PEPPERMINT INNOVATION LIMITED
(ACN 125 931 964)
Annual Financial Report
for the Year Ended 30 June 2023
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
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9
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20
45
46
49
2023 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
2023 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 2023.
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
its commercialisation. Anthony also has
intellectual property and
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 practices and digital & cultural transformation.
Listed company directorships in the past 3 years: None
2. Company Secretary
The company secretary is Anthony Kain. Details are disclosed in director information.
2023 Annual Financial Report
2
Directors’ Report
3. Directors’ Meetings
Peppermint Innovation Limited
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
4. Principal Activities
Number of meeting
eligible to attend
3
Number of meetings
attended
3
3
3
3
3
Peppermint is focused on the development of a proprietary innovative financial technology solution aimed at
delivering financial inclusion to the unbanked and underbanked, facilitating mobile micro business enterprise
and providing consumer convenience.
It has developed and commercially deployed the bizmoto mobile App, a comprehensive mobile micro-
enterprise platform and ecosystem of services to Filipinos.
Peppermint is tackling the problem of providing inclusive financial services to 70% of the circa 113 million
Filipinos who are unbanked and/or underbanked.
Peppermint is currently applying its technology in the Philippines where it assists with:
• Digitalisation - We aim to provide those in the unbanked and underbanked community with access to
a digital platform via a mobile app to access financial services
• E-Payments - We provide a “hand up” by enabling them to make payments and access online services
without having to use a bank or credit card.
• Enabling Business - We give them a “hand up” by providing access to a micro-enterprise platform to
conduct business they can scale and earn revenue from.
• Micro Solutions - We give them a “hand up” by providing non-bank micro enterprise lending and
micro insurance.
Peppermint has also commercially deployed white label mobile banking app solutions to the banking sector in
the Philippines.
The bizmoto platform and ecosystem of services is scalable and targeted at developing-world countries in the
ASEAN region. More than 70% of Southeast Asia’s 658 million people do not have a bank account and a
large portion of them operate without access to finance, banking, credit cards and payment services.
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:
• Signed exclusive five-year agreement with Visa to significantly expand digital financial offering
around the world, focussing initially on key markets of the Philippines, Singapore and Australia
2023 Annual Financial Report
3
Directors’ Report
Peppermint Innovation Limited
• Signed exclusive five-year agreement with the Philippines' largest regional cooperative federation -
MASS-SPECC Cooperative Development Centre - for its 1.6 million members to use bizmoto's
Electronic Money Issuer (“EMI”) financial services via Peppermint's bizmoto platform
• Successfully completed all back-end integration of bizmoto’s EMI financial services into MASS-
SPECC’s Pinoy Coop App
•
Initiated discussions with MASS-SPECC around identifying and providing technical solutions to
overcome third-party front-end delays, and help deploy MASS-SPECC’s Pinoy Coop App as quickly
as possible
• Progressed discussions with MASS-SPECC about cross-promoting bizmoto’s other products and
services such as bizmoLoan and bizmoTinda, which has the potential to deliver additional revenues
for Peppermint.
