(ACN 125 931 964)
Annual Financial Report
for the Year Ended 30 June 2022
Index
Peppermint Innovation Limited
Corporate Information
Directors’ Report
Auditor’s Independence Declaration
Remuneration Report
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Cash Flows
Statement of Changes in Equity
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
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3
9
10
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51
52
55
2022 Annual Financial Report
Company Directory
Peppermint Innovation Limited
ABN 56 125 931 964
Registered Office
Directors
Mr Christopher Kain
Managing Director
Mr Anthony Kain
Executive Director
Neal Cross
Non-executive Director
Company Secretary
Mr Anthony Kain
Solicitors
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street
Perth WA 6000
Level 2 East, The Wentworth Building
300 Murray Street, Off Raine Lane
Perth WA 6000
Tel: +61 8 6255 5504
Web Address: www.pepltd.com.au
ASX Code: PIL
Share Registry
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000
Tel: +61 8 9323 2000
Fax: +61 8 9323 2033
Web: www.computershare.com.au
Auditors
RSM Australia Partners
Level 32
2 The Esplanade
Perth WA 6000
2022 Annual Financial Report
2
Directors’ Report
Peppermint Innovation Limited
Your Directors submit the financial report of Peppermint Innovation Limited (the Company or Peppermint), and
the entities it controlled (the Group), for the year ended 30 June 2022.
1. Directors
The names of directors who held office during or since the end of the financial year and until the date of this report
are as follows. Directors were in office for the entire financial year unless otherwise stated.
Name, qualifications,
independence status and
special responsibilities
Experience
Mr Anthony Kain (BJuris, LLB)
Chairperson
Executive Director
Company Secretary
Appointed 4 December 2015
Mr Christopher Kain (B Comm,
MBA)
Managing Director and CEO
Appointed 4 December 2015
Anthony has over 20 years’ experience working in Australian capital
markets. He has played a key role in the formation of numerous privately
owned and publicly listed companies and has an in-depth understanding of
intellectual property and
its commercialisation. Anthony also has
considerable experience as a director having held managing director, director
and legal counsel roles with Australian Stock Exchange listed companies
operating foreign assets.
Anthony has held advisory roles in capital raising, joint ventures and mergers
and acquisitions through his exposure to a diverse range of international and
national development opportunities working with technical teams primarily
in the energy, motor vehicle and resources sectors.
Listed company directorships in the past 3 years: None
Christopher is a practiced company director with 18 years experience in
finance services, investment markets and corporate management with a
proven capability
identify business opportunities and executing
commercial strategies for the benefit of both stakeholders and investors.
Christopher has specific expertise in investment evaluation, public and
private capital raising programs, debt funding strategies and, project
development and financing.
to
Christopher has held advisory and development roles with institutions such
as Barclays Capital and Credit Suisse First Boston in London, National
Australia Bank and Macquarie Bank in Australia where he worked across
institutional, wholesale and retail investment and financial markets.
Listed company directorships in the past 3 years: None
Mr Neal Cross
Independent Non-executive
Director
Appointed 24 March 2022
30+ years’ working in technology and innovation roles including executive
positions at Microsoft, Mastercard and DBS Bank.
Multi global award winning innovator – voted world’s most disruptive
CIO/CTO by Steve Wozniak and Sir Richard Branson.
Well versed in innovation 2ractices and digital & cultural transformation.
Mr Matthew Cahill
Independent Non-executive
Director
Appointed 4 December 2015
Resigned 24 March 2022
Listed company directorships in the past 3 years: None
Matthew is an accomplished technical director with experience in the Web
industry working across a broad range of technologies. He has been involved
in roles such as management, strategy, team lead, business analysis,
application architecture and development.
As technical director at Vivid Group (now Isobar of Dentsu Aegis Network),
Matthew has worked with some of Australia’s largest brands, including
Sunbeam, JB HiFi, Echo Entertainment, Fusion Retail Brands, Coates Hire
2022 Annual Financial Report
2
Directors’ Report
Peppermint Innovation Limited
and many more. Matthew’s responsibilities included guiding the technical
direction of the company, along with leadership of the large development
technologies.
teams
spanned multiple
disciplines
that
and
Listed company directorships in the past 3 years: None
2. Company Secretary
The company secretary is Anthony Kain. Details are disclosed in director information.
3. Directors’ Meetings
The number of meetings of Directors held during the financial year and the number of meetings attended by
each Director was as follows:
Name
Anthony Kain
Christopher Kain
Neal Cross (appointed 24 March 2022)
Matthew Cahill (resigned 24 March 2022)
4. Principal Activities
Number of meeting
eligible to attend
4
Number of meetings
attended
4
4
2
2
4
2
2
Peppermint Innovation Limited is an Australian company focused on the commercialisation, deployment and
development of the proprietary Peppermint Platform, a white label mobile App banking platform and mobile
App micro enterprise platform that offers payments, remittance, delivery and logistics and ecommerce services
to the Philippines market with the aim of creating financial inclusion for the Filipino people who otherwise
might not have access to these services. Peppermint currently operates the commercially proven and deployed
Peppermint Platform by providing white label mobile App banking platforms to the Philippines banking sector,
and by providing mobile App micro enterprise services via its own “bizmoto” agent network as well as through
other third-party non-bank networks (“bizmoto” meaning “my business” in Filipino).
The bizmoto brand is emerging and Peppermint is firmly focused on its growth through the ongoing
development and deployment across four fundamental business sectors covered by the Peppermint Platform
namely:
• Payments;
• Delivery & Logistics;
• E-Commerce; and
• Financial Services
The Philippines is an attractive market for Peppermint where 70% of its 108 million people are unbanked and
the average age is 24. 90% of the population do not have a credit score and there are approximately 118 mobile
phones for every 100 people. In this market the predominant way of doing business is with cash with an
estimated US$920 Billion in annual payment value across the four business sectors Peppermint is focused on.
Unfortunately, cash is an aging payment form which results in significant cash leakage and locks the cash
buyer out of the rapidly expanding and convenient world of ecommerce and services (which is even more
important in today’s Covid 19 affected world).
The Groups’s mission is to give members of this unsupported Filipino community a “hand up by:
• providing access to financial tools on a digital platform via App on their mobile phone;
•
enabling them to make payments and access services online without use of a bank or credit card;
2022 Annual Financial Report
3
Directors’ Report
Peppermint Innovation Limited
• providing them with a platform to conduct business on a scale they can deal with and earn from; and
• building an alternative path to finance to be accessed and repaid automatically through the App.
The Group has developed and deployed the App and Platform under the brand name “Bizmoto” (meaning “my
business” in Filipino) via which a local Filipino agent or his customer can access eCommerce, delivery and
logistics (where accredited riders are available on-demand), make bill payments, make cash transfers, e-load
mobile phones, or make QR code payments to purchase products, all via the Bizmoto App and connected
Bizmoto wallet on the registered agents mobile phone. In addition, The Group is now working to add micro-
enterprise lending and non-bank financial services to its expanding network of agents and riders which will
provide further impetus for Bizmoto (an ecosystem of services readily scalable and targeted at developing
world countries in the ASEAN region).
Accomplishments and Awards:
• The Group is an established mobile banking app technology provider in the Philippines, already
providing a white-label mobile banking and payments app with a tier-1 major Filipino bank.
• The Group has a long-standing, respected and continuing engagement with the Central Bank of the
Philippines and major regulatory bodies.
• The Group is the chosen technology partner and mobile banking platform provider for the largest
interbank network and single ATM switch operator in the Philippines – Banknet to whose members
The Group is now starting to provide a mobile banking solution.
In 2019 The Group was chosen by a panel of experts in Washington DC as one of the inaugural
“Inclusive Fintech 50” (early-stage Fintech companies that demonstrated the power of financial
technology to expand access, usage and quality of financial services in advanced and emerging
markets) from 600 eligible worldwide (www.inclusivefintech50.com).
•
No significant change in the nature of these activities occurred during the year.
5. Operating and financial review
Overview for the year
Highlights for the year were:
• Electronic Money Issuer ("EMI") licence granted by the Central Bank of the Philippines in one of the
biggest regulatory milestones ever achieved by the Company;
• EMI licence allows e-wallet services to be delivered via the bizmoto mobile App to any Filipino - not
just bizmoto agents;
• EMI licence significantly expands opportunity to reach micro-entrepreneurs and provide digital
payments for their businesses, as well as helping facilitate strategic partnerships with global leaders in
digital payments;
• Launched bizmoPay - an alternative non-bank micro-enterprise loan offering - after being granted a
financial licence by the Philippines Securities Exchange
•
Increased numbers of registered bizmoto agents to 56,605, bizmoGo riders to 672 and Merchants to
747
• Enhanced bizmoTinda website to include multi-vendor customer and multi-vendor merchant
functionality
• Adopted 'community-based' sales and marketing campaign to promote a wider adoption of bizmoto
services and drive the use of the bizmoto ecosystem
•
Improved level of communications via 'news room' blog, social media channels and updated and
optimised company website
• Placed A$5million shares at 2 cents each, with strong support from existing and new investors
2022 Annual Financial Report
4
Directors’ Report
Peppermint Innovation Limited
• Pivoted marketing campaigns for bizmoto and bizmoPay offerings to focus on digital assets due to
ongoing lockdowns and travel restrictions in the Philippines caused by COVID-19
• bizmoto user platform technically refined to allow third parties to empower InstaPay and
PesoNet settlement functionality which are required to cater for planned EMI pilot program;
• Financial education platform being developed to improve financial literacy and wellbeing of
bizmoto agents and local Filipino community;
• Went 'live' with the Bank of Philippines ("BPI") "cash-in" offering via the bizmoto platform;
• Went 'live' with some of the largest and most reliable online payment gateway platforms in the
Philippines - DragonPay and PayMaya - providing bizmoto agents with mobile wallet 'cash-in' or 'top-
up' functionality via DragonPay and PayMaya
•
Integration of "cash-in" offering with Cebuana Lhuillier and ECPay expected to go 'live' soon;
• bizmoto App adopted fully automated Know-Your-Customer and facial recognition software;
• Online loan application process being refined to facilitate continued bizmoPay growth;
• Continued delivering targeted digital and physical marketing campaigns for new products and
new agents throughout the Philippines, resulting in a five per cent increase in the total number
of registered bizmoto agents;
• Peppermint named one of the "Financial Times" 2022 Top 500 Asia-Pacific High-Growth Companies
and
• Removed all convertible note debt from the Company balance sheet.
