,908,973) (10,101,724) (168,133) (3,002,089) - (61,719) (3,075,383) (2,242,723) - (36,200) (3,356,687) (403,593) 27,679,051 492,061 107 8,416,780 4,783,094 (12,133,953) (8,211,958) - (3,410,125) (258,906) - (2,154,683) (1,107,969) (848,202) (20,575) (2,758,814) (2,502,699) (2,389,924) - 7,963,209 - (2,389,924) 7,963,209 - - (2,389,924) 7,963,209 2022 $ 2021 $ (54,654,269) (2,389,924) (62,617,478) 7,963,209 (57,044,193) (54,654,269) 115 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 116 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 35. Deed of cross guarantee (continued) Statement of financial position Current assets Cash and cash equivalents Trade and other receivables Contract assets Other Non-current assets Property, plant and equipment Right-of-use assets Intangibles Investment in subsidiary Related party receivable Total assets Current liabilities Trade and other payables Contract liabilities Lease liabilities Provisions Related party payables Non-current liabilities Borrowings Lease liabilities Provisions Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Total equity l y n o e s u l a n o s r e p r o F 2022 $ 2021 $ 2,930,990 6,719,427 681,192 985,481 11,317,090 39,128 1,107,138 5,766,958 765,465 7,036,109 14,714,798 1,864,832 5,724,903 383,892 1,000,120 8,973,747 45,962 223,396 6,237,541 765,465 6,504,656 13,777,020 26,031,888 22,750,767 8,073,574 954,719 150,081 2,202,194 3,386,926 14,767,494 3,000,000 990,006 88,303 4,078,309 6,327,120 564,911 201,125 2,210,928 3,386,077 12,690,161 3,000,000 13,482 50,195 3,063,677 18,845,803 15,753,838 7,186,085 6,996,929 60,427,740 3,802,538 (57,044,193) 59,931,481 1,719,717 (54,654,269) 7,186,085 6,996,929 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 36. Earnings per share Consolidated 2022 $ 2021 $ (Loss)/profit after income tax attributable to the owners of Pureprofile Ltd (2,164,277) 2,811,156 Weighted average number of ordinary shares used in calculating basic earnings per share Adjustments for calculation of diluted earnings per share: Options over ordinary shares Rights over ordinary shares Number Number 1,089,228,154 660,151,961 - - 1,672,283 12,990,935 Weighted average number of ordinary shares used in calculating diluted earnings per share 1,089,228,154 674,815,179 Basic earnings per share Diluted earnings per share Cents Cents (0.20) (0.20) 0.43 0.42 In the current financial year, options and rights have been excluded from the calculation of diluted earnings per share as they were considered anti-dilutive. Note 37. Share-based payments The following share options were granted during the year ended 30 June 2022 and 30 June 2021: On 19 October 2020, 15,000,000 unlisted options were granted to Peloton Capital Pty Ltd as consideration for underwriting services provided to the company. The options vest on the date they were granted. Each option has an exercise price of $0.03 and a contractual life of two years. On 29 January 2021, 4,930,156 unlisted options were granted to A. Edwards, the chairman of the company. The options vest on 30 June 2021 and the contractual life of each option is five years. On 29 January 2021, 2,000,000 unlisted options were granted to S. Klose, a director of the company. The options vest on 30 June 2021 and the contractual life of each option is five years. On 29 January 2021, 32,867,707 unlisted options were granted to M. Filz, the chief executive officer of the company. The options vest in three tranches: 10,955,902 options will vest on the date following the announcement of annual audited results for financial year ('FY') 2021 (1 September 2021), 10,955,902 options will vest on the date following the announcement of annual audited result for FY2022 (1 September 2022) and 10,955,903 options will vest on the date following the announcement of annual audited result for FY2023 (1 September 2023). The contractual life of each option is five years. On 1 April 2021, 12,626,719 unlisted options were granted to M. Sheppard, a key management personnel of the company. The options vest in three tranches: 4,208,906 options will vest on the date following the announcement of annual audited results for FY2021 (1 September 2021), 4,208,906 options will vest on the date following the announcement of annual audited result for FY2022 (1 September 2022) and 4,208,907 options will vest on the date following the announcement of annual audited result for FY2023 (1 September 2023). The contractual life of each option is five years. On 1 April 2021, 34,023,703 unlisted options were granted to executive team members. The options vest in three tranches: 11,341,234 options