• Piloted Artificial Intelligence (“AI”) in several areas of the business as a means to servicing unbanked
and underserved Filipino customers more efficiently and effectively
• Adopted a new credit score using AI program which has driven a reduction in non-performing loans
• Appointed Non-Executive Director Neal Cross to lead Peppermint’s technical team to further develop
areas where AI can assist the unbanked and underserved with AI-driven lending
• Rebranded bizmoPay to bizmoLoan to better reflect provision of alternative non-bank finance products
to customers
o Significantly increased number of bizmoLoan applications received and loan approvals
issued, building a strong database of loan applicants that will become a growing asset
o Significantly improved bizmoLoan operations to achieve more efficient lead generation, loan
originaton and approvals processes, including the establishment of an in-house call centre
o Launched two new loan products – Employee Loans and Micro-Business Loans – based
around ongoing data analysis of bizmoLoan operations
•
Introduced new technical improvements to bizmoto platform and bizmoLoan functionality to optimise
customer experience, with a view to increasing the number of customers transactions
• Went ‘live’ with bizmoto agents' access to ECPay via any 7-Eleven outlet across the Philippines
• Continued developing strong relationships with strategic partners with the aiming of signing-up
additional EMI financial service agreements to use Peppermint's bizmoto platform
• Worked on developing strategic partnerships and alliances to broaden Peppermint's operational area,
with a primary focus on the ASEAN region
• Continued pursuing M&A opportunities that can add value and extract additional revenue for
Peppermint from the Company’s established EMI licensed technology platform and loan book
operations in the Philippines, while at the same time vertically integrating across current operations to
deliver new and diversified revenue streams
• Launched bizmoKarte pilot - a unique financial literary knowledge sharing platform aimed at helping
individuals & small-to-medium size business owners become more confident and successful in
managing financial matters
• Continued marketing and promotion of bizmoto platform increased number of bizmoto agents and
riders and bizmoGo merchants
2023 Annual Financial Report
4
Directors’ Report
Shareholder returns
Peppermint Innovation Limited
2023
2022
2021
2020
2019
Net loss for the year
Earnings per share (cents)
Net (liabilities) / assets
(2,438,623)
(0.1)
2,663,022
(3,593,844)
(0.2)
5,091,998
(2,833,209)
(0.2)
2,663,607
Share price
$0.006
$0.009
$0.016
(1,691,500)
(0.2)
(988,458)
Suspended
from the
ASX
(2,142,786)
(0.2)
(1,119,645)
$0.012
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:
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 $3,055,677 cash at bank as at 30 June 2023.
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.
2023 Annual Financial Report
5
Peppermint Innovation Limited
Directors’ Report
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.
10. Directors’ interests
As at the date of this report, the interests of the Directors in the Company were:
Anthony Kain
Christopher Kain
Neal Cross
11. Share options
Number of
fully paid
ordinary
shares
83,991,416
110,325,322
-
Number of
performance
rights
10,000,000
10,000,000
10,000,000
The following is a summary of option movements during the period:
Listed/
Unlisted
Unlisted
Expiry Date
18/02/2024
Exercise
Price
$0.025
Unlisted
30/06/2024
$0.020
Unlisted
30/06/2024
$0.025
Unlisted
Unlisted
Listed
Unlisted
Total
30/06/2024
30/06/2024
30/06/2023
30/03/2025
$0.030
$0.040
$0.030
$0.015
Notes
Opening balance
20,000,000
Issued
-
Converted
Expired
-
Closing
20,000,000
(i)
(i)
(i)
(i)
(ii)
(i)
2,500,000
-
-
-
2,500,000
2,500,000
-
-
-
2,500,000
2,500,000
2,500,000
-
-
-
-
-
-
2,500,000
2,500,000
115,739,110
20,000,000
-
-
(1,500)
-
(115,737,610)
-
-
20,000,000
165,739,110
-
(1,500)
(115,737,610) 50,000,000
Weighted average exercise price
$0.028
-
$0.030
$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 2023 and 2022 year:
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 (ii)
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
2023 (i)
5,000,000 18,700,000
2022
5,000,000 18,200,000
5,000,000 18,200,000
2023 Annual Financial Report
6
Directors’ Report
Peppermint Innovation Limited
(i)
(ii)
Performance rights were issued to Mr Neal Cross following receipt of shareholder approval at
the annual general meeting of shareholders held on 30 November 2022.
The Tranche A performance rights expired on 30 June 2023.
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.
2023 Annual Financial Report
7
Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
RSM Australia Partners
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Peppermint Innovation Limited for the year ended 30 June
2023, 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: 29 September 2023
ALASDAIR WHYTE
Partner
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the
RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Directors’ Report - Remuneration report (audited)
Peppermint Innovation Limited
This remuneration report for the financial year ended 30 June 2023 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 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.
2023 Annual Financial Report
9
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 2023 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
2023 Annual Financial Report
10
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.