COVID-19
Beginning in February 2020, governments worldwide issued increasingly stringent orders to contain the spread
of COVID-19, including shelter-in-place orders and travel bans. In response to this travel was ceased for all
employees. The Group however continued to operate at full capacity including enacting necessary precautions
for essential staff attending offices in accordance with local restrictions, which also included some staff
working from home at times.
The COVID-19 pandemic is a new risk to human health and is a concern the Company’s Board takes seriously
and is confident appropriate procedures are in place to navigate the Group through this period.
Shareholder returns
2022
2021
2020
2019
2018
Net loss for the year
Earnings per share (cents)
Net assets / (liabilities)
(3,593,844)
(0.20)
5,091,998
(2,833,209)
(0.20)
2,663,607
Share price
$0.009
$0.016
(1,691,500)
(0.20)
(988,458)
Suspended
from the
ASX
(2,142,786)
(0.20)
(1,119,645)
(1,743,348)
(0.20)
(5,103)
$0.012
$0.025
2022 Annual Financial Report
5
Directors’ Report
Investments for future performance
The main expense item for the Company is its human resources, which have continued to focus on the four
business focuses that have emerged from the Company’s operations and evolution over the last year. They
are:
Peppermint Innovation Limited
1. Payments;
2. Delivery & Logistics;
3. E-Commerce; and
4. Financial Services;
all utilising the Peppermint technology platform.
All areas are expected to grow with continued marketing, agent and merchant sign up and product development
over the year ahead.
Review of financial condition
The Company had $5,574,339 cash at bank as at 30 June 2022.
Significant changes in the state of affairs
There have been no significant changes in the state of affairs of the Group to the date of this report, not
otherwise disclosed in this report.
6. Dividends
No dividends have been paid or declared since the start of the financial year and the Directors do not
recommend the payment of a dividend in respect of the financial year.
7. Significant events after balance date
There has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to
affect significantly the operations of the Group, the results of those operations, or the state of affairs of the
Group, in future financial years.
8. Likely developments
The Group intends to continue to develop its four business divisions via organic growth and strategic
acquisitions.
9. Environmental legislation
The Group’s operations are not regulated by any significant environmental regulations under a law of the
Commonwealth or of a state or territory.
2022 Annual Financial Report
6
Directors’ Report
10. Directors’ interests
As at the date of this report, the interests of the Directors in the Company were:
Peppermint Innovation Limited
Anthony Kain
Christopher Kain
Neal Cross
Number of
fully paid
ordinary
shares
93,991,416
110,325,322
-
Number of
performance
rights
15,000,000
15,000,000
(i)
(i)
The Company has, subject to shareholder approval, agreed to issue 1,500,000 performance rights
to Mr Cross.
11. Share options
The following is a summary of option movements during the period:
Listed/
Unlisted
Expiry
Date
Exercise
Price
Notes
Opening
balance
Issued
Converted
Expired
Closing
Unlisted
31/12/2021
$0.010
20,000,000
- (20,000,000)
-
-
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Listed
Unlisted
Total
18/02/2024
18/02/2024
30/06/2024
30/06/2024
30/06/2024
30/06/2024
30/06/2023
30/03/2025
$0.015
$0.025
$0.020
$0.025
$0.030
$0.040
$0.030
$0.015
(i)
(i)
(i)
(i)
(ii)
(i)
- (20,000,000)
20,000,000
-
20,000,000
2,500,000
-
2,500,000
-
2,500,000
-
-
2,500,000
- 115,764,110
20,000,000
60,000,000 145,764,110
(25,000)
-
(40,025,000)
-
-
-
-
- -
- -
-
-
-
20,000,000
- 2,500,000
2,500,000
2,500,000
2,500,000
- 115,739,110
20,000,000
- 165,739,110
-
Weighted average exercise price
$0.017
$0.028
$0.013
$0.028
(i)
(ii)
Issued to consultants as part of their remuneration
Options attaching to placements, including a short dated bonus option issued to shareholder
Options not exercised by the expiry date will lapse.
The options do not entitle the holder to participate in any share issue of the Company or any other body
corporate.
Since the end of the financial year the Company has not issued any shares as a result of the exercise of options.
12. Performance rights
The following performance rights were issued during the 2022 year:
Grant Date
Vesting Condition
28/2/2022
28/2/2022
28/2/2022
Tranche A: To be awarded when the Company achieves $4m annual revenue
based on audited/reviewed financial reports on or before 30 June 2023
Tranche B: To be awarded when the Company achieves Breakeven as
validated against audited/reviewed financial reports on or before 30 June 2024
Tranche C: To be awarded when the Company achieves $1m net income/profit
as validated against audited/reviewed financial reports on or before 30 June
2025
Number
(i)
18,700,000
18,200,000
18,200,000
2022 Annual Financial Report
7
Directors’ Report
Peppermint Innovation Limited
(i)
The Company has, subject to shareholder approval, agreed to issue 1,500,000 performance rights
to director, Mr Cross.
13. Indemnification and insurance of Directors and Officers
The Company has agreed to indemnify all the directors and executive officers against all liabilities to another
person (other than the Company or related body corporate) that may arise from their position as officers of the
Company and its controlled entities, except where the liability arises out of conduct involving a lack of good
faith. The agreement stipulates that the Company will meet the full amount of any such liabilities, including
costs and expenses.
The Company has also agreed to indemnify the current Directors of its controlled entities for all liabilities to
another person (other than the Company or related body corporate) that may arise from their position, except
where the liability arises out of conduct involving a lack of good faith. The agreement stipulates that the
Company will meet the full amount of any such liabilities, including costs and expenses.
14. Auditor Independence and Non-Audit Services
The auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set
out immediately after this Directors’ Report.
15. Non-Audit Services
The directors are of the opinion that the services as disclosed in Note 19 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
16. Proceedings on Behalf of the Company
There are no proceedings on behalf of the Company under section 237 of the Corporations Act 2001 in the
financial year or at the date of this report.
2022 Annual Financial Report
8
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Peppermint Innovation Limited for the year ended 30 June
2022 I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 30 September 2022
ALASDAIR WHYTE
Partner
Directors’ Report - Remuneration report (audited)
Peppermint Innovation Limited
This remuneration report for the financial year ended 30 June 2022 outlines remuneration arrangements of the
Company and the Group in accordance with the requirements of the Corporations Act 2001 (the Act) and its
regulations. This information has been audited as required by section 308(3C) of the Act.
The remuneration report details the remuneration arrangements for key management personnel (KMP) who
are defined as those persons having authority and responsibility for planning, directing and controlling the
major activities of the Company and the Group, directly or indirectly, including any director (whether
executive or otherwise) of the parent company, and including the executives in the Parent and the Group
receiving the highest remuneration.
Individual key management personnel disclosures
Details of KMPs of the Company and Group are set out below:
Key management personnel
(i) Directors
Mr Anthony Kain
Chairman, Executive Director, Company Secretary, appointed 4
December 2015
Mr Christopher Kain
Managing Director and CEO, appointed 4 December 2015
Mr Matthew Cahill
Non-Executive Director, 4 December 2015 to 24 March 2022
Mr Neal Cross
Non-Executive Director, appointed 24 March 2022
(ii) Executives
None
There have not been any changes to KMP after reporting date and before the financial report was authorised
for issue.
The Remuneration Report is set out under the following main headings:
A.
B.
C.
D.
E.
F.
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Performance Shares of key management personnel
Other transactions and balances with Key Management Personnel
Principles used to determine the nature and amount of remuneration
Remuneration philosophy
The performance of the Group depends upon the quality of its directors and executives. To prosper, the Group
must attract, motivate and retain highly skilled directors and executives.
To this end, the Group embodies the following principles in its compensation framework:
• Provide competitive rewards to attract high calibre executives;
• Link executive rewards to shareholder value; and
• Establish appropriate, demanding performance hurdles in relation to variable executive compensation
Remuneration consists of fixed remuneration and variable remuneration.
Fixed Remuneration
Fixed remuneration is reviewed annually by the Board of Directors. The process consists of a review of relevant
comparative remuneration in the market and internally and, where appropriate, external advice on policies and
practices.
2022 Annual Financial Report
10
Directors’ Report - Remuneration report (audited)
Peppermint Innovation Limited
Variable Remuneration
The Group does not currently have a variable component to the remuneration of the board and management,
however, the Group intends to introduce a variable remuneration plan in the near future.
Remuneration Reviews
The Board of Directors of the Company is responsible for determining and reviewing compensation
arrangements for the directors, the Managing Director and all other key management personnel.
The Board of Directors assesses the appropriateness of the nature and amount of compensation of key
management personnel on a periodic basis by reference to relevant employment market conditions with the
overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and
executive team.
Remuneration structure
In accordance with best practice Corporate Governance, the structure of non-executive director and executive
remuneration is separate and distinct.
Non-executive Director Remuneration
The Board seeks to set aggregate remuneration at a level that provides the Group with the ability to attract and
retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors
shall be determined from time to time by a general meeting. The amount of aggregate remuneration sought to
be approved by shareholders and the manner in which it is apportioned amongst directors is reviewed annually.
The Board considers advice from external shareholders as well as the fees paid to non-executive directors of
comparable companies when undertaking the annual review process.
Non-executive directors receive a fee for being a director of the Company. The compensation of non-executive
directors for the year ended 30 June 2022 is detailed below.
The total maximum remuneration of non-executive directors is initially set by the Constitution and subsequent
variation is by ordinary resolution of Shareholders in general meeting in accordance with the Constitution, the
Corporations Act and the ASX Listing Rules, as applicable. The determination of non-executive directors’
remuneration within that maximum will be made by the Board having regard to the inputs and value to the
Company of the respective contributions of each non-executive Director. This amount has been set at an
amount not to exceed $300,000 per annum.
In addition, a director may be paid fees or other amounts and non-cash performance incentive such as options,
subject to necessary shareholder approval, where a director performs special duties or otherwise performs
services outside the scope of the ordinary duties of a director.
Directors are also entitled to be reimbursed reasonable travelling, hotel and other expenses incurred by them
respectively in or about the performance of their duties as directors.