will vest on the date following the announcement of annual audited results for FY2021 (1 September 2021), 11,341,234 options will vest on the date following the announcement of annual audited result for FY2022 (1 September 2022) and 11,341,235 options will vest on the date following the announcement of annual audited result for FY2023 (1 September 2023). The contractual life of each option is five years. On 24 May 2021, 4,000,000 unlisted options were granted to eXtreme Visions as consideration for introducing Peloton Capital Pty Ltd as partial underwriter to the company. The options vest on the date they were granted. Each option has an exercise price of $0.03 and a contractual life of 1.5 years. 117 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 118 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 37. Share-based payments (continued) l y n o On 16 September 2021, 25,437,719 unlisted options were granted to M. Sheppard, a member of the key management personnel of the company. The award was issued as two tranches. Tranche 1 - Short Term Incentives ('STI') options for 16,958,480 will vest in two tranches: 8,479,240 options will vest on the 12 months anniversary of the grant date (16 September 2022) and 8,479,240 options will vest on the 24 months anniversary of the grant date (16 September 2023). Tranche 2 - Long Term Incentives ('LTI') options for 8,479,240 will vest in three tranches: 2,826,413 options will vest on the date following the announcement of the company’s annual audited consolidated results for the year ended 30 June 2022 (1 September 2022), 2,826,413 options will vest on the date following the announcement of the company’s annual audited consolidated results for the year ended 30 June 2023 (1 September 2023) and 2,826,413 options will vest on the date following the announcement of the company’s annual audited consolidated results for the year ended 30 June 2024 (1 September 2024). The contractual life of each option is five years. e s u On 17 September 2021, 41,433,030 unlisted options were granted to executive team members. The award was issued as two tranches. Tranche 1 - STI options for 20,716,515 will vest in two tranches: 10,358,258 options will vest on the 12 months anniversary of the grant date (17 September 2022) and 10,358,258 options will vest on the 24 months anniversary of the grant date (17 September 2023). Tranche 2 - LTI options for 20,716,515 will vest in three tranches: 6,905,505 options will vest on the date following the announcement of the company’s annual audited consolidated results for the year ended 30 June 2022 (1 September 2022), 6,905,505 options will vest on the date following the announcement of the company’s annual audited consolidated results for the year ended 30 June 2023 (1 September 2023) and 6,905,505 options will vest on the date following the announcement of the company’s annual audited consolidated results for the year ended 30 June 2024 (1 September 2024). The contractual life of each option is five years. l a n o s r e p r o F The following share rights were granted during the year ended 30 June 2022 and 30 June 2021: On 29 January 2021, 14,000,000 share rights were granted to A. Edwards, the chairman of the company. The share rights are exercisable at nil value. The share rights vest on 30 June 2021. The contractual life of each share right is five years. On 29 January 2021, 1,750,000 share rights were granted to S. Klose, a director of the company. The share rights are exercisable at nil value. The share rights vest on 30 June 2021. The contractual life of each share right is five years. On 1 April 2021, 2,453,740 share rights were granted to employees. The share rights are exercisable at nil value. The share rights vest on 1 April 2022. The contractual life of each share right is five years. On 1 April 2021, 703,942 share rights were granted to Albert Hitchcock, a board associate. The share rights are exercisable at nil value. The share rights vest in two tranches: 351,971 rights vest on 30 June 2021 and 351,971 will vest on 30 September 2021. The contractual life of each share right is five years. On 3 February 2022, 15,653 share rights were granted to employees. The share rights are exercisable at nil value. The share rights will vest on 3 February 2023. The contractual life of each share right is five years. On 9 February 2022, 15,653 share rights were granted to employees. The share rights are exercisable at nil value. The share rights will vest on 9 February 2023. The contractual life of each share right is five years. On 21 March 2022, 40,225 share rights were granted to