2023 Annual Financial Report
11
Directors’ Report - Remuneration report (audited)
Peppermint Innovation Limited
A.
Details of remuneration
Year ended 30 June 2023
Directors
Salary &
Fees
Non-
monetary
benefits (i)
Post employ-
ment
benefits /
super-
annuation
22,617
30,765
Share-
based
payments
(ii)
Total
Performance
Related (iii)
(27,154)
(27,154)
233,082
319,217
(27,154)
(27,154)
Mr Anthony Kain
Mr Christopher Kain
Mr Neal Cross
Totals
215,402
293,000
120,607
22,217
22,606
8,715
4,211
-
133,533
-
629,009
53,538
57,593
(54,308)
685,832
(54,308)
Compensation is stated on an accruals basis.
(i) Comprises of directors and officers’ insurance.
(ii) 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. The probability of the performance hurdles being
achieved has been assessed as nil, and accordingly the expense recognised in prior periods was reversed.
(iii) Performance related remuneration is risk based, all other remuneration is not risk based.
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
(vi)
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) Included 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.
(vi) Performance related remuneration is risk based, all other remuneration is not risk based.
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:
2023 Annual Financial Report
12
Directors’ Report - Remuneration report (audited)
Peppermint Innovation Limited
i.
ii.
Anthony Kain - $221,000 per annum plus statutory superannuation (currently 10.5%, 11%
from 1 July 2023); and
Christopher Kain - $293,000 per annum plus statutory superannuation (currently 10.5%, 11%
from 1 July 2023).
(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 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 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) 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.
C.
Share-based compensation
Compensation shares, performance rights and options – granted and vesting over vesting period
Performance rights were granted as compensation as follows:
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
2023
5,000,000
2022
18,700,000
5,000,000
18,200,000
5,000,000
18,200,000
15,000,000 55,100,000
The tranche A performance rights expired on 30 June 2023.
The probability of the performance hurdles being achieved has been assessed as nil.
2023 Annual Financial Report
13
Directors’ Report - Remuneration report (audited)
D.
Share holdings of key management personnel
Peppermint Innovation Limited
30 June 2023
Directors
Mr Anthony Kain
Mr Christopher Kain
Mr Neal Cross
Totals
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
Balance at start
of the financial
year / date of
appointment
93,991,416
110,325,322
-
204,316,738
Balance at start
of the financial
year / date of
appointment
93,991,416
110,325,322
-
6,437,768
210,754,506
E.
Performance Rights
Granted as
remuneration
On exercise of
options
Acquisitions
/(Disposals)
Balance at the
end of financial
year / date of
retirement
-
-
-
-
-
-
-
(10,000,000)
83,991,416
-
-
110,325,322
-
-
(10,000,000)
194,316,738
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
30 June 2023
Balance at start
of the financial
year / date of
appointment
Granted as
remuneration
On exercise of
options
Acquisitions
/(Disposals)
(i)
Balance at the
end of financial
year / date of
retirement
Directors
Mr Anthony Kain
Mr Christopher Kain
Mr Neal Cross (appointed
24 March 2022)
Totals
15,000,000
15,000,000
-
-
-
15,000,000
-
-
-
(5,000,000)
(5,000,000)
10,000,000
10,000,000
(5,000,000)
10,000,000
30,000,000
15,000,000
-
(15,000,000)
30,000,000
(i)
Tranche A performance rights expired.
2023 Annual Financial Report
14
Directors’ Report - Remuneration report (audited)
Peppermint Innovation Limited
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
-
1,500,000
31,500,000
-
-
-
-
-
-
-
-
-
-
15,000,000
15,000,000
-
1,500,000
31,500,000
F.
Other transactions and balances with Key Management Personnel
Apart from 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 2023 (2022: Nil).