Senior Manager and Executive Director remuneration
Objective
The entity aims to reward executives with a level and mix of compensation commensurate with their position
and responsibilities within the entity so as to:
•
•
•
•
reward executives for company, business unit and individual performance against targets set to
appropriate benchmarks;
align the interests of executives with those of shareholders;
link rewards with the strategic goals and performance of the Group; and
ensure total compensation is competitive by market standards.
Compensation consists of the following key elements:
•
Fixed Compensation; and
2022 Annual Financial Report
11
Directors’ Report - Remuneration report (audited)
Peppermint Innovation Limited
•
Variable Compensation.
The proportion of fixed compensation and variable compensation (potential short term and long term
incentives) is established for each key management person by the Directors.
Fixed Compensation
Objective
Fixed compensation is reviewed annually by the Directors. The process consists of a review of individual
performance, relevant comparative compensation in the market and internally and, where appropriate, external
advice on policies and practices.
Structure
Executives are given the opportunity to receive their fixed remuneration in a variety of forms including cash
and fringe benefits such as motor vehicles and expense payment plans.
Variable Compensation
Objective
The objective of the Variable Compensation is to reward executives in a manner that aligns this element of
compensation with the creation of shareholder wealth.
Structure
The Company and Group do not currently have a Variable Compensation plan, however, it is intended that
one be established in the near future.
Use of remuneration consultants
The Group did not use the services of remuneration consultants.
Objective of the remuneration committee
The Company did not have a remuneration committee during the year.
Voting and comments made at 2021 Annual General Meeting
All resolutions at the 2021 Annual General Meeting were passed by poll.
Overview of Group performance
The performance of the Group is detailed in the Directors’ Report.
There is no link between remuneration and performance.
2022 Annual Financial Report
12
Directors’ Report - Remuneration report (audited)
Peppermint Innovation Limited
A.
Details of remuneration
Year ended 30 June 2022
Directors
Mr Anthony Kain
Mr Christopher Kain
Mr Matthew Cahill
(retired 24 March 2022)
Mr Neal Cross
(appointed 24 March 2022)
Totals
Salary &
Fees
Non-
monetary
benefits (i)
Post employ-
ment
benefits
Share-
based
payments
(v)
Total
Performance
Related
341,572(ii)
452,816(iii)
18,992
25,056
34,157
42,881
27,154
27,154
421,875
547,907
119,931
150,244
31,759(iv)
1,758
3,017
2,715
39,249 4,365
31,500
1,681
1,750
-
34,931
-
857,647
47,487
81,805
57,023 1,043,962
274,540
Compensation is stated on an accruals basis.
(i) Comprises of directors and officers’ insurance.
(ii) Includes bonuses of $84,343
(iii) Includes bonuses of $111,900
(iv) Includes bonuses of $1,500
(v) Represents an apportionment of the value of the underlying shares from grant date to the expected date of achievement of the
performance hurdle. The actual benefit, if received, may differ materially.
Cash bonuses are dependent on meeting defined performance measures. The amount of the bonus is determined
having regard to the satisfaction of performance measures and weightings as described above in the section
'Consolidated entity performance and link to remuneration'. The maximum bonus values are established at the
start of each financial year and amounts payable are determined in the final month of the financial year by the
Nomination and Remuneration Committee.
Year ended 30 June 2021
Directors
Salary &
Fees
Non-
monetary
benefits (i)
Post employ-
ment
benefits
Share-
based
payments
Total
Performance
Related
Mr Anthony Kain
Mr Christopher Kain
Mr Matthew Cahill
Totals
200,000
265,000
30,000
13,387
17,737
2,008
19,000
25,175
2,850
-
-
-
232,387
307,912
34,858
495,000
33,132
47,025
-
575,157
-
-
-
-
Compensation is stated on an accruals basis.
(i)
Comprises of directors and officers’ insurance.
2022 Annual Financial Report
13
Directors’ Report - Remuneration report (audited)
Peppermint Innovation Limited
B.
Service agreements
Agreements with Executives
The Company entered into employment contracts with Christopher Kain (as Chief Executive Officer /
Managing Director) and Anthony Kain (as General Counsel and Company Secretary).
The material terms of the employment agreements are as follows:
(a) Remuneration:
i.
ii.
Anthony Kain - $221,000 per annum plus statutory superannuation (currently 10%, 10.5%
from 1 July 2022); and
Christopher Kain - $293,000 per annum plus statutory superannuation (currently 10%, 10.5%
from 1 July 2022).
(b) Annual review: performance reviewed on an annual basis with the possibility of a performance and
CPI based remuneration adjustments.
(c) Termination: either party may give the other 12 months’ notice, in which the case the Company may
make a payment in lieu of notice. In the event of misconduct, the Company may terminate employment
without notice.
(d) Standard employment terms and conditions.
Agreements with Non-Executive directors
The Company has entered into director and consultancy services agreements with Mathew Cahill (together
with Digital Data Consulting Pty Ltd, an entity controlled by Mathew Cahill). The material terms of the
agreement are as follows:
(a) Director’s fees: director’s fees at the rate of $30,000 per annum plus superannuation together with:
•
an entitlement to fees or other amounts in relation to special duties or service performed outside
the scope of ordinary employment as a director; and
•
reimbursement for out of pocket expenses incurred as a result of engagement as a director.
(b) Termination: Non-Executive Directors may retire at any time and are subject to re-election at the
annual general meeting of shareholders in accordance with the Company’s policy of at least one third
of the Non-Executive Directors being nominated for re-election each year based on the Company’s
rotation schedule.
The Company has entered into director and consultancy services agreements with Neal Cross (together with
Cross Innovation Pty Ltd, an entity controlled by Neal Cross). The material terms of the agreement are as
follows:
(a) Director’s fees: director’s fees at the rate of $36,000 inclusive of superannuation together with:
•
an entitlement to fees or other amounts in relation to special duties or service performed outside
the scope of ordinary employment as a director; and
•
reimbursement for out of pocket expenses incurred as a result of engagement as a director.
(b) Consulting fees of $7,000 per month, with Cross Innovation Pty Ltd.
(c) Termination: Non-Executive Directors may retire at any time and are subject to re-election at the
annual general meeting of shareholders in accordance with the Company’s policy of at least one third
of the Non-Executive Directors being nominated for re-election each year based on the Company’s
rotation schedule.
2022 Annual Financial Report
14
Directors’ Report - Remuneration report (audited)
Peppermint Innovation Limited
C.
Share-based compensation
Compensation shares, performance rights and options – granted and vested during the financial year
2022
55,100,000 performance rights were granted as compensation during the 2022 year as follows:
Grant
Date
28/2/2022
28/2/2022
28/2/2022
Vesting Condition
Tranche A: To be awarded when the
Company achieves $4m annual revenue
based on audited/reviewed financial reports
on or before 30 June 2023
Tranche B: To be awarded when the
Company achieves Breakeven as validated
against audited/reviewed financial reports on
or before 30 June 2024
Tranche C: To be awarded when the
Company achieves $1m net income/profit as
validated against audited/reviewed financial
reports on or before 30 June 2025
Number
(i)
18,700,000
Assumed
Probability
of
Achievement
100%
Fair value
vesting
over period
205,700
18,200,000
100%
200,200
18,200,000
100%
200,200
(i)
The Company has, subject to shareholder approval, agreed to issue 1,500,000 performance rights
to director, Mr Cross.
55,100,000
606,100
2021
No shares, options nor performance rights were granted as compensation during the 2021 year.
D.
Share holdings of key management personnel
30 June 2022
Directors
Mr Anthony Kain
Mr Christopher Kain
Mr Neal Cross (appointed
24 March 2022)
Mr Matthew Cahill
(retired 24 March 2022)
Totals
30 June 2021
Directors
Mr Anthony Kain
Mr Christopher Kain
Mr Matthew Cahill
Totals
Balance at start
of the financial
year / date of
appointment
93,991,416
110,325,322
-
6,437,768
210,754,506
Balance at start
of the financial
year / date of
appointment
93,991,416
110,325,322
6,437,768
210,754,506
2022 Annual Financial Report
Granted as
remuneration
On exercise of
options
Acquisitions
/(Disposals)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Granted as
remuneration
On exercise of
options
Acquisitions
/(Disposals)
Balance at the
end of financial
year / date of
retirement
93,991,416
110,325,322
-
6,437,768
210,754,506
Balance at the
end of financial
year / date of
retirement
-
-
-
-
-
-
-
-
-
-
-
-
93,991,416
110,325,322
6,437,768
210,754,506
15
Directors’ Report - Remuneration report (audited)
Peppermint Innovation Limited
E.
Performance Rights
30 June 2022
Balance at start
of the financial
year / date of
appointment
Granted as
remuneration
On exercise of
options
Acquisitions
/(Disposals)
Balance at the
end of financial
year / date of
retirement
Directors
Mr Anthony Kain
Mr Christopher Kain
Mr Neal Cross (appointed
24 March 2022)
Mr Matthew Cahill
(retired 24 March 2022)
Totals
-
-
-
-
-
15,000,000
15,000,000
(i)
1,500,000
31,500,000
-
-
-
-
-
-
-
-
-
-
15,000,000
15,000,000
(i)
1,500,000
31,500,000
(ii)
The Company has, subject to shareholder approval, agreed to issue 1,500,000 performance rights
to director, Mr Cross.
F.
Other transactions and balances with Key Management Personnel
In the prior year, unpaid directors’ fees, salaries and superannuation totalling $38,500 were accrued.
Apart from the above items and reimbursements for expenses paid on behalf of the Company and the Group,
director and fees paid directly or indirectly to director related entities, there were no transactions or balances
with KMP during the year ended 30 June 2022 (2021: Nil).