employees. The share rights are exercisable at nil value. The share rights were vest on 1 April 2022. The contractual life of each share right is five years. The following performance rights were granted during the year ended 30 June 2022 and 30 June 2021: On 29 January 2021, 9,875,000 performance rights were granted to M. Filz, the chief executive officer of the company. The performance rights are exercisable at nil value. The performance rights vest in three tranches: 4,937,500 rights will vest on the 6 month anniversary of the grant date (29 July 2021), 2,468,750 rights will vest on the 12 month anniversary of the grant date (29 January 2022) and 2,468,750 rights will vest on the 24 month anniversary of the grant date (29 January 2023). The contractual life of each performance right is five years. On 1 April 2021, 6,250,000 performance rights were granted to M. Sheppard, a member of the key management personnel of the company. The performance rights are exercisable at nil value. The performance rights vest in three tranches: 3,125,000 rights will vest on the 6 month anniversary of the grant date (1 October 2021), 1,562,500 rights will vest on the 12 month anniversary of the grant date (1 April 2022) and 1,562,500 will vest on the 24 month anniversary of the grant date (1 April 2023). The contractual life of each performance right is five years. Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 37. Share-based payments (continued) On 26 October 2021, 10,000,000 performance rights were granted to M. Filz, the chief executive officer of the company. The performance rights are exercisable at nil value. The performance rights vest in three tranches: 3,333,333 rights will vest on the date following the announcement of the company’s annual audited consolidated results for the year ended 30 June 2022 (1 September 2022), 3,333,333 rights will vest on the date following the announcement of the company’s annual audited consolidated results for the year ended 30 June 2023 (1 September 2023) and 3,333,334 rights will vest on the date following the announcement of the company’s annual audited consolidated results for the year ended 30 June 2024 (1 September 2024). The contractual life of each performance right is 5 years. Share-based payments expense for the financial year was $2,238,811 (2021: $1,141,608). Share options Set out below are summaries of options granted by the company: 2022 Grant date Expiry date Exercise price 19/10/2020 29/01/2021 29/01/2021 29/01/2021 01/04/2021 01/04/2021 24/05/2021 16/09/2021 17/09/2021 08/12/2022 01/04/2026 01/04/2026 01/04/2026 01/04/2026 01/04/2026 08/12/2022 16/09/2026 17/09/2026 $0.030 $0.020 $0.020 $0.020 $0.020 $0.020 $0.030 $0.027 $0.027 Balance at the start of the year 15,000,000 4,930,156 2,000,000 32,867,707 12,626,719 34,023,703 4,000,000 - - 105,448,285 Granted Exercised Forfeited Balance at the end of the year - - - - - - - 25,437,720 41,433,030 66,870,750 (13,800,000) - - (10,955,902) (4,208,906) (9,392,667) (4,000,000) - - (42,357,475) 1,200,000 - 4,930,156 - 2,000,000 - 21,911,805 - 8,417,813 - 22,501,869 (2,129,167) - - 23,922,481 (1,515,239) (3,956,106) 37,476,924 (7,600,512) 122,361,048 Weighted average exercise price $0.020 $0.027 $0.024 $0.025 $0.024 2021 Grant date Expiry date 19/10/2020 29/01/2021 29/01/2021 29/01/2021 01/04/2021 01/04/2021 24/05/2021 08/12/2022 01/04/2026 01/04/2026 01/04/2026 01/04/2026 01/04/2026 08/12/2022 Exercise price Balance at the start of the year Granted Exercised Expired/ forfeited/ other Balance at the end of the year $0.030 $0.020 $0.020 $0.020 $0.020 $0.020 $0.030 - - - - - - - - 15,000,000 4,930,156 2,000,000 32,867,707 12,626,719 34,023,703 4,000,000 105,448,285 - - - - - - - - - - - - - - - - 15,000,000 4,930,156 2,000,000 32,867,707 12,626,719 34,023,703 4,000,000 105,448,285 Weighted average exercise price $0.000 $0.020 $0.000 $0.000 $0.020 Set out below are the options that have vested and are exercisable at the end of the financial year: Grant date Expiry date 19/10/2020 29/01/2021 29/01/2021 24/05/2021 08/12/2022 01/04/2026 01/04/2026 08/12/2022 2022 Number 2021 Number 1,200,000 4,930,156 2,000,000 - 15,000,000 4,930,156 2,000,000 4,000,000 8,130,156 25,930,156 119 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 120 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 37. Share-based payments (continued) The weighted average share price during the financial year was $0.05 (2021: $0.02). The weighted average remaining contractual life of options outstanding at the end of the financial year was 3.96 years (2021: 4.2 years). Share rights Set out below are