END OF THE REMUNERATION REPORT
Signed in accordance with a resolution of the Directors:
Christopher Kain
Managing Director
Perth, 29 September 2023
2023 Annual Financial Report
15
STATEMENT OF PROFIT AND LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
Peppermint Innovation Limited
Revenue
Cost of sales
Gross profit
Other income
Administration expenses
Finance costs
Share based payment credit / (expense)
(Loss) before income tax
Income tax expense
(Loss) for the year
Other comprehensive (loss)
Items that may be reclassified to profit or loss:
- Translation of foreign operations
Note
Consolidated
2023
$
2022
$
4
4
4
6
376,244 1,312,760
(361,746) (1,246,013)
66,747
14,498
19,048
(2,571,978)
(408)
1,863
(3,189,765)
(154,341)
100,217 (318,348)
(2,438,623)
(3,593,844)
-
-
(2,438,623)
(3,593,844)
109,819
109,819
-
-
Total comprehensive (loss) for the year
(2,328,804)
(3,593,844)
(Loss) for the year attributable to members of the parent
entity
Total comprehensive (loss) for the year attributable to
members
(2,328,804)
(3,593,844)
(2,328,804)
(3,593,844)
Basic and diluted loss per share (cents per share)
3
(0.1)
(0.2)
The accompanying notes form part of these financial statements
2023 Annual Financial Report
16
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Peppermint Innovation Limited
CURRENT ASSETS
Cash and cash equivalents
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
8
Consolidated
2023
$
2022
$
3,055,677
5,574,339
375,894 178,097
24,520 39,079
3,456,091 5,791,515
6,011
6,011
28,219
28,219
3,462,102
5,819,734
458,367 418,444
309,292
340,713
-
-
727,736
799,080
799,080
727,736
2,663,022
5,091,998
25,410,716
(23,472,644)
724,950
25,410,671
(21,034,021)
715,348
2,663,022 5,091,998
9
10
11
12
The accompanying notes form part of these financial statements
2023 Annual Financial Report
17
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
Peppermint Innovation Limited
Cash flows from Operating Activities
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs paid
Net cash (used in) operating activities
Cash Flows from Investing Activities
Release of restricted cash
Net cash provided / (used in) by investing activities
Cash Flows from Financing Activities
Issue of shares
Share issue expenses
Loan repayments
Net cash provided by financing activities
Net (decrease) / increase in cash held
Cash at the beginning of the financial year
Foreign currency translation
Cash at the end of the financial year
Note
Consolidated
2023
$
2022
$
295,067
(2,941,959)
18,366
-
1,234,049
(4,269,658)
1,863
(1,014)
7(b)
(2,628,526)
(3,034,760)
-
-
336,829
336,829
45
-
-
45
5,549,366
(352,307)
(37,200)
5,159,859
(2,628,481)
5,574,339
109,819
3,055,677
2,461,928
3,112,411
-
5,574,339
7(a)
The accompanying notes form part of these financial statements
2023 Annual Financial Report
18
Peppermint Innovation Limited
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Issued
Capital
$
Foreign
Currency
Translation
Reserve
$
Share Based
Payment
Reserve
Accumulated
Losses
Total
$
$
$
Balance at 1 July 2022
25,410,671
-
715,348
(21,034,021)
5,091,998
Loss for the year
Total comprehensive loss for
the year
Transactions with owners in
their capacity as owners
Shares issued
Change in value of
performance rights
Balance at 30 June 2023
-
-
109,819
109,819
-
-
(2,438,623)
(2,438,623)
(2,328,804)
(2,328,804)
45
-
-
-
-
(100,217)
-
-
45
(100,217)
25,410,716
109,819
615,131
(23,472,644)
2,663,022
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
-
-
5,000,000
48,616
500,750
(559,307)
-
-
-
-
-
-
-
-
-
-
-
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
-
506,828
-
-
(262,538)
-
-
-
262,538
-
-
25,410,671
-
-
-
100,217
218,131
715,348
-
-
(21,034,021)
100,217
218,131
5,091,998
The accompanying notes form part of these financial statements
2023 Annual Financial Report
19
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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 29 September 2023.
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 2023 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.
2023 Annual Financial Report
20
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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 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.