END OF THE REMUNERATION REPORT
Signed in accordance with a resolution of the Directors:
Christopher Kain
Managing Director
Perth, 30 September 2022
2022 Annual Financial Report
16
STATEMENT OF PROFIT AND LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
Revenue
Cost of sales
Gross profit
Other income
Administration expenses
Finance costs
Share based payment expense
(Loss) before income tax
Income tax expense
(Loss) for the year
Other comprehensive (loss)
Items that may be reclassified to profit or loss:
- Nil
Note
4
4
4
4
5(a)
Consolidated
2022
$
2021
$
1,312,760 1,938,359
(1,246,013) (1,758,987)
179,372
66,747
1,863
(3,189,765)
(154,341)
37,602
(2,006,650)
(982,947)
(318,348) (60,586)
(3,593,844)
(2,833,209)
6
-
-
(3,593,844)
(2,833,209)
-
-
-
-
Total comprehensive (loss) for the year
(3,593,844)
(2,833,209)
(Loss) for the year attributable to members of the parent
entity
Total comprehensive (loss) for the year attributable to
members
(3,593,844)
(2,833,209)
(3,593,844)
(2,833,209)
Basic and diluted loss per share (cents per share)
3
(0.20)
(0.20)
The accompanying notes form part of these financial statements
2022 Annual Financial Report
17
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
Peppermint Innovation Limited
CURRENT ASSETS
Cash and cash equivalents
Other financial assets - restricted cash
Trade and other receivables
Other assets
Total Current Assets
NON-CURRENT ASSETS
Other non-current assets
Total Non-Current Assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
Financial liabilities
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Accumulated losses
Reserves
TOTAL EQUITY
Note
7
7
8
Consolidated
2022
$
2021
$
5,574,339 3,112,411
336,829
92,317
55,113
3,596,670
-
178,097
39,079
5,791,515
28,219
28,219
-
-
5,819,734
3,596,670
418,444
309,292
-
727,736
353,799
188,563
390,701
933,063
727,736
933,063
5,091,998
2,663,607
25,410,671
(21,034,021)
715,348
19,913,784
(17,702,715)
452,538
5,091,998
2,663,607
9
10
11
12
The accompanying notes form part of these financial statements
2022 Annual Financial Report
18
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
Cash flows from Operating Activities
Receipts from customers
Payments to suppliers and employees
Government grants
Interest received
Finance costs paid
Net cash (used in) operating activities
Cash Flows from Investing Activities
Application for finance licence
Refund of other financial assets - restricted cash
Net cash provided / (used in) by investing activities
Cash Flows from Financing Activities
Issue of shares
Share issue expenses
Proceeds from borrowings
Loan repayments
Net cash provided by financing activities
Net increase in cash held
Cash at the beginning of the financial year
Cash at the end of the financial year
Note
Consolidated
2022
$
2021
$
1,234,049
(4,269,658)
-
1,863
(1,014)
7(b)
(3,034,760)
2,021,165
(3,958,823)
80,368
102
(12,607)
(1,869,795)
-
336,829
336,829
(336,829)
-
(336,829)
12
11
7(a)
5,549,366
(352,307)
-
(37,200)
5,159,859
5,270,000
(212,391)
-
-
5,057,609
2,461,928
3,112,411
5,574,339
2,850,985
261,426
3,112,411
The accompanying notes form part of these financial statements
2022 Annual Financial Report
19
Peppermint Innovation Limited
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
Note Issued Capital Convertible
Note Reserve
$
$
Share Based
Payment
Reserve
$
Accumulated
Losses
Total
$
$
Balance at 1 July 2021
19,913,784
262,538
190,000
(17,702,715)
2,663,607
Loss for the year
Total comprehensive loss for the
year
Transactions with owners in their
capacity as owners
Shares issued
Shares issued from the conversion
of short-dated options
Shares issued upon options
exercised
Share and convertible note issue
expenses
Conversion of convertible notes
Convertible note reserve recycled
to accumulated losses on shares
being issued
Issue of performance rights
Issue of options
Balance at 30 June 2022
12
12
12
12
11
11
-
-
5,000,000
48,616
500,750
(559,307)
506,828
-
-
-
25,410,671
-
-
-
-
-
-
-
-
-
-
-
207,000
(3,593,844)
(3,593,844)
(3,593,844)
(3,593,844)
-
-
-
-
5,000,000
48,616
500,750
(352,307)
506,828
-
-
(262,538)
-
-
-
262,538
-
-
-
100,217
218,131
715,348
-
-
(21,034,021)
100,217
218,131
5,091,998
Issued Capital Convertible
Note Reserve
$
$
Share Based
Payment
Reserve
$
Accumulated
Losses
Total
$
$
Balance at 1 July 2020
13,679,095
1,001,343
284,000
(15,952,896)
(988,458)
Loss for the year
Total comprehensive loss for the
year
Transactions with owners in their
capacity as owners
Shares issued
Shares issued upon options
exercised
Share and convertible note issue
expenses
Conversion of convertible notes
Convertible note reserve recycled
to accumulated losses on shares
being issued
Share based payment reserve
recycled to accumulated losses on
expiry of options
Cancellation of options
Balance at 30 June 2021
-
-
3,405,000
1,865,000
(402,391)
1,367,080
-
-
-
-
-
-
-
-
(738,805)
-
-
-
-
190,000
-
-
(2,833,209)
(2,833,209)
(2,833,209)
(2,833,209)
-
-
-
-
3,405,000
1,865,000
(212,391)
1,367,080
738,805
-
-
-
(284,000)
284,000
-
19,913,784
-
262,538
-
190,000
60,585
(17,702,715)
60,585
2,663,607
The accompanying notes form part of these financial statements
2022 Annual Financial Report
20
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Peppermint Innovation Limited (the Company) is an Australian company incorporated on 24 July 2014. On 4
December 2015, the Company listed on the Australian Securities Exchange.
The principal activities of the Group (the Company and its controlled entities) were the development and
commercialisation of its mobile banking, payment and remittance platform.
(a)
Basis of Preparation
Statement of compliance
The financial report is a general-purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and Interpretations, and as
appropriate for profit oriented entities.
Accounting Standards include Australian Accounting Standards (AASBs). Compliance with Australian
Accounting Standards ensures that the financial statements and notes comply with International Financial
Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB).
The financial statements were authorised for issue by the directors on 30 September 2022.
Basis of measurement
The financial report has also been prepared under the historical cost convention.
Functional and presentation currency
The financial report is presented in Australian dollars, which is the Company’s functional currency.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Peppermint
Innovation Limited ('Company' or 'parent entity') as at 30 June 2022 and the results of all subsidiaries for the
year then ended. Peppermint Innovation Limited and its subsidiaries together are referred to in these financial
statements as the Group.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability
to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the Group. They are de-consolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment
of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
The acquisition of 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.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit
or loss and other comprehensive income, statement of financial position and statement of changes in equity of
the Group. Losses incurred by the Group are attributed to the non-controlling interest in full, even if that results
in a deficit balance.
2022 Annual Financial Report
21
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
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.
(b)
New or amended Accounting Standards and Interpretations adopted
New standards and interpretations adopted
The Group has 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.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
(c)
Statement of Compliance
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial
report, comprising the financial statements and notes thereto, complies with International Financial Reporting
Standards (IFRS).
(d)
Critical accounting judgements and key sources of estimation uncertainty
The application of accounting policies requires the use of judgements, estimates and assumptions about
carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
Share-based payment transactions:
The Group measures the cost of equity-settled share-based payments at fair value at the grant date using an
option pricing model, taking into account the terms and conditions upon which the instruments were granted.
The fair value is determined by a valuation using a Black Scholes or Trinomial Option Pricing Model.
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.
(e)
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
2022 Annual Financial Report
22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
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 initially recognised as deferred revenue in the form of a separate refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the
goods, which is generally at the time of delivery.
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered based on
either a fixed price or an hourly rate.
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.
(f)
Cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash
equivalents as defined above.
(g)
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.
(h)
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as
part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are
subsequently measured at either amortised cost or fair value depending on their classification. Classification
is determined based on both the business model within which such assets are held and the contractual cash
flow characteristics of the financial asset unless, an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred
and the Group has transferred substantially all the risks and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset, it's carrying value is written off.
2022 Annual Financial Report
23
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are
classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either:
(i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of
making a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value
movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the Group
intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial
recognition.
Derivatives
A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from
the host and accounted for as a separate derivative if: the economic characteristics and risks are not closely
related to the host; a separate instrument with the same terms as the embedded derivative would meet the
definition of a derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded
derivatives are measured at fair value with changes in fair value recognised in profit or loss. Reassessment
only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows
that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or
loss category.
A derivative embedded within a hybrid contract containing a financial asset host is not accounted for
separately. The financial asset host together with the embedded derivative is required to be classified in its
entirety as a financial asset at fair value through profit or loss.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either measured
at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance
depends upon the Group's assessment at the end of each reporting period as to whether the financial
instrument's credit risk has increased significantly since initial recognition, based on reasonable and
supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month
expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit
losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset
has become credit impaired or where it is determined that credit risk has increased significantly, the loss
allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised
is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life
of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in profit or
loss.
(i)
Intangible assets
Research and development costs
Research costs are expensed as incurred. An intangible asset arising from development expenditure on an
internal project is recognised only when the Group can demonstrate the technical feasibility of completing the
intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell
the asset, how the asset will generate future economic benefits, the availability of resources to complete the
development and the ability to measure reliably the expenditure attributable to the intangible asset during its
development. Following the initial recognition of the development expenditure, the cost model is applied
requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses.
2022 Annual Financial Report
24
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
Any expenditure so capitalised is amortised over the period of expected benefit from the related project on a
straight line basis.
The carrying value of an intangible asset arising from development expenditure is tested for impairment
annually when the asset is not yet available for use, or more frequently when an indication of impairment arises
during the reporting period.
Licences
Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any
accumulated impairment losses. Internally generated intangible assets, excluding capitalised development
costs, are not capitalised and expenditure is charged against profit or loss in the year in which the expenditure
is incurred.
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite
lives are amortised over the useful life on a straight line basis and assessed for impairment whenever there is
an indication that the intangible asset may be impaired. The amortisation period and the amortisation method
for an intangible asset with a finite useful life is reviewed at least at each financial year-end. Changes in the
expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset
are accounted for by changing the amortisation period or method, as appropriate, which is a change in
accounting estimate. The amortisation expense on intangible assets with finite lives is recognised in profit or
loss in the expense category consistent with the function of the intangible asset.
Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the
cash-generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an
indefinite life is reviewed each reporting period to determine whether indefinite life assessment continues to
be supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for as a
change in an accounting estimate and is thus accounted for on a prospective basis.
Disposals
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the
net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset
is de-recognised.
(j)
Income tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted by reporting date.
Deferred income tax is provided on all temporary differences at reporting date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill or of 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 profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled
and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused
tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against
2022 Annual Financial Report
25
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses
can be utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
• when the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is
probable that the temporary difference will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same
taxable entity and the same taxation authority.