summaries of share rights granted by the company: Expiry date 01/04/2026 01/04/2026 01/04/2026 01/04/2026 01/10/2026 03/02/2027 09/02/2027 21/03/2027 Expiry date 01/04/2026 01/04/2026 01/04/2026 01/04/2026 Exercise price $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 Balance at the start of the year 14,000,000 1,750,000 2,453,740 703,942 - - - - 18,907,682 Granted Exercised Forfeited - - - - 285,442 15,653 15,653 40,225 356,973 - - (2,453,740) (473,355) - - - (40,225) (2,967,320) - - - (230,587) (285,442) - - - (516,029) Balance at the end of the year 14,000,000 1,750,000 - - - 15,653 15,653 - 15,781,306 Exercise price Balance at the start of the year Granted Exercised Expired/ forfeited/ other Balance at the end of the year $0.000 $0.000 $0.000 $0.000 - - - - - 14,000,000 1,750,000 2,453,740 703,942 18,907,682 - - - - - - - - - - 14,000,000 1,750,000 2,453,740 703,942 18,907,682 Set out below are the share rights exercisable at the end of the financial year: Expiry date 01/04/2026 01/04/2026 01/04/2026 2022 Number 2021 Number 14,000,000 1,750,000 - 14,000,000 1,750,000 351,971 15,750,000 16,101,971 The weighted average remaining contractual life of share rights outstanding at the end of the financial year was 3.8 years (2021: 4.8 years). l y n o e s u l a n o s r e p r o F 2022 Grant date 29/01/2021 29/01/2021 01/04/2021 01/04/2021 01/10/2021 03/02/2022 09/02/2022 21/03/2022 2021 Grant date 29/01/2021 29/01/2021 01/04/2021 01/04/2021 Grant date 29/01/2021 29/01/2021 01/04/2021 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 37. Share-based payments (continued) Performance rights Set out below are summaries of performance rights granted under the plan: - - - - - - - 2,468,750 1,562,500 10,000,000 14,031,250 Balance at the end of the year 9,875,000 6,250,000 16,125,000 2022 Grant date Expiry date 29/01/2021 01/04/2021 26/10/2021 01/04/2026 01/04/2026 26/10/2026 2021 Exercise price Balance at the start of the year Granted Exercised Expired/ forfeited/ other Balance at the end of the year $0.000 $0.000 $0.000 9,875,000 6,250,000 - 16,125,000 - - 10,000,000 10,000,000 (7,406,250) (4,687,500) - (12,093,750) Grant date Expiry date Exercise price Balance at the start of the year Granted Exercised Expired/ forfeited/ other 29/01/2021 01/04/2021 01/04/2026 01/04/2026 $0.000 $0.000 - - - 9,875,000 6,250,000 16,125,000 - - - No performance rights are exercisable at the end of the financial year (2021: nil) The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 4.2 years (2021: 4.8 years). For the options granted during the current financial year, the valuation model inputs used to determine the fair value at the grant date, are as follows: Grant date Expiry date Share price at grant date Exercise price Expected volatility Dividend yield Risk-free interest rate Fair value at grant date 16/09/2021 17/09/2021 16/09/2026 17/09/2026 $0.048 $0.051 $0.027 $0.027 74.00% 75.00% - - 0.66% 0.66% $0.0340 $0.0368 For the share rights granted during the current financial year, the valuation model inputs used to determine the fair value at the grant date, are as follows: Grant date Expiry date 01/10/2021 21/03/2022 03/02/2022 09/02/2022 01/10/2026 21/03/2027 03/02/2027 09/02/2027 Share price at grant date Exercise price Expected volatility Dividend yield Risk-free interest rate Fair value at grant date $0.064 $0.057 $0.064 $0.066 $0.000 $0.000 $0.000 $0.000 - - - - - - - - - - - - $0.0613 $0.0570 $0.0639 $0.0639 For the performance rights granted during the current financial year, the valuation model inputs used to determine the fair value at the grant date, are as follows: Grant date Expiry date Share price at grant date Exercise price Expected volatility Dividend yield Risk-free interest rate Fair value at grant date 26/10/2021 26/10/2026 $0.057 $0.000 - - - $0.0604 121 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 122 Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 38. Cash flow information (continued) Changes in liabilities arising from financing activities Consolidated Balance at 1 July 2020 Net cash from/(used in) financing activities Loans received Acquisition of leases Loan forgiveness Other changes Balance at 30 June 2021 Net cash used in financing activities Acquisition of leases Lease modification Balance at 30 June 2022 Loans $ 20,000,000 (9,896,878) 3,000,000 - (8,416,780) (1,686,342) Lease liabilities $ Total $ 2,513,561 (863,588) - 233,413 - 228,948 22,513,561 (10,760,466) 3,000,000 233,413 (8,416,780) (1,457,394) 3,000,000 - - - 2,112,334 (453,429) 1,175,231 (1,694,051) 5,112,334 (453,429) 1,175,231 (1,694,051) 3,000,000 1,140,085 