Performance rights are valued at the share price at the date of grant with this value being amortised over the
vesting period after considering the probability of the performance hurdle being achieved.
(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
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.
2023 Annual Financial Report
21
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Peppermint Innovation Limited
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.
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.
2023 Annual Financial Report
22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Peppermint Innovation Limited
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)
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.
2023 Annual Financial Report
23
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Peppermint Innovation Limited
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
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.
(j)
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.
(k)
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
2023 Annual Financial Report
24
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Peppermint Innovation Limited
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.
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.
(l)
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.
(m)
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.
2023 Annual Financial Report
25
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
(n)
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.
(o)
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
2023 Annual Financial Report
26
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Peppermint Innovation Limited
new award are treated as if they were a modification of the original award, as described in the previous
paragraph.
(p)
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.
(q)
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.
(r)
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.
(s)
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.
(t)
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.
2023 Annual Financial Report
27
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
(u)
Right-of-use assets
Peppermint Innovation Limited
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.
(v)
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.
(w)
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised
at the present value of the lease payments to be made over the term of the lease, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate.
Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that
depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a
purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in
which they are incurred.
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.
(x)
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.
(y)
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.
(z)
Employee benefits
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
2023 Annual Financial Report
28
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
(aa)
Fair value of assets and liabilities
Peppermint Innovation Limited
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).
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.
(bb) 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.
2023 Annual Financial Report
29
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.
SEGMENT REPORTING
Peppermint Innovation Limited
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.
Year Ended 30 June 2023
Revenue
External customers
Inter-segment
Total revenue
Income/(expenses)
Depreciation and
amortisation
Segment profit
Total assets
Total liabilities
Year Ended 30 June 2022
Revenue
External customers
Inter-segment
Total revenue
Income/(expenses)
Depreciation and
amortisation
Segment profit
Total assets
Total liabilities
Mobile
Banking and
Payment
Services
376,244
-
376,244
-
International
Remittance
Head Office
Total
Segments
Adjustments
and
Eliminations
Consolidated
-
-
-
-
-
-
-
376,244
-
376,244
22,208
22,208
-
-
-
-
376,244
-
376,244
22,208
(381,902)
2,730,861
2,367,591 605,573
(548) (2,056,173) (2,438,623) - (2,438,623)
6,632,313 (3,170,211) 3,462,102
1 3,901,451
799,080
996,127 3,969,291 (3,170,211)
Mobile
Banking and
Payment
Services
1,312,760
-
1,312,760
-
International
Remittance
Head Office
Total
Segments
Adjustments
and
Eliminations
Consolidated
-
-
-
-
-
-
-
-
1,312,760
-
1,312,760
-
-
-
-
-
1,312,760
-
1,312,760
-
(540,621)
286,344
2,367,255 605,026
(2,189) (3,051,034) (3,593,844) - (3,593,844)
8,753,034 (2,933,300) 5,819,734
763,629
724,648 3,696,929 (2,933,300)
1 8,466,689
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.
2023 Annual Financial Report
30
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Peppermint Innovation Limited
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
All revenue was earned in The Philippines.
3.
LOSS PER SHARE
Basic and diluted loss per share (cents per share)
2023
$
2022
$
62,683
52,686
52,537
472,081
448,550
187,490
2023
$
(0.1)
2022
$
(0.2)
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
(2,438,623)
(3,593,844)
Weighted average number of shares outstanding during the year used in the
calculations of basic loss per share:
2,037,851,062
1,869,058,778
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.
4.
RESULT FOR THE YEAR
Revenue from contracts with customers
Transaction revenue
Project revenue
Other income
Interest income
2023
$
2022
$
376,244
-
376,244
1,303,615
9,145
1,312,760
19,048
19,048
1,863
1,863
2023 Annual Financial Report
31
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Peppermint Innovation Limited
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
30 June 2023
Major product lines
ELoad sales
System usage fees and commissions
Timing of revenue recognition
Goods transferred at a point in time
Services transferred at a point in time
Administration costs
Audit fees
Bad debts
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.