(k)
Other taxes
Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (‘GST’) except:
• when the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part
of the expense item as applicable; and
receivables and payables, which are stated with the amount of GST included.
•
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the Statement of Financial Position.
Cash flows are included in the Consolidated Statement of Cash Flows on a gross basis and the GST component
of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the
taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(l)
Impairment of assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate
of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell
and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or groups of assets and the asset's value in use cannot
be estimated to be close to its fair value.
2022 Annual Financial Report
26
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
An assessment is also made at each reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such indication exists, the
recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a
change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was
recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That
increased amount cannot exceed the carrying amount that would have been determined, net of depreciation,
had no impairment loss been recognised for the asset in prior years.
Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the
reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future
periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its
remaining useful life.
(m) Contract liabilities
Contract liabilities 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. The liability is the Group's obligation to transfer goods or
services to a customer from which it has received consideration.
(n)
Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received less directly
attributable transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently
measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or
loss when the liabilities are de-recognised.
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost or fair value. Any difference between the proceeds (net of transaction costs) and
the redemption amount is recognised in profit or loss over the period of the borrowings using the effective
interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan
to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is
deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of
the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over
the period of the facility to which it relates.
General and specific borrowing costs that are directly attributable to the acquisition, construction or production
of a qualifying asset are capitalised during the period of time that is required to prepare the asset for its intended
use or sale. Qualifying assets are assets that necessarily take a substantial period to get ready for their intended
use or sale. Borrowing costs cease to be capitalised upon the earlier of extinguishment of the liability or the
commencement of commercial production from the qualifying asset.
Borrowings are removed from the statement of financial position when the obligation specified in the contract
is discharged, cancelled or expired. Where the terms of a financial liability are renegotiated and the entity
issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or
loss is recognised in profit or loss, which is measured as the difference between the carrying amount of the
financial liability and the fair value of the equity instruments issued.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement
of the liability for at least 12 months after the reporting date.
2022 Annual Financial Report
27
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
(o)
Provisions
Peppermint Innovation Limited
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract,
the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The
expense relating to any provision is presented in the statement of profit and loss and other comprehensive
income net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as a finance
cost.
Employee Benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating long
service leave are recognised in other payables in respect of employees’ services up to the reporting date. They
are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-
accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.
(p)
Share-based payment transactions
The Group provides benefits to employees (including senior executives) and consultants of the Group in the
form of share-based payments, whereby employees and consultants render services in exchange for shares or
rights over shares (equity-settled transactions).
The cost of these equity-settled transactions with employees and consultants are measured by reference to the
fair value of the equity instruments at the date at which they are granted. The fair value is determined by an
internal valuation using an option pricing model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions
linked to the price of the shares of the Group (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance and/or service conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number
of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance
conditions being met as the effect of these conditions is included in the determination of fair value at grant
date. The statement of comprehensive income charge or credit for a period represents the movement in
cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition. If the terms of an equity-settled award are modified, as a minimum an
expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any
modification that increases the total fair value of the share-based payment arrangement, or is otherwise
beneficial to the employee, as measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any
expense not yet recognised for the award is recognised immediately. However, if a new award is substituted
for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and
2022 Annual Financial Report
28
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
new award are treated as if they were a modification of the original award, as described in the previous
paragraph.
(q)
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.
(r)
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.
(s)
Foreign currency translation
The financial statements are presented in Australian dollars, which is Peppermint Innovation Limited's
functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions
and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in profit or loss.
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.
(t)
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to
match them with the costs that they are intended to compensate.
(u)
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.
2022 Annual Financial Report
29
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
(v)
Inventories
Peppermint Innovation Limited
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on
a 'first in first out' basis. Cost comprises of direct materials and delivery costs, direct labour, import duties and
other taxes, an appropriate proportion of variable and fixed overhead expenditure based on normal operating
capacity, and, where applicable, transfers from cash flow hedging reserves in equity. Costs of purchased
inventory are determined after deducting rebates and discounts received or receivable.
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery
costs, net of rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
(w)
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 (excluding land) over their expected useful lives as follows:
Plant and equipment:
3-7 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. Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained
profits.
(x)
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.
(y)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial
year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
2022 Annual Financial Report
30
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
(z)
Lease liabilities
Peppermint Innovation Limited
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.
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.
(aa)
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.
(bb) 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.
(cc)
Employee benefits
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
(dd) Fair value of assets and liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis,
depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an
orderly (ie unforced) transaction between independent, knowledgeable and willing market participants at the
measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used
to determine fair value. Adjustments to market values may be made having regard to the characteristics of the
specific asset or liability. The fair values of assets and liabilities that are not traded in an active market are
determined using one or more valuation techniques.
These valuation techniques maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability
(ie the market with the greatest volume and level of activity for the asset or liability) or, in the absence of such
a market, the most advantageous market available to the entity at the end of the reporting period (ie the market
that maximises the receipts from the sale of the asset or minimises the payments made to transfer the liability,
after taking into account transaction costs and transport costs).
2022 Annual Financial Report
31
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
For non-financial assets, the fair value measurement also takes into account a market participant's ability to
use the asset in its highest and best use or to sell it to another market participant that would use the asset in its
highest and best use.
The fair value of liabilities and the entity's own equity instruments (excluding those related to share-based
payment arrangements) may be valued, where there is no observable market price in relation to the transfer of
such financial instruments, by reference to observable market information where such instruments are held as
assets. Where this information is not available, other valuation techniques are adopted and, where significant,
are detailed in the respective note to the financial statements.
Valuation techniques
In the absence of an active market for an identical asset or liability, the Group selects and uses one or more
valuation techniques to measure the fair value of the asset or liability, The Group selects a valuation technique
that is appropriate in the circumstances and for which sufficient data is available to measure fair value. The
availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or
liability being measured.
(ee)
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of the Company,
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.
2.
SEGMENT REPORTING
The Group operates predominantly in the mobile banking, payment and remittance industry. For management
purposes, the Group is organised into business units based on its services and has three reportable segments,
as follows:
• mobile banking and payment services, presently operating in the Philippines;
•
•
international remittances, recently established from Australia; and
corporate and head office.
No operating segments have been aggregated to form the above reportable operating segments.
Management monitors the operating results of its business units separately for the purpose of making decisions
about resource allocation and performance assessment. Segment performance is evaluated based on profit or
loss and is measured consistently with profit or loss in the consolidated financial statements.
Also, the Group’s financing (including finance costs and finance income) and income taxes are managed on a
Group basis and are not allocated to operating segments.
Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions
with third parties.
2022 Annual Financial Report
32
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
Year Ended 30 June
2022
Revenue
External customers
Inter-segment
Total revenue
Income/(expenses)
Depreciation and
amortisation
Mobile
Banking and
Payment
Services
1,312,760
-
1,312,760
-
International
Remittance
Head Office
Total
Segments
Consolidated
Adjustments
and
Eliminations
-
-
-
-
-
-
-
-
1,312,760
-
1,312,760
-
-
-
-
-
1,312,760
-
1,312,760
-
Segment profit
Total assets
Total liabilities
(540,621) (2,189) (3,051,034) (3,593,844) - (3,593,844)
8,753,034 (2,933,300) 5,819,734
286,344
727,736
2,367,255 605,026 724,648 3,696,928 (2,933,300)
1 8,466,689
Year Ended 30 June
2021
Revenue
External customers
Inter-segment
Total revenue
Income/(expenses)
Depreciation and
amortisation
Segment profit
Total assets
Total liabilities
Mobile
Banking and
Payment
Services
1,938,359
-
1,938,359
-
International
Remittance
Head Office
Total
Segments
Consolidated
Adjustments
and
Eliminations
-
-
-
-
-
-
-
1,938,359
-
1,938,359
2,581
2,581
-
-
-
-
1,938,359
-
1,938,359
2,581
(379,189)
186,155 7,690 5,762,827
1,939,312 610,526
(1,247) (2,452,773) (2,833,209) - (2,833,209)
5,956,672 (2,360,002) 3,596,670
933,063
743,227 3,293,065 (2,360,002)
Inter-segment revenues are eliminated upon consolidation and reflected in the ‘adjustments and eliminations’
column. All other adjustments and eliminations are part of detailed reconciliations presented further below.
Adjustments and eliminations
Finance income and costs, and fair value gains and losses on financial assets are not allocated to individual
segments as the underlying instruments are managed on a group basis. Current taxes and certain financial
assets and liabilities are not allocated to those segments as they are also managed on a group basis. Inter-
segment revenues are eliminated on consolidation.
Sales to customers which represent over 10% of revenue, all within the Mobile Banking and Payment Services
segment, were as follow:
Customer 1
Customer 2
Customer 3
2022
$
2021
$
472,081
448,550
187,490
948,943
-
541,732
2022 Annual Financial Report
33
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Geographical information
Peppermint Innovation Limited
Australia
Philipines
Sales to external
customers
2022
$’000
2021
$’000
Geographical non-
current assets
2022
$’000
2021
$’000
-
-
1,312,760
1,938,359
1,312,760
1,938,359
-
28,219
28,219
-
-
-
The geographical non-current assets above are exclusive of, where applicable, financial instruments, deferred
tax assets, post-employment benefits assets and rights under insurance contracts.
3.
LOSS PER SHARE
2022
$
2021
$
Basic and diluted loss per share (cents per share)
(0.20)
(0.20)
The loss and weighted average number of ordinary shares used in the calculation of basic earnings per share
is as follows:
Loss for the year
(3,593,844)
(2,833,209)
Weighted average number of shares outstanding during the year used in the
calculations of basic loss per share:
1,869,058,778
1,254,272,043
There is no dilution of shares due to options as the potential ordinary shares are not dilutive and are therefore
not included in the calculation of diluted loss per share.
2022 Annual Financial Report
34
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
4.