4,140,085 Note 39. Events after the reporting period Mr Albert Hitchcock was appointed to the Board of Directors on the 26th July 2022. No other matter or circumstance has arisen since 30 June 2022 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. Pureprofile Ltd Notes to the financial statements 30 June 2022 Note 38. Cash flow information Reconciliation of (loss)/profit after income tax to net cash from operating activities (Loss)/profit after income tax expense for the year (2,164,277) 2,811,156 Consolidated 2022 $ 2021 $ Adjustments for: Depreciation and amortisation Share-based payments Consultancy fee paid in share option Net loss on disposal of non-current assets Gain from loan forgiveness Restructuring, acquisition and capital raising costs Capitalised finance cost Interest on lease liabilities Change in operating assets and liabilities: Increase in trade and other receivables Increase in contract assets Increase in prepayments Increase in trade and other payables Increase in contract liabilities Increase in provision for income tax Increase/(decrease) in employee benefits Increase in other provisions Net cash from operating activities Non-cash investing and financing activities Additions to the right-of-use assets Shares issued on conversion of loan 3,246,427 2,238,811 - (247,874) - - - 145,313 3,747,842 1,141,608 8,750 250,065 (8,416,780) 794,142 2,328,565 204,227 (1,350,940) (9,403) (65,909) 1,783,294 228,854 3,490 38,108 45,868 (1,983,133) (286,490) (259,389) 1,215,604 355,634 26,309 (24,820) 437,677 3,891,762 2,350,967 Consolidated 2022 $ 2021 $ 1,175,231 - 233,413 5,407,292 1,175,231 5,640,705 l y n o e s u l a n o s r e p r o F 123 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 124 Pureprofile Ltd Directors' declaration 30 June 2022 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 2022 and of its performance for the financial year ended on that date; there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; and at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee described in note 35 to the financial statements. The directors have been given the declarations required by section 295A of the Corporations Act 2001. Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001. ● l y n o ● ● ● ● e s u a n o s r e p r o F l On behalf of the directors ___________________________ Andrew Edwards Non-Executive Chairman 30 August 2022 Sydney 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 2022, 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 2022 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. ACN-130 913 594 www.grantthornton.com.au Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ‘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 Limited 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. Liability limited by a scheme approved under Professional Standards Legislation. 125 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 126 l y n o e s u l a n o s r e p r o F 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. Key audit matter How our audit addressed the key audit matter Capitalisation of development costs, Note 15 During the year ended 30 June 2022, the Group capitalised $2,217,326 of costs related to developing its software assets. These intangible assets are being amortised over their finite life of between four and five years. AASB 138 Intangible Assets sets out the specific requirements to be met to capitalise development costs. We considered this a key audit matter given the magnitude of capitalised amounts, the significant judgements involved in determining which costs may be capitalised, and the assets’ useful lives. Our procedures included, amongst others: • Assessing the Group’s accounting policy in respect of product development costs for compliance with AASB 138; • Evaluating management’s assessment of each project for compliance with the recognition criteria set out in AASB138, including discussing project plans with management and project leaders to develop an understanding of the nature and feasibility of key projects; • Testing a sample of costs capitalised by vouching to underlying support, including timesheets, employment contracts and payroll reports, and assessing whether the expenditure was attributable to the development of the assets; • Assessing the reasonableness of the useful lives attributed to capitalised development costs and 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. Information other than the financial report and auditor’s report thereon The Directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2022 but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report, or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the financial report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. 