International
Remittance
Total
Mobile
Banking
and
Payment
Services
258,933
117,311
376,244
-
-
-
258,933
117,311
376,244
258,933
117,311
376,244
-
-
-
258,933
117,311
376,244
2023
$
2022
$
57,858
91,962
17,640
17,518
345,122
233,966
275
23,278
939,452
686,602
830,089
817,143
48,809
47,466
99,275 311,821
84,386
64,748
21,998
78,485
390,425
-
3,189,765
95,805
65,299
22,616
41,556
303,010
25,139
2,571,978
2023
$
-
408
408
2022
$
153,327
1,014
154,341
2023 Annual Financial Report
32
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
5.
SHARE BASED PAYMENTS
(a) Options Issued
2023:
No options were issued.
2022:
Peppermint Innovation Limited
The following options were issued during the 2022 year:
Number
2,500,000
Grant Date Exercise Price Expiry Date
30 Jun 2024
$0.02
1 Nov 2021
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 was recognised.
(b) Performance Rights Issued
The following performance rights were issued during the 2023 and 2022 years:
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
2023
5,000,000
2022
18,700,000
5,000,000
18,200,000
5,000,000
18,200,000
15,000,000 55,100,000
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:
Accounting loss before tax
Income tax benefit at 25%
Unrecognised tax losses
Income tax expense
2023 Annual Financial Report
2023
$
(2,438,623)
609,656
(609,656)
-
2022
$
(3,593,844)
898,461
(898,461)
-
33
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Peppermint Innovation Limited
(c)
Unrecognised deferred tax balances
Tax losses at 25%
Deferred tax asset not booked
Accrued liabilities
Provision for annual and long service leave
Prepayments
Net unrecognised deferred tax assets at 25%
2023
$
(4,159,187)
2022
$
(3,573,193)
(8,750)
(85,178)
-
(4,253,115)
(30,535)
(77,323)
751
(3,680,300)
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 $16,636,479 (2022: $14,292,774) of 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
Cash at bank
2023
$
3,055,677
2022
$
5,574,339
3,055,677
5,574,339
Cash at bank earns interest at floating rates based on daily bank deposit rates.
(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
2023
$
2022
$
3,055,677
5,574,339
2023 Annual Financial Report
34
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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:
2023
$
2022
$
(2,438,623)
(3,593,844)
-
153,327
22,208
(28,219)
(100,217)
318,348
- Decrease (Increase) in trade and other receivables
(197,797)
(85,780)
- 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:
24,156
16,034
30,326
64,645
31,421
120,729
(2,628,526)
(3,034,760)
Shares with a value of $506,828 were issued from the conversion of convertible notes reducing
financial liabilities by the same amount in 2022. There were no non-cash financing activities in 2023.
8.
TRADE AND OTHER RECEIVABLES – current
Current:
Trade receivables
Loans receivable
Allowance for expected credit losses
Other
2023
$
2022
$
39,588
45,275
(35,677)
326,708
39,984
25,321
(17,640)
130,432
375,894
178,097
Allowance for expected credit losses
The Group has recognised a loss of $18,037 (2022: $17,640) in profit or loss in respect of the expected
credit losses for the year ended 30 June 2023.
The ageing of the receivables and allowance for expected credit losses provided for above are as
follows:
Expected credit
loss rate
Carrying amount
Allowance for expected
credit losses
2023
%
-
Not overdue
0 to 3 months overdue 6%
3 to 6 months overdue 100%
Over 6 months overdue 100%
2022
%
-
16%
100%
100%
2023 Annual Financial Report
2023
$
2022
$
2023
$
43,785
5,960
4,738
30,380
84,863 47,665
2,812
11,646
-
559
9,654 4,738
23,553 30,380
35,677
2022
$
-
969
2,135
14,536
17,640
35
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Peppermint Innovation Limited
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Closing balance
9.
TRADE AND OTHER PAYABLES – current
Sundry payables and accrued expenses
10.