RESULT FOR THE YEAR
Revenue from contracts with customers
Transaction revenue – Ecommerce revenue
Project revenue
Other income
Government grants
Interest income
Peppermint Innovation Limited
2022
$
2021
$
1,303,615
9,145
1,312,760
1,873,122
65,237
1,938,359
-
1,863
1,863
37,500
102
37,602
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
30 June 2022
Major product lines
ELoad sales
Software development services
System usage fees and commissions
Timing of revenue recognition
Goods transferred at a point in time
Services transferred at a point in time
Services transferred over time
International
Remittance
Total
Mobile
Banking
and
Payment
Services
1,267,981
9,145
35,634
1,312,760
-
-
-
-
1,267,981
9,145
35,634
1,938,359
1,267,981
35,634
9,145
1,312,760
-
-
-
-
1,267,981
35,634
9,145
1,938,359
2022 Annual Financial Report
35
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
30 June 2021
Major product lines
ELoad sales
Software development services
System usage fees and commissions
Timing of revenue recognition
Goods transferred at a point in time
Services transferred at a point in time
Services transferred over time
Administration costs
Audit fees
Expected credit loss
Consulting fees
Depreciation and amortisation
Directors' fees and consulting remuneration
Employee expenses
Insurance
Investor relations
Legal fees
Rent
Share registry fees
Stock exchange fees
Sundry expenses
Travel
Finance costs
Notional and accrued interest on convertible notes
Other
Finance costs includes all interest-related expenses.
Mobile Banking
and Payment
Services
International
Remittance
Total
1,854,144
65,237
18,978
1,312,760
-
-
-
-
1,854,144
65,237
18,978
1,938,359
1,854,144
18,978
65,237
1,312,760
-
-
-
-
1,854,144
18,978
65,237
1,938,359
2022
$
2021
$
53,833
57,858
-
17,640
150,636
345,122
2,581
275
450,475
939,452
558,199
830,089
47,466
33,132
311,821 124,052
154,417
56,920
31,088
35,930
352,312
3,076
2,006,650
84,386
64,748
21,998
78,485
390,425
-
3,189,765
2022
$
2021
$
153,327
1,014
970,340
12,607
154,341
982,947
2022 Annual Financial Report
36
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
5.
SHARE BASED PAYMENTS
(a) Options Issued
2022:
The following options were issued during the year:
Number
2,500,000
Grant Date Exercise Price Expiry Date
30 Jun 2024
$0.02
1 Nov 2021
Peppermint Innovation Limited
Comments
2,500,000
1 Nov 2021
$0.025
30 Jun 2024
Granted to a consultant as part of their remuneration
2,500,000
1 Nov 2021
2,500,000
1 Nov 2021
85,764,110
Dec 2021
30,000,000
25 Nov 2021
$0.03
$0.04
$0.03
$0.03
30 Jun 2024
30 Jun 2024
30 Jun 2023
30 Jun 2023
Attaching options to placements
Broker options
20,000,000
29 Mar 2022
$0.015
30 Mar 2025 Granted to a consultant as part of their remuneration
145,764,110
A share based payment expense of $318,348 has been recognised.
2021:
15,000,000 options exercisable at $0.01 on or before 31 March 2021 were granted to the former holder of a
convertible note, and 20,000,000 options exercisable at $0.015 on or before 18 February 2024 and 20,000,000
options exercisable at $0.025 on or before 18 February 2024 which were issued to the broker who arranged a
placement of 250,000,000 shares at $0.01 per share. A share based payment expense of $60,586 has been
recognised.
(b) Performance Rights Issued
The following performance rights were issued during the 2022 year:
Grant Date
Vesting Condition
28/2/2022
28/2/2022
28/2/2022
Tranche A: To be awarded when the Company achieves $4m annual revenue
based on audited/reviewed financial reports on or before 30 June 2023
Tranche B: To be awarded when the Company achieves Breakeven as
validated against audited/reviewed financial reports on or before 30 June 2024
Tranche C: To be awarded when the Company achieves $1m net income/profit
as validated against audited/reviewed financial reports on or before 30 June
2025
Number
(i)
18,700,000
18,200,000
18,200,000
55,100,000
(i)
The Company has, subject to shareholder approval, agreed to issue 1,500,000 performance rights
to director, Mr Cross.
No performance rights were issued during the 2021 year.
6.
INCOME TAX
(a)
Income tax recognised in profit/loss
No income tax is payable by the Company as it recorded a loss for income tax purposes for the period.
(b)
Numerical reconciliation between income tax expense and the loss before income tax
The prima facie income tax expense on pre-tax accounting loss from operations reconciles to the income tax
expense in the financial statements as follows:
2022 Annual Financial Report
2022
2021
37
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Accounting loss before tax
Income tax benefit at 25% (2021: 25%)
Unrecognised tax losses
Income tax expense
(c)
Unrecognised deferred tax balances
Tax losses at 25% (2021: 25%)
Deferred tax asset not booked
Accrued liabilities
Provision for annual and long service leave
Prepayments
Blackhole deductions
Net unrecognised deferred tax assets at 25% (2021: 25%)
Peppermint Innovation Limited
$
(3,593,844)
898,461
(898,461)
-
$
(2,833,209)
708,302
(708,302)
-
2022
$
(3,573,193)
2021
$
(2,725,511)
(30,535)
(77,323)
751
-
(3,680,300)
(17,224)
(47,141)
751
(25,554)
(2,814,679)
A deferred tax asset attributable to income tax losses has not been recognised at balance date as the probability
criteria disclosed in Note 1(j) is not satisfied and such benefit will only be available if the conditions of
deductibility also disclosed in Note 1(j) are satisfied.
The Group has $14,292,774 (2021: $11,007,284) tax losses arising in Australia and that are available
indefinitely for offset against future profit of the Group in which the losses arose.
7.
CASH AND CASH EQUIVALENTS AND OTHER FINANCIAL ASSETS
Cash at bank
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Other financial assets - restricted cash
2022
$
5,574,339
2021
$
3,112,411
5,574,339
3,112,411
2022
$
-
-
2021
$
336,829
336,829
Restricted cash comprises of a deposit paid for the application of a finance licence. Upon grant of the licence
the cash became available for use in the business.
(a)
Reconciliation to the Statement of Cash Flows
For the purposes of the statement of cash flows, cash and cash equivalents comprise cash on hand and at bank.
Cash and cash equivalents as shown in the statement of cash flows are reconciled to the related items in the
balance sheet as follows:
Cash and cash equivalents
2022 Annual Financial Report
2022
$
2021
$
5,574,339
3,112,411
38
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
(b)
Reconciliation of loss after income tax to net cash flows from operating activities:
Loss for the year
Adjustments:
-
Interest accrued on convertible notes
- Depreciation / assets written off
- Share based payment
Changes in operating assets and liabilities:
- Decrease (Increase) in trade and other receivables
- Decrease (Increase) in inventory
-
-
Increase (decrease) in trade and other payables
Increase in provisions
Net cash used in operating activities
(c)
Non-cash financing activities:
2022
$
2021
$
(3,593,844)
(2,833,209)
153,327
970,340
(28,219)
2,580
318,348
60,586
(85,780)
32,574
16,034
(3,502)
64,645 (134,990)
120,729
35,826
(3,034,760)
(1,869,795)
Shares with a value of $506,828 (2021: $1,367,080) were issued from the conversion of convertible notes
reducing financial liabilities by the same amount.
8.
TRADE AND OTHER RECEIVABLES – current
Current:
Trade receivables
Loans receivable
Allowance for expected credit losses
Other receivables
2022
$
2021
$
39,984
25,321
(17,640)
26,931
-
-
47,665
130,432
26,931
65,386
178,097
92,317
2022 Annual Financial Report
39
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
Allowance for expected credit losses
The Group has recognised a loss of $17,640 (2021: Nil) in profit or loss in respect of the expected credit losses
for the year ended 30 June 2022.
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Carrying amount
Allowance for expected credit
losses
2021
$
2022
$
2021
$
Expected credit
loss rate
2022
%
-
16%
100%
100%
2021
%
-
-
-
-
Not overdue
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
2022
$
2,812
11,646
9,654
23,553
47,665
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Closing balance
9.
TRADE AND OTHER PAYABLES – current
6,459
11,541
1,586
7,345
26,931
-
969
2,135
14,536
17,640
2022
$
-
17,640
17,640
2022
$
-
-
-
-
-
2021
$
-
-
-
2021
$
Sundry payables and accrued expenses
418,444
353,799
10.
PROVISIONS – current
Unused annual and long service leave
11.
FINANCIAL LIABILITIES
Current
Convertible notes and accrued interest
2022
$
2021
$
309,292
188,563
2022
$
-
-
2021
$
390,701
390,701
2022 Annual Financial Report
40
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
Financial liability balance at beginning of the year
Less: Value of shares issued
Less: notes repaid
Add: Accrued finance costs
Financial liability balance at year-end
2022
$
2021
$
390,701
(506,828)
(37,200)
153,327
-
787,441
(1,367,080)
-
970,340
390,701
The convertible notes have a face value of $1,673,358 maturity of 30 April 2022, bear interest of 12% interest
per annum from the date of receipt of funds unless redeemed or converted earlier, are unsecured, and are
convertible into fully paid ordinary shares at $0.01 per share. The facility has been fully drawn.
The value of conversion rights on convertible notes of $262,538 was recognised in the convertible note reserve
(see Note 13) and is amortised as notional interest over the term of the convertible notes.
Original convertible note:
The convertible notes originally had a maturity date of 30 April 2020, or as the parties otherwise agree in
writing, bear 12% interest per annum from the date of receipt of funds unless redeemed or converted earlier,
and are convertible into fully paid ordinary shares at 2.5 cps ($0.025).
The convertible notes provided the holder with 20 unlisted options with an exercise price of $0.014 on or
before 20 May 2021 for every dollar drawn under the convertible note facility.
The convertible notes were secured by the Company’s 100% owned subsidiary Zambian Copper Pty Ltd,
which held the Company’s mineral exploration project in Zambia.
The $1,500,000 convertible note facility replaced an earlier facility of $250,000 maturing on 21 December
2019 (see Note 11(b)(ii)) by increasing the convertible note face value to $1,500,000 and extending the
maturity date to 30 April 2020.
12.