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 65 to 74 of the Directors’ report for the year ended 30 June 2022. In our opinion, the Remuneration Report of Pureprofile Limited, for the year ended 30 June 2022 complies with section 300A of the Corporations Act 2001. Responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Grant Thornton Audit Pty Ltd Chartered Accountants S M Coulton Partner – Audit & Assurance Sydney, 30 August 2022 127 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 128 Andrew Edwards Martin Filz Sue Klose Tim Hannon Albert Hitchcock Lee Tamplin To be announced Level 5, 126 Phillip Street Sydney NSW 2000 263 Riley Street Surry Hills NSW 2010 Tel: +61 2 9333 9700 Automic Level 5, 126 Phillip Street Sydney NSW 2000 Tel: +61 2 9698 5414 Grant Thornton Level 17, 383 Kent Street Sydney NSW 2000 Tel: +61 2 8297 2400 Pureprofile Ltd Corporate directory 30 June 2022 Directors Company secretary Notice of annual general meeting Registered office Principal place of business Share register Auditor Stock exchange listing Website Business objectives Corporate Governance Statement l y n o e s u l a n o s r e p r o F Pureprofile Ltd Shareholder information 30 June 2022 The shareholder information set out below was applicable as at 29 July 2022. Distribution of equitable securities Analysis of number of equitable security holders by size of holding: Ordinary shares Options over ordinary shares Rights over ordinary shares Number of holders % of total shares issued Number of holders % of total shares issued Number of holders % of total shares issued 1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and over 47 115 113 826 627 - 0.03 0.09 3.35 96.53 1,728 100.00 Holding less than a marketable parcel 285 0.13 Equity security holders - - - - 15 15 - - - - - 100.00 100.00 - - - - 2 4 6 - - - - 0.11 99.89 100.00 - Twenty largest quoted equity security holders The names of the twenty largest security holders of quoted equity securities are listed below: 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 (Fourth 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 Principis Master Fund SPC J P Morgan Nominees Australia Pty Limited Appwam Pty Ltd Mr Christopher Wayne Lonergan HSBC Custody Nominees (Australia) Limited Sandhurst Trustees Ltd (Cyan C3G Fund A/C) DMX Capital Partners Limited Onmell Pty Ltd (ONM BPSF A/C) Depofo Pty Ltd (Ordinary A/C) Mr Mark Heeley GEMH Pty Ltd Vadina Pty Limited (Jordan Super Fund A/C) Saint Chapelle Pty Ltd (Hannon Family A/C) J & A Reeve Pty Ltd (Reeve Family A/C) Camden Equity Pty Ltd (Byrne Hybrid Investment A/C) National Nominees Limited BNP Paribas Noms Pty Ltd (DRP) Andrew Edwards Snowball Asset Management Pty Ltd (Snowball Asset Mgmt A/C) Mr Paul Augustine Chan (The Chan Family A/C) Ordinary shares Number held % of total shares issued 172,148,230 127,230,534 50,000,000 33,000,000 32,471,803 23,970,000 19,951,104 16,600,000 16,500,000 16,232,231 15,036,616 15,000,000 13,478,821 13,108,906 13,090,000 9,981,624 9,311,109 8,862,219 8,276,789 7,500,000 621,749,986 15.55 11.49 4.52 2.98 2.93 2.17 1.80 1.50 1.49 1.47 1.36 1.35 1.22 1.18 1.18 0.90 0.84 0.80 0.75 0.68 56.16 129 SECTION NINE DIRECTOR’S REPORT, FINANCIAL REPORT AND AUDITOR’S REPORT ANNUAL REPORT 2022 130 Pureprofile Ltd Shareholder information 30 June 2022 Substantial holders Substantial holders in the company are set out below: Principis Master Fund Spc Jencay Capital Pty Ltd Voting rights The voting rights attached to each class of equity securities 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. Unlisted Options and Rights These classes do not have voting rights. l Classes of unquoted equity securities Unlisted Options Rights The only holders in these unquoted security classes holding more than 20% of the unquoted class were issued the securities under the company’s Equity Plan. On-market buy-back The company is not currently conducting an on-market buy-back. Ordinary shares Number held % of total shares issued 172,148,230 92,740,765 15.55 8.38 Number of Holders Number of Securities 15 6 127,832,394 29,812,556 l y n o e s u a n o s r e p r o F l y n o e s u l a n o s r e p r o F Copyright © 2022 Pureprofile 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 263 Riley Street, Surry Hills 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 29 August 2022. The directors have the power to amend and reissue the financial statements. 

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