PROVISIONS – current
Unused annual and long service leave
11.
FINANCIAL LIABILITIES
(i)
$1,673,358 convertible note facility maturing on 30 April 2022
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
2023
$
2022
$
17,640
18,037
35,677
-
17,640
17,640
2023
$
2022
$
458,367
418,444
2023
$
2022
$
340,713
309,292
2023
$
-
-
-
-
-
2022
$
390,701
(506,828)
(37,200)
153,327
-
The convertible notes had 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) during the year and is amortised as notional interest over the term of the convertible notes.
12.
ISSUED CAPITAL
Paid up capital – ordinary shares
Capital raising costs
2023
$
27,154,051
(1,743,335)
25,410,716
2022
$
27,154,006
(1,743,335)
25,410,671
2023 Annual Financial Report
36
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Peppermint Innovation Limited
(a)
Ordinary shares
30 June 2023 movements in issued capital:
Balance at 1 July 2022
Exercise of options at $0.03 per share
Balance at 30 June 2023
Number of
shares
$
2,037,851,062
1,500
25,410,671
45
2,037,852,562
25,410,761
(b)
Performance rights
The following performance rights were issued during the 2023 and 2022 years:
$4m
based
annual
revenue
Vesting Condition
Tranche A: To be awarded when the Company
on
achieves
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
against
audited/reviewed financial reports on or before 30 June
2025
as validated
income/profit
2023
2022
Assumed
Probability of
Achievement
5,000,000
18,700,000
0%
5,000,000
18,200,000
0%
5,000,000
18,200,000
0%
15,000,000
55,100,000
The Tranche A performance rights expired on 30 June 2023.
2023 Annual Financial Report
37
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Peppermint Innovation Limited
(c)
Options
2023
The following is a summary of option movements during 2023:
Listed/
Unlisted
Expiry Date
Exercise
Price
Notes
Opening
balance
Issued
Converted
Expired
Closing
Unlisted
18/02/2024
$0.025
20,000,000
-
-
20,000,000
Unlisted
Unlisted
30/06/2024
30/06/2024
$0.020
$0.025
Unlisted
30/06/2024
$0.030
Unlisted
30/06/2024
$0.040
(i)
(i)
(i)
(i)
2,500,000
2,500,000
-
-
- -
-
2,500,000
- 2,500,000
2,500,000
- -
-
2,500,000
2,500,000
-
-
- 2,500,000
Listed
30/06/2023
$0.030
(ii)
115,739,110
-
(1,500)
(115,737,610)
-
Unlisted
Total
30/03/2025
$0.015
(i)
20,000,000
165,739,110
-
-
-
(1,500)
-
20,000,000
(115,737,610) 50,000,000
Weighted average exercise price
$0.028
-
$0.03
$0.03
$0.028
2022:
The following is a summary of option movements during 2022:
Listed/
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Listed
Unlisted
Total
Expiry Date
Exercise Price Notes
Opening
balance
Issued
Converted
Expired
Closing
31/12/2021
18/02/2024
18/02/2024
30/06/2024
30/06/2024
30/06/2024
30/06/2024
30/06/2023
30/03/2025
$0.010
$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
-
-
-
-
- (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 and an entitlement issue, including 30,000,000 options issued to
a broker as part of their compensation for raising capital for the Company.
2023 Annual Financial Report
38
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Peppermint Innovation Limited
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
Exercise
Price
2,500,000
1 Nov 2021
$0.02
2,500,000
1 Nov 2021
$0.025
2,500,000
1 Nov 2021
2,500,000
1 Nov 2021
30,000,000
25 Nov 2021
$0.03
$0.04
$0.03
20,000,000
29 Mar 2022
$0.015
60,000,000
Assumed
Stock
Price at
Grant
Date
$0.018
$0.018
$0.018
$0.018
$0.02
$0.014
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
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
13.
CONVERTIBLE NOTE RESERVE
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 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.