ISSUED CAPITAL
Paid up capital – ordinary shares
Capital raising costs
2022
$
27,154,006
(1,743,335)
25,410,671
2021
$
21,097,813
(1,184,029)
19,913,784
2022 Annual Financial Report
41
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
(a)
Ordinary shares
30 June 2021 movements in issued capital:
Balance at 1 July 2021
Issue of shares at $0.02 per share
Issue of shares at $0.02 per share from the exercise of short dated options
Exercise of options at $0.01 per share
Exercise of options at $0.015 per share
Exercise of options at $0.03 per share
Conversion of convertible note (see Note 11)
Costs relating to issue of shares
Cost of options issued to the broker who arranged the issue of shares
Balance at 30 June 2022
(b)
Performance rights
The following performance rights were issued during the 2022 year:
Vesting Condition
Number
Number of
shares
$
1,694,712,508
250,000,000
19,913,784
5,000,000
2,430,794
20,000,000
20,000,000
25,000
50,682,760
-
-
48,616
200,000
300,000
750
506,828
(352,307)
(207,000)
2,037,851,062
25,410,671
Assumed
Probability of
Achievement
100%
Fair value
vesting over
period
205,700
18,700,000
Tranche A: To be awarded when the
Company achieves $4m annual revenue
based on audited/reviewed financial reports
on or before 30 June 2023
Tranche B: To be awarded when the
Company achieves Breakeven as validated
against audited/reviewed financial reports on
or before 30 June 2024
Tranche C: To be awarded when the
Company achieves $1m net income/profit as
validated against audited/reviewed financial
reports on or before 30 June 2025
18,200,000
100%
200,200
18,200,000
100%
200,200
55,100,000
606,100
Grant
Date
28/2/2022
28/2/2022
28/2/2022
The Company has, subject to shareholder approval, agreed to issue 1,500,000 performance rights to director,
Mr Cross.
2022 Annual Financial Report
42
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
(c)
Options
2022:
The following is a summary of option movements during the period:
Listed/
Unlisted
Expiry
Date
Exercise
Price
Notes
Opening
balance
Issued
Converted
Expired
Closing
Unlisted
31/12/2021
$0.010
20,000,000
- (20,000,000)
-
-
Unlisted
Unlisted
Unlisted
Unlisted
18/02/2024
18/02/2024
30/06/2024
30/06/2024
$0.015
$0.025
$0.020
$0.025
Unlisted
30/06/2024
$0.030
Unlisted
30/06/2024
$0.040
Listed
Unlisted
Total
30/06/2023
30/03/2025
$0.030
$0.015
(i)
(i)
(i)
(i)
(ii)
(i)
20,000,000
20,000,000
-
-
- (20,000,000)
-
2,500,000
2,500,000
-
-
-
-
-
20,000,000
- 2,500,000
2,500,000
-
-
2,500,000
- -
2,500,000
-
2,500,000
- -
2,500,000
- 115,764,110
20,000,000
60,000,000 145,764,110
-
(25,000)
-
(40,025,000)
- 115,739,110
20,000,000
-
- 165,739,110
Weighted average exercise price
$0.017
$0.028
$0.013
$0.028
(i)
(ii)
Issued to consultants as part of their remuneration.
Options attaching to placements and an entitlement issue, including 30,000,000 options issued to a broker as part of
their compensation for raising capital for the Company.
Options are valued using a Trinomial Lattice Option Pricing Model or Black-Scholes Option Pricing Model .
The following table lists the assumptions to the model used to value options issued.
Number
Grant Date
2,500,000
2,500,000
2,500,000
2,500,000
1 Nov 2021
1 Nov 2021
1 Nov 2021
1 Nov 2021
30,000,000
25 Nov 2021
Exercise
Price
$0.02
$0.025
$0.03
$0.04
$0.03
20,000,000
29 Mar 2022
$0.015
Assumed
Stock Price
at Grant
Date
$0.018
$0.018
$0.018
$0.018
$0.02
$0.014
60,000,000
2021:
The following options were issued during the period:
Issue Price
Interest
Rate
Volatility
Value Per
Option
nil
nil
nil
nil
nil
nil
0.98%
0.98%
0.98%
0.98%
0.55%
2.11%
80%
80%
80%
80%
100%
100%
$0.0084
$0.0074
$0.0065
$0.0053
$0.0069
$0.0075
Number
Grant Date
15,000,000
1 Jul 2020
Exercise
Price
$0.01
40,500,000
19 Aug 2020
50,000,000
15 Dec 2020
$0.01
$0.01
20,000,000
18 Feb 2021
$0.015
20,000,000 18 Feb 2021
$0.025
Expiry Date
Comments
31 Mar 2021 Granted to the former holder of a convertible note, and
cancelled during the period.
31 Mar 2021 Approved by shareholders on 25 January 2021.
31 Dec 2021 The grant of 15,000,000 options was approved by
shareholders on 25 January 2021 and 35,000,000 was
without shareholder approval.
18 Feb 2024 Approved by shareholders on 25 January 2021.
Issued as part of the fee of a broker who arranged
funding of $2.5m, being 250m shares at $0.01 per
share.
18 Feb 2024
145,500,000
2022 Annual Financial Report
43
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
Options are valued using a Black-Scholes Option Pricing Model. The following table lists the assumptions to
the model used to value options issued.
Number
Grant Date
Exercise
Price
15,000,000
20,000,000
20,000,000
1 Jul 2020
18 Feb 2021
18 Feb 2021
$0.01
$0.015
$0.025
Assumed
Stock
Price at
Grant
Date
$0.011
$0.011
$0.011
Issue
Price
Interest
Rate
Volatility Value Per
Option
nil
nil
nil
0.22%
0.22%
0.22%
100%
100%
100%
$0.0040
$0.0052
$0.0043
The following unlisted options expired during the period:
Number Exercise Price
Expiry
Date
Exercise Condition
10,000,000
$0.03
27 Aug 2020 After the 30 day volume weighted average price of fully paid ordinary
shares exceeds 5 cents.
10,000,000
$0.03
27 Aug 2020 After the 30 day volume weighted average price of fully paid ordinary
shares exceeds 10 cents.
10,000,000
$0.05
27 Aug 2020 After the 30 day volume weighted average price of fully paid ordinary
shares share price exceeds 15 cents.
10,000,000
$0.05
27 Aug 2020 After the 30 day volume weighted average price of fully paid ordinary
shares share price exceeding 20 cents.
40,000,000
The following unlisted options to acquire fully paid ordinary shares were exercised during the year:
Number Exercise Price
94,500,000
$0.01
Expiry
Date
31 Mar 2021
30,000,000
$0.014
20 May 2021
35,000,000
15,000,000
174,500,000
$0.01
$0.01
30 May 2021
31 Dec 2021
Exercise Condition
None
None
None
None
The following unlisted options to acquire fully paid ordinary shares were cancelled during the year:
Number Exercise Price
15,000,000
$0.01
15,000,000
Expiry
Date
31 Mar 2021
Exercise Condition
None
The following unlisted options to acquire fully paid ordinary shares were on issue:
Number Exercise Price
20,000,000
20,000,000
20,000,000
60,000,000
$0.01
$0.015
$0.025
Expiry
Date
31 Dec 2021
18 Feb 2024
18 Feb 2024
Exercise Condition
None
None
None
17,050,000 unlisted options with a $0.014 exercise price on or before 20 May 2021 were issued as part of the
consideration of convertible notes with a face value of $852,500 (see Note 11(b)(i)).
2022 Annual Financial Report
44
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
35,000,000 unlisted options with a $0.01 exercise price on or before 30 May 2021 were issued as consideration
for extending the maturity of a $1,500,000 convertible note from 30 April 2020 to 30 April 2021 (see Note
11(b)(i)).
39,000,000 unlisted options with a $0.01 exercise price on or before 31 March 2021 were issued as free
attaching options to placements of shares (see Note 12).
13.
CONVERTIBLE NOTE RESERVE
The convertible note reserve arises from bifurcating the derivatives embedded in the convertible notes (see
Note 11 for further details). This includes the right of the holders to convert their notes into ordinary shares
and any attaching options.
Upon the restructuring of the convertible note originally maturing on 20 April 2020, the value in the
Convertible Note Reserve was transferred to Accumulated Losses. Accordingly, the value in the Convertible
Note Reserve is the ascribed value of the right of the holders of the replacement convertible note to convert
their notes to ordinary shares.
14.
RELATED PARTIES
Transactions between related parties are on normal commercial terms and conditions no more favourable than
those available to other parties unless otherwise stated.
(a)
The Group's related parties are as follows:
(i)
Key management personnel (‘KMP’):
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the
Company, directly or indirectly, including any director (whether executive or otherwise) of that Company are
considered key management personnel.
For details of remuneration disclosures relating to key management personnel, refer to Note 15: Key
Management Personnel Disclosures.
Other transactions with KMP and their related entities are shown below.
(ii)
Other related parties include close family members of key management personnel and entities that are
controlled.
Other related parties include close family members of key management personnel and entities that are
controlled or significantly influenced by those key management personnel or their close family members.
(iii)
Other transactions with related parties,
Unpaid directors’ fees, salaries and superannuation totalling Nil (2021: $38,500) were accrued.
Apart from the above items and reimbursements for expenses paid on behalf of the Company and the Group,
director and fees paid directly or indirectly to director related entities, there were no transactions or balances
with KMP during the year ended 30 June 2022 (2021: Nil).
2022 Annual Financial Report
45
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
(b)
Subsidiaries
Peppermint Innovation Limited
All controlled entities are included in the consolidated financial statements. The parent entity does not
guarantee to pay the deficiency of its controlled entities in the event of a winding up of any controlled entity.
Name
Peppermint Technology Pty Ltd
Peppermint Payments Pty Ltd
Peppermint Technology, Inc
Peppermint Financing, Inc (i)
Peppermint bizmoto Inc (ii)
Country of
Incorporation
Australia
Australia
Philippines
Philippines
Philippines
Principal Activity
Information technology
International remittance
Information technology
Lending
Payments
% Equity interest
2022
100%
% Equity interest
2021
100%
100%
100%
100%
100%
100%
100%
-
-
i.
ii.
During the year Peppermint Financing, Inc was established to undertake a proposed lending business in The
Philippines.
During the year Peppermint bizmoto, Inc was established to hold the Group’s electronic money issuer licence.
15.
KEY MANAGEMENT PERSONNEL
Remuneration paid:
Short-term employee benefits
Post-employment benefits
Share based payments
Non-monetary benefits
Please see the Remuneration Report for further details.
16.
PARENT ENTITY INFORMATION
(a)
Information relating to Peppermint Innovation Limited
2022
$
2021
$
857,647
81,805
57,023
47,487
1,043,962
495,000
47,025
-
33,132
575,157
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets (liabilities)
Issued capital
Accumulated losses
Reserves
Total shareholders’ equity
2022
$
2021
$
5,241,964 3,066,899
-
5,241,964 3,066,899
(780,260)
(459,993)
-
-
-
(459,993)
4,781,971
24,465,366
(780,260)
2,286,639
19,159,504
(20,398,743) (17,325,403)
452,538
(2,286,639)
715,348
4,781,971
Loss for the parent entity
Total comprehensive income of the parent entity
(3,073,340)
(3,073,340)
(2,057,517)
(2,057,517)
(b)
Guarantees
No guarantees have been entered into by the Company in relation to the debts of its subsidiaries.