2023 Annual Financial Report
39
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Peppermint Innovation Limited
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,
Apart from 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
2023 (2022: Nil).
(b)
Subsidiaries
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
2023
100%
% Equity interest
2022
100%
100%
100%
100%
100%
100%
100%
100%
100%
i.
ii.
During the 2022 year, Peppermint Financing, Inc was established to undertake a proposed lending business in The
Philippines.
During the 2022 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.
2023
$
2022
$
629,008 857,647
57,593 81,805
57,023
53,538 47,487
685,831 1,043,962
(54,308)
2023 Annual Financial Report
40
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
16.
PARENT ENTITY INFORMATION
(a)
Information relating to Peppermint Innovation Limited
Peppermint Innovation Limited
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
2023
$
2022
$
616,598 5,241,964
-
616,598 5,241,964
(459,993)
(581,635)
-
-
-
(581,635)
34,963
24,674,238
(459,993)
4,781,971
24,465,366
(25,354,623) (20,398,743)
715,348
4,781,971
715,348
34,963
Loss for the parent entity
Total comprehensive income of the parent entity
(4,955,880)
(4,955,880)
(3,073,340)
(3,073,340)
(b)
Guarantees
No guarantees have been entered into by the Company in relation to the debts of its subsidiaries.
(c)
Commitments
The Company does not have any commitments as at reporting date.
17.
COMMITMENTS
Other than the matter noted above, the Group did not have any contractual commitments to capital expenditure
not recognised as liabilities at 30 June 2023.
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)
- Additional audit fees related to prior year
- Auditing of one of the subsidiary companies (Reyes Tacandong & Co)
2023
$
2022
$
57,700
26,236
8,026
91,962
49,832
-
8,026
57,858
2023 Annual Financial Report
41
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
20.
FINANCIAL RISK MANAGEMENT
Peppermint Innovation Limited
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
Financial risk management policies
2023
$
2022
$
3,055,677
-
375,894
24,520
3,456,091
5,574,339
-
178,097
39,079
5,791,515
458,367
418,444
458,367
418,444
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.
2023 Annual Financial Report
42
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Liquidity risk
Peppermint Innovation Limited
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
2023
$
2022
$
1 to 5 years
2023
$
2022
$
Total
2023
$
2022
$
Trade and other payables
Total
458,367
458,367
418,444
418,444
-
-
-
-
458,367
458,367
418,444
418,444
Foreign currency risk
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 2023, 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
2023
$
2,456,012
359,863
14,923
-
2,830,798
2022
$
334,356
175,091
39,079
28,219
576,745
321,406 263,997
263,997
321,406
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.
2023 Annual Financial Report
43
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Sensitivity analysis
Peppermint Innovation Limited
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.
Fair value of other financial instruments not measured at fair value
The carrying amounts of trade receivables and payables 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.
2023 Annual Financial Report
44
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 2023 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
29 September 2023
2023 Annual Financial Report
45
Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
RSM Australia Partners
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
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 2023, 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 2023 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.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
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 2023 was
$376,244. 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
to determine
supplier
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
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 2023, 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
2023.
In our opinion, the Remuneration Report of Peppermint Innovation Limited, for the year ended 30 June 2023,
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: 29 September 2023
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 15 August 2023.
Peppermint Innovation Limited
(A)
DISTRIBUTION OF EQUITY SECURITIES
(i)
Ordinary share capital
2,037,856,836 fully paid ordinary shares are held by 2,603 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
54
122
71
1,262
1,094
2,603
Holding less than a marketable parcel
1,145
(B)
SUBSTANTIAL SHAREHOLDERS
Ordinary shareholders
CHRISTOPHER KAIN
Number
Percentage
110,325,322
110,325,322
5.41
5.41
2023 Annual Financial Report
49
Peppermint Innovation Limited
ASX ADDITIONAL INFORMATION (continued)
(C)
TWENTY LARGEST SECURITY HOLDERS
Fully paid ordinary shares:
2023 Annual Financial Report
50
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.
2023 Annual Financial Report
51