2022 Annual Financial Report
46
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
(c)
Commitments
The Company does not have any commitments as at reporting date.
17.
COMMITMENTS
Peppermint Innovation Limited
The Group did not have any contractual commitments to capital expenditure not recognised as liabilities at 30
June 2022.
18.
CONTINGENT LIABILITIES
There are no contingent assets nor liabilities.
19.
AUDITORS’ REMUNERATION
Amounts received or due and receivable by the auditors for:
- Auditing or reviewing the financial report (RSM Australia Partners)
- Auditing of one of the subsidiary companies (Reyes Tacandong & Co)
2022
$
2021
$
49,832
8,026
57,858
46,500
7,333
53,833
20.
FINANCIAL RISK MANAGEMENT
The Group’s financial situation is not complex. Its activities may expose it to a variety of financial risks in the
future: market risk (including currency risk and fair value interest rate risk), credit risk, liquidity risk and cash
flow interest rate risk. At that stage the Group’s overall risk management program will focus on the
unpredictability of the financial markets and seek to minimise potential adverse effects on the financial
performance of the Group.
Risk management is carried out under an approved framework covering a risk management policy and internal
compliance and control by management. The Board identifies, evaluates and approves measures to address
financial risks.
The Group holds the following financial instruments:
Financial Assets:
Cash and cash equivalents
Restricted cash
Trade and other receivables
Other assets
Financial Liabilities:
Financial liabilities at amortised cost:
- Trade and other payables
- Convertible notes and loans
2022
$
2021
$
5,574,339
-
178,097
39,079
5,791,515
3,112,411
336,829
92,317
55,113
3,596,670
418,444
-
418,444
353,799
390,701
744,500
2022 Annual Financial Report
47
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Financial risk management policies
Peppermint Innovation Limited
The Board of Directors has overall responsibility for the establishment of the Group’s financial risk
management framework. Risk management policies and systems are reviewed regularly to reflect changes in
market conditions and the Group’s activities. Mitigation strategies for specific risks faced are described below.
Specific financial risk exposures and management
The main risk the Group is exposed to through its financial instruments are interest rate risk, credit risk,
liquidity and foreign currency risk.
Interest rate risk
The Group is not exposed to any material interest rate risk.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial
loss to the Group.
Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and
financial institutions, as well as credit exposure to wholesale and retail customers, including outstanding
receivables and committed transactions.
The Group does not have any material credit risk exposure to any single receivable under financial instruments
entered into by the Group.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital and the finance charges and principal
repayments on its debt instruments. It is the risk that the Group will encounter difficulty in meeting its financial
obligations as and when they fall due.
The Group manages its liquidity needs by carefully monitoring scheduled debt servicing payments for
liabilities as well as cash outflows for day-to-day operations.
The Group’s liabilities have contractual maturities which are summarised below:
Within 1 year
2022
$
2021
$
1 to 5 years
2022
$
2021
$
Total
2022
$
2021
$
Trade and other payables
Convertible notes and loans
Total
418,444
-
418,444
353,799
390,701
744,500
-
-
-
-
-
-
418,444
-
418,444
353,799
390,701
744,500
2022 Annual Financial Report
48
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Foreign currency risk
Peppermint Innovation Limited
The Group earns revenues and incurs expenses in Philippines Pesos (PHP). As such, the Group is subject to
foreign exchange risk arising from fluctuations between the PHP and AUD.
At 30 June 2022, the Group had the following exposure to PHP foreign currency expressed in A$ equivalents,
which are not designated as cash flow hedges:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Other non-current assets
Financial Liabilities:
Trade and other payables
Capital Risk Management
2022
$
334,356
175,091
39,079
28,219
576,745
2021
$
93,511
36,311
55,113
-
184,935
263,997 149,543
149,543
263,997
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising
the return to shareholders. The capital structure of the Group consists of equity attributable to equity holders,
comprising issued capital and retained earnings as disclosed in Note 12.
The Board reviews the capital structure on a regular basis and considers the cost of capital and the risks
associated with each class of capital. The Group will balance its overall capital structure through new share
issues as well as the issue of debt, if the need arises.
Sensitivity analysis
The sensitivity effect of possible interest rate and foreign exchange rate movements have not been disclosed
as they are not material.
Fair value of financial instruments
The carrying amount of financial assets and financial liabilities recorded in the financial statements
approximates their respective net fair values, determined in accordance with the Company’s accounting
policies. All financial instruments for which fair value is recognised or disclosed are categorised within the
fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole,
is described as follows:
• Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
• Level 3 Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
2022 Annual Financial Report
49
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Peppermint Innovation Limited
Fair value of other financial instruments not measured at fair value
The carrying amounts of current asets and current liabilities are assumed to approximate their fair values due
to their short-term nature.
21.
EVENTS AFTER THE BALANCE SHEET DATE
There has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Group, to
affect significantly the operations of the Group, the results of those operations, or the state of affairs of the
Group in future.
2022 Annual Financial Report
50
Peppermint Innovation Limited
DIRECTORS’ DECLARATION
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 1 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; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act
2001.
On behalf of the directors
Christopher Kain
Managing Director
30 September 2022
2022 Annual Financial Report
51
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
PEPPERMINT INNOVATION LIMITED
Opinion
We have audited the financial report of Peppermint Innovation Limited (the Company) and its subsidiaries (the
Group), which comprises the statement of financial position as at 30 June 2022, the statement of profit or loss
and other comprehensive income, the statement of changes in equity and the statement of cash flows for the year
then ended, and notes to the 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:
(i) giving a true and fair view of the Group's financial position as at 30 June 2022 and of its financial
performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
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 this matter
Revenue
Refer to Note 4 in the financial statements
Revenue for the year ended 30 June 2022 was
$1,312,760. The primary revenue source is the
provision of mobile banking and payment services.
Revenue was considered a key audit matter
because it is a significant account balance in the
statement of profit or loss and other comprehensive
income and the process of revenue recognition
involves multiple revenue streams for services or
products rendered.
Our audit procedures included:
•
•
•
•
•
•
•
with
Australian
Assessing the Group’s accounting policy for
compliance
Accounting
Standards;
Obtaining an understanding of each of the
revenue sources and the process for determining
and recognising revenue;
On a sample basis, testing revenue recorded to
supporting documentation:
Performing substantive analytical procedures on
revenue transactions with reference to volume
and fixed fees;
On a sample basis, testing the occurrence and
completeness of transactions by comparison to
supplier
to determine
whether revenue had been recorded in the correct
financial year;
Assessing the work performed by component
auditors; and
Assessing
statements.
the disclosures
transactions
financial
reports
the
in
Key Audit Matter
How our audit addressed this matter
Share-based payment
Refer to Note 5 and 12 in the financial statements
During the financial year, the Group issued options
and performance rights in accordance with AASB 2
Share-based Payment, recognising capital raising
costs of $207,000 and share based payment
expenses of $218,131 from the issue of options and
recognising share based payment expenses of
$100,217 from the issue of performance rights:
• 55,100,000 performance rights were granted
conditions.
the
the non-market
non-market
with
Management was required
probability of achieving
performance conditions attached to the rights.
to assess
vesting
• 30,000,000 options were
lead
managers (capital raising costs) and 30,000,000
options were
for
services rendered.
issued as consideration
issued
to
We determined this to be a key audit matter due to
the material amount of the share-based payment
and the significant judgement involved in assessing
the fair value of the transactions in accordance with
AASB 2 Share-based Payment.
Our audit procedures included:
•
•
•
•
•
•
•
the
the
Australian
terms and conditions of
Assessing the Group’s accounting policy for
compliance with
Accounting
Standards;
Reading
performance rights and options issued;
Obtaining the valuation models prepared by
management and assessing whether the models
were appropriate for valuing the performance
rights and options;
Assessing management’s estimate of
the
probability of achieving non-market performance
conditions attached to performance rights;
Testing
the
the mathematical accuracy of
computation and the apportioned expense over
the vesting period;
Challenging
key
the
assumptions used by management to value the
options; and
Assessing
statements.
reasonableness of
the disclosures
financial
the
in
Other Information
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 the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of 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_responsibilities/ar1.pdf.
This description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in within the directors' report for the year ended 30 June
2022.
In our opinion, the Remuneration Report of Peppermint Innovation 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.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 30 September 2022
ALASDAIR WHYTE
Partner
ASX ADDITIONAL INFORMATION
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report
is as follows. The information is current as at 29 July 2022.
Peppermint Innovation Limited
(A)
DISTRIBUTION OF EQUITY SECURITIES
(i)
Ordinary share capital
2,037,856,836 fully paid ordinary shares are held by 2,865 individual shareholders
All issued ordinary shares carry one vote per share and carry the rights to dividends.
The number of security holders by size of holding are:
1
–
1,001 –
5,001 –
10,001 –
100,001
1,000
5,000
10,000
100,000
and over
Fully paid
ordinary shares
50
125
72
1,401
1,188
2,837
Holding less than a marketable parcel
1,093
(B)
SUBSTANTIAL SHAREHOLDERS
Ordinary shareholders
CHRISTOPHER KAIN
Number
Percentage
110,325,322
110,325,322
5.41
5.41
2022 Annual Financial Report
55
Peppermint Innovation Limited
ASX ADDITIONAL INFORMATION (continued)
(C)
TWENTY LARGEST SECURITY HOLDERS
Fully paid ordinary shares:
2022 Annual Financial Report
56
ASX ADDITIONAL INFORMATION (continued)
Listed options with an exercise price of $0.03 on or before 30 June 2023:
Peppermint Innovation Limited
(D)
ADDITIONAL ASX REQUIRED DISCLOSURES NOT MADE ELSEWHERE
In accordance with Listing Rule 4.10, the Company confirms:
• There is no current on-market share buy-back; and
• The Company used its cash and assets in a form readily convertible to cash that it has at the time of
admission to the Official List of the ASX in a way consistent with its business objectives.
2022 Annual Financial Report
57